EXECUTION VERSION
LOAN GUARANTEE AGREEMENT
dated as of February 23, 2011
among
USG OREGON LLC, as Borrower,
U.S. DEPARTMENT OF ENERGY, as provider of the DOE
Guarantee,
U.S. DEPARTMENT OF ENERGY, as Loan Servicer,
PNC BANK, NATIONAL ASSOCIATION, doing business as MIDLAND
LOAN
SERVICES, a division of PNC BANK, NATIONAL
ASSOCIATION
as Administrative Agent
and
PNC BANK, NATIONAL ASSOCIATION, doing business as MIDLAND
LOAN
SERVICES, a division of PNC BANK, NATIONAL
ASSOCIATION,
as Collateral Agent
(each as defined
herein)
Neal Hot Springs Geothermal Project
Malheur County, Oregon
Table of Contents
i
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Exhibits
LOAN GUARANTEE AGREEMENT
This
LOAN GUARANTEE AGREEMENT (this "
Loan Guarantee Agreement
"), dated as of
February 23, 2011, is by and among (i) USG Oregon LLC, a limited liability
company organized and existing under the laws of the State of Delaware (the
"
Borrower
"), (ii) the U.S. DEPARTMENT OF ENERGY, an agency of the United
States of America, acting by and through the Secretary of Energy, as provider of
the DOE Guarantee (in such capacity, "
DOE
" ), (iii) the U.S. DEPARTMENT
OF ENERGY, an agency of the United States of America, acting by and through
authority delegated by the Secretary of Energy to its Loan Programs Office, as
loan servicer in accordance with the terms of this Loan Guarantee Agreement (in
such capacity, the "
Loan Servicer
"), (iv) PNC BANK, NATIONAL ASSOCIATION,
doing business as MIDLAND LOAN SERVICES, a division of PNC BANK, NATIONAL
ASSOCIATION ("
Midland
") as the Administrative Agent for DOE and the Loan
Servicer, and (v) MIDLAND, as the Collateral Agent for the Secured Parties.
RECITALS
WHEREAS,
the Borrower is designing, developing financing and constructing and intends to
own and operate the approximately 22 megawatt Neal Hot Springs Geothermal
Project, including its associated diesel cold start generator, located near
Vale, in Malheur County, Oregon (the "
Project
").
WHEREAS,
the Equity Interests of the Borrower are indirectly held by the Sponsor and the
Investor through Holdco, which is the sole equity owner of the Borrower, and
subject to the terms and conditions of the Equity Funding and Recapture
Obligation Agreement, the Sponsor has agreed to make, or procure the making of,
Equity Contributions to the Borrower.
WHEREAS,
the Borrower, in furtherance of its obligations with respect to the Project has
requested that:
(i)
FFB make Advances pursuant to the DOE Credit Facility Documents in the aggregate
principal amount not exceeding the Maximum Principal Amount, and
(ii)
DOE guarantee the repayment of the DOE Guaranteed Loans pursuant to the DOE
Guarantee.
WHEREAS,
the execution of this Loan Guarantee Agreement is a condition precedent to the
obligations of FFB and the Credit Parties under the DOE Credit Facility
Documents.
NOW,
THEREFORE, in consideration of the foregoing, the Credit Parties entering into
this Loan Guarantee Agreement, and other good and valid consideration, the
receipt and adequacy of which are hereby expressly acknowledged, the parties
hereby agree as follows:
ARTICLE 1
DEFINITIONS; RULES OF NTERPRETATION
1.1
Definitions
.
Except as otherwise expressly provided herein, capitalized
terms used in this Loan Guarantee Agreement and its exhibits and schedules shall
have the meanings given in
Exhibit A
hereto.
1.2
Rules
of Interpretation
.
Except as otherwise expressly provided herein, the rules of
interpretation set forth in
Exhibit B
hereto shall apply to this Loan
Guarantee Agreement.
1.3
Conflict with DOE Credit Facility Documents
.
Except as otherwise expressly provided herein, in the case of
any conflict between the terms of this Loan Guarantee Agreement and the terms of
any DOE Credit Facility Document, the terms of such DOE Credit Facility
Document, as between the Borrower and the Credit Parties party thereto, shall
control.
ARTICLE 2
FUNDING
2.1
Financial Plan
.
The proposed sources and uses of financing with respect to the
Project are set forth in the Financial Plan below:
|
SOURCES
:
|
|
|
|
Debt
|
|
|
|
DOE Guaranteed Loans
|
|
$96,823,342
|
|
|
Total Debt
|
$96,823,342
|
|
Equity
|
|
|
|
Base Equity Commitment (Base Project Costs minus Guaranteed
Loan Amount)
|
|
$33,957,451
|
|
|
Total Equity, other
than Overrun Equity
|
$33,957,451
|
|
TOTAL SOURCES
|
|
$130,780,793
|
|
USES
:
|
|
|
|
Eligible Base Project Costs
|
|
$129,097,789
|
|
including contingency of
|
|
$5,494,300
|
|
including capitalized interest of
|
|
$3,062,014
|
|
Ineligible Base Project Costs
|
|
$1,683,004
|
|
TOTAL USES (Base Project Costs)
|
|
$130,780,793
|
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2.2
Availability of Advances
.
2.2.1.
Availability
. Subject to the satisfaction (or waiver by the Loan Servicer
in writing) of each applicable condition precedent set forth in this Loan
Guarantee Agreement and satisfaction (or waiver by FFB in writing) of each
applicable condition precedent in the DOE Credit Facility Documents, Advances of
the DOE Guaranteed Loans shall be made during the Guaranteed Loan Availability
Period.
2.2.2.
Loan Commitment Reductions and Cancellations
.
The Borrower may on not less than fifteen days prior written
notice to the Loan Servicer and upon the satisfaction of any consent requirement
or other applicable provisions of each DOE Credit Facility Document, permanently
reduce the unutilized portions of the DOE Credit Facility Commitment, in whole
or in part, but only if:
(a)
each partial reduction is in an amount permitted under the DOE Credit Facility
Documents;
(b) the
Loan Servicer is satisfied that such cancellation or reduction will not impair
the timely construction or development of the Project;
(c) after
taking into account the proposed reduction, Total Funding Available equals or
exceeds the amount of remaining Total Project Costs projected to be incurred
through the Project Completion Date;
(d)
the Cap-Ex Reserve Account is fully funded to an amount not less than the
Initial Cap-Ex Funding Amount, and the Loan Servicer has received satisfactory
evidence of such funding;
(e)
the Short-Term Wellfield Drilling Reserve Account is funded in an amount not
less than the Short-Term Wellfield Funding Amount, and the Loan Servicer has
received satisfactory evidence of such funding;
(f) the
Long-Term Wellfield Drilling Reserve Account is fully funded to the Initial
Long-Term Wellfield Drilling Funding Amount, and the Loan Servicer has received
satisfactory evidence of such funding; and
(g)
upon such cancellation or reduction, the Borrower pays all fees, Periodic
Expenses, and other amounts then due with respect to such cancellation or
reduction under the Loan Documents.
Once reduced or canceled, the DOE Credit Facility Commitment
may not be reinstated.
3
2.2.3.
No Obligation to Make Advances
.
Nothing in this Loan Guarantee Agreement obligates the Credit
Parties to make Advances to the Borrower. Any Advances will be made solely by
FFB pursuant to the DOE Credit Facility Documents.
2.3
Mechanics
for Requesting Advances
.
2.3.1.
Advance Notice
.
(a) The
Borrower may request an Advance by delivering to the Loan Servicer and the
Independent Engineer, at any time not more than twenty but not less than ten
Business Days prior to the Requested Advance Date, an appropriately completed
Advance Notice with respect to such Advance. The Borrower may request an Advance
no more frequently than once per calendar month.
(b) Each
Advance Notice shall specify:
(i)
the amount of the Advance requested, which shall be in the minimum amount and
increments required by the DOE Credit Facility Documents;
(ii)
the Requested Advance Date, which shall be any Business Day;
(iii) the
Overrun Equity that has been directly or indirectly contributed by the Sponsor
to the Borrower in connection with the Advance or which will concurrently with
the Advance be contributed directly or indirectly by the Sponsor to the
Borrower;
(iv)
the aggregate amount, on a prospective basis after giving effect to the
requested Advance, of (A) all Advances outstanding under the DOE Guaranteed
Loans, and (B) all Equity Contributions;
(v)
the Project Costs being financed or reimbursed using the proceeds of the
requested Advances, which shall be only Eligible Base Project Costs;
(vi)
the payees to whom the proceeds of the requested Advance is to be paid, which
may include, (A) (1) each Material Project Party (including Turbine Air Systems)
to whom the proceeds of the requested Advances are to be paid directly, and the
amount of such payments, (2) the required Reserve Accounts to be funded and the
amount to be funded into each such Reserve Account, (3) the amount to be paid to
the Borrower, to reimburse the Borrower for Eligible Project Costs previously
paid by the Borrower, in each case in accordance with the Construction Budget,
taking into account any Approved Budget Changes, (4) interest to be capitalized,
or, (B) with respect to the last Advance to be made during the Guaranteed Loan
Availability Period ("
Final Advance
"), the amount to be paid to the
Borrower in the amount equal to (Z) as the product of the calculation pursuant
to the following formula:
Z
= X – (Y * 0.25) where:
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X = Base Equity Commitment actually
contributed as of the Final Advance by the Borrower (other than any contribution
made in the form of a Base Equity Letter of Credit, but including, without
duplication, the proceeds of any draw of a Base Equity Letter of Credit, any
contribution made in respect of a Dishonored Base Equity Letter of Credit Amount
and any cash contributed as equity by the Sponsor or Holdco and deposited in the
Construction Account to replace the undrawn portion of any Base Equity Letter of
Credit)
Y = Eligible Project Costs actually
incurred as of the Final Advance, less the aggregate amount of proceeds
deposited, as of the date of the Final Advance and to the extent such amount is
an Eligible Project Cost, into each Reserve Account, where such proceeds are
from (i) any Cash Grant, (ii) equity contributions by the Sponsor or Holdco that
is not otherwise included in the calculation of (x), (iii) the undrawn amount of
any Reserve Letter of Credit standing to the credit of the Debt Service Reserve
Account and (iv) any draws of any Reserve Letter of Credit (and for the
avoidance of doubt, excluding any amount paid into any such Reserve Account that
is (a) the proceeds of any Advance or (b) any transfer into the Debt Service
Reserve Account or Long-Term Wellfield Drilling Reserve Account from the Project
Revenue Account)
provided
,
however
, that an Advance may be
requested pursuant to
Section 2.3.1(b)(vi)(B)
only if the amount equal to
(Z) is a positive number;
(vii) the
"Prepayment Election" (as defined in the FFB Promissory Note) for the
Advance;
(viii) that
(A) the representations and warranties of the Borrower contained in the Loan
Documents to which the Borrower is a party are true, correct and complete on and
as of the Requested Advance Date, (B) no Event of Default or Potential Default
has occurred and is continuing, and (C) such other matters as are required to be
certified by the Borrower pursuant to
Section 4.2
; and
(ix)
such other information as may be required in the form of Advance Notice.
(c) Each
Advance Notice shall include as attachments thereto, and the Borrower shall
deliver the same to the Loan Servicer:
(i)
a draft of the FFB Advance Request with respect to the requested Advance,
together with any information necessary for FFB and DOE to process such request;
and
(ii)
all other certificates and documentation required in respect of such
Advance under the DOE Credit Facility Documents and the related Loan
Documents.
5
2.4
Mechanics
for Funding Advances
.
2.4.1.
DOE Guaranteed Loan Funding
. The following provisions shall apply to each
Advance.
(a)
Satisfaction
of Conditions Precedent
.
(i)
Promptly after receipt of an Advance Notice, the Loan Servicer shall review such
Advance Notice and the attachments thereto to determine whether all certificates
and documentation required under
Section 2.3
have been delivered to it.
At such time as the Loan Servicer has determined that it has received all such
required certificates and documentation, it shall promptly so notify DOE and the
Borrower.
(ii)
No less than six Business Days prior to the Requested Advance Date, the
Borrower shall deliver to the Loan Servicer (with copies to DOE and FFB) a
completed FFB Advance Request with respect to the requested Advance, including
all wire transfer information for the designated payees of the proceeds of such
Advance, together with any other information required on such FFB Advance
Request.
(iii) As
soon as the Loan Servicer determines that (A) all applicable conditions
precedent set forth in
Article 4
in respect of the requested Advance have
been satisfied (or waived), and (B) the FFB Advance Request and all other
certificates and documentation required under the DOE Credit Facility Documents
in respect of the requested Advance have been provided and are satisfactory (or
that such requirement has been waived), then DOE shall sign the FFB Advance
Request Approval Notice attached to the FFB Advance Request and forward both to
FFB, with a copy to the Borrower, the Collateral Agent and the Independent
Engineer, it being agreed that if the Loan Servicer makes such determination not
less than six Business Days prior to the Requested Advance Date, then the Loan
Servicer shall use all reasonable efforts to sign and forward such FFB Advance
Request Approval Notice to FFB not less than five Business Days prior to the
Requested Advance Date.
(b)
FFB
Funding of Advances
. For any requested Advance for which a FFB Advance
Request Approval Notice has been issued pursuant to this
Section 2.4.1
and for which no Drawstop Notice has been issued pursuant to
Section
2.4.2
, in accordance with the terms of the FFB Note Purchase Agreement, FFB
has agreed to fund such Advance on the Requested Advance Date in accordance with
the DOE Credit Facility Documents. Such funds shall be disbursed and applied as
specified herein.
2.4.2.
Drawstop Notices
.
(a)
Issuance
. At any time after the issuance of an Advance Notice and prior
to the making of the Advance requested therein, whether or not DOE has issued an
FFB Advance Request Approval Notice, the Loan Servicer may, from time to time,
issue a Drawstop Notice to the Borrower, the other Credit Parties and FFB, if
the Loan Servicer determines that:
(i) the
applicable conditions in
Article 4
with respect to such Advance are not
met or, having been met, are no longer met; or
6
(ii)
the applicable conditions precedent to such Advance contained in the DOE
Credit Facility Documents are not met or, having been met, are no longer
met.
(b)
Consequences
.
If a Drawstop Notice is issued and remains in effect, the requested Advance
shall not be made.
(c)
Costs
.
The Borrower shall pay all costs in respect of any Advance that failed to be
made under this
Section 2.4.2
.
2.4.3.
No Liability
.
Without limiting the generality of
Section 9.6
, no
Credit Party shall have any liability to the Borrower or any Affiliate thereof
or to any other Credit Party solely arising from the issuance of or failure to
issue any FFB Advance Request Approval Notice, Drawstop Notice, or any other
notice contemplated by this
Section 2.4
.
2.5
Payment
of Eligible Project Costs
.
Subject to
Section 2.4.2
, and if the mechanisms for
funding Advances pursuant to
Section 2.4.1
have been satisfied, on the
relevant Requested Advance Date, the amount of the Advance shall be disbursed
subject to the terms of the DOE Credit Facility Documents pursuant to the FFB
Advance Request.
2.6
Advance Requirements under the DOE Credit Facility
Documents
.
Notwithstanding anything to the contrary contained in this
Article 2
, the Borrower also shall comply with all separate disbursement
requirements set forth in the DOE Credit Facility Documents. Unless otherwise
specified in the DOE Credit Facility Documents, all determinations to be made
with respect to any Advance shall be made by the Loan Servicer.
2.7
No Approval of Work
.
The making of any Advance under the Loan Documents shall not be
deemed an approval or acceptance by any Credit Party of any work, labor,
supplies, materials or equipment furnished or supplied with respect to the
Project.
ARTICLE 3
PAYMENTS; PREPAYMENTS
3.1
Place and Manner of Payments
.
3.1.1.
Generally
.
All payments due under the DOE Guaranteed Loans shall be made
by the Borrower pursuant to the terms of the DOE Credit Facility Documents and
as specified herein. The Collateral Agent shall apply each payment received by
it as specified in the Depositary Agreement.
7
3.1.2.
Net of Tax, Etc
.
(a)
Tax
. Any and all payments to any Secured Party or FFB by the Borrower
hereunder or under any other Loan Document shall be made free and clear of, and
without deduction for, any and all taxes, levies, imposts, deductions, charges
or withholdings imposed by any central bank or other Governmental Authority, and
all liabilities with respect thereto, excluding (i) taxes imposed on or measured
by the net income (however denominated) of such Secured Party or FFB, as
applicable, by any jurisdiction or any political subdivision or taxing authority
thereof or therein solely as a result of a present or former connection between
such Secured Party or FFB, as applicable, and such jurisdiction or political
subdivision (other than any connection arising as a result of the transactions
contemplated by the Loan Documents), and (ii) any withholding taxes or other tax
based on gross income imposed by the United States of America that are not
attributable to any Change of Law or the interpretation or administration of any
Governmental Rule by any Governmental Authority (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "
Covered Taxes
"). If the Borrower shall be
required by law to withhold or deduct any Covered Taxes from or in respect of
any sum payable hereunder or under any other Loan Document to any Secured Party
or FFB, (A) the sum payable shall be increased as may be necessary so that after
making all such required deductions (including deductions applicable to
additional sums payable under this
Section 3.1.2
), such Secured Party or
FFB, as applicable, receives an amount equal to the sum it would have received
had no such deductions been made, (B) the Borrower shall make such deductions
and (C) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with all Governmental Rules. If the
Borrower shall make any payment with respect to Covered Taxes under this
clause (a)
to or for the benefit of any Secured Party or FFB and if such
Secured Party or FFB, as applicable, shall claim any credit or deduction for
such Covered Taxes against any other taxes payable by such Secured Party or FFB
then such Secured Party or FFB, as applicable, shall pay to the Borrower an
amount equal to the amount such Secured Party or FFB determines in its sole
discretion is the amount by which such other taxes are actually reduced;
provided
that the aggregate amount payable by such Secured Party or FFB
pursuant to this sentence shall not exceed the aggregate amount previously paid
by the Borrower with respect to such Covered Taxes.
(b)
Indemnity
.
The Borrower shall indemnify each Secured Party and FFB for the full amount of
Covered Taxes (including any Covered Taxes imposed by any jurisdiction on
amounts payable under this
Section 3.1.2)
paid by such Secured Party or
FFB, as applicable, whether or not such Covered Taxes were correctly or legally
asserted. Each Secured Party and FFB shall give notice to the Borrower of the
assertion of any claim against such Secured Party or FFB, as applicable,
relating to such Secured Party's or FFB's Covered Taxes as promptly as is
practicable after being notified of such assertion;
provided
that any
failure to notify the Borrower promptly of such assertion shall not relieve the
Borrower of its obligation under this
Section 3.1.2
, except, with respect
to any such notice given by a Secured Party or FFB, as applicable, more than
ninety days after such Secured Party or FFB has notice or knowledge of such
claim to the extent that the Borrower is actually prejudiced by such failure.
Payments by the Borrower pursuant to this indemnification shall be made within
ten days after the date such Secured Party or FFB, as applicable, makes written
demand therefor (which may be submitted through the Loan Servicer), which demand
shall be accompanied by a certificate describing in reasonable detail the basis
thereof. Each Secured Party and FFB agrees to repay to the Borrower any refund (including that portion of any interest that was
included as part of such refund with respect to Covered Taxes paid by the
Borrower pursuant to this
clause (b)
for the period following such
Borrower payment) received by such Secured Party or FFB, as applicable, for
Covered Taxes that were paid by the Borrower pursuant to this
clause (b)
,
and to provide reasonable assistance to the Borrower (and at the expense of the
Borrower) to contest any such Covered Taxes that such Secured Party or FFB or
the Borrower reasonably believes not to have been properly assessed.
8
(c)
Notice
.
Within ten days after the date of any payment of Covered Taxes by the Borrower,
the Borrower shall furnish to the Loan Servicer and each affected Secured Party
and FFB the original or a certified copy of a receipt evidencing such payment,
or if the relevant tax authority has not provided the Borrower with such a
receipt, shall furnish such other evidence of such payment as may be available
to the Borrower (in which case the Borrower shall promptly request a receipt
from the relevant tax authority, and so furnish the original or a certified copy
thereof promptly on receipt thereof). The Borrower shall compensate each Secured
Party and FFB for all reasonable losses and expenses sustained by such Secured
Party or FFB, as applicable, as a result of any failure by the Borrower to so
furnish such copy of such receipt.
(d)
Survival of Obligations
. The obligations of the Borrower under this
Section 3.1.2
shall survive the termination of this Loan Guarantee
Agreement and Security Discharge Date.
(e)
Documentation
.
Any foreign Secured Party, or successor to FFB under the DOE Credit Facility
Documents following an FFB Loan Transfer, that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to the Borrower, at the time or times prescribed by applicable law
or reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any
Secured Party or successor to FFB, if requested by the Borrower, shall deliver
such other documentation prescribed by applicable law or reasonably requested by
the Borrower as will enable the Borrower to determine whether or not such
Secured Party or successor to FFB is subject to backup withholding or
information reporting requirements. Each such Secured Party or successor to FFB
shall promptly (i) notify the Borrower of any change in circumstances that would
modify or render invalid any such claimed exemption or reduction and (ii) take
such steps as shall not be disadvantageous to it, in the sole judgment of such
Secured Party or successor to FFB, as the case may be, and as may be reasonably
necessary (including the re-designation of its lending office) to avoid any
requirement of applicable laws of any such jurisdiction that the Borrower make
any deduction or withholding for taxes from amounts payable to such Secured
Party or successor to FFB, as the case may be.
3.2
Interest Provisions Relating to All Advances
.
3.2.1.
Interest Account and Interest Computations
.
In accordance with Section 609.10(e)(1) of the Applicable Loan
Guarantee Requirements, interest shall accrue on the unpaid principal amount of
each Advance from the date such Advance is disbursed or deemed disbursed pursuant to the DOE
Credit Facility Documents, to the date such Advance is paid in full, at a rate
per annum relating thereto as specified in the DOE Credit Facility Documents.
The Borrower hereby authorizes the Loan Servicer to record in an account or
accounts maintained by the Loan Servicer on its books (A) the interest rates
applicable to all Advances, (B) the interest periods for each Advance
outstanding, (C) the date and amount of each principal and interest payment on
the DOE Guaranteed Loans outstanding, and (D) such other information as the Loan
Servicer may determine is necessary for the computation of interest payable by
the Borrower hereunder. The Borrower agrees that all computations of interest by
the Loan Servicer pursuant to this
Section 3.2.1
shall, absent manifest
error, constitute prima facie evidence of the amount thereof, and shall be
conclusive absent manifest error. All computations of interest shall be made as
set forth in the relevant DOE Credit Facility Documents.
9
3.2.2.
Interest Payment Dates
.
Subject to the other terms of the DOE Credit Facility
Documents, the Borrower shall pay interest on the Guaranteed Loan pursuant to
the terms of the FFB Note. In accordance with the FFB Note, interest shall
accrue and be added to the unpaid principal balance of each Advance commencing
on the Initial Advance Date, until the Interest Capitalization End Date. From
and after the Interest Capitalization End Date, interest shall accrue on the
unpaid principal balance of each Advance and be payable in cash commencing on
each Semi-Annual Payment Date. Notwithstanding any other provision of this
Section 3.2.2
, interest shall be payable in cash on prepayment (to the
extent thereof), and at maturity (whether by acceleration or otherwise).
3.3
FFB Loan Transfer
.
Upon any FFB Loan Transfer or receipt of notice of FFB's
intention to make any FFB Loan Transfer in accordance with the FFB Note Purchase
Agreement, the Borrower and the Credit Parties shall cooperate with the
transferee of the DOE Guaranteed Loan to amend this Loan Guarantee Agreement and
any other Loan Documents to incorporate terms and conditions reasonably
satisfactory to such transferee with respect to:
(a) any
Change of Law that makes it unlawful or impossible for any lender to make, hold
or maintain any DOE Guaranteed Loans;
(b) any
Change of Law that subjects such transferee lender to any tax, duty or other
charge with respect to any DOE Guaranteed Loans; and
(c) such
transferee lender designating an alternative lending office for its DOE
Guaranteed Loan to mitigate costs or to avoid any circumstances that might make
it unlawful or impossible for such transferee lender to maintain a DOE
Guaranteed Loan.
3.4
Prepayments
.
3.4.1.
Terms of all Prepayments
.
(a) With
respect to any prepayment of the Guaranteed Loans, in whole or in part, and
whether such prepayment is voluntary or mandatory, including a prepayment upon
acceleration, the Borrower shall comply with all applicable terms and
provisions of the FFB Note Purchase Agreement.
10
(b) All
prepayments of the DOE Guaranteed Loans shall be applied in accordance with the
DOE Credit Facility Documents.
(c) The
Borrower may not reborrow the principal amount of any DOE Guaranteed Loan that
is prepaid.
3.4.2.
Voluntary Prepayments
.
The Borrower may prepay the principal amount of any Advance in
whole or in part upon no less than five Business Days' prior written notice
submitted by the Borrower to the Credit Parties. Any prepayment in whole or in
part shall be subject to satisfaction of the following conditions:
(a) the
Project Completion Date shall have occurred, except with respect to a voluntary
prepayment made pursuant to
Section 7.10.1(f)(ii)
;
(b)
compliance with any restrictions contained in the DOE Credit Facility Documents,
including (i) with respect to the DOE Guaranteed Loans, any "No-Call Period"
specified in the FFB Note Purchase Agreement, and (ii) satisfaction of any
minimum amount requirement of the DOE Credit Facility Documents; and
(c) payment
of all accrued and unpaid interest on such principal amount, and any other fees
and Periodic Expenses then payable, including any prepayment premiums, or other
amounts as may be required under the Loan Documents.
3.4.3.
Mandatory Prepayments
.
(a) The
Borrower shall be required to make mandatory prepayments of the DOE Guaranteed
Loans upon the occurrence of any of the following and in the amounts set forth
in this
Section 3.4.3
:
(i)
any receipt by the Borrower of (A) any amounts received with respect to a single
termination or repudiation of a Project Document, or a single or related series
of breaches of a Project Document, which are in excess of both (x) one hundred
thousand Dollars ($100,000) and (y) the amounts needed to remedy such
termination, repudiation or breach, as demonstrated by a Project Document
Replacement Plan that has been approved by the Loan Servicer within ten days of
receipt of such amounts (or such longer period determined by the Loan Servicer),
or (B) such amounts received with respect to termination or repudiation of a
Project Document, or a single or related series of breaches of a Project
Document, that are in excess of one hundred thousand Dollars ($100,000) and with
respect to which a Project Document Replacement Plan is not approved by the Loan
Servicer within ten days of receipt of such amounts (or such longer period
determined by the Loan Servicer), as required by Section 14.1.2(b) of the
Depositary Agreement;
11
(ii)
any Cash Grant Prepayment Amount, as required by priorities
first
,
seventh
and
eighth
of the Cash Grant Waterfall provided in Section
12.1.2 of the Depositary Agreement;
(iii) the
receipt by the Borrower of any performance liquidated damages paid under any
Project Document that are either not to be applied or not permitted by the Loan
Servicer to be applied, to repair or improve the performance of the Project
Facility, as required by Section 14.1.2(c) of the Depositary Agreement, unless
such performance liquidated damages are applied to repair or improve the
performance of the Project Facility as permitted in advance in writing by the
Loan Servicer, in consultation with the Independent Engineer;
(iv)
the receipt by the Borrower of Loss Proceeds, to the extent that such Loss
Proceeds are not used to repair or restore the Project Facility as contemplated
pursuant to
Section 6.21
or the Event of Loss giving rise to such Loss
Proceeds resulted in a total loss to the Project Facility;
(v)
the receipt by the Borrower of proceeds of sales of any assets of the Borrower
that are in excess of one hundred thousand Dollars ($100,000) in a single
transaction or a series of related transactions, unless applied or to be applied
to the acquisition of replacement assets, as required by Section 14.1.2(a)(iii)
of the Depositary Agreement;
(vi)
a portion of unused amounts from the Short-Term Wellfield Drilling Reserve
Account, as required by Section 9.1.3 of the Depositary Agreement;
(vii)
any amounts that have remained on deposit in the Equity Distribution Account in
excess of twenty-four months, as required by Section 15.1.2(c) of the Depositary
Agreement; and
(viii) any
proceeds of a Cash Grant that have remained on deposit in the Cash Grant
Proceeds Account in excess of twenty-four months, as required by Section
12.1.2(h) of the Depositary Agreement.
(b) Any
mandatory prepayments of the DOE Guaranteed Loans shall be made on the Payment
Date immediately following the occurrence of any mandatory prepayment event
specified above (or at such earlier or later date required by the Depositary
Agreement or the Loan Servicer) in accordance with the DOE Credit Facility
Documents, shall be applied, and shall be subject to the terms and conditions,
as set forth in the DOE Credit Facility Documents.
3.5
Payment
of DOE Credit Facility Fees
.
(a) The
Borrower shall pay to DOE, on the Financial Closing Date, the balance of the DOE
Loan Facility Fee.
(b) The
Borrower shall pay to FFB the fees payable to FFB from time to time in
accordance with the requirements of the DOE Credit Facility Documents.
12
(c) The
Borrower shall pay to DOE, for its own account, the DOE Maintenance Fee each
year in advance over the term of the DOE Guaranteed Loans, commencing on the
Financial Closing Date and on January 1 of each calendar year thereafter.
(d) The
Borrower shall pay to DOE the DOE Modification Payment, if any, in the amount(s)
and at the time(s) reasonably determined by DOE.
(e) All
DOE Credit Facility Fees shall be paid on the dates due, in immediately
available funds in Dollars, to DOE or FFB, as applicable. Once paid, the DOE
Credit Facility Fees shall not be refundable under any circumstances.
3.6
Evidence
of Debt
.
(a) The
Loan Servicer shall maintain, in accordance with its usual practice, internal
records evidencing the amounts from time to time (i) advanced by FFB under the
FFB Note Purchase Agreement, including Interest During Construction and any
other capitalized interest, and (ii) paid by DOE with respect to the DOE
Guarantee and, in each case, each of the payments made from time to time in
respect thereof.
(b)
Except as otherwise provided in any Loan Document, the entries made in the
internal records maintained by the Loan Servicer, pursuant to
clause (a)
above shall, absent manifest error, constitute prima facie evidence of the
existence and amount of Secured Obligations of the Borrower as therein recorded,
and shall be conclusive absent manifest error.
ARTICLE 4
CONDITIOS PRECEDENT
4.1
Conditions Precedent to Financial Closing Date
.
The Financial Closing Date is subject to the prior satisfaction
(or waiver in writing), as determined in all cases by the Loan Servicer in its
sole discretion, of each of the following conditions precedent (and of any
deliverable, as to its form and substance) as of the Financial Closing Date.
4.1.1.
Loan Documents
.
The Loan Servicer shall have received fully executed originals,
in sufficient counterparts for each Credit Party that is a party thereto, of
each of the following documents:
(a)
Loan
Guarantee Agreement
. This Loan Guarantee Agreement.
(b)
DOE
Credit Facility Documents
. Each of the following "DOE Credit Facility
Documents":
(i)
the FFB Program Financing Agreement;
(ii)
the FFB Note Purchase Agreement;
13
(iii) the
FFB Promissory Note;
(iv)
the DOE Guarantee; and
(v)
all other documents, certificates and instruments required to be delivered on or
before the Financial Closing Date in connection with the foregoing.
(c)
Security
Documents
. The Loan Servicer shall have received a fully executed original,
in sufficient counterparts for each Credit Party that is a party thereto, of
each the following Security Documents:
(i)
the Mortgage;
(ii)
the Security Agreement;
(iii) the
Depositary Agreement;
(iv) the
Depositary Accounts Control Agreement;
(v) the Equity Pledge Agreement; and
(vi) all
other documents, certificates and instruments required to be delivered on or
before the Financial Closing Date in connection with the foregoing.
(d)
Equity Funding and Recapture Obligation Agreement
. The Equity Funding and
Recapture Obligation Agreement and all other documents, certificates and
instruments required to be delivered on or before the Financial Closing Date in
connection with the Equity Funding and Recapture Obligation Agreement.
4.1.2.
Project Documents
.
The Loan Servicer shall have received fully executed copies of
each of the following documents, certified by the Borrower that (x) such copy is
a true, correct and complete copy of such document (including all schedules,
exhibits, attachments, supplements and amendments thereto and any related
protocols or side letters), (y) such document has been duly executed and
delivered by the parties thereto and is in full force and effect, and (z) to the
Borrower's Knowledge, no party to such document is, or but for the passage of
time or giving of notice or both will be, in breach of any obligation
thereunder:
(a)
Real Property Rights
. Each of the following "
Real Property
Rights
":
(i)
The Bureau of Land Management Right-of -Way Serial Number OR-66140, effective
January 19, 2010;
(ii)
Hot Springs Ranch Geothermal Lease and Agreement, dated as of January 24,
2007, by and between Cyprus Gold Exploration Corporation and the Sponsor, as
assigned to the Borrower pursuant to the Assignment, Assumption and Indemnity
Agreement, dated February 16, 2010, by and between the Borrower and the Sponsor,
as evidenced by that certain Memorandum of Geothermal Lease Assignment, dated
February 17, 2010;
14
(A) Consent
to Assignment, dated January 29, 2010, by Cyprus Gold Exploration
Corporation;
(B)
Assignment, Assumption and Indemnity Agreement, dated February 16, 2010, by and
between the Borrower and the Sponsor; and
(C) Memorandum
of Geothermal Lease Assignment, dated February 17, 2010, by and between the
Borrower and the Sponsor;
(iii) Quitclaim
Deed, dated July 13, 2010, by and among International Paper Company, Sustainable
Forests L.L.C., International Paper Realty Corporation, Blue Sky Timber
Properties LLC, SP Forests L.L.C., IP Petroleum Company, Inc., GCO Minerals LLC,
IP Pacific Timberlands, Inc., IP Timberlands Operating Company, Ltd., IP Farms,
Inc., Champion Realty Corporation, Transtates Properties Incorporated, and The
Long-Bell Petroleum Company, Inc.;
(iv)
Option Agreement, dated May 24, 2010, by and between the Borrower and GCO
Minerals Company;
(v)
Geothermal Lease and Agreement, dated as of November 1, 2009, by and among
John and Kathy Jordan and the Sponsor, as assigned to the Borrower pursuant to
Assignment, Assumption and Indemnity Agreement, dated February 16, 2010, by and
between the Borrower and the Sponsor, as evidenced by that certain Memorandum of
Geothermal Lease Assignment, dated February 17, 2010;
(A) Assignment,
Assumption and Indemnity Agreement, dated February 16, 2010, by and between the
Borrower and the Sponsor;
(B) Memorandum
of Geothermal Lease Assignment, dated February 17, 2010, by and between the
Borrower and the Sponsor; and
(C) Acknowledgment
of Lease Assignment/Waiver of Notice, dated August 31, 2010, by and among John
and Kathy Jordan and the Sponsor;
(vi)
Hot Spring Ranch Geothermal Lease and Agreement, dated as of May 24, 2006,
by and between JR Land and Livestock Inc. and the Sponsor, as assigned to the
Borrower pursuant to the Assignment, Assumption and Indemnity Agreement, dated
February 16, 2010, by and between the Borrower and the Sponsor, as evidenced by
that certain Memorandum of Geothermal Lease Assignment, dated February 17,
2010;
(A) Assignment,
Assumption and Indemnity Agreement, dated February 16, 2010, by and between the
Borrower and the Sponsor;
(B) Memorandum
of Geothermal Lease Assignment, dated February 17, 2010, by and between the
Borrower and the Sponsor; and
15
(C) Acknowledgment
of Lease Assignment/Waiver of Notice, dated September 1, 2010, by and between JR
Land and Livestock Inc. and the Sponsor;
(vii) Bargain
and Sale Deed, dated May 20, 2010, by James Rex Marquis, Personal Representative
of the Robert Charles Marquis Estate, conveying mineral interest located in
Malheur County, Oregon to the Sponsor; and
(viii) Bargain
and Sale Deed, dated August 26, 2010, by the Sponsor conveying mineral interest
located in Malheur County, Oregon to the Borrower;
(b)
Construction
Contracts
. Each of the following Construction Contracts:
(i) the Equipment
Contract;
(ii) the EPC Contract; and
(iii) each
Well Drilling Contract that has been executed by the parties thereto prior to or
on the Financial Closing Date.
(c)
Operating
Documents
. Each of the following Operating Documents:
(i) the Power Purchase
Agreement;
(ii) the LGIA; and
(iii) the Management Services Agreement.
4.1.3.
Assignment of LGIA
. The Loan Servicer shall have received evidence that
the LGIA has been assigned to the Borrower.
4.1.4.
Base Case Projections; Construction Budget
.
The Loan Servicer shall have received, at least thirty days
prior to the Financial Closing Date (or such shorter period as may be
satisfactory to the Loan Servicer), the following items, certified by the
Borrower, which shall be the Borrower's reasonable estimate of the information
contained therein:
(i)
the Base Case Projections, including a computer file containing the Base Case
Projections and the underlying models and assumptions and explanations thereto,
which Base Case Projections shall provide for a minimum annual Debt Service
Coverage Ratio of at least 1.15 to 1 for the period after the Project Completion
Date is expected to be achieved until repayment in full of the DOE Guaranteed
Loans; and
(ii)
the Construction Budget.
16
4.1.5.
Financial Statements
.
The Loan Servicer shall have received the most recent audited
(in the case of the Sponsor only) and unaudited Financial Statements, together
with a certificate issued by a Financial Officer of each of the Borrower, Holdco
and the Sponsor as set forth in
Section 6.1(d)
.
4.1.6.
Update of Conditional Commitment
.
Either (i) the Loan Servicer shall have determined that there
are not any material changes to the terms and conditions of the Conditional
Commitment or (ii) at least thirty days prior to the Financial Closing Date (or
such shorter period as may be satisfactory to the Loan Servicer), the Loan
Servicer shall have received a written summary of such changes.
4.1.7.
No Material Adverse Effect
.
No event shall have occurred since the date of the Conditional
Commitment or could reasonably be expected to occur with respect to the Project
or any Major Project Participant that has had or could reasonably be expected to
have a Material Adverse Effect on the Project.
4.1.8.
Credit Rating
.
The Loan Servicer shall have received a credit rating of the
Borrower from a Rating Agency dated no more than thirty days prior to the
Financial Closing Date, based on the updated commitment of DOE reflected in the
DOE Credit Facility Documents and assuming that the DOE Credit Facility
Commitment does not benefit from the DOE Guarantee.
4.1.9.
No Unapproved Changes for Budgeted Overrun Contingencies
. The Loan
Servicer shall have received certification from the Borrower and the Independent
Engineer that no changes have been made to the line item for Overrun
Contingencies, except for Approved Construction Changes.
4.1.10.
Consents and Approvals
.
The Loan Servicer shall have received (i) certification from
the Borrower, together with such other evidence as the Loan Servicer may
request, that all Governmental Approvals and other Required Consents, including
(a) consents and approvals from FERC with respect to approval of the Power
Purchase Agreement and of market based rate approval, and (b) consent and
approval of the Idaho Public Utilities Commission with respect to the Power
Purchase Agreement listed on
Schedule 5.10
to the Disclosure Letter
(except those identified on such
Schedule 5.10
as to be obtained at a
later stage in the development of the Project) have been duly obtained and are
not subject to any waiting period or appeal, and shall not contain any
conditions that are not capable of being satisfied without materially adversely
affecting the Project, and (ii) a copy of each such Governmental Approval or
other Required Consent, certified by the Borrower as being true, correct and
complete.
17
4.1.11.
Project Plans
.
The Loan Servicer shall have received updated Project Plans,
certified by the Independent Engineer as being satisfactory, other than those
Project Plans set forth in
Schedule 4.1.11
that are immaterial or are not
required as of the Financial Closing Date and can be obtained when needed in the
ordinary course of business.
4.1.12.
Debt Repayment
.
The Loan Servicer shall have received satisfactory evidence of
repayment of any Indebtedness and other obligations of the Borrower and release
of associated Liens encumbering any Collateral, other than Indebtedness
permitted under
Section 7.1
.
4.1.13.
Market Advisor Report
.
The Loan Servicer shall have received the Market Advisor's
Report addressing such matters as the Loan Servicer may reasonably request.
4.1.14.
Authority and Incumbency of Major Project Participants
. The Loan Servicer
shall have received certified copies of (i) each of the Borrower's, Holdco's,
the Sponsor's, the Operator's, each other Sponsor Affiliate's that is a Major
Project Participant and (ii) (except with respect to
clause (A)
,
Investor's: (A) Organizational Documents, (B) good standing certificates, (C)
incumbency certificates, (D) resolutions, and (E) any other such documents as
the Loan Servicer may reasonably request, with respect to approval of (1) each
such Major Project Participant's participation in the Project, (2) in the case
of the Borrower, Holdco and the Sponsor, the financing therefor and the granting
of Liens, and (3) the execution, delivery and performance by each such Major
Project Participant of the Transaction Documents (including any Direct
Agreement) to which it is party.
4.1.15.
Independent Engineer's Certificate and Report
. The Loan Servicer shall
have received in form and substance satisfactory to the Loan Servicer, (i) a
certificate of the Independent Engineer, dated as of the Financial Closing Date,
regarding the matters to be certified as set forth in this
Section 4.1
,
including certification as to the reasonableness and appropriateness of (A) the
Financial Plan, (B) the Construction Budget and (C) the Base Case Projections,
and (ii) an Independent Engineer's Report addressing such matters as the Loan
Servicer may reasonably request.
4.1.16.
Legal Opinions
.
The Loan Servicer shall have received legal opinions, dated the
Financial Closing Date and from legal counsel satisfactory to the Loan Servicer,
with respect to the laws of the jurisdictions governing the Transaction
Documents to be executed on or before the Financial Closing Date (other than
with respect to the Real Property Rights listed in Sections 4.1.2(a)(i),
4.1.2(a)(iii), 4.1.2(a)(vii) and 4.1.2(a)(viii)) to which each of the Borrower,
Holdco, the Sponsor and each other Major Project Participant is a party and the
laws of the jurisdictions of organization of each such Major Project Participant
(other than with respect to Turbine Air Systems, Industrial Builders, Inc. and
Idaho Power), including the laws of the State of New York, the State of Oregon,
the State of Idaho and the State of Delaware.
18
Such legal opinions shall include the following: (i) due
authorization, execution, delivery and enforceability of the Transaction
Documents to be executed on or before the Financial Closing Date (other than
with respect to the Real Property Rights listed in Sections 4.1.2(a)(i),
4.1.2(a)(iii), 4.1.2(a)(vii) and 4.1.2(a)(viii)) to which such Major Project
Participant is a party (other than with respect to Turbine Air Systems,
Industrial Builders, Inc. and Idaho Power), (ii) creation and perfection of
security interests created by all Security Documents entered into as of the
Financial Closing Date, (iii) DOE will not be regulated as an electric
corporation or public utility under the federal law of United States of America
or the law of the State of Oregon solely as a result of entering into the
Transaction Documents and (iv) absence of conflicts with law, agreements or
Organizational Documents.
4.1.17.
Accounting Systems
.
The Loan Servicer shall have received a certification by a
Financial Officer of the Borrower, in form and substance satisfactory to the
Loan Servicer, that Borrower's accounting systems, controls, and management
information systems provide information necessary for financial reporting in
accordance with GAAP.
4.1.18.
Lobbying Certification
.
The Loan Servicer shall have received evidence that the
Borrower has provided a Standard Form-LLL "Disclosure Form to Report Lobbying"
as required.
4.1.19.
Rights to Project Site; Title Insurance
. The Loan Servicer shall have
received (i) evidence of the Borrower's acquisition of unencumbered real
property rights (subject only to Permitted Liens), including the Real Property
Rights and any other easements under the relevant laws of the State of Oregon,
to the Project Site as is necessary for the development of the Project, (ii) the
ALTA Survey with respect to the Project Site, and (iii) an ALTA Form 2006
Mortgagee Policy of Title Insurance (or similar policy form) issued by the Title
Company, with such coinsurers or reinsurers as may be reasonably acceptable to
the Loan Servicer, in the aggregate amount of not less than ninety six million,
eight hundred and twenty three thousand, three hundred and forty one Dollars and
fifty five cents ($96,823,341.55) insuring as of the Financial Closing Date that
the Mortgage creates a first and prior Lien and security title on Borrower's
leasehold interests in and to the Project Site subject only to Permitted Liens
and containing all endorsements requested by the Loan Servicer and available in
the State of Oregon
4.1.20.
Intellectual Property
.
The Loan Servicer shall have received evidence that the
Borrower and the Operator have available, directly or indirectly, all
intellectual property rights necessary to complete and operate the Project
throughout the term of the Guaranteed Loan.
4.1.21.
Description of Assets
.
The Loan Servicer shall have received a listing and description
of all assets pledged in respect of the Secured Obligations, dated no later than
thirty days (or such shorter period reasonably acceptable to the Loan Servicer)
prior to the Financial Closing Date, including appropriate data as to the value
of the assets and the useful life of any physical assets.
19
4.1.22.
No Judgments; No Liens
.
The Loan Servicer shall have received search results and
confirmation that (i) neither the Borrower nor Holdco has any Governmental
Judgments or Liens against any of its property for a debt owed to the U.S. or
any other creditor, and (ii) neither the Sponsor nor Investor has any (A)
Governmental Judgments or Liens against any of its property for a debt owed to
the U.S., or (B) Liens against any of its property for a debt owed to any
creditor other than the U.S. that would reasonably be expected to have a
Material Adverse Effect.
4.1.23.
Davis-Bacon Compliance
.
The Loan Servicer shall have received a certificate of an
Authorized Official of the Borrower, in form and substance satisfactory to the
Loan Servicer, as of the Financial Closing Date, stating that the Borrower has
taken all steps necessary to comply with, and in all material respects is in
compliance with the Davis-Bacon Requirements.
4.1.24.
Availability of Funds
.
The Loan Servicer shall have received satisfactory evidence
that the Total Funding Available is sufficient to pay all remaining Total
Project Costs (including Interest During Construction, DOE Credit Facility Fees,
Agents' Fees, Periodic Expenses, and identified Cost Overruns).
4.1.25.
Due Diligence Review
.
The Loan Servicer shall have received from DOE confirmation
that it has completed its due diligence review of the Project, each Major
Project Participant and Investor, and all other matters related thereto and that
the results thereof are satisfactory to DOE, including that no material issues
exist with respect to the Project under the laws of Oregon and Idaho.
4.1.26.
Review and Payment of Credit Subsidy
.
The Loan Servicer shall have received confirmation that (i) OMB
has reviewed and approved DOE's calculation of the Credit Subsidy Cost for the
DOE Guarantee as of the Financial Closing Date, and (ii) DOE has received an
appropriation in full of the Credit Subsidy Cost in accordance with the Program
Requirements.
4.1.27.
Project Financing Information
.
The Loan Servicer shall have received satisfactory updated
project financing information, if required, to comply with the provisions of
Section 609.9(e) of 10 C.F.R Part 609.
4.1.28.
Conditions Precedent in Transaction Documents
.
The Loan Servicer shall have received certification of an
Authorized Official of the Borrower, together with such other evidence as the
Loan Servicer may request, that the Borrower has determined that all conditions
precedent to the obligations of any party under any Transaction Document to be
performed as of the Financial Closing Date have been satisfied.
20
4.1.29.
Program Requirements
.
The Loan Servicer shall have determined that all Program
Requirements required to have been satisfied as of the Financial Closing Date
shall have been satisfied.
4.1.30.
Patriot Act
.
Each of the Borrower, the Sponsor and the Sponsor Affiliates
has established an anti-money laundering compliance program if and as required
by the Patriot Act.
4.1.31.
Disclosure Letter
.
The Loan Servicer shall have received the Disclosure Letter,
together with all schedules required to be attached thereto pursuant to this
Loan Guarantee Agreement.
4.1.32.
Insurance
.
The Loan Servicer shall have received certification of an
Authorized Official of the Insurance Advisor that the Required Insurance is
consistent with industry standards.
4.1.33.
Payment of Fees
.
The Loan Servicer shall have received evidence that (i) each of
the DOE Loan Facility Fee and the DOE Maintenance Fee and (ii) all Agents' Fees
payable as of the Financial Closing Date have been paid in full.
4.1.34.
Commencement of Construction
. The Loan Servicer shall have received
evidence that the Commencement of Construction has occurred.
4.1.35.
Sponsor and Investor Support Letters
. The Loan Servicer shall have
received each of the following:
(i)
the Sponsor Support Letter; and
(ii)
the Investor Support Letter.
4.1.36.
Tax Certification
. Sponsor and/or Borrower, as applicable, shall have
delivered to DOE a certificate, in form and substance satisfactory to DOE,
representing and warranting to DOE as follows: (i) Borrower intends to treat the
Guaranteed Loan as debt for federal income tax purposes and (ii) Sponsor has
received an opinion, addressed to the Sponsor and dated as of the Financial
Closing Date, from a nationally-recognized law firm, that, subject to customary
qualifications and assumptions, the allocation of partnership items by Holdco
should be respected for federal income tax purposes.
4.1.37.
Environmental Requirements
. The Loan Servicer shall have received
evidence of satisfaction of environmental requirements (including required
mitigations) in accordance with Environmental Laws, including all required
National Environmental Policy Act documentation with respect to the Project Site and publication
of a record of decision by the applicable Governmental Authority.
21
4.1.38.
Security Interests
. The Loan Servicer shall have received evidence that
all security interests in the Collateral intended to be created by the Security
Documents have been created and, where appropriate, have been (or, subject to
arrangements satisfactory to the Loan Servicer, will be) registered or otherwise
perfected to create a first priority perfected security title, security interest
and Lien, subject only to Permitted Liens, over the Collateral in favor of the
Collateral Agent, except with respect to any Unrestricted Local Account. Each
such Lien (i) to the extent it arises or attaches under the Uniform Commercial
Code, shall be valid and enforceable and shall constitute a first priority
perfected security interest, and (ii) in all other cases, shall be enforceable
against the Borrower or Holdco, as applicable, any subsequent lienor (including
a judgment lienor), any junior lienor, or any transferee for or not for value,
in bulk, by operation of law, for the benefit of creditors, or otherwise.
4.1.39.
Filings
. The Loan Servicer shall have received evidence that (i) each of
the Security Documents required to be executed on or before the Financial
Closing Date has been (or arrangements satisfactory to the Loan Servicer have
been made so that it will be) duly filed and registered or recorded in every
jurisdiction in which such filing and registration or recording is necessary or
advisable to make valid and effective the Liens intended to be created thereby
and the rights of the Secured Parties thereunder, (ii) all fees and duties in
connection with such filing, registration or recording (x) have been paid in
full, (y) are to be paid with the proceeds of the requested Advance, or (z) are
to be paid by other arrangements satisfactory to the Loan Servicer.
4.1.40.
Project Accounts
. The Loan Servicer shall have received evidence that
each of the Project Accounts has been established in accordance with the
Depositary Agreement.
4.2
Conditions Precedent to the Initial Advance
.
The obligation of DOE to approve the Initial Advance, is
subject to the prior satisfaction (or waiver in writing), as determined in all
cases by the Loan Servicer in its sole discretion, of each of the following
conditions precedent (and of any deliverable, as to its form and substance) (the
"
Initial Advance Conditions Precedent
") as of the Initial Advance Notice
Date and to their continued satisfaction on the Advance Date for such Initial
Advance:
4.2.1.
Financial Closing Date; Advance Conditions Precedent
. The Financial
Closing Date shall have occurred and the Advance Conditions Precedent shall have
been satisfied or waived in writing by the Loan Servicer in its sole
discretion.
4.2.2.
Approved Reservoir Engineer's Report
.
The Loan Servicer shall have received (i) the Approved
Reservoir Engineer's Report demonstrating that the geothermal resource to be
used by the Project is proven and the Project is viable, based on a thirty day
(or such shorter period that is approved by the Loan Servicer in consultation
with the Approved Reservoir Engineer) resource test, and (ii) a certificate of
the Approved Reservoir Engineer confirming that, (A) based on the drilling of
additional wells after the date of the Approved Reservoir Engineer's Report, no
further long term resource studies or tests are recommended by the Approved Reservoir Engineer (or if
any additional tests or studies are recommended, they have been completed to the
satisfaction of the Approved Resource Engineer and an updated Approved Reservoir
Engineer's Report, reasonably satisfactory to the Loan Servicer, has been
issued), and (B) all geothermal resource required for production of energy by
the Project in a manner consistent with the Base Case Projections is under well
head.
22
4.2.3.
Development Costs Statement; Base Equity; Available Equity
.
(a)
Development
Costs Statement
. The Loan Servicer shall have received a detailed
description, with supporting documents as reasonably requested, of Development
Costs incurred and paid prior to the Initial Advance Date, and a Development
Costs Statement (certified as satisfactory in an audit by the Independent
Engineer) summarizing those costs that the Borrower seeks credit to be applied
toward Base Equity and certifying that such amounts have been applied toward
Project Costs in accordance with the Construction Budget; and
(b)
Base
Equity; Available Equity
. The Loan Servicer shall have received evidence
that the Base Equity Commitment (including the amounts set forth in the
Development Costs Statement and certified by the Independent Engineer's audit)
has been contributed in cash by Holdco or the Sponsor to the Borrower or, at the
Sponsor's option, by a combination of cash contributed to the Borrower and the
delivery of one or more Base Equity Letters of Credit to the Collateral Agent
(
provided
that the maximum amount of the Base Equity Commitment that can
be satisfied by delivery of Base Equity Letters of Credit shall not exceed in
the aggregate the Base Equity LC Amount).
4.2.4.
Availability of Funds
.
The Loan Servicer shall have received satisfactory evidence
that the Total Funding Available is sufficient to pay all remaining Total
Project Costs (including Interest During Construction, DOE Credit Facility Fees,
Agents' Fees, Periodic Expenses, and identified Cost Overruns).
4.2.5.
No Judgments; No Liens
. The Loan Servicer shall have received bring-down
search results and confirmation that, since the Financial Closing Date, (i)
neither the Borrower nor Holdco has any Governmental Judgments or Liens against
any of its property for a debt owed to the U.S. or any other creditor, and (ii)
neither the Sponsor nor the Investor has any (A) Governmental Judgments or Liens
against any of its property for a debt owed to the U.S., or (B) Liens against
any of its property for a debt owed to any creditor other than the U.S. that
would reasonably be expected to have a Material Adverse Effect.
4.2.6.
Notice to Proceed; Conditions Precedent to Construction Contracts
.
The Loan Servicer shall have received certification and
evidence from the Borrower that with respect to each of the Equipment Contract,
the EPC Contract, and each Well Drilling Contract that is required to have been
entered into on or before the Initial Advance Date, Borrower either (i) has
issued a Construction Notice to Proceed or (ii) has made arrangements
satisfactory to the Loan Servicer for the issuance of such Construction Notices
to Proceed simultaneously with the Initial Advance Date.
23
4.2.7.
Payment and Performance Bonds
.
(a) The
Loan Servicer shall have received confirmation that the payment and performance
bonds (or letters of credit, escrow accounts or other performance security set
forth in the Construction Contracts) in respect of the Construction Contracts
have been delivered and are in full force and effect and are satisfactory to the
Loan Servicer; and
(b) The
Borrower shall have delivered to the Collateral Agent each such payment and
performance bond (or letter of credit or other performance security) in respect
of the Construction Contracts that is an "instrument" (as defined in the Uniform
Commercial Code), together with any endorsements reasonably requested in
connection therewith.
4.2.8.
Conditions Precedent in DOE Credit Facility Documents
.
Each condition precedent to the Initial Advance under the DOE
Credit Facility Documents shall have been satisfied in the sole determination of
FFB and DOE, as applicable.
4.2.9.
Well Drilling Contracts
.
The Loan Servicer shall have received:
(a)
a fully executed copy of each Well Drilling Contract that has not been
previously delivered by the Borrower, certified by the Borrower that (i) such
copy is a true, correct and complete copy of such Well Drilling Contract
(including all schedules, exhibits, attachments, supplements and amendments
thereto and any related protocols or side letters), (ii) such Well Drilling
Contract has been duly executed and delivered by the parties thereto and is in
full force and effect, and (iii) to the Borrower's Knowledge, no party to such
Well Drilling Contract is, or but for the passage of time or giving of notice or
both will be, in breach of any obligation thereunder;
(b)
a fully executed original, in sufficient counterparts for each Credit Party that
is a party thereto, of each Direct Agreement among each Construction Contractor
that is a party to each such Well Drilling Contract, the Borrower and the
Collateral Agent; and
(c) a
legal opinion or opinions, dated on or about the Initial Advance Notice Date and
from legal counsel(s) satisfactory to the Loan Servicer, with respect to the
laws of the jurisdictions governing each such Well Drilling Contract and the
laws of the jurisdictions of organization of each such Construction Contractor.
Such legal opinion or opinions shall include the following: (i) due
authorization, execution, delivery and enforceability of each such Well Drilling
Contract, (ii) receipt of all Governmental Approvals necessary for well drilling
and related construction, procurement, installation and equipment pursuant to
the terms of such Well Drilling Contract (other than those Governmental
Approvals not required to be obtained as of such date), and (iii) absence of
conflicts with law, agreements or Organizational Documents.
24
4.2.10.
Major Vendor Contracts
. Each contract with a Major Vendor (as defined in
the Equipment Contract) together with evidence reasonably satisfactory to the
Loan Servicer that each such contract is assignable to the Borrower and the
designee of the Loan Servicer.
4.2.11.
Direct Agreements
. The Loan Servicer shall have received a fully executed
original, in sufficient counterparts for each Credit Party that is a party
thereto each of the following Direct Agreements:
(i)
a consent and direct agreement among the Operator, Borrower and the Collateral
Agent;
(ii)
for each Construction Contractor, a consent and direct agreement among such
Construction Contractor, Borrower and the Collateral Agent;
(iii) for
each Lease, a consent and direct agreement among the landlord for such Lease,
the Borrower and the Collateral Agent; and
(iv) a
consent and direct agreement among Idaho Power, the Borrower and the Collateral
Agent.
4.2.12.
Warrant Agreement
. The Loan Servicer shall have received a fully executed
original, in sufficient counterparts for each Credit Party that is a party
thereto, of the Warrant Agreement.
4.2.13.
Environmental Indemnity Agreement
. The Loan Servicer shall have received
a fully executed original, in sufficient counterparts for each Credit Party that
is a party thereto, of the Environmental Indemnity Agreement.
4.2.14.
Local Accounts
.
(i)
The Loan Servicer shall have received evidence that each Unrestricted Local
Account has been closed or converted to a Local Account by execution of a Local
Accounts Control Agreement. Such Local Accounts Control Agreement shall be
sufficient to create a first priority perfected security title, security
interest and Lien, subject only to Permitted Liens, over the Collateral
identified therein in favor of the Collateral Agent. Each such Lien (A) to the
extent it arises or attaches under the Uniform Commercial Code shall be valid
and enforceable and shall constitute a first priority perfected security
interest and (B) in all other cases, shall be enforceable against the Borrower,
any subsequent lienor (including a judgment lienor), any junior lienor, or any
transferee for or not for value, in bulk, by operation of law, for the benefit
of creditors or otherwise.
(ii)
The Loan Servicer shall have received evidence that (A) each Local Accounts
Control Agreement has been duly filed and registered or recorded in every
jurisdiction in which such filing and registration or recording is necessary or
advisable to make valid and effective the Liens intended to be created thereby
and the rights of the Secured Parties thereunder, (B) all fees and duties in
connection with such filing, registration or recording (x) have been paid in
full, (y) are to be paid with the proceeds of the requested Advance, or (z) are
to be paid by other arrangements satisfactory to the Loan Servicer.
25
(iii) Fully-executed
originals of each such Local Accounts Control Agreement shall be delivered in
sufficient counterparts for each Credit Party that is a party thereto.
4.2.15.
Environmental
.
The Loan Servicer shall have received Phase I environmental
site assessments for the Project Site prepared by an environmental consulting
firm reasonably acceptable to the Loan Servicer (which report, with respect to
land where wells, turbines and other physical parts of the Project are located,
will be evaluated under the E1527 standard, and with respect to the other
parcels of land, will be evaluated under the ASTM 2247 standard) and a reliance
letter prepared by such consultant.
4.2.16.
Legal Opinions
. The Loan Servicer shall have received legal opinions,
dated the Initial Advance Date and from legal counsel satisfactory to the Loan
Servicer, with respect to the laws of the jurisdictions governing the
Transaction Documents to which each of the Borrower and each other Major Project
Participant is a party (other than those previously addressed in opinions
delivered pursuant to
Section 4.1.16
, and for the avoidance of doubt,
including an opinion of counsel to Turbine Air Systems, Industrial Builders,
Inc. and counsel to the Borrower with respect to Idaho Power) and the laws of
the jurisdictions of organization of each such Major Project Participant,
including the laws of the State of New York, the State of Oregon, the State of
Idaho and the State of Delaware. Such legal opinions shall include the
following: (i) due authorization, execution, delivery and enforceability of the
Transaction Documents to which such Major Project Participant is a party (other
than those previously addressed in opinions delivered pursuant to
Section
4.1.16
), (ii) creation and perfection of security interests created by the
Local Accounts Control Agreement, (iii) absence of conflicts with law,
agreements or Organizational Documents with respect to such Transaction
Documents to which such Major Project Party is a party (other than those
previously addressed in opinions delivered pursuant to
Section 4.1.16
),
and (iv) receipt of all Governmental Approvals necessary to (A) construct and
operate the Project (other than those Governmental Approvals not required to be
obtained as of such date), and (B) in the case of the Borrower, Holdco and
Sponsor, enter into financing arrangements with respect to the Project.
4.2.17.
BLM Recognition Letter
. If requested by the Loan Servicer, the Loan
Servicer shall have received a letter, executed by the Bureau of Land Management
and addressed to DOE, covering such matters as may be reasonably requested by
the Loan Servicer with respect to Bureau of Land Management Right-of -Way Serial
Number OR-66140, effective January 19, 2010.
4.2.18.
Insurance
. The Loan Servicer shall have received certification of an
Authorized Official of the Borrower that all Required Insurance is in place, in
good standing and in full force and effect without default and all premiums due
thereon (x) have been paid in full, or (y) are to be paid by other arrangements
satisfactory to the Loan Servicer.
4.2.19.
Authority and Incumbency of Idaho Power
. The Loan Servicer shall have
received certified copies of Idaho Power's: (A) good standing certificates, (B)
incumbency certificates, (C) resolutions, and (D) any other such documents as
the Loan Servicer may reasonably request, with respect to approval of (1) Idaho
Power's participation in the Project and
26
(2) the execution, delivery and performance by Idaho Power of
the Transaction Documents (including any Direct Agreement) to which it is
party.
4.3
Conditions Precedent to Each Advance
.
The obligation of DOE to approve each Advance, including the
Initial Advance, is subject to the prior satisfaction (or waiver in writing), as
determined in all cases by the Loan Servicer in its sole discretion, of each of
the following conditions precedent (and of any deliverable, as to its form and
substance) (the "
Advance Conditions Precedent
") as of the Advance Notice
Date and to their continued satisfaction on the Advance Date for such
Advance:
4.3.1.
Application of Advance Proceeds
.
The Loan Servicer shall have received:
(a) except
with respect to the Initial Advance, copies of invoices, certification of an
Authorized Official of the Borrower and a certification of an Authorized
Official of the Independent Engineer (which may be in a separate certificate)
that the proceeds of all Advances made since the Advance Notice Date for the
previous Advance have been applied to Project Costs in accordance with the
applicable Advance Notice or as otherwise approved by the Loan Servicer;
(b)
certification of an Authorized Official of the Borrower that the proceeds of the
requested Advance will be needed for Eligible Project Costs that have been
incurred or will be incurred by the applicable Requested Advance Date, together
with a description in reasonable detail of such Eligible Project Costs; and
(c) to
the extent proceeds of Advances proposed in the requested Advance will be needed
to fund the Initial Cap-Ex Funding Amount, Short-Term Wellfield Funding Amount
or Initial Long-Term Wellfield Drilling Funding Amount, evidence that Base
Equity in an aggregate amount equal to or greater than 25% of the total funds
needed as of such Advance Date to fund the Initial Cap-Ex Funding Amount,
Short-Term Wellfield Funding Amount or Initial Long-Term Wellfield Drilling
Funding Amount shall have been or will be funded into such Reserve Account prior
to, or on such Advance Date.
4.3.2.
Adequate Resources for Overrun Project Costs
. If the Independent Engineer
shall have identified Overrun Project Costs in its certification provided
pursuant to
Section 6.1(a)(i)
, the Loan Servicer shall have received
evidence that the Sponsor has adequate resources available to timely provide to
the Borrower Overrun Equity sufficient to fund such projected Overrun Project
Costs
4.3.3.
Quarterly Reporting Package
. The Loan Servicer shall have received the
most recent Quarterly Reporting Package (if any).
4.3.4.
Construction Budget
.
(a) The
Loan Servicer shall have received certification of an Authorized Official of the
Borrower and certification of an Authorized Official of the Independent Engineer
(which may be in a separate certificate) that (i) except with respect
to the Initial Advance, there have been no changes to the Construction Budget
since the previous Advance Date, except for Approved Construction Changes, and
(ii) the aggregate amounts expended for each type of Project Cost does not
exceed the aggregate amount budgeted for such cost in the Construction Budget,
except for Approved Construction Changes.
27
4.3.5.
Fees and Expenses
.
The Loan Servicer shall have received certification of an
Authorized Official of the Borrower, and such other evidence as the Loan
Servicer may request, that all required taxes, all DOE Credit Facility Fees,
Agents' Fees, all Periodic Expenses, and all recordation and other costs and
fees including those due in connection with the execution, delivery, filing,
registration, or performance of the Transaction Documents, the creation and
perfection of the security interests in the Collateral, or otherwise incurred
and invoiced prior to the relevant date (x) have been paid in full, (y) are to
be paid with the proceeds of any requested Advance (only in the event that such
amounts are Eligible Project Costs), or (z) are to be paid by other arrangements
satisfactory to the Loan Servicer.
4.3.6.
Consents and Approvals
.
The Loan Servicer shall have received (i) certification of an
Authorized Official of the Borrower, together with such other evidence as the
Loan Servicer may reasonably request or as may be required under the Transaction
Documents, that all consents and approvals of third parties as may be required
in connection with the proposed Advances and all Governmental Approvals required
as of the Advance Date have been duly obtained and are in full force and effect
and are not under appeal or subject to other proceedings or unsatisfied
conditions that could reasonably be expected to result in a material
modification or cancellation thereof, and (ii) copies of all such material third
party consents and Governmental Approvals not previously delivered, certified by
the Borrower as being true, correct and complete.
4.3.7.
Insurance
.
The Loan Servicer shall have received (i) certification of an
Authorized Official of the Borrower in the Advance Notice that all Required
Insurance is in place, in good standing and in full force and effect without
default and all premiums due thereon (x) have been paid in full, (y) are to be
paid with the proceeds of the requested Advance, or (z) are to be paid by other
arrangements satisfactory to the Loan Servicer, and (ii) certificates or
policies with respect to any additional renewal or substitute insurance obtained
by the Borrower since the previous Advance Date, designating the Collateral
Agent as loss payee, as appropriate, and the Secured Parties as additional
insured, certified by the Borrower as being true, correct and complete.
4.3.8.
Additional Project Documents
.
The Loan Servicer shall have received with the Advance Notice,
copies certified as true, correct and complete by an Authorized Official of the
Borrower, of all Additional Project Documents entered into since the later of
the Financial Closing Date or the most recent Advance Date and any other
Additional Project Documents that have not previously been delivered to the Loan
Servicer.
28
4.3.9.
Representations and Warranties; No Default
.
The Loan Servicer shall have received certification of an
Authorized Official of the Borrower that, on both the Advance Notice Date and
the Advance Date, the representations and warranties in the Loan Documents
(other than those that speak only as to an earlier date, which shall be true and
correct as of such earlier date) are true and correct in all material respects
(other than those qualified by materiality or Material Adverse Effect, which
shall be true and correct in all respects) and no Event of Default or Potential
Default has occurred and is continuing.
4.3.10.
No Change in Circumstances
.
Since the Financial Closing Date, no event (including any
legal, arbitral or other dispute review proceeding, whether proceeding, pending
or threatened, or any Change of Law) has occurred or could reasonably be
expected to occur, that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3.11.
No Violation of Law
.
The Loan Servicer shall have received certification of an
Authorized Official of the Borrower, together with such other evidence as it may
request, that the Advance will not result in a violation of any law, Transaction
Document, Governmental Approval, or any other agreement or consent to which the
Borrower is a party or any judgment or approval to which it is subject.
4.3.12.
Compliance with Covenants
.
The Loan Servicer shall have received certification of an
Authorized Official of the Borrower, that the Borrower is in compliance with (a)
its obligations under the Loan Documents, including all affirmative covenants
and negative covenants, and has furnished all information requested under the
Loan Documents, and (b) all Program Requirements required to have been satisfied
as of the Requested Advance Date.
4.3.13.
Continuation of Title
.
The Loan Servicer shall have received a date down title
endorsement or title continuation dated no earlier than one Business Day prior
to the Requested Advance Date as evidence of the Borrower's continued ownership
of unencumbered leasehold title (subject only to Permitted Liens), under the
relevant laws of the State of Oregon, of the Project Site as are necessary for
the development of the Project.
4.3.14.
Davis-Bacon Requirements
.
The Loan Servicer shall have received a certificate of an
Authorized Official of the Borrower in form and substance satisfactory to the
Loan Servicer, stating that the Borrower has taken all steps necessary to comply
with, and in all material respects is in compliance with the Davis-Bacon
Requirements.
29
4.3.15.
Recovery Act Requirements.
The Loan Servicer shall have received a certificate of an
Authorized Official of the Borrower, as of a date not earlier than fifteen
Business Days prior to the relevant Advance Date (or such shorter period
acceptable to the Loan Servicer), stating that the Borrower has timely complied
in all material respects with its reporting requirements under
Section
6.24(a)
with respect to the Recovery Act.
4.3.16.
Additional Documents
.
The Loan Servicer shall have received such other documents,
certifications or consents relating to the Project or the matters contemplated
by the Transaction Documents as the Loan Servicer may reasonably request.
4.3.17.
Advance Notice
.
Pursuant to
Article 2
, the Loan Servicer shall have
received an Advance Notice and wire transfer instructions confirming that all
applicable conditions to the requested Advance have been satisfied and together
with all certificates and documentation required under
Section 2.3
and
any additional documents and certificates required by
Section 4.2
or
4.3
.
4.3.18.
Issuance of FFB Advance Request Approval Notice
.
Pursuant to
Article 2
, FFB shall have received, in
accordance with the DOE Credit Facility Documents, the FFB Advance Request
signed by an Authorized Official of the Borrower, together with the FFB Advance
Request Approval Notice signed by DOE.
4.3.19.
Absence of Drawstop Notice
.
Pursuant to
Article 2
, the Loan Servicer shall have not
received a Drawstop Notice with respect to such Advance.
4.3.20.
Eligible Base Project Costs and Certain Construction Costs
.
With respect to the Advance made pursuant to
Section
2.3.1(b)(vi)(B)
only, the Loan Servicer shall have received satisfactory
evidence that (i) the Eligible Base Project Costs equal to the amount of the
requested Advance have been previously incurred and paid for using proceeds of
Equity Contributions and have not previously been reimbursed with proceeds of
any other Advance, and (ii) adequate reserves have been established for, or
sufficient cash is otherwise available to the Borrower to cover, any remaining
Punch List Items and Project Costs to design, develop, construct, and start up
the Project through the Project Completion Date under the Construction Contracts
(as verified by the Independent Engineer).
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
The
Borrower makes all of the following representations and warranties to and in
favor of DOE on (i) the Financial Closing Date, (iii) each Advance Notice Date,
(iv) each Advance Date, and (v) the Project Completion Date, except as such
representations and warranties relate to an earlier date.
30
5.1
Organization
.
The Borrower (a) is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware,
(b) is duly qualified to do business in the State of Oregon and Idaho, and in
each other jurisdiction where the failure to so qualify could reasonably be
expected to have a Material Adverse Effect, and (c) has all requisite limited
liability company power and authority to (i) own or hold under lease and operate
the property it purports to own or hold under lease, (ii) carry on its business
as now being conducted and as now proposed to be conducted in respect of the
Project, (iii) incur Indebtedness and create Liens on its properties, and (iv)
execute, deliver, perform and observe the terms and conditions of each of the
Transaction Documents to which it is a party.
5.2
Authorization; No Conflict
.
The Borrower has duly authorized, executed and delivered the
Transaction Documents to which it is a party, and neither its execution and
delivery thereof nor its consummation of the transactions contemplated thereby
nor its compliance with the terms thereof (a) does or will contravene its
Organizational Documents or any Governmental Rules, (b) does or will contravene
or result in any breach or constitute any default under any Governmental
Judgment, (c) does or will contravene or result in any breach or constitute any
default under, or result in or require the creation of any Lien upon any of its
revenues, properties or assets under, any agreement or instrument to which it is
a party or by which it or any of its revenues, properties or assets may be
bound, except for Permitted Liens, if any, or (d) does or will require the
consent or approval of any Person other than the Required Consents and any other
consents or approvals that have been obtained, and are in full force and
effect.
5.3
Legality;
Validity; Enforceability
.
Each Transaction Document is a legal, valid and binding
obligation of each party thereto, enforceable against such party (other than the
Credit Parties) in accordance with its terms, subject to Bankruptcy Laws and
general principles of equity regardless of whether enforcement is considered in
a proceeding at law or in equity.
5.4
Capitalization
.
All of the Equity Interests of the Borrower are owned by
Holdco. As of the Financial Closing Date, eighty percent (80%) of the Equity
Interests of Holdco are owned by the Sponsor and twenty percent (20%) of the
Equity Interests of Holdco are owned by the Investor. There are no outstanding
options or rights for conversion into or acquisition, purchase or transfer of
Equity Interests of the Borrower or any agreements or arrangements for the
issuance by the Borrower of additional Equity Interests. The Borrower does not
have outstanding (a) any securities convertible into or exchangeable for its
Equity Interests or (b) any rights to subscribe for or to purchase, or any
option for the purchase of, or any agreement, arrangement or understanding
providing for the issuance (contingent or otherwise) of, or any call, loan
commitment or claims of any character relating to, its Equity Interests.
31
5.5
Investments; Subsidiaries
.
The Borrower has not made any Investments other than Permitted
Investments. The Borrower has no subsidiaries and does not beneficially own the
whole or any part of the Equity Interests of any other Person.
5.6
Title
.
The Borrower owns and has valid legal and beneficial title to,
a valid leasehold interest in, or a valid license interest or other rights of
use with respect to the Project Site, and the personal property and other assets
and revenues of the Borrower (tangible and intangible) on which it purports to
grant security title and Liens pursuant to the Security Documents, in each case
free and clear of any Lien of any kind except for the Lien created by the
Security Documents and Permitted Liens.
5.7
Leases
.
Any Leases are valid and subsisting, the Borrower is not in
default in any material respect under any of such Leases, and the Borrower
enjoys peaceful and undisturbed possession of the property subject to such
Leases and the right to continue to enjoy such possession during the time when
such property is necessary for the Project.
5.8
Security
Interests
.
Pursuant to the Security Documents, as of the date of each
Advance, the Collateral Agent (for the benefit of the Secured Parties) has a
perfected first priority security title and Lien in the Collateral, subject only
to the Permitted Liens. Such security title and security interest in the
Collateral will, as of the Financial Closing Date and with respect to any
subsequently acquired property, when so subsequently acquired, be superior and
prior to the rights of all third Persons (other than Permitted Liens) now
existing or hereafter arising whether by way of deed of trust, mortgage, Lien,
security interests, encumbrance, assignment or otherwise. As of the Financial
Closing Date, all documents and instruments, including the Mortgage and
financing statements, have been recorded or filed for record in such manner and
in such places as are required, and all other action as is necessary or
desirable shall have been taken to establish and perfect the Collateral Agent's
Lien in and to the Collateral (for the benefit of the Secured Parties) to the
extent contemplated by the Security Documents. All taxes and filing fees and
Periodic Expenses that are due and payable in connection with the execution,
delivery or recordation of the Mortgage and the Financing Statements, or the
execution, issuance and delivery of the FFB Promissory Note, or the granting of
the security title and security interest on the property under the Mortgage,
have been paid or satisfactory arrangements have been made with the relevant
Secured Parties to satisfy such obligations.
5.9
Liens
.
Except for Permitted Liens, the Borrower has not created, and
is not under any obligation to create, any Lien upon any of its revenues,
properties or assets. There are no Liens on the Equity Interests of the Borrower
or the Collateral, except for Permitted Liens.
32
5.10
Governmental
Approvals; Other Required Consents
.
(a)
Schedule 5.10
to the Disclosure Letter sets forth all material consents
and approvals, including all Governmental Approvals, that are required to have
been obtained or to be obtained by the Borrower in connection with the
Transaction Documents and the Project (any such consent or approval, whether or
not identified on such Schedule, the "
Required Consents
").
(b)
The Borrower has filed applications for or obtained such Required Consents
required as of the date this representation is made (including any Required
Consents required on that date) and such Required Consents then required to have
been obtained are in full force and effect and are not then under appeal or
subject to other proceedings or unsatisfied conditions that could reasonably be
expected to result in a material modification or cancellation as of such date,
and the Borrower has provided the Loan Servicer with copies of all such Required
Consents.
(c) To
the Borrower's Knowledge, any Required Consent which has not been obtained as of
the date this representation is made, but which will be required to be obtained
in the future, is reasonably expected to (i) be obtained in due course, (ii) not
be subject to waiting periods or appeal, and (iii) not contain any condition or
requirement which the Borrower does not expect to satisfy, without material cost
to itself, in each case, on or prior to the relevant date or stage of
development of the Project for which such Required Consent will be required.
(d) Each
of the Project, the Borrower or the Operator is in compliance in all material
respects with all such Required Consents, including all federal, state, and
local Governmental Approvals and other regulatory requirements.
5.11
Litigation, Labor
Disputes
.
(a) Except
as set forth on
Schedule 5.11
to the Disclosure Letter, there is no
pending or threatened (in writing) action, suit, or proceeding, or investigation
by a Governmental Authority, of any kind, including no action or proceeding of
or before any Governmental Authority, that (i) relates to any transactions
contemplated by any of the Transaction Documents or (ii) to which the Borrower
or, to the Borrower's Knowledge, any other Major Project Participant or the
Project is a party, in either case, that has, or could reasonably be expected to
have, a Material Adverse Effect.
(b) The
Borrower has not failed to observe in any material respect, or is otherwise in
material default with respect to, any Governmental Judgment or any order of any
court, arbitrator, administrative agency or other Governmental Authority. There
is no injunction, writ, or preliminary restraining order of any nature issued by
a court, arbitrator, administrative agency or other Governmental Authority
directing that any of the transactions provided for in any of the Transaction
Documents not be consummated as herein or therein provided. No Governmental
Judgment or order of any court, arbitrator, administrative agency or other
Governmental Authority has been entered against (i) the Borrower or the Sponsor
that has, or could reasonably be expected to have, a Material Adverse Effect on
the financial condition of the Project, the Borrower or the Sponsor; or (ii) to
the Knowledge of the Borrower, any other Material Project Party that has, or
could reasonably be expected to have, a Material Adverse Effect on the financial
condition of the Project or such Material Project Party.
33
(c) There
are no strikes, slowdowns or work stoppages by the employees of any of the
Borrower or, to the Borrower's Knowledge, any Major Project Participant
on-going, or, to the Borrower's Knowledge, currently threatened in writing, that
causes or could reasonably be expected to cause a Material Adverse Effect.
(d)
To the Borrower's Knowledge, neither the Sponsor nor the Investor is in default
with respect to any Governmental Judgment which default has, or could be
reasonably expected to have, a Material Adverse Effect on the Sponsor or the
Investor.
5.12
Tax
.
(a) The
Borrower has filed all material tax returns required by Governmental Rules to be
filed by it and has paid (i) all income taxes payable by it that have become due
pursuant to such tax returns and (ii) all other material taxes and assessments
payable by it that have become due (other than those taxes that it is contesting
in good faith and by appropriate proceedings, for which reserves have been
established to the extent required by GAAP). The Borrower has paid or has
provided cash or cash-equivalent reserves adequate in the reasonable judgment of
the Borrower's management and consistent with GAAP for the payment of all income
or other material taxes imposed on it by the applicable Governmental Authority
for all prior Fiscal Years and accrued for the current Fiscal Year to the date
hereof, which reserves shall be in an amount at least equal to the full assessed
amount of such taxes. The Borrower shall not be liable for, absent a Change of
Law, any material tax liability in connection with the Project or the other
transactions contemplated by the Transaction Documents that is not specifically
reflected in the Base Case Projections as in effect on the Financial Closing
Date and in the Construction Budget or as reflected in the assumptions in the
then applicable Operating Forecast, as the case may be.
(b)
Except for those items set forth on
Schedule 5.12
to the Disclosure
Letter as of the Financial Closing Date, no withholding taxes are payable by the
Borrower to any Governmental Authority in connection with any amounts payable by
the Borrower under or in respect of the Loan Documents.
5.13
Business;
Contracts
.
The Borrower has not conducted any business other than the
business contemplated by the Transaction Documents and such other business as
may be related to the Project and is not a party to or bound by any contract
other than those contracts permitted under the Loan Documents.
5.14
Transactions with
Affiliates
.
Except as set forth on
Schedule 5.14
to the Disclosure
Letter or as permitted by
Section 7.12
, the Borrower is not a party to
any contracts or agreements with, and does not have any other loan commitments
to, whether or not in the ordinary course of business, any Affiliate. The
Borrower is not a party to any agreement requiring the payment of development
fees.
34
5.15
Compliance with
Governmental Rules
.
(a) In
accordance with Section 609.10(d)(20) of the Applicable Loan Guarantee
Requirements, each of the Borrower and the Project is in compliance with, and
has conducted its business, operations, assets, equipment, property, leaseholds,
and other facilities in compliance with (i) Title XVII and the Applicable Loan
Guarantee Requirements, in all respects, and (ii) all other Governmental Rules
and all other Program Requirements in all material respects.
(b)
No notices of violation of any Governmental Rule have been issued, entered or
received by the Borrower that have not been cured with no remaining liability to
the Borrower, other than those that are immaterial.
5.16
Environmental
Laws
.
(a)
The Borrower and, to the Borrower's Knowledge, each Environmental Affiliate (x)
has been issued, or reasonably expects to obtain prior to the time required and
without material and adverse conditions or requirements, all Environmental
Approvals relating to its then-existing obligations with respect to, and (y) has
received no complaint, order, directive, claim, citation or notice by any
Governmental Authority relating to its then-existing obligations with respect
to: (A) air emissions, (B) discharges to surface water or ground water, (C)
noise emissions, (D) solid or liquid waste disposal, (E) the use, generation,
storage, transportation or disposal of toxic or Hazardous Substances or wastes,
or (F) other environmental, health or safety matters.
(b)
Except as set forth on
Schedule 5.16
to the Disclosure Letter, neither
the Project, the Borrower nor, to the Borrower's Knowledge, any Environmental
Affiliate or other third party, has used, released, discharged, generated,
manufactured, produced, stored, or disposed of in, on, under or about the
Project Facility or transported thereto or therefrom, any Hazardous Substances
that could reasonably be expected to cause material harm to environmental,
health or safety matters as reasonably determined by the Loan Servicer.
(c) There
is not and has not been any condition, circumstance, action, activity or event
with respect to the Project, the Borrower or the Project Site that could
reasonably form the basis of any violation of any Environmental Law or that
could reasonably be expected to cause material harm to environmental, health or
safety matters as reasonably determined by the Loan Servicer.
5.17
Investment Company
Act
.
The Borrower is not required to register as an "investment
company" and it is not "controlled" by a company required to register as an
"investment company" under the Investment Company Act.
5.18
Regulation of
Parties
.
The Borrower is not subject to the Public Utility Holding
Company Act. Neither DOE nor any other Credit Party shall by reason if its
ownership or operation of the Project upon the exercise of remedies under the
Security Documents be subject to the Public Utility Holding Company Act.
35
5.19
Corrupt Practices
Laws
.
The Borrower, the Sponsor and their respective officers,
directors, employees and agents, and to the Knowledge of Borrower, the Investor
and its officers, directors, employees and agents, have complied with all
applicable Corrupt Practices Laws in obtaining any consents, licenses,
approvals, authorizations, rights, or privileges with respect to the Project,
and the Borrower, its officers, directors, employees and agents are otherwise
conducting the Project and the Borrower's business in compliance with all
applicable Corrupt Practices Laws. The internal management and accounting
practices and controls of the Borrower, the Sponsor and, to the Knowledge of the
Borrower, the Investor, are adequate to ensure compliance with all Corrupt
Practices Laws.
5.20
ERISA
.
(a)
The Borrower has operated any Employee Benefit Plans in compliance with their
terms and with all applicable provisions and requirements of the Internal
Revenue Code, ERISA, and other applicable Laws and have performed all their
respective obligations under each Employee Benefit Plan.
(b) Neither
the Borrower nor any ERISA Affiliate sponsors, maintains, participates in,
contributes to or has or has had any liability in respect of any Pension Plan or
Multiemployer Plan. Without limiting the generality of the foregoing, no ERISA
Event has occurred or is reasonably expected to occur.
(c) Except
to the extent required under Section 4980B of the Internal Revenue Code or
comparable state law, the Borrower provides no health or welfare benefits
(through the purchase of insurance or otherwise) to any retired or former
employee of the Borrower.
(d)
As of the most recent valuation date for any Pension Plan, the amount of
outstanding benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed one million Dollars ($1,000,000).
(e)
The execution and delivery of this Loan Guarantee Agreement and the consummation
of the transactions contemplated hereunder will not involve any transaction that
is subject to the prohibitions of Section 406 of ERISA or in connection with
which taxes could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the
Internal Revenue Code.
(f) All
liabilities under each Pension Plan are (i) funded to at least the minimum level
required by applicable law or, if higher, to the level required by the terms
governing the Pension Plans (ii) insured with a reputable insurance company,
(iii) provided for or recognized in the Financial Statements most recently
delivered to the Loan Servicer pursuant to
Section 6.1
or (iv) estimated
in the formal notes to the Financial Statements most recently delivered to the
Loan Servicer pursuant to
Section 6.1
.
(g) There
are no circumstances which may give rise to a liability in relation to any
Pension Plan which is not funded, insured, provided for, recognized or estimated
in the manner described in
clause (f)
above.
36
(h) (i)
The Borrower is not and will not be a "plan" within the meaning of Section
4975(e) of the Internal Revenue Code; (ii) the assets of the Borrower do not and
will not constitute "plan assets" within the meaning of the United States
Department of Labor Regulations set forth in 29 C.F.R. 2510.3 -101; (iii) the
Borrower is not and will not be a "governmental plan" within the meaning of
Section 3(32) of ERISA; (iv) transactions by or with the Borrower are not and
will not be subject to state statutes applicable to the Borrower regulating
investments of fiduciaries with respect to governmental plans; and (v) the
Borrower shall not engage in any transaction which would cause any obligation,
or action taken or to be taken, hereunder (or the exercise by the Credit Parties
of any of their respective rights under this Loan Guarantee Agreement) to be a
non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA or Section 4975 of the Internal Revenue Code. The
Borrower further agrees to deliver to the Loan Servicer such certifications or
other evidence of compliance with the provisions of this
clause (h)
as
the Loan Servicer may from time to time request.
5.21
Insurance
.
All Required Insurance to be obtained and maintained pursuant
to
Section 6.3(b)
is in full force and effect.
5.22
Intellectual
Property
.
(a) The
Borrower owns or holds a valid and enforceable license, permit, certificate,
franchise, or other authorization or right to use the Technology and
Intellectual Property Rights necessary to do the following in a commercially
reasonable manner and as contemplated in connection with the Project: (i)
construct, operate, use and maintain the Project, and (ii) exercise its rights
and perform its obligations under the Operating Documents and the Construction
Contracts in connection with the Project, except, in each case, where the
failure to own or hold a valid and enforceable license, permit, certificate,
franchise, or other authorization or right to use such Technology and
Intellectual Property Rights could not reasonably be expected to result in a
Material Adverse Effect.
(b) The
Technology and Intellectual Property Rights licensed to the Borrower under the
Equipment Contract and the use thereof by the Borrower or the Operator does not
infringe upon or misappropriate the Intellectual Property Rights or other rights
of any other Person and no actions by the Borrower or the Operator or any
product, process, method, substance, part or other material presently
contemplated to be sold or employed by the Borrower or the Operator infringe
upon or misappropriate the Intellectual Property Rights of any other Person,
except, in each case, where such infringement or misappropriation of such
Intellectual Property Rights or such other rights could not reasonably be
expected to result in a Material Adverse Effect.
(c) To
the Borrower's Knowledge, all Technology and Intellectual Property Rights
necessary to complete and operate the Project have been duly obtained, are
adequate and are readily available to the Borrower.
37
5.23
No
Defaults
.
No Event of Default or Potential Default has occurred and is
continuing. There is no breach by the Borrower of any material obligation under
any Loan Document and no notices of breach of any Loan Document have been
issued, entered or received by the Borrower that has not been resolved.
5.24
No Judgment Liens; No
Indebtedness
.
(a)
The Borrower does not have a judgment lien against any of its property for a
debt owed to the United States of America or any other creditor and does not
have an outstanding debt (other than a debt under the Internal Revenue Code)
owed to the United States of America or any agency thereof that is in delinquent
status, as the term "delinquent status" is defined in 31 C.F.R.§ 285.13(d) .
(b)
Neither the Borrower, in accordance with Section 609.10(d)(21) of the Applicable
Loan Guarantee Requirements, nor, to the Borrower's Knowledge, any Major Project
Participant, has owed any delinquent Indebtedness to any Governmental Authority
of the United States, including tax liabilities, unless the delinquency has been
resolved with the appropriate Governmental Authority in accordance with the
standards of the Debt Collection Improvement Act.
(c) The
Borrower has no outstanding Indebtedness other than Permitted Indebtedness and
has no other liabilities other than those permitted under the Loan
Documents.
5.25
Sufficiency of
Project Documents
.
(a)
All easements, leasehold and other property interests, and all utility and other
services, means of transportation, facilities, other materials and other rights
that can reasonably be expected to be necessary for the construction, completion
and operation of the Project in accordance with Governmental Rules and the
Transaction Documents (including diesel fuel, gas, electrical, water and sewage
services and facilities) have been procured under the Project Documents or are
commercially available to the Project at the Project Site on terms consistent
with the Construction Budget and the Base Case Projections and, to the extent
appropriate, arrangements have been made on terms consistent with the
Construction Budget and the Base Case Projections for such easements, interests,
services, means of transportation, facilities, materials and rights.
(b)
The Loan Servicer has received a true, complete and correct copy of each of the
Project Documents (including all exhibits, schedules, protocols and side letters
referred to therein or delivered pursuant thereto, if any, and all amendments,
modifications, additions, waivers thereto or thereof). None of the Project
Documents has been amended or modified, except in accordance with this Loan
Guarantee Agreement. Prior to the execution of each such Project Document
entered into on or prior to the date this representation is made, the Borrower
believed, after having made a reasonable investigation with respect thereto,
that each party to each such Project Document would be able to carry out its
obligations in accordance therewith and nothing has come to the attention of the
Borrower to cause it to believe that any such party will not be able to carry
out its obligations in accordance therewith.
38
(c) Each
Principal Project Document is in full force and effect and all conditions
precedent to the obligations of the respective parties under the Principal
Project Documents have been satisfied or where required, with the written
consent of the Loan Servicer, waived.
(d) To
the Borrower's Knowledge, all representations, warranties and other factual
statements made by each party to each of the Project Documents (other than the
Borrower) are true and correct in all material respects.
(e) The
Borrower believes that it is technically feasible for the Project to be operated
so as to fulfill in all material respects the design specifications and
requirements contained in the Application.
5.26
Financial
Statements
.
Each of the Financial Statements of the Borrower, Holdco and
the Sponsor delivered to the Loan Servicer has been prepared in accordance with
GAAP and presents fairly in all material respects the financial condition of the
Borrower, Holdco or the Sponsor as of the respective dates of the balance sheets
included therein and the results of operations of the Borrower, Holdco or the
Sponsor for the respective periods covered by the statements of income included
therein. Except as reflected in such Financial Statements, there are no
liabilities or obligations of the Borrower, Holdco or the Sponsor, as
applicable, of any nature whatsoever for the period to which such Financial
Statements relate (other than under the Transaction Documents) that are required
to be disclosed in accordance with GAAP.
5.27
Construction Budget;
Operating Forecasts and Base Case Projections
.
(a) The
Construction Budget, the Operating Forecast (to the extent delivered), the
Operating Plan (to the extent delivered) and the Base Case Projections, as
amended or supplemented by Approved Construction Changes or otherwise in
accordance with this Loan Guarantee Agreement, (i) are complete and based on
reasonable assumptions, (ii) are consistent with the provisions of the Project
Documents, (iii) have been prepared in good faith and with due care, and (iv)
fairly represent the Borrower's expectation as to the matters covered thereby as
of the date of the representation.
(b) The
Construction Budget, as amended or supplemented by Approved Construction Changes
or otherwise in accordance with this Loan Guarantee Agreement, represents the
Borrower's best estimate of all costs and expenses anticipated by the Borrower
to be incurred to construct the Project in the manner contemplated by the
Transaction Documents.
(c) The
Borrower's good faith estimate and belief as of the Financial Closing Date and
the Initial Advance Date is that (i) Physical Completion and Operational
Completion will occur no later than the Anticipated Completion Date, (ii) Total
Project Costs will not exceed Base Project Costs, and (iii) each of Total
Project Costs, Base Project Costs, Eligible Base Project Costs and Ineligible
Base Project Costs will not exceed the respective amounts therefor set forth in
the Financial Plan. Nothing has occurred to cause the Borrower to believe that
the Base Case Projections, as amended or supplemented by Approved Construction
Changes, are unreasonable in any material respect.
39
5.28
Sufficient
Funds
.
In accordance with Section 609.10(d)(8) of the Applicable Loan
Guarantee Requirements, the Total Funding Available to the Borrower will be
sufficient to develop and construct the Project and to achieve Physical
Completion and Operational Completion, including adequate contingency funds for
identified Cost Overruns.
5.29
Fees and
Enforcement
.
Other than amounts that have been paid in full or with respect
to which arrangements satisfactory to the Loan Servicer have been made, no fees
or taxes including documentary, stamp, transaction, registration, or similar
taxes are required to be paid to ensure the legality, validity, enforceability,
priority or admissibility in evidence in applicable jurisdictions of any
Transaction Documents.
5.30
Immunity
.
In any proceedings in connection with any Transaction Document
to which the Borrower is a party, the Borrower has not been and will not be
entitled to claim for itself or any of its assets immunity from suit, execution,
attachment or other legal processes.
5.31
No Other
Powers-of-Attorney
.
The Borrower has not executed and delivered any powers of
attorney or similar documents, except (i) to its directors and employees in the
ordinary course of business, and (ii) to the Secured Parties in connection with
the Collateral.
5.32
No Additional
Fees
.
The Borrower has not paid nor become obligated to pay any fee
or commission to any broker, finder or intermediary for or on account of
arranging the financing of the transactions contemplated by the Transaction
Documents.
5.33
Foreign Assets
Control Regulations; Etc
.
(a) To
the extent applicable, each of the Borrower, Holdco, the Sponsor, and any
Affiliate thereof (other than the Investor), and, to the Knowledge of the
Borrower, the Investor and any Affiliate thereof, is in compliance, in all
material respects, with (i) all Foreign Asset Control Regulations, (ii) all
applicable orders, rules and regulations of the OFAC and (iii) the Patriot
Act.
(b) Neither
the making of any Advances nor the use of the proceeds thereof will violate any
Foreign Asset Control Regulations or any anti-boycott laws and regulations.
(c) Neither
the Borrower, Holdco, the Sponsor, or any Affiliate thereof (other than the
Investor), nor any of their members, directors, officers, parents or
subsidiaries, nor to the Knowledge of the Borrower, the Investor, nor any
Affiliate thereof nor any of its members, directors, officers, parents or
subsidiaries: (x) is subject to United States or multilateral economic or trade sanctions in which the United States participates, (y)
is owned or controlled by, or act on behalf of, any governments, corporations,
entities or individuals that are subject to United States or multilateral
economic or trade sanctions in which the United States participates, or (z) is a
Prohibited Person or otherwise is named, identified or described on any blocked
persons list, designated nationals list, denied persons list, entity list,
debarred party list, unverified list, sanctions list or other list of
individuals or entities with whom United States persons may not conduct
business, including lists published or maintained by the OFAC, lists published
or maintained by the U.S. Department of Commerce, and lists published or
maintained by the U.S. Department of State.
40
(d) None
of the Collateral is traded or used, directly or indirectly, by a Prohibited
Person or by a Person organized in a Prohibited Jurisdiction.
5.34
U.S. Government
Requirements
.
(a)
Suspension and Debarment
. No event has occurred and no condition exists
that is likely to result in the debarment or suspension of the Borrower from
contracting with the U.S. Government or any agency or instrumentality thereof,
and the Borrower is not now and has not been subject to any such debarment or
suspension. Neither the Borrower nor its Principal Persons are (a) debarred,
suspended, proposed for debarment with a final determination still pending,
declared ineligible or voluntarily excluded (as such terms are defined in any of
the Debarment Regulations) from participating in procurement or non-procurement
transactions with any United States federal government department or agency
pursuant to any of the Debarment Regulations, or (b) indicted, convicted or had
a Governmental Judgment rendered against the Borrower or any of its Principal
Persons for any of the offenses listed in any of the Debarment Regulations and
no event has occurred and no condition exists that is likely to result in the
debarment or suspension of the Borrower from contracting with the U.S.
Government or any agency or instrumentality thereof.
(b)
Lobbying
.
In accordance with 31 U.S.C. §1352, no proceeds of the Advances have been or
will be expended by the Borrower, Holdco, the Sponsor, the Operator or, to the
Knowledge of the Borrower, the Investor, to pay any Person for influencing or
attempting to influence an officer or employee of any agency, a Member of
Congress (as defined for purposes of 31 U.S.C. §1352), an officer or employee of
Congress, or an employee of a Member of Congress.
5.35
Insolvency
Proceedings; Solvency
.
(a)
The Borrower is not the subject of any pending or, to the Borrower's Knowledge,
threatened, Insolvency Proceedings.
(b) The
Borrower is and, upon the incurrence of any Indebtedness under the Loan
Documents and after giving effect to the transactions contemplated hereby, will
be solvent.
5.36
Use of
Proceeds
.
The Borrower has used and shall continue to use the proceeds of
all Advances in accordance with the terms and conditions of all applicable Loan
Documents.
41
5.37
No Material Adverse
Effect
.
No Material Adverse Effect has occurred and is continuing nor
is there any fact or circumstance that could reasonably be expected to have a
Material Adverse Effect.
5.38
Certain Program
Requirements
.
(a)
Eligibility
.
In accordance with Section 609.10(d)(1) of the Applicable Loan Guarantee
Requirements, the Project qualifies as an "Eligible Project" under Title XVII
and is not a research, development, or demonstration project or a project that
employs Commercial Technologies (as defined in the Applicable Loan Guarantee
Requirements) in service in the United States.
(b)
U.S.
Nexus
. In accordance with Section 609.10(d)(2) of the Applicable Loan
Guarantee Requirements, the Project will be constructed and operated in the
United States, the employment of the new or significantly improved technology in
the Project has the potential to be replicated in other commercial projects in
the United States, and this technology is or is likely to be available in the
United States for further commercial application.
(c)
Useful
Life
. In accordance with Section 609.10(d)(6) of the Applicable Loan
Guarantee Requirements, the Maturity Date occurs prior to the end of 90 percent
of the projected useful life of the Project's major physical assets, as
calculated in accordance with GAAP.
(d)
No
Tax-Exempt Indebtedness
. In accordance with Section 609.10(d)(7) of the
Applicable Loan Guarantee Requirements, the DOE Credit Facility Commitment and
the DOE Guaranteed Loans will not finance, either directly or indirectly,
tax-exempt indebtedness obligations, consistent with the requirements of Section
149(b) of the Internal Revenue Code.
5.39
Davis-Bacon
Act
.
The Borrower has taken all steps necessary to comply with, and
is in material compliance with all Davis-Bacon Requirements. Each of the
Davis-Bacon Act Covered Contracts includes the provisions set forth in
Exhibit C
and the wage determination(s) set forth on
Schedule 1
to
Exhibit C
.
5.40
Buy American
Provisions
. The Project does not involve the construction, alteration,
maintenance or repair of a "public building" or "public work" within the meaning
of Section 1605 of Title XVI of Division A of the Recovery Act, 2 C.F.R.
Sections 176.140 and 176.160, and the OMB Implementing Guidance and, in each
case, any amendment, supplement or successor thereto, including any relevant
regulation or guidance which may be issued by DOE.
5.41
Recovery Act
Reporting
. The Borrower has taken all necessary steps to be in
compliance with its reporting obligations under
Section 6.24(a)
with
respect to the Recovery Act.
5.42
Full
Disclosure
.
(a) The
statements and information contained in any Loan Document, including any
certificates delivered on connection with or pursuant to any Loan Document by an
Authorized Official of the Borrower, Holdco or Sponsor, taken together
with all documents, reports or other written information pertaining to the
Project and all updates of such information from time to time, that have been
furnished by or on behalf of the Borrower to DOE, or any other Credit Party or
any Independent Consultant, are complete and correct in all material respects
and do not contain any untrue statement of a material fact or omit to state a
material fact or any fact necessary to make the statements contained therein not
misleading in light of the circumstances in which they were made.
42
(b)
There is no fact known to the Borrower that has not been disclosed to the Loan
Servicer in writing the existence of which would be material to the DOE's
decision to enter into this Loan Guarantee Agreement or to DOE's decision to
authorize or guarantee any Advance or could otherwise reasonably be expected to
have a Material Adverse Effect.
(c) There
are in existence no documents or agreements that have not been disclosed to the
Loan Servicer in writing that are material in the context of the Transaction
Documents or that have the effect of varying any of the Transaction Documents or
the Project.
5.43
No Ownership by
Disqualified Persons
. As of the Financial Closing Date and thereafter
until the expiration of the Recapture Period, neither the Borrower nor any
direct or indirect owner of the Borrower (other than any such direct or indirect
equity owner that is a direct or indirect owner solely as a result of owning
Equity Interests in an entity that is treated as a corporation for federal
income tax purposes) is a Disqualified Person.
ARTICLE 6
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that until the Security Discharge Date,
unless the Loan Servicer waives compliance in writing:
6.1
Information
Covenants
.
At its own expense the Borrower shall furnish or cause to be
furnished to the Loan Servicer, in each case (x) in unalterable electronic
format with a reproduction of the signatures where required, (y) upon request by
the Loan Servicer, in soft electronic format, and (z) upon request by the Loan
Servicer, in hard copy with sufficient copies for each Credit Party, the
following items:
(a)
Monthly
Reports
. Within ten days after the end of each month following the Initial
Advance Date:
(i)
prior to the Project Completion Date, a Construction Progress Report based upon
the Borrower's good faith reasonable estimates of the information contained
therein and certified by the Borrower and the Independent Engineer as being
accurate and complete in all material respects as of the date of its submission
to the Loan Servicer (
provided
that failure to timely provide such
certification of the Construction Progress Report by the Independent Engineer
shall not constitute an Event of Default or Potential Default only if (x) the
Borrower otherwise timely complied with the requirements in this
Section
6.1(a)
and promptly and satisfactorily responded to all questions or
requests for additional information, clarification and other similar requests from the Independent Engineer, and (y)
the Independent Engineer's failure to certify the Construction Progress Report
is not due to its determination that such Construction Progress Report is not
accurate and complete in all material respects), with respect to the
following:
43
(A)
construction of the Project is proceeding in accordance with the Construction
Budget and the construction milestones set forth in Section 3.1 of the Power
Purchase Agreement, or if construction is not proceeding in accordance with the
Construction Budget, then the Construction Progress Report shall describe any
variances from the Construction Budget or the construction milestones set forth
in Section 3.1 of the Power Purchase Agreement;
(B) the
Project is expected to achieve completion by the Anticipated Completion Date (or
explaining the reason for any projected delay);
(C) any
anticipated Overrun Project Costs shall be identified;
(D) the
Total Funding Available is sufficient to pay all remaining Total Project Costs
(including Interest During Construction, DOE Credit Facility Fees, Agents' Fees,
Periodic Expenses, and identified Cost Overruns); and
(E) evidence
that as of the date of such Construction Progress Report (A) each Construction
Contractor, and any subcontractors, shall have irrevocably waived and released
all Liens, statutory or otherwise, that any of them may have or acquire on the
Collateral or the Project with respect to work completed prior to the last
submission for payment, except for Permitted Liens, and (B) any unpaid balances,
other than retainage not required to be paid at the time of such certification
pursuant to the terms of the relevant Principal Project Document, or unsettled
claims with any Construction Contractor or subcontractor or supplier, if any,
have been adequately paid and that those being contested or negotiated in good
faith and where a bond, adequate reserves or other security acceptable to the
Loan Servicer has been posted or provided in such manner and amount as to assure
DOE that any amounts determined to be due will promptly be paid in full when
such contest is determined or negotiations are completed; and
(F) such
other documents, certifications or consents relating to the Project or matters
contemplated by the Transaction Documents as the Loan Servicer may reasonably
request.
(ii)
Each month, a description and explanation of any material casualty losses,
material disputes between the Borrower and any Person, and material
non-compliance with any Governmental Approvals; and
(iii)
Each month, monthly statement reports on the Project Accounts and the Local
Accounts.
(b)
Quarterly Reporting Package
. Within forty-five days after the end of each
fiscal quarter (including the fourth fiscal quarter) of each Fiscal Year
following the Initial Advance Date, each certified by an Authorized Official of the Borrower
in a completed Quarterly Reporting Certificate:
44
(i)
if such fiscal quarter is prior to the Project Completion Date, an updated
Financial Plan and a copy of the Construction Budget, as updated or supplemented
by all Approved Construction Changes (or a confirmation from the Borrower
certifying that no changes or updates are then required);
(ii)
if such fiscal quarter is prior to the Project Completion Date, a
certification of an Authorized Official of the Borrower and the Independent
Engineer that (i) the proceeds of all Advances to be made with respect to such
fiscal quarter will be needed for Eligible Project Costs that have been or will
be incurred, together with a description in reasonable detail of such Eligible
Project Costs; and (ii) all Advances made with respect to the immediately
preceding fiscal quarter have been applied as set forth in the prior
certification with respect to such fiscal quarter, or as otherwise approved by
the Loan Servicer (
provided
that failure to timely provide such
certification by the Independent Engineer shall not constitute an Event of
Default or Potential Default only if (x) the Borrower otherwise timely complied
with the requirements in this
Section 6.1(b)
and promptly and
satisfactorily responded to all questions or requests for additional
information, clarification and other similar requests from the Independent
Engineer, and (y) the Independent Engineer's failure to provide such
certification is not due to its determination that the estimated proceeds amount
needed for Eligible Project Costs and application of Advances are not
certifiable);
(iii) if
such fiscal quarter is prior to the Project Completion Date, unaudited quarterly
Financial Statements of the Sponsor prepared in accordance with GAAP certified
by a Financial Officer of the Sponsor as having been prepared in accordance with
GAAP (except for changes with which the Sponsor's Accountant concurs) on a
consistent basis and as fairly presenting in all material respects the financial
condition of the Sponsor as of the date thereof and the results of operations
and cash flows of the Sponsor for the periods presented;
(iv)
if such fiscal quarter is prior to the Project Completion Date, a certification
of the Borrower, that (x) all Required Insurance is in place, in good standing
and in full force and effect without default and all premiums due thereon have
been paid in full or are to be paid by arrangements satisfactory to the Loan
Servicer, and (y) all certificates or policies with respect to any additional
renewal or substitute insurance obtained by the Borrower since the later of the
Financial Closing Date or the date of the previous certificate delivered
pursuant to this
Section 6.1(b)(iv)
, designate the Collateral Agent as
loss payee, as appropriate, and the Secured Parties as additional insured;
(v)
for every fiscal quarter, unaudited Financial Statements and reports of the
Borrower as of the end of such quarterly period;
(vi)
for every fiscal quarter, a discussion and analysis by a Financial Officer of
the Borrower of the business and operations of the Borrower with respect to such
fiscal quarter, including a statement of all material financial transactions
(other than any transactions contemplated under the Transaction Documents), and
a report of all transactions involving the Borrower, on the one hand, and on the
other hand the Sponsor or Investor or any Affiliate of the Sponsor (other than transactions directly pursuant to and in
accordance with the Management Services Agreement) or Investor; and for each
such fiscal quarter that includes all or a portion of the Operating Period,
calculations showing compliance with the requirements of
Section 7.14
and
certification of such compliance, or if such certification cannot be made, an
explanation therefor and what corrective action the Borrower has taken or
proposes to take with respect thereto;
45
(vii) for
each such fiscal quarter that includes all or a portion of the Operating Period,
a summary operating report, which shall include a detailed assessment of the
Project's performance in comparison with the Operating Forecast and Operating
Plan then in effect for such period, including basic data relating to the
operation of the Project, pricing information, unusual maintenance activity,
material casualty losses, material disputes between the Borrower and any Person,
and material non-compliance with any Governmental Approvals; and
(viii) for
each fiscal quarter that includes all or a portion of the Operating Period, an
updated Operating Plan for the next four fiscal quarters and an updated
Operating Forecast for the next four fiscal quarters and, if requested by the
Loan Servicer, updated Base Case Projections, in each case in form and substance
satisfactory to the Loan Servicer.
(c)
Annual
Financial Statements and Reports
. As soon as available, but in any event not
later than ninety days after the end of each Fiscal Year:
(i)
Audited annual Financial Statements of the Borrower as of the end of such Fiscal
Year, certified by the Borrower's Accountant and accompanied by any management
letter delivered by the Borrower's Accountant;
(ii)
a discussion and analysis by the management of the Borrower of the Borrower's
business and operations at the end of such Fiscal Year with respect to the
matters set forth in
clause (b)(vi)
above;
(iii) a
report from the Borrower's Accountant, certifying that, for each such Fiscal
Year, it has no knowledge that an Event of Default or Potential Default has
occurred and is continuing or if, any Event of Default or Potential Default has
occurred and is continuing, a statement as to the nature and period of existence
thereof;
(iv) a
report by a Financial Officer of the Borrower for each such Fiscal Year that
includes all or a portion of the Operating Period, which report shall contain a
comparison between such annual Financial Statements and the projections for such
Fiscal Year contained in the Operating Forecast; and
(v)
with respect to the Sponsor if any portion of the Fiscal Year is prior to
the Project Completion Date, audited annual Financial Statements of the Sponsor
prepared in accordance with GAAP certified by a Financial Officer of the Sponsor
as having been prepared in accordance with GAAP (except for changes with which
the Sponsor's Accountant concurs) on a consistent basis and as fairly presenting
in all material respects the financial condition of the Sponsor as of the date
thereof and the results of operations and cash flows of the Sponsor for the
period presented.
46
(d)
Certification
by Financial Officer
. Each time Financial Statements of the Borrower are
delivered pursuant to,
Section 6.1(b)
and
Section 6.1(c)
(other
than with respect to
Section 6.1(c)(iv)
) and by the Borrower, Sponsor and
Holdco, pursuant to
Section 4.1.5
, such Financial Statements shall be
certified by a Financial Officer of the Borrower (or Sponsor or Holdco, as
applicable) as having been prepared in accordance with GAAP on a consistent
basis and as fairly presenting in all material respects the financial condition
of the Borrower (or Sponsor, or Holdco, as applicable) as of the date thereof
and the results of operations and cash flows of the Borrower (or Sponsor, or
Holdco, as applicable) for the periods presented. Such certification shall also
include a certification that the Person has made or caused to be made a review
of the transactions and financial condition of the Borrower (or Sponsor, or
Holdco, as applicable) during the relevant fiscal period and (i) that other than
as set out in such Financial Statements, there are no liabilities or obligations
of the Borrower (or Sponsor, or Holdco, as applicable) that are required to be
presented in such Financial Statements in accordance with GAAP, and (ii) that no
Event of Default or Potential Default exists, or if such certification cannot be
made, the nature and period of existence of such Event of Default or Potential
Default and what corrective action the Borrower (or Sponsor, or Holdco, as
applicable) has taken or proposes to take with respect thereto.
(e)
Reporting
of Management Letters
. Promptly after the Borrower's receipt thereof, a copy
of any management letter and all other material communications received by the
Borrower from the Borrower's Accountant in relation to its financial, accounting
and other systems, management or accounts or the Project.
(f)
Other Reporting Obligations
. Promptly, but in any event within five
Business Days, after any Authorized Official of the Borrower obtains Knowledge
thereof or information pertaining thereto, notice of:
(i)
any event that constitutes an Event of Default or Potential Default, specifying
the nature thereof, together with a certificate of an Authorized Official of the
Borrower indicating any steps the Borrower has taken or proposes to take to
remedy the same;
(ii)
any material action, litigation, claim, arbitration, dispute or
governmental proceeding pending or threatened in writing (A) against the
Borrower or any of its property, (B) with respect to the Project or any
Transaction Document, or (C) against any other Project Participant, and of any
developments with respect to any of the foregoing;
(iii) any
proceeding or legislation by any Governmental Authority specifically affecting
(A) the Project, the Borrower, any of its property or its Equity Interests or
(B) a Project Participant that, in each case, could reasonably be expected to
have a Material Adverse Effect, including any developments with respect to any
of the foregoing;
(iv)
any change in the Authorized Officials of the Borrower, including
certified specimen signatures of any new Person so appointed and satisfactory
evidence of the authority of such Person, or any change in the Borrower's
Accountant and the reason therefor;
(v)
any actual or proposed termination, rescission, discharge (otherwise than by
performance), amendment, supplement, modification, waiver or indulgence or
breach in any material respect of any Transaction Document, Governmental
Approval or other Required Consent, or any execution of any new material
agreement, that is not otherwise approved, consented to or accepted pursuant to
the terms of the Transaction Documents;
47
(vi)
any material notice or correspondence received or initiated by the Borrower
relating to the Project or any Transaction Document or any notice or
correspondence received or initiated by the Borrower relating to any
Governmental Approval, but excluding notices or correspondence received or
initiated in the ordinary course of business or otherwise previously delivered
pursuant to any Transaction Document;
(vii)
any Lien (other than a Permitted Lien) being granted or established or becoming
enforceable over any of the Borrower's assets or the Borrower's Equity
Interests;
(viii)
any proposed material change in the nature or scope of the Project or the
business or operations of the Borrower;
(ix)
any casualty damage or loss to the Project (A) in excess of one hundred
thousand Dollars ($100,000), or (B) that has resulted in death or serious injury
to a natural person (and, in the case of this clause (B), such notice shall be
delivered as soon as practicable but in any event within 24 hours of the
occurrence);
(x)
any notice of a delinquent payment owed by any Material Project Party to
the Borrower, or owed by the Borrower to a Material Project Party, if in either
case such delinquent payment has not been paid within the applicable cure period
set forth in such Principal Project Document and if the amount of any such
delinquent payment is in excess of twenty five thousand Dollars ($25,000), in
each case together with a copy of all correspondence received or sent by the
Borrower with respect to such delinquent payment;
(xi)
any material correspondence from any Construction Contractor, any other Material
Project Party or the Operator relating to (A) any material delay in the
completion of the Project or the related transmission or interconnection
facilities, or (B) any event that could reasonably be expected to interrupt the
operation of the Project for more than fifteen days;
(xii) any
one or more events, conditions or circumstances (including government action)
that exist or have occurred or in the judgment of the Borrower acting reasonably
are expected as imminent that could reasonably be expected to have a Material
Adverse Effect;
(xiii) Any
non-compliance of a Reserve Letter of Credit or a Base Equity Letter of Credit
with the criteria established with respect thereto and any event, condition or
circumstance that represents or could reasonably be expected to lead to
non-compliance by a bank providing a Reserve Letter of Credit or a Base Equity
Letter of Credit, as applicable, with the required criteria with respect thereto
or the renewal thereof;
(xiv) any
event of force majeure (as defined in each respective Project Document) claimed
by either the Borrower or any other Major Project Participant, together with
copies of all notices, calculations, data and other correspondence between such
Major Project Participant and the Borrower in respect of any such event,
circumstance or condition;
48
(xv) any
material dispute between (a) the Borrower and any other Major Project
Participant, or (b) the Borrower, any other Major Project Participant and any
Governmental Authority;
(xvi) upon
request by the Loan Servicer, copies of any data relating to the performance of
tests under any Project Document;
(xvii) any
event that could be reasonably expected to cause a reduction in the Operating
Revenues of the Borrower for any Fiscal Year by more than ten percent (10%) of
the amount estimated therefor in the Operating Forecast;
(xviii) any
proposed cancellation or material change in any Required Insurance maintained by
the Borrower or by any other Person for the benefit of the Borrower with respect
to the Project, and after the Borrower obtains Knowledge of any occurrence that
has or could reasonably be expected to result in any cancellation or non-renewal
of, any policy of Required Insurance, notice (including a summary description)
of such event, and within thirty days after an Authorized Official obtains
knowledge of such event, a report describing such event and the potential
insurance-related impact thereof;
(xix) notice
and prompt delivery of a copy of any periodic reports submitted by the Borrower
to Idaho Power pursuant to the Power Purchase Agreement, including the report
required to be delivered each year pursuant to Section 8.5.2 of the Power
Purchase Agreement;
(xx)
notice and a copy of any other material report filed or required to be filed by
any Major Project Participant with any Governmental Authority relating to the
Project, if the Borrower receives a copy;
(xxi) (a)
an ERISA Event, (b) the adoption of any new Pension Plan by the Borrower or any
ERISA Affiliate, (iii) the adoption of any amendment to a Pension Plan, if such
amendment will result in a material increase in benefits or unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) (c) the commencement of
contributions by the Borrower or any ERISA Affiliate to any Pension Plan that is
subject to Title IV of ERISA or Section 412 of the Internal Revenue Code, or (d)
the receipt by the Borrower or any ERISA Affiliate of a notice from a
Multiemployer Plan sponsor concerning an ERISA Event; and
(xxii)
any notice received from the U.S. Department of Treasury or any other
Governmental Authority relating to any Cash Grant Recapture Liabilities
applicable to the Project, the Borrower or otherwise in connection with Cash
Grant.
(g)
Governmental
and Environmental Indemnity Claims and Reports
. As soon as available, but in
any event:
(i)
within ten days after any such report is submitted, a copy of any report
required to be filed by the Borrower (or on behalf of the Borrower) or the
Operator, if the Borrower receives a copy, with any Governmental Authority other
than in the ordinary course of business;
49
(ii)
within twenty-four hours after the Borrower obtains Knowledge, or
reasonably should have obtained knowledge, of any accident related to the
Project having a material and adverse impact on the environment or on human
health (including any accident resulting in the loss of life), notice thereof,
and within ten days thereafter a report describing such accident, the impact of
such accident and the remedial efforts required and (as and when taken)
implemented with respect thereto;
(iii) within
thirty days after the close of each Fiscal Year, a report, satisfactory to the
Loan Servicer in its reasonable discretion, summarizing any violations of
Environmental Laws in connection with the Project over the preceding year, with
sufficient information (as determined by the Loan Servicer) to allow the Loan
Servicer to monitor the Project's performance with respect to the environment
and its compliance with Environmental Laws and including a narrative summary of
(A) the results of environmental monitoring or sampling activity and (B) any
violations of Environmental Laws identified by any environmental Governmental
Authority and any remedial action taken with respect thereto; and
(iv) within
ten days after an Authorized Official of the Borrower obtains knowledge thereof,
any Environmental Claim by any Governmental Authority or any assertion of an
Environmental Claim or claims involving an amount in excess of two hundred and
fifty thousand Dollars ($250,000) individually or five hundred thousand Dollars
($500,000) in the aggregate by any other Person or Persons together with a copy
of any correspondence relating thereto and a description of any steps the
Borrower or the Operator is taking and proposes to take with respect
thereto.
(h)
Required
Discussions
. Upon the request of any Credit Party, an Authorized Official of
the Borrower shall schedule a date to discuss any updated Operating Plan,
updated Operating Forecast, updated Financial Plan, updated Base Case
Projections, and such other matters relating to the Project as any Credit Party
may request.
(i)
Annual
Safety Audit
. Within thirty days after its completion, a copy of the report
regarding the required annual safety audit pursuant to
Section 6.16
.
(j)
Additional
Project Documents and Governmental Approvals
. As soon as available, but in
no event later than ten Business Days after the receipt thereof by the Borrower,
copies of (i) all Additional Project Documents and (ii) any Governmental
Approvals and other Required Consents obtained or entered into by the Borrower
or the Operator after the Financial Closing Date.
(k)
Additional Audit Reports
. As soon as available, but in any event within
ten Business Days after the receipt thereof by the Borrower, copies of all other
material annual or interim reports submitted to the Borrower by the Borrower's
Accountant.
(l)
Other Reports and Filings
. Promptly upon transmission thereof, copies of
all financial information, statutory audits, proxy materials and other
information and reports, if any, which the Borrower has delivered to the
Securities and Exchange Commission or any successor regulatory authority.
50
(m)
Annual Insurance Certificates
. As soon as available, but in any event not
later than thirty days after the end of each Fiscal Year, and at other times
required by
Schedule 6.3(b)
to the Disclosure Letter, a certificate of an
Authorized Official of the Borrower with respect to Required Insurance
conforming to the insurance requirements of such Schedule, certifying that (x)
all Required Insurance is in place, in good standing and in full force and
effect without default and all premiums due thereon have been paid in full or
are to be paid by arrangements satisfactory to the Loan Servicer, and (y) all
certificates or policies with respect to any additional renewal or substitute
insurance obtained by the Borrower since the later of the previous certificate
delivered pursuant to this
Section 6.1(m)
, designate the Collateral Agent
as loss payee, as appropriate, and the Secured Parties as additional
insured.
(n)
Information
Pertaining to Banks Providing Reserve Letters of Credit or Base Equity Letters
of Credit
. As soon as available, but in any event, no later than ten days
after any change in the credit rating of any bank providing a Reserve Letter of
Credit or a Base Equity Letter of Credit, as applicable.
(o)
Other
Information
. Promptly upon request, such other information or documents as
the Loan Servicer or any Independent Consultant may reasonably request with
respect to the Borrower, the Project, Holdco, the Sponsor or any Material
Project Party.
(p)
Information
Available for Disclosure
.
(i)
In accordance with Section 609.10(d)(19) of the Applicable Loan Guarantee
Requirements, (A) the information that will be made available to DOE is as set
forth in the Loan Documents, and (B) any information can be disclosed as
required under federal law; and
(ii)
without limiting the generality of
clause (i)
above, all correspondence,
books, documents, papers and records relating to the structuring, negotiation
and execution of this Loan Guarantee Agreement and the transactions contemplated
herein, including this Loan Guarantee Agreement, the Loan Documents, the
pre-application, the Application, the term sheet and all supporting
documentation, Financial Statements, audit reports of independent accounting
firms, permits and regulatory approvals furnished or otherwise made available to
DOE, will be handled in accordance with all applicable federal laws, rules, or
regulations, including the Trade Secrets Act, 18 U.S.C. §1905, and the Freedom
of Information Act, 5 U.S.C. §552, and DOE's implementing regulations at 10
C.F.R. 1004.
6.2
Books,
Records and Inspections; Accounting and Auditing Matters
.
(a) The
Borrower shall keep proper records and books of account, maintain adequate
management information and cost control systems, and make arrangements
reasonably satisfactory to the Loan Servicer for overseeing the financial
operations of the Borrower, including its cash management, accounting and
financial reporting, for overseeing the Borrower's relationship with DOE and the
Borrower's Accountant and, in accordance with Section 609.10(f)(1) of the
Applicable Loan Guarantee Requirements, for facilitating the effective and
accurate audit and performance evaluation of the Project pursuant to the
Applicable Loan Guarantee Requirements and Program Requirements.
51
(b) Each
set of Financial Statements the Borrower delivers shall be prepared in
accordance with GAAP consistently applied except to the extent that there have
been any changes to such accounting principles or the application thereof noted
in such Financial Statements and all financial records of the Borrower shall be
maintained at the principal executive office of the Borrower.
(c) The
Borrower (i) shall consult and cooperate with the Loan Servicer and the
Collateral Agent regarding the Project upon the Loan Servicer's or the
Collateral Agent's request, (ii) in accordance with Section 609.10(d)(18) of the
Applicable Loan Guarantee Requirements, shall permit officers and designated
representatives of the Loan Servicer, its agents, the Comptroller General and
the Independent Consultants to visit and inspect the Project and any other
facilities and properties of the Borrower upon reasonable notice and at
reasonable times during normal business hours, (iii) in accordance with Section
609.10(f)(2) of the Applicable Loan Guarantee Requirements, shall provide to
officers and designated representatives of the Loan Servicer, its agents,
including the Collateral Agent, the Comptroller General and the Independent
Consultants access to any pertinent books, documents, papers and records of the
Borrower for the purpose of audit, examination, inspection and monitoring upon
reasonable notice and at reasonable times during normal business hours, to
examine and discuss the affairs, finances and accounts of the Borrower with the
representatives of the Borrower, (iv) shall afford proper facilities for such
inspection, shall make copies (at the Borrower's expense) of any records that
are subject to such inspection, shall make available all information related to
the Project, including all Technology and Intellectual Property Rights owned or
controlled by the Borrower and utilized in the construction, startup or
operation of the Project, as may be reasonably necessary in order to determine
the technical progress, soundness of financial condition, management stability,
compliance with environmental requirements, adequacy of health and safety
conditions, and all other matters with respect to the Project, and (v) shall
require each Major Project Participant to make available to the Loan Servicer,
its agents, including the Collateral Agent, the Comptroller General and the
Independent Consultants the same rights of inspection and access to its books
and records that such Major Project Participant makes available to the
Borrower.
(d) The
Borrower shall upon the request of the Loan Servicer, authorize the Borrower's
Accountant to communicate directly with the Loan Servicer, the Collateral Agent,
the Comptroller General and the Independent Consultants and their
representatives at any time regarding any of the Borrower's accounts and
operations.
(e) In
the event that the Borrower's Accountant should cease to be the accountants of
the Borrower for any reason, the Borrower shall appoint and maintain as the
Borrower's Accountant another firm of independent public accountants, which firm
shall be nationally recognized, and shall be approved by the Loan Servicer.
(f) The
Borrower shall retain all records relating to expenditures with respect to which
Advances were made for five years after the Advance was made with respect to
such expenditure.
52
6.3
Maintenance of Property and Insurance
.
(a)
The Borrower shall (i) keep all its property and assets in good working order
and condition to the extent necessary to ensure that its business can be
conducted properly at all times, (ii) possess all equipment and maintain such
spare parts and inventory (or renew and replace such equipment) necessary for
the operation of the Project, and operate, maintain or repair the Project, or
cause the Project to be operated, maintained and repaired, in each case in
accordance with the standards set forth in the Management Services Agreement,
the other Transaction Documents, manufacturer's recommendations, insurance
requirements and the "reasonable and prudent operator" standard, and (iii)
maintain or cause to be maintained at the Project Site a complete set of plans
and specifications for the Project.
(b) The
Borrower shall keep the Project, its present and future properties and its
business insured and as required by and in accordance with the terms and
provisions described on
Schedule 6.3(b)
to the Disclosure Letter. The
Borrower shall obtain and maintain and shall pursue any contractual remedies to
cause other Persons required to provide Required Insurance, including any
Construction Contractor and the Operator, to obtain and maintain such Required
Insurance or alternate coverage provided for on such
Schedule 6.3(b)
or
in their respective Project Documents, as the case may be.
6.4
Maintenance of Existence; Conduct of Business
.
The Borrower shall (i) maintain and preserve its existence as a
limited liability company organized and existing under the laws of Delaware and
acquire, maintain, and renew all rights, licenses, permits, approvals, consents,
contracts, powers, privileges, Leases, lands, sanctions, and franchises
necessary in the normal conduct of its business and in the performance of its
obligations hereunder and under the other Transaction Documents, (ii) observe
all limited liability company formalities and (iii) engage only in the business
contemplated by the Transaction Documents.
6.5
Compliance
with Governmental Rules; Environmental Laws; Governmental
Approvals
.
The Borrower shall, and with respect to work relating to the
Project shall pursue all contractual remedies available to it to cause each
Environmental Affiliate to, (i) comply with, and shall conduct its business,
operations, assets, equipment, property, leaseholds, and other facilities (A) in
compliance with all Environmental Laws and Environmental Approvals, including
requirements under the National Environmental Policy Act and (B) in all material
respects in compliance with all other Governmental Rules, and (ii) procure,
maintain and comply with all Governmental Approvals required for the ownership,
construction, financing, maintenance or operation of the Project or any part
thereof as contemplated by the Transaction Documents at or prior to such time as
such Governmental Approval is required or necessary, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
6.6
Compliance with Debarment Regulations
.
The Borrower shall provide immediate written notice (including
a brief description) to the Loan Servicer if at any time it learns that the
representations made with respect to Debarment Regulations were erroneous when made or have become erroneous
by reason of changed circumstances.
53
6.7
Tax,
Duties, Expenses, and Liabilities
.
The Borrower shall pay or arrange for the payment before they
become overdue of all present and future (i) material taxes (including stamp
taxes), duties, fees, Periodic Expenses, or other charges payable on or in
connection with the execution, issue, delivery, registration, or notarization,
or for the legality, validity, or enforceability, of this Loan Guarantee
Agreement, any other Transaction Documents and any other documents related to
this Loan Guarantee Agreement (other than those taxes that it is contesting in
good faith and by appropriate proceedings for which reserves have been
established to the extent required by GAAP) and (ii) claims, levies, or
liabilities (including claims for labor, services, materials and supplies), for
sums that have become due and payable and that have or, if unpaid, might become
a Lien (other than a Permitted Lien) upon the property of the Borrower (or any
part thereof).
6.8
Proper Legal Form
.
The Borrower shall take all action to ensure that each of the
Transaction Documents is in proper legal form under the respective governing
laws selected in such Transaction Document, without any further action required
with respect to such legal form for the enforcement of such Transaction
Documents.
6.9
Construction
and Approved Construction Changes; Cost Overruns and
Contingencies
.
(a) The
Borrower shall apply the proceeds of the Advances exclusively to Eligible
Project Costs and shall use its best efforts to cause Physical Completion and
Operational Completion to be achieved on or prior to the Anticipated Completion
Date and within the Construction Budget.
(b) The
Borrower shall not change, reallocate, amend, modify, or supplement or permit or
consent to any changes, reallocations, amendments, modifications, or supplements
(each a "
Construction Change
") of any of the provisions of the
Construction Budget, except for the following approved construction changes
("
Approved Construction Changes
"):
(i)
any Construction Change that (x) has been submitted in writing by the Borrower
to the Loan Servicer (including an explanation in reasonable detail of the
reasons for such Construction Change) and (y) has received a written approval
from the Loan Servicer in consultation with the Independent Engineer; or
(ii)
any increase of any of the line items in the Construction Budget if such
increase (x) is not individually in excess of ten percent (10%) of any such line
item, and (y) when aggregated with all other changes to the Construction Budget
in accordance with this
Section 6.9(b)(ii)
since the Financial Closing
Date, would not result in a cumulative net decrease, since the date of this Loan
Guarantee Agreement, of Overrun Contingencies of more than one million two
hundred fifty thousand Dollars ($1,250,000).
54
(c)
All Approved Construction Changes shall be reflected in a revised Construction
Budget, as the case may be, delivered as part of the next Quarterly Reporting
Package.
(d) The
aggregate amount of Budgeted Contingencies available under the Construction
Budget is five million, four hundred and ninety four thousand, three hundred
Dollars ($5,494,300). To the extent that the Construction Budget allows for a
Cost Overrun to be funded from Budgeted Contingencies, such Cost Overrun shall
be funded as a Project Cost and charged against the available Budgeted
Contingency amount. Any Cost Overrun that cannot be funded from Budgeted
Contingencies shall be funded from Overrun Equity.
6.10
Operating
Plan
.
From and after the Project Completion Date, the Borrower shall
cause the Project to be operated in all material respects pursuant to the
Operating Plan then in effect.
6.11
Diligent Construction
of Project and Operations
.
The Borrower shall construct, or cause to be constructed, the
Project diligently in accordance with the Project Plans, the Construction
Contracts and the other Transaction Documents, Governmental Approvals the
Construction Budget and any Governmental Rules. The Borrower shall conduct, and
shall cause the Operator to conduct, the operations of the Project on the basis
of customary commercial practice and arm's-length arrangements, or as otherwise
set forth in the Project Documents, with due diligence and efficiency and under
the supervision of qualified and experienced management.
6.12
Use of
Proceeds
.
The Borrower shall use the proceeds of all Equity Contributions
and all Advances in accordance with the terms and conditions of all applicable
Loan Documents.
6.13
Maintenance of
Transaction Documents; Performance of Obligations
.
The Borrower shall maintain in full force and effect each of
the Transaction Documents to which it is a party in accordance with the
respective terms thereof. The Borrower shall comply with the provisions of and
perform all of its obligations under each Transaction Document in accordance
with the terms thereof and shall diligently pursue all of its rights and
remedies thereunder. The Borrower shall maintain, or cause to be maintained, in
full force and effect, each of the Project Accounts in accordance with the
provisions of the Depositary Agreement.
6.14
Cash
Deposits
.
The Borrower shall at all times following the Initial Advance
Date, instruct each Person remitting cash to or for the account of the Borrower
to deposit such cash in accordance with the terms of the Depositary Agreement,
and shall otherwise comply with the provisions thereof, and shall remit any
amounts received by the Borrower or received by third parties on its behalf to
the Collateral Agent for deposit in accordance with the terms of the Depositary
Agreement.
55
6.15
Debt Service
Reserve
.
6.15.1.
The Borrower shall establish and maintain in accordance with the provisions of
the Depositary Agreement a reserve for Debt Service (the "
Debt Service
Reserve
"). The Debt Service Reserve shall consist of any combination of cash
and the maximum amounts a beneficiary may from time to time draw under Reserve
Letters of Credit credited to the Debt Service Reserve. The amount on deposit in
or credited to the Debt Service Reserve shall at all times following the Project
Completion Date be no less than the Debt Service Reserve Requirement.
6.16
Safety
Audit
.
Not less frequently than once each calendar year, the Borrower
shall conduct a safety audit of the Project in a manner reasonably satisfactory
to the Loan Servicer, in its sole discretion, including an analysis of whether
the Project is in compliance with all Governmental Rules and Environmental Laws
and each such safety audit shall result in the prompt preparation of a written
report with respect thereto which shall be delivered to the Loan Servicer and
the Independent Engineer, for review and approval by the Loan Servicer. The
Borrower shall provide for the prompt correction of any deficiencies identified
in such safety audit and for the operation and maintenance of the Project in
accordance with any recommendations set forth therein.
6.17
Title; Rights to
Land
.
The Borrower shall preserve and maintain good and valid title
to all its property and assets, the Project and such rights to use the Project
Site as are necessary to construct, operate and maintain the Project in
accordance with the requirements of the Transaction Documents.
6.18
Independent
Consultants
.
The Borrower (i) shall cooperate in all respects with each
Independent Consultant, and (ii) shall ensure that each Independent Consultant
is provided with all information reasonably requested by such Independent
Consultant in fulfilling its duties to DOE and the Loan Servicer and ensure that
any information that it may supply to such Independent Consultant is accurate
and not, by omission of information or otherwise, misleading in any material
respect at the time such information is provided.
6.19
Creation and
Perfection of Security Interests; Additional Documents; Filings and
Recordings
.
(a) The
Borrower shall execute and deliver, from time to time as reasonably requested by
the Loan Servicer, DOE or the Collateral Agent, at the Borrower's expense, such
other documents as shall be necessary or advisable or that the Loan Servicer,
DOE or the Collateral Agent may reasonably request in connection with the rights
and remedies of DOE and the Collateral Agent granted or provided for by the
Transaction Documents, and to consummate the transactions contemplated
therein.
56
(b)
(i) The Borrower shall, at its
own expense, take all actions that have been or shall be requested by the Loan
Servicer, DOE, the Collateral Agent or that the Borrower knows are necessary to
establish, maintain, protect, perfect and continue the perfection of the first
priority (subject to Permitted Liens) security interests of the Secured Parties
created by or to be created by the Security Documents and shall furnish timely
notice of the necessity of any such action, together with such instruments, in
execution form, and such other information as may be required or reasonably
requested to enable any appropriate Secured Party to effect any such action.
Without limiting the generality of the foregoing, the Borrower shall, at its own
expense, (A) execute or cause to be executed and shall file or cause to be filed
or register or cause to be registered such financing statements, continuation
statements, fixture filings and mortgages or deeds of trust in all places
necessary or advisable (in the opinion of counsel for the Loan Servicer, DOE or
the Collateral Agent) to establish, maintain and perfect such security interests
and in all other places that the Loan Servicer, DOE or the Collateral Agent
shall reasonably request, (B) discharge all other Liens (other than Permitted
Liens) or other claims adversely affecting the rights of the Secured Parties in
the Collateral and (C) deliver or publish all notices to third parties that may
be required to establish or maintain the validity, perfection or priority of any
Lien created pursuant to the Security Documents; and
(ii)
The Borrower shall do everything necessary or advisable in the judgment of the
Loan Servicer, DOE or the Collateral Agent (including filing, registering and
recording all necessary documents and paying all fees, taxes, levies, imposts
and Periodic Expenses in connection therewith) to (A) create security
arrangements, including, if applicable, the establishment of a pledge or the
perfection of any Lien or, as applicable, the enforceability of a Lien as
against the Borrower and any subsequent lienor (including a judgment lienor),
holder of a charge, or transferee for or not for value, in bulk, by operation of
law, or otherwise, in each case granted, with respect to future assets in
accordance with the requirements of all Governmental Rules, or the law of any
other jurisdiction, as applicable, (B) maintain the security and pledges created
by the Security Documents in full force and effect at all times (including, as
applicable, the priority thereof) and (C) preserve and protect the Collateral
and protect and enforce its rights and title, and the rights and title of the
Credit Parties, to the security created by the Security Documents. Furthermore,
the Borrower shall cause to be delivered to the Loan Servicer such opinions of
counsel and other related documents as may be reasonably requested by the Loan
Servicer, DOE or the Collateral Agent to assure compliance with this
Section
6.19
;
provided
that the foregoing shall not be interpreted to require
the Borrower to execute a Local Accounts Control Agreement with respect to any
Unrestricted Local Account prior to the Initial Advance Date.
(c) If
the Borrower shall at any time acquire any interest in property not covered by
the Security Documents then in full force and effect or enter into any
Additional Project Document not covered by such Security Documents, the Borrower
shall promptly (i) execute, deliver and record a supplement to the Security
Documents, satisfactory in form and substance to the Loan Servicer, (ii) ensure
that the security interest shall be valid and effective, and (iii) if requested
by the Loan Servicer, deliver to the Credit Parties a Direct Agreement with
respect to any such Additional Project Document.
57
6.20
Event of
Loss
.
If any material Event of Loss shall occur with respect to the
Project or any part thereof, the Borrower shall (i) diligently pursue all of its
rights to compensation against all relevant insurers, reinsurers and
Governmental Authorities, as applicable, in respect of such event, (ii) not,
without the written consent of the Loan Servicer, compromise or settle any claim
with respect to any Event of Loss involving an amount in excess of one hundred
thousand Dollars ($100,000) per claim; and (iv) pay or apply all Loss Proceeds
stemming from such event in accordance with
Section 3.4.3(a)(iv)
and
Section 6.21
.
6.21
Application of Loss
Proceeds
.
(a)
All Loss Proceeds shall be applied as provided in this
Section 6.21
. All
Loss Proceeds shall be paid by the relevant insurers, reinsurers and
Governmental Authorities, as applicable, directly to the Collateral Agent as
loss payee and, if paid to the Borrower, such Loss Proceeds shall be received in
trust for the benefit of the Collateral Agent segregated from other funds of the
Borrower, and shall be forthwith paid over to the Collateral Agent in the same
form as received (with any necessary endorsement).
(b) Upon
the occurrence of any Event of Loss with respect to which Loss Proceeds are
payable in amounts less than or equal to one hundred thousand Dollars ($100,000)
arising from any single loss or series of related losses, the Borrower shall
apply or cause to be applied the Loss Proceeds directly for the replacement or
repair of damaged assets as provided in Section 13.1.2(a) of the Depositary
Agreement.
(c) Upon
the occurrence of any Event of Loss with respect to which Loss Proceeds are
payable in amounts greater than one hundred thousand Dollars ($100,000)) but
less than or equal to four million Dollars ($4,000,000) arising from any single
loss or series of related losses, the Borrower shall apply or cause to be
applied the Loss Proceeds directly for the replacement or repair of damaged
assets as provided in Section 13.1.2(b) of the Depositary Agreement if, and only
if, the Loan Servicer shall have determined and advised the Collateral Agent in
writing that:
(i)
within ninety days after the occurrence of the Event of Loss giving rise to such
proceeds, the Borrower delivers a satisfactory Restoration or Replacement Plan
to the Loan Servicer and the Independent Engineer with respect to such Event of
Loss demonstrating that repair or replacement of the relevant portion of the
Project is technically and economically feasible;
(ii)
no Event of Default has occurred and is continuing, and the proposed repair and
replacement in accordance with the Restoration or Replacement Plan delivered
(including the anticipated time to complete the same) shall not result in a
Potential Default or Event of Default; and
(iii) the
Borrower is in compliance with the conditions set forth in Section 13.1.2(b) of
the Depositary Agreement and such other conditions and requirements as the Loan
Servicer shall consider appropriate in the circumstances.
58
(d) if
(A) the Borrower does not deliver a Restoration or Replacement Plan and the
accompanying deliveries referred to in
Section 6.21(c)(i)
satisfactory to
the Loan Servicer within the required ninety day period, or (B) the Borrower
notifies the Loan Servicer in writing that it does not intend to repair or
replace the damaged assets, or (C) after the work set forth in an approved
Restoration or Replacement Plan is completed, there are excess Loss Proceeds on
deposit in or standing to the credit of such Loss Proceeds Account, the Borrower
shall cause the Depositary Bank on the second Business Day following receipt of
the written instruction of the Borrower in a Loss Proceeds Request Certificate,
or the Loan Servicer shall direct in writing the Collateral Agent to cause the
Depositary Bank (in each case with a copy to the Collateral Agent and the
Administrative Agent or the Borrower, as applicable), to transfer to the account
directed by the Loan Servicer an amount equal to such Loss Proceeds for
mandatory prepayment of the Guaranteed Loan in accordance with
Section
3.4.3(a)(iv)
(
Mandatory Prepayments
).
(e) Upon
the occurrence of an Event of Loss, if the Project is to be restored or repaired
in accordance with
clause (b)
or
(c)
above, the Borrower shall, on
the first Business Day of each month until such restoration and repair has been
completed and the contractors performing such restoration or repair work have
been paid in full, deliver to the Collateral Agent and the Loan Servicer the
following:
(i)
a detailed summary of the work performed in connection with any such restoration
or repair during the preceding month and the itemized expenses that are then due
and payable, together with copies of all invoices, conditional (upon payment
only) lien waivers from the contractors performing such restoration or repair
work and other information and documents reasonably requested by the Loan
Servicer with respect to such work and expenses; and
(ii)
a proposed Extraordinary Proceeds Release Certificate directing the Loan
Servicer to disburse to the contractors performing such restoration or repair
work amounts constituting Loss Proceeds on deposit in the Loss Proceeds Account
in the respective amounts then due and payable to such contractors.
(f) Upon
the completion of any such restoration and repair work, or if restoration and
repair work is not undertaken pursuant to this
Section 6.21
, the Loan
Servicer may apply any amounts constituting Loss Proceeds on deposit in the Loss
Proceeds Account to the prepayment of the DOE Guaranteed Loans in accordance
with
Section 3.4.3(a)(iv)
.
(g)
Any Loss Proceeds in respect of an Event of Loss that resulted in a total loss
to the Project Facility shall, be transferred as set forth in Section 13.1.2(c)
of the Depositary Agreement for mandatory prepayment of the Guaranteed Loan in
accordance with
Section 3.4.3(a)(iv)
. The Dollar thresholds specified in
Section 6.21(b)
of this Loan Guarantee Agreement and
Section 13.1.2(b)
of the Depositary Agreement shall not apply to transfers required to be made
pursuant to this
Section 6.21(g)
.
6.22
Acceptance and
Startup Testing
.
The Borrower shall consult with and provide, or cause to be
provided, reasonable notice to the Loan Servicer and Independent Engineer
regarding provisions related to startup and testing of facility and equipment
pursuant to the Construction Contracts and the Management Services Agreement.
59
6.23
Technology
.
(a) The
Borrower shall not take any action that would in any way prevent it from
exercising the rights granted to the Borrower under the Equipment Contract, or
that would otherwise materially conflict with or adversely affect the rights
granted to the Borrower under the Equipment Contract.
(b) The
Borrower shall take all commercially reasonable actions necessary to maintain
and protect the Technology and Intellectual Property Rights licensed under the
Equipment Contract, including (i) protecting the secrecy and confidentiality of
all confidential information and trade secrets having material value by having
and enforcing a policy requiring all current and former employees, consultants,
licensees, vendors and contractors to execute appropriate confidentiality and
invention assignment agreements; and (ii) taking all commercially reasonable
actions necessary to ensure that none of the Technology that is a trade secret
having a material value falls or has fallen into the public domain.
(c) If
the Borrower becomes aware of any breach or violation of any of the terms or
conditions of the Equipment Contract, the Borrower shall take such actions under
the Equipment Contract to protect the rights granted to the Borrower, including
suing for an injunction against such violation or breach.
6.24
Compliance with
Certain U.S. Government Requirements
.
(a)
Recovery Act
. The Borrower shall timely comply with the reporting
requirements set out in Section 1512(c) of Title XV of Division A of the
Recovery Act, Such reporting shall be made in accordance with the procedures set
out or otherwise referenced in 2 C.F.R. Section 176.50 and the OMB Implementing
Guidance and, in each case, any amendment, supplement or successor thereto. DOE
may require by notice that such reporting relate back to the date hereof.
Accordingly, Borrower shall at all times maintain such records as may be
necessary, in the event DOE issues such notice, to undertake such reporting
requirements.
(b)
Lobbying
Requirements
. The Borrower shall comply with all requirements of 31 U.S.C.
§1352, including if any funds have been paid or will be paid to any Person for
influencing or attempting to influence an officer or employee of any agency, a
Member of Congress (as defined for purposes of 31 U.S.C. §1352), an officer or
employee of Congress, or an employee of a Member of Congress in connection with
the DOE Guaranteed Loans, the Borrower shall complete and submit Standard
Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its
instructions.
(c)
Use of U.S. Government Funds
. The Borrower shall comply with Section
609.10(c) of the Applicable Loan Guarantee Requirements regarding the
prohibition on the use of funds obtained from the U.S. Government, or from a
loan or other instrument guaranteed by the U.S. Government, for the payment of
Credit Subsidy Costs, administrative fees, or other fees charged by or paid to
DOE relating to the Applicable Loan Guarantee Requirements, except to the extent
explicitly authorized by an act of Congress.
60
(d)
Program
Requirements
. The Borrower shall timely comply with all other Program
Requirements.
6.25
Foreign Assets
Control Regulations; OFAC; Etc
.
(a) The
Borrower, Holdco, the Sponsor, the Investor and any Affiliate thereof shall at
all times comply with (i) all Foreign Asset Control Regulations, (ii) all
applicable orders, rules and regulations of the OFAC, and (iii) the Patriot
Act.
(b) The
Borrower shall ensure that the making of any Advances and the use of the
proceeds thereof will not violate any Foreign Asset Control Regulations or any
anti-boycott laws or regulations.
(c)
Neither the Borrower, Holdco, the Sponsor, the Investor nor any Affiliate
thereof, nor any of their members, directors, officers, parents or subsidiaries:
(x) shall be subject to United States or multilateral economic or trade
sanctions in which the United States participates, (y) shall be owned or
controlled by, or act on behalf of, any governments, corporations, entities or
individuals that are subject to United States or multilateral economic or trade
sanctions in which the United States participates, or (z) shall be a Prohibited
Person or otherwise named, identified or described on any blocked persons list,
designated nationals list, denied persons list, entity list, debarred party
list, unverified list, sanctions list or other list of individuals or entities
with whom United States persons may not conduct business, including lists
published or maintained by the OFAC, lists published or maintained by the U.S.
Department of Commerce, and lists published or maintained by the U.S. Department
of State.
(d)
None of the Collateral shall be traded or used, directly or indirectly, by a
Prohibited Person or by a Person organized in a Prohibited Jurisdiction.
6.26
Davis-Bacon
Act
.
(a)
In accordance with Section 1702(k) of Title XVII, beginning on the date hereof,
all laborers and mechanics employed by contractors and subcontractors in the
performance of construction work financed in whole or in part by the DOE
Guaranteed Loans shall be paid wages at rates not less than those set forth in
the wage determination(s) of the Secretary of Labor set forth in
Schedule 1
to
Exhibit C
. The contract clauses set forth in
Exhibit C
shall be incorporated into all Davis-Bacon Act Covered Contracts.
(b) The
Borrower shall, on DOE's behalf, and in accordance with subparagraph (b)(3)(i)
of
Exhibit C
maintain the certified payroll records that shall be
provided weekly by each DBA Contract Party and shall systematically review those
records for compliance with the Davis-Bacon Act. The Borrower shall promptly
notify the Loan Servicer in writing if it receives any complaint related to
non-compliance with the Davis-Bacon Act, or discovers an incident that the
Borrower reasonably believes to be a case of such non-compliance and which, in
each case, the Borrower cannot resolve on its own. In such instances, the
Borrower shall forward to the Loan Servicer (1) the complaint or a written
summary of the non-compliant incident, (2) a summary of the Borrower's
investigation into such complaint or such incident, and (3) the relevant
certified payroll records. Certified payroll records shall be maintained by the
Borrower for three (3) years after completion of work. Notwithstanding anything
to the contrary in subparagraph (b)(3)(ii)(A) of
Exhibit C
, the Borrower
shall maintain such certified payroll records at a site designated by the
Borrower and shall make such records available (and provide copies) to the Loan
Servicer and the U.S. Department of Labor within five (5) days of a request by
DOE or the Department of Labor. Certified payroll records maintained by the
Borrower shall be considered federal government records for the purposes of the
Freedom of Information Act, 42 U.S.C. §552.
61
(c) If
and to the extent performance of construction work financed in whole or in part
by the DOE Guaranteed Loans began prior to the date hereof, the Borrower shall,
pursuant to the provisions of 29 C.F.R. 1.6(g), retroactively adjust, and cause
each DBA Contract Party to retroactively adjust, the wages of each laborer and
mechanic employed by a DBA Contract Party that performed construction work prior
to the date hereof, so that each such laborer or mechanic is paid any such
additional wages necessary for such laborers and mechanics to have been paid at
rates not less than those indicated in the wage determination(s) listed on
Schedule 1
to
Exhibit C
;
provided
,
however
, that
this
clause (c)
shall not apply if and to the extent the Borrower obtains
an exemption pursuant to the provisions of 29 C.F.R. 1.6(g) .
(d)
If the Borrower, the Sponsor or any Affiliate of the Borrower or the Sponsor
intends to enter into a Davis-Bacon Covered Contract after the date hereof, the
Borrower shall provide DOE (i) a statement of the work for any DBA Contract
Party that will perform construction, alteration, or repair of a building or
work financed in whole or in part by the DOE Guaranteed Loans and (ii) any other
information relating to such Davis-Bacon Covered Contract requested by DOE (the
"
DBA Bid Information
"). If the Borrower, the Sponsor, or any Affiliate of
the Borrower or the Sponsor does not conduct a bid solicitation or similar
competition for such Davis-Bacon Act Covered Contract, the DBA Bid Information
shall be provided no less than ten (10) Business Days prior to the execution of
such Davis-Bacon Act Covered Contract. If the Borrower, the Sponsor, or any
Affiliate of the Borrower or the Sponsor conducts a bid solicitation or similar
competition for any such Davis-Bacon Act Covered Contract after the Financial
Closing Date, (A) the DBA Bid Information shall be provided to DOE no less than
ten (10) Business Days prior to the DBA Contract Party’s issuance of such
solicitation or similar competition and as soon as practicable prior to the
effective date of any amendment or modification of such solicitation or similar
competition and (B) the Borrower shall (x) notify DOE at least ten (10) Business
Days prior to the opening of received bids and (y) notify DOE at least ten (10)
Business Days prior to the execution of such Davis-Bacon Act Covered
Contract.
(e) After
the date hereof, if the Borrower, the Sponsor or any Affiliate of the Borrower
or the Sponsor intends to commence work under a Davis-Bacon Covered Contract for
which it has not yet received a wage determination from DOE, the Borrower shall
provide to DOE (i) a copy of the executed contract or statements of the work for
any DBA Contract Party that will perform construction, alteration, or repair of
a building or work financed in whole or in part by the DOE Guaranteed Loans and
(ii) any other information requested by DOE relating to such Davis-Bacon Covered
Contract (the "
DBA Wage Determination Information
"). Such DBA Wage
Determination Information shall be provided no less than ten (10) Business Days
prior to the commencement of work under such Davis-Bacon Act Covered
Contract.
62
6.27
ERISA
Covenants
.
(a)
The Borrower shall do, and shall cause each of its ERISA Affiliates to do, each
of the following: (i) maintain each Pension Plan in compliance in all material
respects with the applicable provisions of ERISA, the Internal Revenue Code or
other federal or state law; (ii) cause each Qualified Plan to maintain its
qualified status under Section 401(a) of the Internal Revenue Code; (iii) timely
make all required contributions to any Pension Plan; (iv) not become a party to
any Multiemployer Plan; (v) ensure that all liabilities under each Pension Plan
are either (A) funded to at least the minimum level required by law or, if
higher, to the level required by the terms governing such Pension Plan, (B)
insured with a reputable insurance company, or (C) provided for or recognized in
the Financial Statements most recently delivered to the Loan Servicer under
Section 6.1
; and (vi) ensure that the contributions or premium payments
to or in respect of each Pension Plan is and continues to be promptly paid at no
less than the rates required under the rules of such Pension Plan and in
accordance with the most recent actuarial advice received in relation to such
Pension Plan and applicable law.
(b) The
Borrower shall not, nor shall it permit any of ERISA Affiliate to, (i) terminate
any Pension Plan so as to result in any material (in the opinion of the Loan
Servicer) liability to the Borrower or any ERISA Affiliate, (ii) permit to exist
any ERISA Event, or any other event or condition, which presents the risk of a
material (in the opinion of the Loan Servicer) liability to any ERISA Affiliate,
(iii) make a complete or partial withdrawal (within the meaning of Section 4201
of ERISA) from any Multiemployer Plan so as to result in any material (in the
opinion of the Loan Servicer) liability to the Borrower or any ERISA Affiliate,
(iv) enter into any new Plan or modify any existing Plan so as to increase its
obligations thereunder which could result in any material (in the opinion of the
Loan Servicer) liability to the Borrower or any ERISA Affiliate, or (v) permit
the present value of all nonforfeitable accrued benefits under any Pension Plan
(using the actuarial assumptions utilized by the PBGC upon termination of an
employee pension benefit plan subject to Title IV of ERISA) materially (in the
opinion of the Loan Servicer) to exceed the fair market value of the Pension
Plan's assets allocable to such benefits, all determined as of the most recent
valuation date for each such Pension Plan.
6.28
Corrupt Practices
Laws
.
(a) The Borrower, Holdco, the Sponsor, the Investor
and their respective officers, directors, employees and agents shall comply with
all applicable Corrupt Practices Laws in obtaining any consents, licenses,
approvals, authorizations, rights, or privileges with respect to the Project;
(b) the Borrower, its officers directors, employees and agents shall otherwise
conduct the Project and the Borrower's business in compliance with all
applicable Corrupt Practices Laws; and (c) the internal management and
accounting practices and controls of the Borrower, Holdco, the Sponsor and the
Investor shall at all times be adequate to ensure compliance with all Corrupt
Practices Laws.
6.29
Separateness
Provisions
.
The Borrower shall observe all of the separateness and other
provisions and procedures in its certificate of formation and the Borrower's LLC
Agreement.
63
6.30
Cash Grant Recapture
Obligations
.
6.30.1.
During the Recapture Period, the Borrower shall comply with the Cash Grant
Guidance and the Cash Grant Terms and Conditions, including all requirements to
file annual performance reports, file annual certifications that the Project has
not been disposed of to a Disqualified Person and that the Project continues to
qualify as "specified energy property" (as defined in Section 1603(d) of the
Recovery Act) and maintain proper project, financial and accounting records.
6.30.2.
To the extent required by the Cash Grant Guidance and the Cash Grant Terms and
Conditions and during the Recapture Period, the Borrower shall deliver to the
U.S. Department of Treasury, together with a copy to the Loan Servicer, (A)
within ten days of the due date for filing with the U.S. Department of the
Treasury as provided in the Cash Grant Guidance or Cash Grant Terms and
Conditions, an annual project performance report and a certification that no
direct or indirect equity interests in the Borrower have been transferred to a
Disqualified Person and (B) the certification that the Project continues to
qualify as "specified energy property" (as defined in Section 1603(d) of the
Recovery Act). During the Recapture Period, the Borrower shall maintain proper
financial and accounting records with respect to the Qualifying Costs incurred
with respect to the Project in accordance with the requirements of Cash Grant
Guidance and Cash Grant Terms and Conditions.
6.30.3.
In the event the Borrower responds to a notice received from the U.S. Department
of Treasury or any other Governmental Authority relating to any Cash Grant
Recapture Liabilities applicable to the Project or otherwise in connection with
the Cash Grant, the Borrower shall grant the Loan Servicer an opportunity to
comment on any such response to such notice and the Borrower shall include any
such comments in such response.
6.31
Owner's Engineer;
Construction Manager
.
The Borrower will maintain at all times prior to the Project
Completion Date, an Owner's Engineer and a Construction Manager, each of whom
shall be at all times reasonably satisfactory to the Loan Servicer and the
Independent Engineer.
6.32
Amendments to
Mortgage
.
The Borrower will execute and deliver all documents and
instruments, make all filings and registrations and perform all other actions
necessary in connection with any amendments to the Mortgage requested by the
Loan Servicer after the Financial Closing Date.
ARTICLE 7
NEGATIVE COVENANTS
The
Borrower covenants and agrees that until the Security Discharge Date, unless the
Loan Servicer waives compliance in writing:
64
7.1
Indebtedness
.
The Borrower shall not, and shall not agree to, incur, create,
guarantee, assume, permit to exist or otherwise become liable for any
Indebtedness, other than Permitted Indebtedness.
7.2
Liens
.
The Borrower shall not, and shall not agree to, create, assume
or otherwise permit to exist any Lien upon any of the Collateral or any of its
other property, its Equity Interests, whether now owned or hereafter acquired,
or in any proceeds or income therefrom, other than Permitted Liens.
7.3
Leases
.
The Borrower shall not enter into any agreement or arrangement
to acquire by lease the use of any property or equipment of any kind (including
by sale-leaseback or otherwise), except for the Real Property Rights and other
Permitted Leases in an amount not in excess of the amount budgeted therefor in
the Construction Budget or forecast therefor in the Operating Forecast, as
applicable.
7.4
Loans,
Advances and Investments
.
The Borrower shall not make or permit to remain outstanding any
loans, extensions of credit or advances by the Borrower to or Investments by the
Borrower in (whether by acquisition of any stocks, notes or other securities or
obligations) any Person, except for Permitted Investments or as expressly
provided in the Transaction Documents as in effect on the Financial Closing
Date.
7.5
Capital
Expenditures
.
The Borrower shall not make any Capital Expenditure in any year
except for (a) expenditures contemplated by the Construction Budget or the
Operating Plan, including Major Maintenance, (b) expenditures made from the
proceeds of insurance to the extent permitted by the Loan Documents, and (c)
expenditures approved in advance by the Loan Servicer in the event of an actual
or imminent emergency condition with respect to the Project.
7.6
Subsidiaries;
Partnerships
.
The Borrower shall not: (a) form or have any subsidiaries; (b)
enter into any partnership or a joint venture; (c) acquire any Equity Interest
in or make any capital contribution to any other Person; (d) enter into any
partnership, profit-sharing or royalty agreement or other similar arrangement
whereby the Borrower's income or profits are, or might be, shared with any other
Person; or (e) enter into any management contract or similar arrangement whereby
its business or operations are managed by any other Person, other than the
Management Services Agreement.
7.7
Ordinary
Course of Conduct; No Other Business
.
The Borrower shall not: (a) engage in any business other than
the acquisition, ownership, design, development, construction, financing,
implementation, completion, operation and maintenance of the Project in
accordance with and as contemplated by the Transaction Documents; (b) undertake any action that could reasonably be
expected to lead to a material alteration of the nature of its business or the
nature or scope of the Project; (c) change its name or take any other action
that might adversely affect the Liens created by the Security Documents; or (d)
fail to maintain its limited liability company existence and its right to carry
on its business.
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7.8
Merger; Bankruptcy; Dissolution; Transfer of Assets
.
The Borrower shall not, and shall not agree to: (a) enter into
any transaction of merger or consolidation or convey, sell, lease or otherwise
transfer any of Borrower's property or assets, except (i) transactions permitted
under the Transaction Documents, (ii) sales in the ordinary course of business,
(iii) sales to Idaho Power (or any successor offtaker under the Power Purchase
Agreement) under the terms of the Power Purchase Agreement, and (iv) sales of
equipment or other assets that are (x) obsolete, (y) no longer used or useful in
the operation of the Project, or (z) are replaced by other equipment of equal
value and utility, and in all cases for which the Borrower shall have received
consideration reflecting value that would have been obtained in a transaction on
an arm's length basis with an unaffiliated third party (unless such assets only
have scrap value), each of which, with respect to
clause (iv)
, shall be
verified by the Independent Engineer if requested by the Loan Servicer; (b) wind
up, liquidate, or dissolve itself, commence an Insolvency Proceeding or file any
petition or pass a resolution seeking the same; (c) acquire property or assets
of any other Person (other than purchases or other acquisitions of inventory or
materials or spare parts or Capital Expenditures, each in the ordinary course of
business in accordance with the applicable budget); or (d) transfer or release
(other than as permitted by
clause (a)
above) the Collateral, or other
similar actions.
7.9
Organizational
Documents; Fiscal Year; Legal Form; Capital Structure
.
The Borrower shall not (a) amend or modify its Organizational
Documents, or (b) amend or modify its legal form, its Fiscal Year or its capital
structure (including the issuance of any options, warrants or other rights with
respect thereto).
66
7.10
Restricted
Payments
.
7.10.1.
The Borrower shall not reduce its capital or declare or make or authorize any
dividend, management or any other fee (other than pursuant to the Management
Services Agreement, except that the Performance Fee, as defined in the
Management Services Agreement, shall be subject to the conditions set forth in
Sections 7.10.1(a) - (g)
unless such Performance Fee is being paid
following 30 days after the delivery pursuant to
Section 6.1(c)(i)
of
audited Financial Statements of the Borrower covering the entire period for
which such Performance Fee applies), or distribution of cash or property to its
equity owners on account of any Equity Interest (other than proceeds of any Cash
Grant distributed as set forth in the Cash Grant Waterfall pursuant to Section
12.1.2 of the Depositary Agreement or proceeds of the Advance made pursuant to
Section 2.3.1(b)(vi)(B)
distributed to Holdco), or make a transfer from
the Equity Distribution Account (each of the foregoing a "
Restricted
Payment
"), unless the Borrower satisfies each of the following
conditions:
(a)
the proposed date of such Restricted Payments shall be within fifteen Business
Days after a Semi-Annual Payment Date and no other Restricted Payment has been
made during the current half of the Fiscal Year;
(b)
the Project Completion Date shall have occurred;
(c) no
Event of Default or Potential Default under the Loan Documents exists or would
exist after giving effect to any such Restricted Payment, including any Event of
Default or Potential Default arising because of the occurrence and continuation
of an event that would reasonably be expected to result in Recapture Liabilities
or failure by the Borrower to satisfy any Recapture Liabilities;
(d) each
of the Reserve Accounts are sufficiently funded at the level required by the
Financing Documents as of the date of such Restricted Payment, including:
(i)
all scheduled amounts to be funded into the Long-Term Wellfield Drilling Reserve
Account shall have been made as of the date of such Restricted Payment;
(ii)
the Long-Term Wellfield Drilling Reserve Account shall have a minimum balance of
(1) from the Project Completion Date until (but not including) the fifteenth
anniversary of the Project Completion Date, one million Dollars ($1,000,000),
and (2) thereafter, one million and five hundred thousand Dollars
($1,500,000);
(iii)
the Cap-Ex Reserve Account shall have a minimum balance of (1) from the Project
Completion Date until (but not including) the fifteenth anniversary of the
Project Completion Date, one million and five hundred thousand Dollars
($1,500,000), and (2) thereafter, one million Dollars ($1,000,000);
(e) the
historical 12-month Debt Service Coverage Ratio (or, if less than 12 months have
elapsed since the Project Completion Date, a historical 6-month Debt Service
Coverage Ratio), calculated as of the end of the most recently completed fiscal
quarter, based on the Financial Statements delivered by the Borrower with
respect to such 12-month period, and the projected 36-month Debt Service
Coverage Ratio, calculated based on the then-current Base Case Projections, shall each be at least 1.25 to 1;
provided
, that the calculation of the 36-month Debt Service Coverage
Ratio shall reflect the information set forth in the most recent report provided
pursuant to Section 8.5.2 of the Power Purchase Agreement;
67
(f) either
(i) the First Principal Payment Date shall have occurred or (ii) as of the First
Interest Payment Date (as defined in the FFB Note), the Borrower has made a
voluntary prepayment in accordance with
Section 3.4.2
in an amount equal
to 1/44th of the aggregate amount of DOE Guaranteed Loans outstanding as of such
First Interest Payment Date; and
provided
,
further
that this
condition (f) shall not apply to a distribution of proceeds of the Cash Grant
pursuant to the Cash Grant Waterfall set forth in Section 12.1.2 of the
Depositary Agreement; and
(g) the
Borrower shall have delivered to Loan Servicer, not less than ten Business Days
prior to the proposed date of the Restricted Payment, a Equity Distribution
Account Withdrawal Certificate, in substantially the form attached as Exhibit M
to the Depositary Agreement, which certificate shall include a certification to
the Loan Servicer that, as of the date of such Restricted Payment, sufficient
funds will be available in each of the relevant Reserve Account(s) (as
applicable) to cover all costs of all wellfield work that is then reasonably
anticipated to be required for the Project, taking into account the information
set forth in the then most recent report provided pursuant to Section 8.5.2 of
the Power Purchase Agreement.
7.11
Redemption or
Issuance of Stock
.
The Borrower shall not redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of its Equity Interests now or hereafter
outstanding (or any options or warrants issued by the Borrower with respect to
its Equity Interests) or set aside any funds for any of the foregoing or issue
any Equity Interests to any other Person.
7.12
Other
Transactions
.
Except for the Transaction Documents as in effect on the
Financial Closing Date or as set out on
Schedule 5.14
to the Disclosure
Letter, the Borrower shall not, directly or indirectly: (a) enter into any
transaction or series of related transactions with any Person (including any
Affiliate) other than in the ordinary course of business and on an arm's-length
basis, or (b) establish any sole and exclusive purchasing or sales agency, or
enter into any transaction whereby the Borrower might pay more than the fair
market value for products of others.
7.13
Accounts
.
The Borrower shall not, establish or maintain any bank accounts
other than (i) the Project Accounts, (ii) Unrestricted Local Accounts and (iii)
Local Accounts with respect to which Local Accounts Control Agreements have been
duly executed and delivered in accordance with the terms of the Loan
Documents.
7.14
Debt Service Coverage
Ratio
.
7.14.1.
As of the last day of each fiscal quarter of the Borrower occurring after the
Project Completion Date and continuing until the repayment in full of the DOE
Guaranteed Loans, the Borrower shall not permit its Debt Service Coverage
Ratio for the projected 12-month period (calculated based on the then-current
Base Case Projections), in each case to be less than 1.15 to 1.
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7.15
Commissions
.
The Borrower shall not pay:
(a)
any commission or fee to the Sponsor or the Investor or any Affiliate of the
Sponsor or the Investor for furnishing guarantees, counter-guarantees or similar
credit support for any obligations undertaken in connection with the Project;
or
(b)
any fee to the Sponsor or the Investor or any Affiliate of the Sponsor or the
Investor with respect to or in connection with the development, construction,
financing or operation of the Project, including salaries, bonuses, commissions,
management fees, consulting fees, and technical assistance fees other than
pursuant to the Management Services Agreement.
7.16
Amendment of and
Notices Under Transaction Documents
.
The Borrower shall not (other than to correct minor or
technical errors that do not change any Person's rights or obligations), other
than with the prior written consent of the Loan Servicer:
(a) directly
or indirectly agree to any amendment, modification, termination, replacement,
supplement, consent or waiver or waive any right to consent to any amendment,
modification, termination, replacement, supplement or waiver of any right with
respect to, or assign any of the respective duties or obligations under:
(i)
any Project Document, except for Change Orders under any Construction
Contract that (A) do not change the Construction Budget, except for Approved
Construction Changes, (B) could not reasonably be expected to delay the
occurrence of Operational Completion by more than thirty days, and (C) could not
reasonably be expected to have a Material Adverse Effect;
provided
that
the Borrower shall give the Loan Servicer and the Independent Engineer prompt
written notice of such Change Orders;
(ii)
any Governmental Approval or other Required Consent, the effect of which
could reasonably be expected to have a Material Adverse Effect;
(iii) any
Loan Document; or
(iv) any
Organizational Document;
(b) certify,
consent to or otherwise permit through a Change Order or otherwise "Substantial
Completion" or "Final Completion" to occur under the Equipment Contract or EPC
Contract; or
(c) enter
into any agreement, other than any Loan Document, restricting its ability to
amend or otherwise modify any of the Transaction Documents.
69
7.17
Other
Agreements
.
The Borrower shall not enter into or become a party to any
agreement, contract or loan commitment outside the ordinary course of business
other than (a) the Transaction Documents as in effect on the Financial Closing
Date, or (b) agreements, contracts or loan commitments expressly contemplated or
permitted by the Transaction Documents as in effect on the Financial Closing
Date, or (c) as contemplated by the Construction Budget, the Operating Plan or
the Operating Forecast.
7.18
Hedging
Agreements
.
The Borrower shall not enter into any Hedging Agreement,
foreign currency trading or speculative transactions.
7.19
Compromise or
Settlement of Disputes
.
The Borrower shall not agree or otherwise consent to settle or
compromise:
(i)
any single litigation, arbitration or other dispute in excess
of one hundred thousand Dollars ($100,000), without the prior written consent of
the Loan Servicer; or
(ii)
any material dispute under any Project Document without the prior written
consent of the Loan Servicer.
7.20
Abandonment or
Suspension of Project
.
The Borrower shall not (a) abandon or suspend, agree (directly
or indirectly) to abandon or suspend or make any public statements regarding its
intention to abandon or suspend the development, construction or operation of
the Project, or take any action that could be deemed an "abandonment" or
"suspension," or transfer the Project to any Person, or (b) notify any Project
Participant of its intent to terminate, or agree (directly or indirectly) to the
termination of, any Project Document or the construction or operation of the
Project.
7.21
Improper
Use
.
The Borrower shall not use, operate or occupy, or allow
(directly or indirectly) the use, maintenance, operation or occupancy of, any
portion of the Project Site or Project in any manner or for any purpose: (a)
that would be illegal or dangerous (unless safeguarded as required by
Governmental Rules), (b) that could reasonably be expected to have a Material
Adverse Effect, (c) that may make void, voidable or cancelable, or materially
increase the premium of, any insurance or warranty then in force with respect to
the Project or any part thereof, or (d) other than for the intended purpose
thereof in the construction, operation and maintenance of the Project.
7.22
Assignment
.
Other than the assignment of the Project Documents and
Governmental Approvals to the Collateral Agent as security for the benefit of
the Secured Parties, the Borrower shall not assign or otherwise transfer its rights under any of the Transaction
Documents or Governmental Approvals to any Person.
70
7.23
Margin
Regulations
.
The Borrower shall not directly or indirectly apply any part of
the proceeds of any Advance or other revenues to the purchasing or carrying of
any margin stock within the meaning of Regulation T, U or X of the Board of
Governors of the Federal Reserve of the United States, or any regulations,
interpretations or rulings thereunder.
7.24
Environmental
Laws
.
The Borrower shall not undertake any action or Release any
Hazardous Substances in violation of any Environmental Law and shall ensure that
the Project shall be operated in compliance with all Environmental Laws and that
the Project shall not be operated in any manner that would pose a hazard to
public health or safety or to the environment, in each case unless such action
could not reasonably be expected to have a Material Adverse Effect.
7.25
ERISA
.
The Borrower shall not adopt, establish, participate in, or
incur any obligation to contribute to, any Employee Benefit Plan or incur any
liability to provide post-retirement welfare benefits in violation of any
Governmental Rule.
7.26
Investment Company
Act
.
The Borrower shall not take any action that would result in the
Borrower being required to register as an "investment company" under the
Investment Company Act.
7.27
Public Utility
Holding Company Act
.
The Borrower shall not take, nor permit any Affiliate to take,
any action that could result in the Borrower being subject to regulation under
the Public Utility Holding Company Act.
7.28
Powers of
Attorney
.
The Borrower shall not grant any power of attorney or similar
power to any Person, except (i) to its directors and employees in the ordinary
course of business, or (ii) in connection with Permitted Liens granted to the
Secured Parties.
7.29
Debarment
Regulations
.
Unless authorized by the Loan Servicer, the Borrower shall not
knowingly enter into any transactions with any Person who is debarred,
suspended, declared ineligible or voluntarily excluded from participation in
procurement or non-procurement transactions with any United States federal
government department or agency pursuant to any of the Debarment
Regulations.
71
7.30
Replacement or
Removal of the Operator
.
The Borrower shall not vote to replace or remove the Operator,
other than with the prior written consent of the Loan Servicer.
7.31
Utilization of
Geothermal Reserves
.
The Borrower shall not and shall not permit any Affiliate of
the Borrower to, develop or cause to be developed a project near the Project or
the Project Site without the prior written consent of the Loan Servicer, which
consent shall not be unreasonably withheld or delayed, so long as the Loan
Servicer determines in its reasonable discretion that such development shall not
adversely impact the geothermal resource, water rights or transmission access
available to the Borrower and the Project or the performance of the Project
compared to the performance projected in the then current Base Case
Projections.
7.32
No Reduction of
Maximum Capacity
.
The Borrower shall not, and shall not permit the Operator to,
revise or permit to be revised the Maximum Capacity, as defined in the Power
Purchase Agreement, in a manner that would reduce the expected revenues under
the Power Purchase Agreement, other than with the prior written consent of the
Loan Servicer, not to be unreasonably withheld.
7.33
Transfer to a
Disqualified Person.
Notwithstanding any other provision in this Agreement, during
the Recapture Period (if any), Borrower shall not cause, make, suffer, permit or
consent to any sale, assignment or transfer of any direct or indirect ownership
interest or other interest in the Borrower or in any Project assets to a
Disqualified Person or (in the case of an interest in any Project assets) to a
Person that has not agreed to be jointly liable with the Borrower for Cash Grant
Recapture Liabilities.
7.34
Prohibition of Claims
for PTCs or ITCs
. The Borrower shall not claim or cause to be claimed,
any renewable energy production credit under Section 45 of the Internal Revenue
Code, or investment tax credit under Section 48 of the Internal Revenue Code (or
any successors to such sections) with respect to any property described in a
Cash Grant Application or the electricity generation of such property.
ARTICLE 8
EVENTS OF DEFAULT; REMEDIES
8.1
Events of Default
.
The occurrence of any of the following events shall constitute
an Event of Default hereunder:
(a)
Failure
to Make Payment Under Loan Documents
. The Borrower shall fail to pay, in
accordance with the terms of the DOE Credit Facility Documents, this Loan
Guarantee Agreement or any other Loan Document (whether at scheduled maturity,
as a required prepayment, by acceleration or otherwise), (i) any principal of or
interest on any DOE Guaranteed Loan on or before the date such amount is due, or
(ii) any scheduled fee, charge or other amount due under any Loan Document on or
before the date such amount is due.
72
(b)
False
Statements; Omissions
. Any representation or warranty confirmed or made in
any Loan Document by or on behalf of the Borrower, Holdco, the Sponsor, the
Investor, the Operator or any Major Project Participant in any certificate,
Financial Statement or other document provided by or on behalf of any such
Person to DOE, the Agents or any Independent Consultant in connection with the
transactions contemplated by the Transaction Documents shall be found to have
been false or misleading in any material respect when made or deemed to have
been made.
(c)
Covenants Without Cure Period
. The Borrower shall fail to perform or
observe any of its obligations under (i) any term, covenant or agreement set
forth in
Section 6.1(f)(i)
(
Reporting Obligations
),
Section
6.3(b)
, (
Maintenance of Property and Insurance
),
Section 6.4
(
Maintenance of Existence; Conduct of Business
),
Section 6.12
(
Use of Proceeds
),
Section 6.15
(
Debt Service Reserve
),
Section 6.19
(
Creation and Perfection of Security Interests;
Additional Documents; Filings and Recordings
), or
Article 7
(
Negative Covenants
), (ii) or Section 5.02 (
No Impairment of
Security
), Section 5.03 (
Name; Jurisdiction of Organization
) or
Section 5.04 (
Perfection
) of the Security Agreement or Section 6.1.4
(
Operating Account Minimum Balance
) of the Depositary Agreement, or any
other negative covenant contained in any Loan Document to which it is a party,
where (in the case of this
clause (ii)
) such default has not been
remedied within the cure period, if any, specified in such Loan Document; (iii)
the Borrower or Holdco defaults in the due performance and observance of any of
its obligations under Section 5.05 (
No Impairment of Security
) or Section
5.07 (
Name; Jurisdiction of Organization
) of the Equity Pledge Agreement;
or (iv) any party (other than a Secured Party) to the Depositary Agreement or
the Depositary Accounts Control Agreement defaults in the due performance and
observance of any of its obligations under the Depositary Agreement or the
Depositary Accounts Control Agreement, as applicable.
(d)
Covenants
and Other Agreements with Cure Period
. The Borrower or any other Major
Project Participant shall fail to perform or observe any term, covenant or
agreement (other than those set forth in
clauses (a)
,
(b)
,
(c)
,
(f)
and
(g)
hereof) contained in any Loan Document to
which it is a party, where such default has not been remedied within thirty days
or such other time period as may be specified in the applicable Loan Document if
such default is remediable after any Authorized Official of such party receives
notice or should reasonably have known of such failure.
(e)
Environmental Matters
. (i) Any Governmental Judgment is issued relating
to any Environmental Claim, or (ii) any failure by the Borrower or the Project
to comply in all material respects with any Environmental Law or safety
regulations applicable to the Project, including the National Environmental
Policy Act.
(f)
Breach
or Default Under Principal Project Documents
. Any Major Project Participant
shall breach or default under any of its material agreements, conditions, terms
or covenants contained in any Principal Project Document to which it is a party
and such breach or default shall continue unremedied beyond any applicable cure
period set forth therein.
73
(g)
Equity
Funding and Recapture Obligation Agreement
.
(i)
The Sponsor or the Investor fails to make payment when due under the
Equity Funding and Recapture Obligation Agreement and such failure continues for
three Business Days; or
(ii)
any other breach of or default under the Equity Funding and Recapture Obligation
Agreement occurs and such default or breach continues beyond the applicable
grace period set forth therein.
(h)
Unenforceability,
Termination, Repudiation or Transfer of Certain Transaction Documents
.
(i)
This Loan Guarantee Agreement or any of the other Loan Documents (other
than the DOE Guarantee), the Principal Project Documents or the Atlas Copco
Mafi-Trench Turboexpander Supply Contract or any material provision hereof or
thereof at any time for any reason (i) is or becomes invalid, illegal, void or
unenforceable or any party thereto shall have repudiated or disavowed or taken
any action to challenge the validity or enforceability of such agreement, (ii)
ceases to be in full force and effect, except at the expiration of the stated
term thereof, or shall otherwise be prematurely terminated, (iii) except as
otherwise expressly permitted hereunder shall be assigned or otherwise
transferred by any party thereto (other than with the prior written consent of
the Loan Servicer), or (iv) shall cease to give the Collateral Agent or DOE in
any material respect the Liens, rights, powers and privileges purported to be
created thereby or hereby.
(ii)
The giving of a notice of termination under the Power Purchase Agreement or the
occurrence of any event or circumstance entitling Idaho Power to give such a
notice.
(i)
Security
Interests
. Any of the Security Documents shall fail in any material respect
to provide the Liens, security interests, rights, titles, interests, remedies,
powers or privileges intended to be created thereby (including the priority
intended to be created thereby) or such Lien shall fail to have the priority
contemplated therefor in such Security Documents, or any such Security Document
or Lien shall cease to be in full force and effect, or the validity thereof or
the applicability thereof to the Advances, the Secured Obligations or any other
obligations purported to be secured or guaranteed thereby or any part thereof,
shall be disaffirmed by or on behalf of the Borrower, the Sponsor or any other
party thereto;
provided
that any failure of security interests described
in this
Section 8.1(i)
to provide a security interest that is perfected
and of first priority with respect to any Unrestricted Local Account shall not
result in an Event of Default.
(j)
Change
of Control
. (i) A Change of Control occurs, (ii) Holdco ceases to hold one
hundred percent (100%) of the Equity Interests (including voting power, rights
to economic interests and other beneficial ownership rights) in the Borrower, or
(iii) Sponsor ceases to hold at least fifty-one percent (51%) of the Equity
Interests (including voting power, rights to economic interests and other
beneficial ownership rights) in Holdco.
74
(k)
Borrower
Default under Other Indebtedness
. The Borrower shall default in the payment
of any principal, interest or other amount due under any agreement or instrument
evidencing, or under which the Borrower has outstanding at any time, any
Indebtedness (other than the DOE Guaranteed Loans) in an amount in excess of one
hundred thousand Dollars ($100,000) for a period beyond any applicable grace
period.
(l)
Acceleration under Indebtedness for Borrowed Money of the Sponsor
. Any
default under Indebtedness for Borrowed Money of the Sponsor occurs and the
effect of such default is to accelerate or to permit the acceleration of such
Indebtedness for Borrowed Money of the Sponsor in an amount in excess of one
million Dollars ($1,000,000), or such other amount that causes or could
reasonably be expected to cause a Material Adverse Effect;
provided
that
following the Project Completion Date, such acceleration has or would reasonably
be expected to result in a Material Adverse Effect.
(m)
Judgments
.
One or more Governmental Judgments shall be entered against any Major Project
Participant and such Governmental Judgments shall not be vacated, discharged or
stayed or bonded pending appeal for any period of thirty days, and could be
reasonably expected to have a Material Adverse Effect on the Project.
(n)
Bankruptcy;
Insolvency; Dissolution
.
(i)
Involuntary Bankruptcy, Etc
. An Insolvency Proceeding shall have been
commenced against the Borrower, Holdco, the Sponsor, the Investor, the Operator
or any other Major Project Participant, and such proceeding continues
undismissed for sixty days and could (in the case of any Major Project
Participant other than the Borrower, Sponsor or Operator) reasonably be expected
to have a Material Adverse Effect.
(ii)
Voluntary Bankruptcy, Etc
. The institution by the Borrower, Holdco,
the Sponsor, the Investor or the Operator or any other Major Project Participant
of any Insolvency Proceeding, or the admission by it in writing of its inability
to pay its Indebtedness generally as it becomes due or its general failure to
pay its Indebtedness as it becomes due, and which could (in the case of any
Major Project Participant other than the Borrower, Sponsor, the Investor or
Operator) reasonably be expected to have a Material Adverse Effect, or any other
event shall have occurred that under any Governmental Rule would have an effect
analogous to any of those events listed above in this
clause (ii)
with
respect to any such Person, or any action is taken by any such Person for the
purpose of effecting any of the foregoing.
(iii)
Dissolution
.
The dissolution of the Borrower, Holdco, the Sponsor, the Investor, the Operator
or any other Major Project Participant, which dissolution could (in the case of
any Major Project Participant other than the Borrower, Sponsor or Operator)
reasonably be expected to have a Material Adverse Effect.
(o)
Governmental
Approvals and Required Consents
. (i) The Borrower or the Operator shall fail
to obtain, renew, maintain or comply with any Governmental Approval or other
Required Consent, or (ii) such Governmental Approval or Required Consent shall
be rescinded, terminated, suspended, modified, withdrawn or withheld or shall be
determined to be invalid or shall cease to be in full force and effect
(following the exhaustion of all regulatory and judicial rights of appeal by the
Operator and the Borrower).
75
(p)
Use
of Project Site
. Pursuant to a final, non-appealable determination by a
Governmental Authority, (i) the Borrower shall cease to have the right to
possess and use the Project Site for the purpose of owning, constructing,
maintaining and operating the Project in the manner contemplated by the
Transaction Documents, for a period of ninety days, or (ii) the Borrower shall
sell or otherwise dispose of any of its interest in the Project Facility or the
Project other than as permitted by the Loan Documents.
(q)
Event of Loss
. Any material portion of the Project Facility is destroyed
or becomes permanently inoperative as a result of a material Event of Loss, and
is not covered by insurance or not repaired or restored with Loss Proceeds
within the time periods specified in the Transaction Documents, in each case
that could reasonably be expected to have a Material Adverse Effect.
(r)
Suspension of Construction
. Prior to the Project Completion Date,
construction of the Project shall be suspended for a period of ninety days if
such suspension is a result of the occurrence of an Event of Force Majeure, or
for a period of thirty days if such suspension is a result of any other
cause.
(s)
Suspension
of Operation
. From and after the Project Completion Date, the Project ceases
to operate for a period of ninety days if such failure to operate is a result of
the occurrence of an Event of Force Majeure, or for a period of thirty days if
such failure to operate is a result of any other cause.
(t)
Funding of Project Expenses
.
(i)
At any time prior to the Project Completion Date, in the reasonable
opinion of the Loan Servicer, the Total Funding Available is insufficient to pay
all remaining Total Project Costs (including Interest During Construction, DOE
Credit Facility Fees, Agents' Fees, Periodic Expenses, and identified Cost
Overruns), and such deficiency continues for sixty days following notice thereof
from the Loan Servicer to the Borrower.
(u)
ERISA Events
. There occurs one or more ERISA Events that individually or
in the aggregate results in or otherwise is associated with liability of the
Borrower or any of its ERISA Affiliates in excess of five hundred thousand
Dollars ($500,000) during the term of this Loan Guarantee Agreement, or there
exists, an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which assets exceed benefit liabilities) that exceeds five hundred thousand
Dollars ($500,000).
(v)
Suspension
and Debarment
. The occurrence of any event or condition that has resulted or
is likely to result in the debarment or suspension of the Borrower from
contracting with the United States Government or any agency or instrumentality
thereof.
(w)
Completion
and Operation
. The Project shall fail to (i) achieve Physical Completion and
Operational Completion by the Anticipated Completion Date, or (ii) to
achieve the Operation Date (as defined in the Power Purchase Agreement)
by the Scheduled Operation Date (as defined in the Power Purchase
Agreement).
76
(x)
Compliance
with Governmental Rules; Program Requirements
.
(i)
The Borrower or the Operator (with respect to the Project) shall fail to comply
with the provisions of Title XVII and such failure continues unremedied for any
period of at least thirty days or, in the case of a failure to comply with
Section 1702(k) of Title XVII, such failure continues unremedied for ninety
days.
(ii)
The Borrower or the Operator (with respect to the Project) shall fail to comply
with the provisions of the Applicable Loan Guarantee Requirements;
provided
,
however
, that, if such failure is capable of being
cured, and the Borrower or the Operator, as applicable, is diligently pursuing
such cure, such failure shall be an Event of Default only if not remedied within
ninety days.
(iii) The
Borrower or the Operator (with respect to the Project) shall fail to comply in
all material respects with (A) all other Governmental Rules and (B) all other
Program Requirements (other than the provisions of Title XVII and the Applicable
Loan Guarantee Requirements), where such failure continues unremedied for at
least ninety days (unless such failure cannot reasonably be cured within such
period and the Borrower or the Operator, as applicable, is diligently working to
cure such failure according to an applicable Remediation Plan);
provided
that the Borrower shall not be in default under this
clause (iii)
at
any time it or the Operator is contesting in good faith by appropriate legal
proceedings each assertion by a Governmental Authority that the Borrower or the
Operator is not in compliance with such Program Requirements or other
Governmental Rules.
(y)
Material
Adverse Effect
. The occurrence of any event or condition that has had a
Material Adverse Effect on (i) prior to the Project Completion Date, the
Borrower, Sponsor, Holdco, or the Project, or (ii) on or following the Project
Completion Date, the Borrower or the Project.
(z)
Cash
Grant Recapture Liability
. Any Cash Grant Recapture Liability has been or is
reasonably expected to be assessed, imposed or levied against Borrower.
For the avoidance of doubt, each clause of this
Section 8.1
shall operate independently, and the occurrence of any such event shall
constitute an Event of Default.
(aa)
Base Equity Letters of Credit
. At any time prior to the Project
Completion Date, the Sponsor shall fail to renew or maintain in full force and
effect, in accordance with its terms and by an issuing bank meeting the credit
rating requirements for an issuer thereof or is otherwise determined to be
unacceptable by the Loan Servicer and the Collateral Agent, each Base Equity
Letter of Credit provided to the Collateral Agent;
provided
that it shall
not be an Event of Default if such Base Equity Letter of Credit is first
replaced by cash contributed as equity by the Sponsor or Holdco and deposited in
the Construction Account to replace the undrawn portion of any Base Equity
Letter of Credit.
77
8.2
Remedies for Events of Default
.
(a) Upon
the occurrence and during the continuance of an Event of Default, DOE may,
without further notice of default, presentment or demand for payment, protest or
notice of non-payment or dishonor, or other notices or demands of any kind, all
such notices and demands being waived (to the extent permitted by Governmental
Rules), exercise any or all rights and remedies at law or in equity (in any
combination or order that DOE, may elect), including, without prejudice to DOE's
other rights and remedies, the following:
(i)
(A) refuse, and DOE and FFB shall not be obligated, to
make or guarantee any further Advances, and the Collateral Agent or Depositary
Bank shall not be obligated to make any payments from any Project Account or any
Account Proceeds or other funds held by the Collateral Agent or Depositary Bank
by or on behalf of the Borrower, and (B) suspend or terminate the DOE Credit
Facility Commitment;
(ii)
take those actions necessary to perfect and maintain the Liens of the Security
Documents;
(iii) declare
and make all sums of outstanding principal and accrued but unpaid interest
remaining under this Loan Guarantee Agreement and the other Loan Documents
together with all unpaid fees, Periodic Expenses and charges due hereunder or
under any other Loan Document, payable on demand or immediately due and payable,
whereupon such amounts shall immediately mature and become due and payable;
(iv)
enter into possession of the Project (or any portion thereof) and perform any
and all work and labor necessary to complete the Project (or any portion
thereof) or to operate and maintain the Project (or any portion thereof), and
all sums expended by any such Person in so doing, together with interest on such
amount at the Late Charge Rate, shall be repaid by the Borrower to such Person
upon demand and shall be secured by the Security Documents, notwithstanding that
such expenditures may, together with the aggregate amount of Advances under the
DOE Guaranteed Loans, exceed the amount of the total DOE Credit Facility
Commitment;
(v)
otherwise foreclose upon or take possession and cause the sale or disposition of
any Collateral;
(vi)
set off and apply such amounts to the satisfaction of the Secured
Obligations under all of the Loan Documents, including (A) all monies on deposit
in any Project Account or Local Account, (B) any Account Proceeds, (C) any
amounts paid under the Equity Funding and Recapture Obligation Agreement
including any Reserve Letters of Credit issued thereunder, or (D) any other
moneys of the Borrower on deposit with the Collateral Agent, the Depositary Bank
or any other Credit Party;
(vii) cure
defaults;
(viii) charge
interest at the Late Charge Rate on any amounts not paid when due;
78
(ix)
proceed to protect and enforce its rights and remedies by appropriate
proceedings, whether for damages or the specific performance of any provision of
this Loan Guarantee Agreement or any other Transaction Document, or in aid of
the exercise of any power granted in this Loan Guarantee Agreement or any other
Transaction Document, or by law, or proceed to enforce the payment of any amount
due and payable;
(x)
exercise any and all rights and remedies available to it under any of the
Transaction Documents with respect to the Project, the Borrower, the Sponsor,
the Investor, and any other Project Participant and under the Collateral or
otherwise under Governmental Rules; and
(xi)
in accordance with Section 609.10(e)(4) of the Applicable Loan Guarantee
Requirements, take such other actions as DOE may reasonably require to provide
for the care, preservation, protection, and maintenance of all Collateral so as
to enable the United States to achieve maximum recovery upon default by the
Borrower on the DOE Guaranteed Loans.
8.3
Automatic Acceleration
.
Upon the occurrence of an Event of Default referred to in
Section 8.1(n)
, (a) the DOE Credit Facility Commitment shall
automatically be terminated, and (b) the DOE Guaranteed Loans, together with
interest accrued thereon and all other amounts due under the DOE Guaranteed
Loans and the other Loan Documents, shall immediately mature and become due and
payable, without any other presentment, demand, diligence, protest, notice of
acceleration, or other notice of any kind, all of which the Borrower hereby
expressly waives.
8.4
Event
of Default Notice
.
(a)
Delivery
of Notice
. The Loan Servicer may deliver an Event of Default Notice to the
Collateral Agent, the Administrative Agent and the Depositary Bank at any time
when an Event of Default has occurred and is continuing.
(b)
Copy
to the Borrower
. Concurrently with the delivery of any Event of Default
Notice to the Collateral Agent, the Loan Servicer shall deliver a copy thereof
to the Borrower, but the effectiveness of any such Event of Default Notice shall
not depend on the delivery of a copy thereof to the Borrower.
(c)
Effect of Notice
. Upon receipt of notice by the Collateral Agent or the
Depositary Bank of an Event of Default Notice and while such Event of Default
Notice remains effective, the Collateral Agent shall, and shall cause the
Depositary Bank to, notwithstanding anything in this Loan Guarantee Agreement to
the contrary, (i) cease to honor any instruction or request from the Borrower to
distribute, transfer or withdraw any funds or other assets from the Project
Accounts or directing the manner in which any such funds or other assets shall
be held or invested, (ii) hold funds on deposit in any Project Account only in
such Permitted Investments as the Loan Servicer may from time to time direct in
writing (or, failing such direction, in an Overnight Investment), (iii)
disburse, transfer and withdraw amounts on deposit in the Project Accounts only
as the Loan Servicer may direct in writing from time to time, and (iv) draw upon
any or all Reserve Letters of Credit for the full undrawn face amount in
accordance with the terms of such Reserve Letters of Credit and disburse the
aggregate amount of such drawings in the Project Accounts as the Loan Servicer may direct from time
to time. Each of the parties hereto confirms that the Collateral Agent shall,
and shall cause the Depositary Bank to, comply with its obligations set forth in
this
clause (c)
, notwithstanding any protest or order to the contrary by
the Borrower at any time.
79
(d)
Revocation
.
Upon request of the Borrower to the Loan Servicer at any time when any and all
Events of Default that gave rise to an Event of Default Notice have been waived
by DOE (or the Loan Servicer on DOE's behalf), the Loan Servicer shall deliver a
written notice to the Collateral Agent, the Administrative Agent and Depositary
Bank (with a copy to the Borrower and each other Credit Party) revoking the
effectiveness of any previously delivered Event of Default Notice.
8.5
Remedies
Instructions
.
(a)
Delivery of Remedies Instructions
. At any time when an Event of Default
exists, DOE (and the Loan Servicer on DOE's behalf) shall be entitled, by
delivery of Remedies Instructions to the Collateral Agent, to:
(i)
direct the Collateral Agent to exercise, or to refrain from exercising, any
right, remedy, power or privilege available to or conferred upon it with respect
to the Collateral or otherwise under this Agreement, the Security Documents or
any other Loan Document to which it is a party; and
(ii)
direct the time, place and manner in which the Collateral Agent is to exercise
any such right, remedy, power or privilege.
(b)
Exercise of Remedies
. If the Collateral Agent has received Remedies
Instructions, it shall exercise the rights, remedies, powers and privileges
specified in the Remedies Instructions unless and until the Collateral Agent
receives written notice that such Remedies Instructions are modified or revoked
by the Loan Servicer or DOE.
(c)
Revocation
. Upon request of the Borrower to the Loan Servicer after any
and all Events of Default that gave rise to a Remedies Instruction have been
waived, the Loan Servicer shall deliver a written notice to the Collateral Agent
(with a copy to the Borrower and each other Credit Party) revoking the
effectiveness of any Remedies Instructions, and the Collateral Agent shall be
required to give effect to such revocation not later than the first Business Day
after the date upon which it receives such revocation;
provided
,
however
, that to the extent that the revocation of any Remedies
Instructions would require affirmative actions to be taken on the part of the
Collateral Agent, the Collateral Agent shall be granted a reasonable amount of
time to undertake such actions.
8.6
Appointment of a Receiver
.
Notwithstanding any appointment of a receiver, subject to
mandatory provisions of Governmental Rule, the Collateral Agent shall be
entitled to retain possession and control of all cash, investments and Reserve
Letters of Credit held by, or deposited with, it or its agents or nominees
pursuant to any provision of this Loan Guarantee Agreement, the Depositary
Agreement or any other Security Document or Loan Document.
80
8.7
DOE
Independent Rights
.
DOE may itself exercise any right given to the Loan Servicer in
this
Article 8
or otherwise in the Loan Documents.
ARTICLE 9
AGENTS AND ADVISORS
9.1
Appointment of Agents
.
In connection with the Project, DOE hereby appoints:
(a) The
U.S. Department of Energy, an agency of the United States of America, acting
through its Loan Programs Office, or its designee to act as Loan Servicer and
authorizes it to (i) exercise such rights, powers, authorities and discretions
as are specifically delegated to the Loan Servicer by the terms of this Loan
Guarantee Agreement and the other Loan Documents, together with all such rights,
powers, authorities and discretions as are reasonably incidental thereto, and
(ii) further delegate, in the Loan Servicer's sole discretion, any of the
foregoing rights, powers, authorities and discretions to the Loan Servicer. The
Loan Servicer, by its signature below, accepts such appointment.
(b) Midland
or, with the Loan Servicer's consent, its designee, to act as Collateral Agent
and:
(i)
authorizes it to exercise such rights, powers, authorities and discretions
as are specifically delegated to the Collateral Agent by the terms of this Loan
Guarantee Agreement and the other Loan Documents, including:
(A)
promptly notifying the Loan Servicer of any material changes in the value of the
Collateral of which it becomes aware;
(B) monitoring
the Borrower's compliance with covenants and agreements relating to the
Collateral;
(C)
monitoring all regulatory and Uniform Commercial Code filings related to the
Collateral to ensure that continuation statements, extensions or renewals, as
applicable, are timely filed;
(D)
during the continuance of an Event of Default or of any other breach or default
under this Loan Guarantee Agreement or any other Loan Document, assisting and
advising DOE and the Loan Servicer in connection with the liquidation of the
Collateral or any part thereof, including selecting specialists to assist in
appraisal and liquidation of the Collateral, recommending liquidation
strategies, identifying potential buyers of the assets and analyzing bids;
(E) asking
for, demanding, collecting, suing for, recovering, receiving and giving
acquittance and receipts for moneys due and to become due under or in respect of
the Collateral;
81
(F) receiving,
endorsing and collecting any drafts or other instruments, documents and chattel
paper in connection with the preceding clauses of this
clause (b)
;
(G) occupying
any premises where the Collateral or any part thereof is assembled or
located;
(H) enforcing
any agreements to which it is a party;
(I) creating,
preserving and protecting its Liens on, and security interest in, the
Collateral;
(J) filing
any claims or taking any action or instituting any proceedings that it may deem
necessary or desirable for the collection of any of the Collateral or otherwise
to accomplish the purposes of the Security Documents or enforce its rights with
respect to any of the Collateral;
(K)
exercising in respect of the Collateral, in addition to any other rights or
remedies available to it and to the extent not in violation of any applicable
law, all the rights and remedies of a secured party under the Uniform Commercial
Code;
(L) ensuring
that all Security Documents are revised or renewed as necessary;
(M) ensuring
that the Collateral is properly maintained for the benefit of DOE, FFB and any
other third party lenders or guarantors, together with all such rights, powers,
authorities and discretions as are reasonably incidental thereto;
(N)
promptly forwarding or making available to the Loan Servicer any certificates,
notices, correspondence or other documents related to the Transaction Documents
that it receives from the Depositary Bank; and
(ii)
the Collateral Agent, by its signature below, accepts such appointment.
(c) Midland
or, with the Loan Servicer's consent, its designee, to act as Administrative
Agent and authorizes it to exercise such rights, powers, authorities and
discretions as are specifically delegated to the Administrative Agent by the
terms of this Loan Guarantee Agreement or as may be delegated to the
Administrative Agent by the Loan Servicer from time to time, and take such other
actions as may be reasonably requested in writing by the Loan Servicer or as
shall be required in respect of the Loan Documents, together with all such
rights, powers, authorities and discretions as are reasonably incidental
thereto. The Administrative Agent, by its signature below, accepts such
appointment.
9.2
Duties and Responsibilities
.
(a) No
Agent shall have any duties or responsibilities except those expressly set out
in this Loan Guarantee Agreement or in the other Loan Documents. Notwithstanding
anything to the contrary contained herein or in any other Loan Document, no
Agent shall be required to take any action that is contrary to any Governmental
Rule.
82
(b) The
Loan Servicer, and any subsequent Person acting as Loan Servicer, or to whom any
rights or responsibilities of the Loan Servicer are delegated, under the Loan
Documents, shall comply with all requirements of the Applicable Loan Guarantee
Requirements with respect to servicing the Advances, including:
(i)
in accordance with Section 609.10(d)(16) and Section 609.10(e)(3) of the
Applicable Loan Guarantee Requirements, the Loan Servicer, with the assistance
of the Collateral Agent, has taken and shall continue to take those actions
necessary to perfect and maintain liens on assets which are pledged as
collateral pursuant to the terms of the Security Documents;
(ii)
in accordance with Section 609.10(f)(1) of the Applicable Loan Guarantee
Requirements, the Loan Servicer shall keep such records concerning the Project
as are necessary for facilitating the effective and accurate audit and
performance evaluation of the Project pursuant to the Applicable Loan Guarantee
Requirements and Program Requirements;
(iii)
in accordance with Section 609.10(g)(1) of the Applicable Loan Guarantee
Requirements, any assignment or transfer of the servicing, monitoring, tracking,
and reporting functions performed by the Loan Servicer must be approved by DOE
in writing in advance of such assignment or transfer; and
(iv) in
accordance with Section 609.10(g)(2) of the Applicable Loan Guarantee
Requirements, for the purpose of identifying holders with the right to receive
payment under the DOE Guarantee, the Loan Servicer shall develop a procedure for
tracking and identifying holders of DOE Guaranteed Loans.
(c) In
accordance with Section 609.10(e)(4) of the Applicable Loan Guarantee
Requirements, the Collateral Agent shall take such other actions as DOE (or the
Loan Servicer on DOE's behalf) may reasonably require to provide for the care,
preservation, protection, and maintenance of all Collateral so as to enable the
United States to achieve maximum recovery upon default by the Borrower on the
DOE Guaranteed Loans.
9.3
Rights and Obligations
.
(a) Each
Agent may:
(i)
assume, absent actual knowledge or written notice to the contrary, that (A) any
representation made by any Project Participant in connection with any
Transaction Document is true; (B) no Event of Default or Potential Default
exists; (C) no Project Participant is in breach of or in default under its
obligations under any Transaction Document; and (D) any right, power, authority
or discretion vested herein upon any other Agent or Independent Consultant has
not been exercised;
(ii)
assume, absent actual knowledge or written notice to the contrary, that
any notice or certificate given by any Project Participant or Independent
Consultant has been validly given by a Person authorized to do so and act upon
such notice or certificate unless the same is revoked or superseded by a further
such notice or certificate;
83
(iii)
assume, absent actual knowledge or written notice to the contrary, that the
address, telecopy and telephone numbers for the giving of any written notice to
any Person hereunder is that identified in
Schedule 11.1
to the
Disclosure Letter until it has received from such Person a written notice
designating some other office of such Person to replace any such address, or
telecopy or telephone number, and act upon any such notice until the same is
superseded by a further such written notice;
(iv)
employ at the expense of the Borrower in accordance with
Section 13.17
,
lawyers, accountants or other experts whose advice or services such Agent may
reasonably determine are necessary, expedient or desirable, may pay reasonable
fees and expenses for the advice or service of any such Person and may rely upon
any advice so obtained;
provided
that no Agent shall be under any
obligation to act upon such advice if it does not deem such action to be
appropriate;
(v)
rely on any matters of fact that might reasonably be expected to be within the
Knowledge of any Project Participant or any Independent Consultant upon a
certificate signed by or on behalf of such party;
(vi)
rely upon any communication or document reasonably believed by it to be
genuine;
(vii)
refrain from acting or continuing to act in accordance with any instructions of
DOE (or the Loan Servicer on DOE's behalf) to begin any legal action or
proceeding arising out of or in connection with any Transaction Document until
it shall have received such indemnity or security from the Borrower or such
other Person (other than DOE, the Loan Servicer and FFB) as it may reasonably
require (whether by payment in advance or otherwise) for all costs, claims,
losses, expenses (including reasonable legal fees and expenses) and liabilities
that it will or may expend or incur in complying or continuing to comply with
such instructions; and
(viii) seek
instructions from DOE (or the Loan Servicer on DOE's behalf) as to the exercise
of any of its rights, powers, authorities or discretions hereunder, and in the
event that it does so, it shall not be considered as having acted unreasonably
or negligently when acting in accordance with such instructions or, in the
absence of any (or any clear) instructions, when refraining from taking any
action or exercising any right, power or discretion hereunder.
(b) Each
Agent party hereto shall:
(i)
except where the Loan Servicer has supplied such notice or document to such
Agent, promptly inform the Loan Servicer of the contents of any notice or
document that in its capacity as Agent it received from or delivers to: (A) the
Borrower; (B) any other Project Participant; (C) any other Agent; (D) any
Independent Consultant; or (E) any Governmental Authority;
(ii)
promptly notify the Loan Servicer of the occurrence of any Event of Default or
Potential Default of which such Agent has actual knowledge or written notice
from any Person;
84
(iii) except
as otherwise expressly provided in any Loan Document, perform its duties in
accordance with any instructions given to it by DOE or the Loan Servicer, which
instructions shall be binding on the Borrower and all Credit Parties; and
(iv)
if so instructed by DOE or the Loan Servicer, refrain from exercising any
right, power, authority or discretion vested in it as an Agent hereunder or
under the other Loan Documents (other than rights arising under this
Article
9
or
Section 13.17
).
9.4
No
Responsibility for Certain Conduct
.
(a)
In connection with the Loan Documents, notwithstanding anything to the contrary
expressed or implied herein or in the other Loan Documents, no Agent shall:
(i)
be bound to inquire as to (A) whether or not any representation or certification
made by any other Person in connection with any Transaction Document is true;
(B) the occurrence or otherwise of any Event of Default or Potential Default;
(C) the performance by any other Person of its obligations under any of the
Transaction Documents; or (D) any breach of or default by any other Person of
its obligations under any of the Transaction Documents;
(ii)
be bound to account to any Person for any sum or the profit element of any sum
received by it for its own account except as expressly provided under the Loan
Documents;
(iii)
be bound to disclose to any Person any information relating to the Project or to
any Person if such disclosure would, or might in its opinion, constitute a
breach of any Governmental Rule or be otherwise actionable at the suit of any
Person; or
(iv)
be under any fiduciary duties or obligation other than those for which
express provision is made in this Loan Guarantee Agreement or in any other Loan
Document to which such Person is a party.
(b)
No Agent shall have any responsibility for the accuracy or completeness of any
information supplied by any Person (other than such Person) in connection with
the Project or for the legality, validity, effectiveness, adequacy or
enforceability of any Transaction Document or any other document referred to
herein or provided for herein or therein or for any recitals, statements,
representations or warranties made by the Borrower or any other Person contained
in this Loan Guarantee Agreement or any other Transaction Document or in any
certificate or other document referred to or provided for in, or received by
such Agent, hereunder or thereunder. No Agent shall be liable as a result of any
failure by the Borrower or its Affiliates or any Person party hereto or to any
other Transaction Document (except such Agent) to perform their respective
obligations hereunder or under any other Transaction Document or any document
referred to or provided for herein or therein or as a result of taking or
omitting to take any action hereunder or in relation to any Transaction
Document, except to the extent of such Agent's gross negligence or willful
misconduct.
85
(c) Any
Agent and its Affiliates may accept deposits from, lend money to, act as trustee
under indentures of and generally engage in any kind of banking or other
business with any Person, without any duty to account therefor to the Credit
Parties.
(d) It
is understood and agreed by each Credit Party (for itself and any Person
claiming through it) that it has itself been, and will continue to be, solely
responsible for making its own independent appraisal of, and investigations
into, the financial condition, creditworthiness, condition, affairs, status and
nature of each Project Participant and, accordingly, each such Credit Party
warrants to each Agent that it has not relied on and will not hereafter rely on
such Agent:
(i)
to check or inquire on its behalf into the adequacy, accuracy or completeness or
any information provided by any Project Participant or Independent Consultant in
connection with any of the Transaction Documents or the transactions therein
contemplated (whether or not such information has been or is hereafter
circulated to such Project Participant or Independent Consultant by an Agent);
or
(ii)
to assess or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of any Project
Participant or Independent Consultant.
9.5
Defaults
.
No Agent shall be deemed to have knowledge or notice of the
occurrence of any Event of Default or Potential Default unless such Agent has
Knowledge of such Event of Default or Potential Default or has received a notice
from a Project Participant, referring to this Loan Guarantee Agreement,
describing such Event of Default or Potential Default and stating that such
notice is a "notice of default." If any Agent has Knowledge of an Event of
Default or Potential Default or receives such a notice of default, such Agent
shall give prompt notice thereof to the Loan Servicer, and the Loan Servicer
shall give prompt notice thereof to each Credit Party, the Depositary Bank and
each Independent Consultant. Each Agent shall take such action with respect to
such Event of Default or Potential Default as is provided in
Article 8
of
this Loan Guarantee Agreement;
provided
,
however
, that unless and
until such Agent shall have received direction from DOE (or the Loan Servicer on
DOE's behalf), it may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Potential Default as it shall deem advisable and in the best interest of the
Credit Parties.
9.6
No Liability
.
No Agent, nor any of its officers, directors, employees or
agents shall be liable to any Project Participant, any Credit Party or
Independent Consultant for any action taken or omitted under this Loan Guarantee
Agreement or under the other Loan Documents, or in connection therewith, except
to the extent caused by the gross negligence or willful misconduct of such
Agent, as determined by a court of competent jurisdiction in a final
non-appealable Governmental Judgment. DOE (for itself and any Person claiming
through it) hereby releases, waives, discharges and exculpates each Agent for
any action taken or omitted by such Agent under this Loan Guarantee Agreement or under the other Loan Documents, or
in connection therewith, except to the extent caused by the gross negligence or
willful misconduct of such Agent as determined by a court of competent
jurisdiction in a final non-appealable Governmental Judgment.
86
9.7
Fees and Expenses of Agents
.
(a) As
is customary in transactions of this type, the Borrower shall be responsible for
paying the fees and expenses of each Agent in connection with the Project, the
Transaction Documents and the DOE Guaranteed Loans under all circumstances,
pursuant to a separate written agreement with each Agent, without recourse to
DOE by such Agent, the Sponsor, the Investor, the Borrower or any other
Person.
(b) In
accordance with one or more letter agreements to be entered into between the
Borrower and each Agent, the Borrower shall (i) from time to time on demand by
such Agent, indemnify such Agent against any and all costs, claims, losses,
expenses (including reasonable legal fees and expenses) and liabilities, that
such Agent may incur in acting in its capacity as an Agent hereunder, other than
by reason of its own gross negligence or willful misconduct; and (ii) without
limitation of the foregoing, reimburse such Agent promptly upon demand for any
out-of-pocket expenses (including reasonable legal fees and expenses) incurred
by such Agent in connection with the preparation, execution, administration or
enforcement of, or services provided in respect of rights or responsibilities
under, the Transaction Documents.
(c)
All payments or reimbursements under this
Section 9.7
shall be due and
payable (i) at the times set forth in that certain fee letter, dated as of
September 2, 2010, by and among the Borrower, the Sponsor and the Collateral
Agent, or (ii) not later than ten Business Days after the Borrower's receipt of
the Agent's request therefor from time to time, in each such case whether or not
this Loan Guarantee Agreement is terminated or any Advance of the DOE Guaranteed
Loans is made.
(d) The
Borrower and each Agent party hereto expressly acknowledge and agree that:
(i)
DOE shall not be financially liable to such Agent for any services rendered or
expenses incurred in connection with the Project under any circumstances
whatsoever, including whether any Advance occurs or under circumstances in which
the Borrower fails to pay such fees and expenses;
(ii)
the Borrower shall acknowledge and pay all fees and expenses represented by
periodic invoices for services rendered by such Agent to DOE with respect to the
Project upon their periodic presentation thereof by such Agent, including prior
to or on the Financial Closing Date;
(iii)
while the services provided by such Agent shall be rendered for the benefit of
DOE in connection with the Project, the invoices of such Agent shall be the sole
responsibility of the Borrower, notwithstanding that such Agent is an agent of
DOE; and
(iv) the
Borrower specifically disclaims any implication of confidential, fiduciary or
other client relationship between the Borrower, the Sponsor or the Investor and
such Agent as a result of this
Section 9.7
and shall not
interfere with the relationship (including the ability to terminate the agency
relationship) between such Agent and DOE.
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(e) The
provisions of this
Section 9.7
shall survive the termination of this Loan
Guarantee Agreement and the other Loan Documents.
9.8
Resignation and
Removal
.
(a) Subject
to
Section 9.9
, any Agent party hereto may resign its appointment
hereunder at any time without providing any reason therefor by giving prior
written notice to that effect to each of the other parties hereto.
(b)
Subject to
Section 9.9
, DOE may remove any Agent party hereto from its
appointment hereunder with or without cause by giving prior written notice to
that effect to the Loan Servicer and the Borrower.
9.9
Successor Agents
.
(a) No
resignation or removal pursuant to
Section 9.8
shall be effective
until:
(i)
a successor for such Agent is appointed in accordance with
(and subject to) the provisions of this
Section 9.9
;
(ii)
the resigning or removed Agent has transferred to its successor all of its
rights and obligations in its capacity as an Agent under this Loan Guarantee
Agreement and the other Loan Documents; and
(iii) the
successor Agent has executed and delivered an agreement to be bound by the terms
of this Loan Guarantee Agreement and the other Loan Documents and to perform all
duties required of such Agent hereunder and under the other Loan Documents.
(b)
If an Agent has given notice of its resignation pursuant to
Section 9.8(a)
or if DOE gives any Agent notice of removal pursuant to
Section
9.8(b)
, then a successor to such Agent may be appointed by DOE (and, unless
an Event of Default or Potential Default has occurred and is continuing, with
the written consent of the Borrower, which consent shall not unreasonably be
withheld or delayed) during the ninety-day period beginning on the date of such
notice in accordance with the terms of this Loan Guarantee Agreement but, if no
such successor is so appointed within ninety days after the above notice, the
resigning or removed Agent may appoint such a successor. If a resigning or
removed Loan Servicer appoints a successor, such successor shall (i) be
authorized under all Governmental Rules to exercise corporate trust powers, and
(ii) be acceptable to DOE (and, unless an Event of Default or Potential Default
has occurred and is continuing, the Borrower, approval by which shall not
unreasonably be withheld or delayed);
provided
that if DOE and the
Borrower, if applicable, do not confirm such acceptance in writing within sixty
days following selection of such successor by the resigning or removed Loan
Servicer or otherwise appoint a successor within such sixty-day period, then DOE
and the Borrower, as the case may be, shall be deemed to have given such
acceptance and such successor shall be deemed appointed as the successor to such
resigning or removed Loan Servicer hereunder.
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(c)
If a successor to an Agent is appointed under the provisions of this
Section
9.9
, then:
(i)
the predecessor Agent shall be discharged from any further obligation hereunder
(but without prejudice to any accrued liabilities);
(ii)
the predecessor Agent shall be entitled to payment of any and all Agents' Fees
that became due and payable to such predecessor Agent on or before the date when
a successor to such Agent has been appointed;
(iii)
the resignation pursuant to
Section 9.8(a)
or removal pursuant to
Section 9.8(b)
of the predecessor Agent notwithstanding, the provisions
of this Loan Guarantee Agreement shall inure to the predecessor Agent's benefit
as to any actions taken or omitted to be taken by it under this Loan Guarantee
Agreement and the other Loan Documents while it was an Agent; and
(iv)
the successor Agent and each of the other parties hereto shall have the same
rights and obligations amongst themselves as they would have had if such
successor Agent had been a party hereto beginning on the date of this Loan
Guarantee Agreement.
9.10
Due Authorization;
Execution; Delivery
.
Each Agent is hereby authorized by DOE to execute, deliver and
perform each of the Loan Documents to which such Agent is or is intended to be a
party. All action on the part of each Agent that is required for the
authorization, execution, delivery and performance by such Agent of the Loan
Documents to which it is a party has been duly and effectively taken. The
obligations of each Agent party hereto under the Loan Documents to which it is a
party are the legal, valid and binding obligations of such Agent party hereto
enforceable in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and by general
principles of equity (regardless of whether enforcement is sought in proceedings
at law or in equity).
9.11
Actions
.
Except as otherwise provided in this
Article 9
, and
subject to the other provisions of this Loan Guarantee Agreement, each Agent
party hereto shall take any action requested in writing by DOE or the Loan
Servicer with respect to the Collateral, this Loan Guarantee Agreement or any
other Loan Document to which it is a party, as applicable.
9.12
Delegation of
Duties
.
Subject to the provisions of
Section 9.1
, each Agent may
execute any of the rights, remedies, powers, privileges, duties or obligations
under this Loan Guarantee Agreement and the other Loan Documents to which it is
a party either directly or by or through nominees or agents, and shall not be
liable for any misconduct or negligence of any such nominee or agent appointed
with due care by it hereunder.
89
9.13
Certain Rights of the
Agents
.
9.13.1.
Each Agent may conclusively rely, without incurring any liability for such
reliance, and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
9.13.2.
Each Agent may consult with counsel of its selection and, as long as such
counsel was selected by such Agent with due care, the advice of such counsel or
any opinion of counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
9.14
Authority of the
Agents
.
The Borrower acknowledges that the rights and responsibilities
of each Agent under this Loan Guarantee Agreement with respect to any action
taken by such Agent or the exercise or non-exercise by such Agent of any power,
right or remedy provided for or resulting or arising out of this Loan Guarantee
Agreement shall, as between such Agent and DOE, be governed by this Loan
Guarantee Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between each Agent and the Borrower,
such Agent shall be conclusively presumed to be acting as the Agent for DOE with
full and valid authority so to act or refrain from acting, and the Borrower
shall not be under any obligation or entitlement to make any inquiry respecting
such authority.
9.15
Force
Majeure
.
In no event shall any Agent be responsible or liable for any
failure or delay in the performance of its obligations hereunder arising out of
or caused by, directly or indirectly, forces beyond its control, including
strikes, work stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and interruptions,
loss or malfunctions of utilities, communications or computer (software and
hardware) services, it being understood that each Agent shall use reasonable
efforts that are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.
9.16
Survival
.
The provisions of this
Article 9
shall survive the
termination of this Loan Guarantee Agreement.
ARTICLE 10
REGARDING THE COLLATERAL AGENT
10.1
Administration of the
Collateral
.
The Collateral Agent shall hold the Collateral and any Lien
thereon for the benefit of the Secured Parties pursuant to the terms of this
Loan Guarantee Agreement and the other Security Documents to which the
Collateral Agent is a party. The Collateral Agent shall administer the Collateral in the manner contemplated by the Security Documents
and the other Loan Documents to which it is a party. The Collateral Agent shall
exercise such rights and remedies with respect to the Collateral as are granted
to it under the Security Documents, the other Loan Documents and Governmental
Rule and, except as otherwise expressly provided in the Security Documents or
the other Loan Documents, as shall be directed in writing by the Loan
Servicer.
90
10.2
Own
Funds
.
The Collateral Agent shall not be under any obligation to take
any action other than as expressly set forth in this Loan Guarantee Agreement or
the other Loan Documents to which it is a party that involves any expense or
liability, the payment of which, within a reasonable time, is not, in the
reasonable opinion of the Collateral Agent, assured to it. Nothing in this Loan
Guarantee Agreement shall be interpreted to require the Collateral Agent to
advance or expend its own funds to make any payments hereunder. The Collateral
Agent shall not be required to invest, or be under any liability for interest,
on any monies at any time received by it pursuant to any of the provisions of
this Loan Guarantee Agreement, except as otherwise expressly provided herein or
in any other Loan Document to which it is a party.
10.3
Waiver of Setoff by
Collateral Agent
.
The Collateral Agent hereby irrevocably waives any right of
setoff, banker's lien, right to combine accounts or any similar Lien or right
that it may have by agreement, under law or otherwise against any of the
Collateral in respect of amounts owing to the Collateral Agent by any
Person.
10.4
Survival
.
The provisions of this
Article 10
shall survive the
termination of this Loan Guarantee Agreement.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES OF THE AGENTS
Each
Agent party hereto makes all of the following representations and warranties, as
to itself, to and in favor of the other Credit Parties as of the date
hereof.
11.1
Organization;
Status
.
11.1.1.
Each Agent party hereto (other than an Agent that is the U.S. Department of
Energy) is a Delaware corporation or national banking association, as
applicable, duly organized and existing under the laws of the United States of
America.
11.2
Power and
Authority
.
Each Agent party hereto has the requisite power and authority
to (a) execute, deliver and perform each of the Loan Documents to which it is a
party and (b) carry on its business as now being conducted.
91
11.3
No
Consents
.
Neither the execution, delivery or performance by each Agent
party hereto of any Loan Document to which it is a party, nor the performance by
each Agent party hereto of the terms and conditions thereof requires the
approval, consent or authorization of any Person other than (a) such approvals,
consents and authorizations as have been obtained or (b) as may be required from
time to time in connection with the exercise of remedies provided for herein and
in the other Loan Documents (as to which the Agents party hereto makes no
representation or warranty).
11.4
Proceedings
.
There are no actions, suits or proceedings, claims or
investigations pending or, to the actual knowledge of any officers of each Agent
party hereto responsible for the administration of this Loan Guarantee
Agreement, threatened against it that (a) challenge the validity or
enforceability of any Loan Document to which it is a party or (b) relate to the
banking or trust powers of such Agent party hereto and that, individually or in
the aggregate, if adversely determined would materially and adversely affect the
ability of such Agent party hereto to perform its obligations under any Loan
Document to which it is a party.
11.5
No Agents'
Liens
.
There are no Liens on or against the Collateral that result
from (i) claims against any Agent party hereto unrelated to the transactions
contemplated by this Loan Guarantee Agreement or the other Loan Documents or
(ii) affirmative acts by any Agent party hereto creating a Lien other than as
contemplated or permitted by this Loan Guarantee Agreement or the other Loan
Documents.
ARTICLE 12
REIMBURSEMENT AGREEMENT
12.1
Reimbursement
Obligation
.
If the Borrower defaults in any payment due to FFB under the
DOE Guaranteed Loans or otherwise under any DOE Credit Facility Document, and as
a result of such payment default by the Borrower, DOE becomes obligated to make
any payments to FFB pursuant to the DOE Guarantee (a "
DOE Guarantee
Payment
"), the Borrower shall become immediately obligated to reimburse DOE
in an amount (the "
DOE Guarantee Payment Amount
") equal to the sum of (i)
all DOE Guarantee Payments paid by DOE to FFB, and (ii) all fees, costs,
expenses and other amounts incurred by DOE in connection therewith, whether by
payment to FFB or otherwise.
12.2
Payments and
Computations
.
12.2.1.
Interest
.
The Borrower shall pay to DOE an amount (the "
Borrower
Reimbursement Obligations
") equal to the sum of (i) the DOE Guarantee
Payment Amount, and (ii) interest on DOE Guarantee Payment Amount from the date
the DOE Guarantee Payment was paid or incurred by DOE under the DOE Guarantee
until payment in full by the Borrower to DOE of the DOE Guarantee Payment Amount, at a rate of interest equal to the rate of
interest in effect under the FFB Note Purchase Agreement with respect to Overdue
Amounts at the time of the payment default by the Borrower.
92
12.2.2.
Method of Payment
.
The Borrower shall make each payment with respect to Borrower
Reimbursement Obligations hereunder (a "
Borrower Reimbursement Payment
"),
irrespective of any right of counterclaim or set-off, in Dollars and in
immediately available funds on or before the fifth Business Day following a
written demand by DOE or the Loan Servicer to the Borrower indicating the DOE
Guarantee Payment Amount and the date it was paid or incurred by DOE, by wire
transfer to the following account, or to such other account as may be specified
by DOE or the Loan Servicer from time to time:
U.S. Treasury
Department
ABA No. 0210-3000-4
TREASNYC/CTR/BNF=D89000001
OBI=LGPO Loan No. 1052 – Guarantee Reimbursement
12.2.3.
Taxes
.
All Borrower Reimbursement Payments by the Borrower hereunder
shall be made in accordance with
Section 3.1.2
.
12.2.4.
Calculations
.
All computations of interest or fees under this Loan Guarantee
Agreement shall be made by the Loan Servicer, on the same basis as payments
under the FFB Note Purchase Agreement.
12.2.5.
Determinations
.
Each determination by the Loan Servicer of an amount of
interest or fees payable hereunder shall be conclusive and binding for all
purposes, absent manifest error.
12.3
Obligations
Absolute
.
To the fullest extent permitted by law, the Borrower
Reimbursement Obligations are absolute, irrevocable and unconditional, and shall
be paid strictly in accordance with the terms of this Loan Guarantee Agreement
under all circumstances whatsoever, including the following circumstances,
whether or not with notice to or the consent of the Borrower:
(i)
the occurrence, or the failure by DOE or any other Secured Party or any
other Person to give notice to the Borrower of the occurrence, of any Event of
Default or Potential Default under this Loan Guarantee Agreement or any default
under any of the other Loan Documents;
93
(ii)
the extension of the time for performance of any obligations, covenants or
agreements of any Person under or arising out of any of the Loan Documents;
(iii) the
existence of any claim set-off, counterclaim, defense or other rights of any
kind or nature which (A) the Borrower, DOE or any other Person may have at any
time against FFB or any transferee, or (B) the Borrower or any other Person may
have at any time against DOE, whether in connection with the Loan Documents, the
transactions contemplated therein or any unrelated transactions;
(iv)
any failure, omission or delay on the part of (A) DOE to assert a defense
to a DOE Guarantee Payment Amount under the DOE Guarantee or to otherwise
contest the DOE Guarantee, or (B) DOE or any other Secured Party or the Borrower
to enforce, assert or exercise any other right, power or remedy conferred by
this Loan Guarantee Agreement or any of the Loan Documents;
(v)
the taking or the omission on the part of DOE or any other Secured Party or the
Borrower of any other actions referred to in any of the Loan Documents;
(vi)
the compromise, settlement, release, modification, amendment (whether material
or otherwise) or termination of any or all of the obligations, conditions,
covenants or agreements of any Person in respect of any of the Loan
Documents;
(vii) any
amendment or waiver of the payment, performance or observance of any of the
obligations, conditions, covenants or agreements of any Person contained in any
of the Loan Documents;
(viii) the
exchange, surrender, substitution or modification of any security for any of the
Loan Documents;
(ix)
any disability, incapacity or lack of powers, authority or legal personality of
or dissolution or change in the status of the Borrower or any other Person;
(x)
any release, irregularity, invalidity, illegality, lack of genuineness,
unenforceability or modification affecting this Loan Guarantee Agreement, the
DOE Guarantee, the DOE Guaranteed Loans, or the other Loan Documents, or the
transactions contemplated hereby or thereby;
(xi)
the voluntary or involuntary liquidation, dissolution, sale or other disposition
of all or substantially all the assets of, the marshaling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition with creditors or
readjustment of, or other similar proceedings which affect the Borrower or any
other Person party to any of the Loan Documents;
(xii) the
release or discharge by operation of law of the Borrower from the performance or
observance or any obligation, covenant or agreement contained in any of the Loan
Documents;
94
(xiii) any
statement or any other document presented under the DOE Guarantee proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect whatsoever; or
(xiv) any
other circumstance or happening whatsoever, whether or not similar to any of the
foregoing.
12.4
Security
.
12.4.1.
Borrower Reimbursement Obligations Secured
.
The parties expressly acknowledge that the Collateral pledged
and assigned under the Security Documents is pledged and assigned to secure
payment by the Borrower of the Borrower Reimbursement Obligations.
12.4.2.
Actions
.
The Borrower expressly acknowledges that DOE is free to
litigate, settle or otherwise satisfy or discharge its obligation with respect
to any DOE Guarantee Payment Amount, and take any action under the Security
Documents or otherwise with respect to the Collateral, as it may from time to
time deem appropriate, and any failure by DOE to advise, notify, or consult with
the Borrower shall not be a defense to, or in any way diminish, discharge or
derogate from the Borrower Reimbursement Obligations hereunder.
12.5
DOE
Rights
.
12.5.1.
Rights Cumulative
.
DOE's right to reimbursement provided for in this
Article 12
shall be in addition to, and not in limitation of, any other claims, rights
or remedies of subrogation, reimbursement, contribution, exoneration or
indemnification or similar claims, rights or remedies, whether arising under
contract, by statute, or otherwise that DOE may have from time to time.
12.5.2.
Subrogation
.
Without limiting the generality of
Section 12.5.1
, in
accordance with Section 609.10(e)(2) of the Applicable Loan Guarantee
Requirements, upon any DOE Guarantee Payment DOE shall be subrogated to the
rights of FFB or any subsequent holder of the DOE Guaranteed Loan, including all
related Liens and Collateral.
12.6
Further
Assurances
.
The Borrower shall cooperate with DOE in connection with the
exercise of any of its rights under this
Article 12
and agrees, promptly
upon request by DOE or the Loan Servicer, to execute, acknowledge and deliver
all further instruments and documents, and take all such further acts as DOE or
the Loan Servicer may reasonably request from time to time in order to carry out
the purposes of this
Article 12
or to enable DOE to exercise and enforce
its rights and remedies hereunder.
95
ARTICLE 13
MISCELLANEOUS
13.1
Notices
.
Any communications, including any notices, between or among the
parties to the Loan Documents shall be given to the addresses listed in
Schedule 11.1
to the Disclosure Letter. All notices or other
communications required or permitted to be given under the Loan Documents shall
be considered as properly given (a) if delivered in person, (b) if sent by
overnight delivery service for inland delivery or international courier for
international delivery, (c) in the event overnight delivery service or
international courier service is not readily available, if mailed by first class
mail (or airmail for international delivery), postage prepaid, registered or
certified with return receipt requested, (d) if sent by facsimile or telecopy
with such transmission subsequently verified by return transmission by first
class mail, facsimile, telecopy or electronic mail or (e) if transmitted by
electronic mail (with such transmission subsequently verified by return
transmission verified by return transmission by first class mail, airmail,
facsimile, telecopy or electronic mail). Notice so given shall be effective upon
delivery to the addressee, except that communications or notices so transmitted
by facsimile or telecopy or other direct written electronic means shall be
deemed to have been validly and effectively given on the day (if a Business Day
and, if not, on the next following Business Day) on which it is validly
transmitted if received (with such receipt subsequently verified by return
transmission by first class mail, airmail, facsimile, telecopy or electronic
mail) before 2:00 p.m., recipient's time, and if received after that time, on
the next following Business Day;
provided
,
however
, that if any
notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender. Any party shall have
the right to change its address for notice under any of the Loan Documents to
any other location by giving prior written notice to the other parties in the
manner set forth hereinabove.
13.2
Further
Assurances
.
The Borrower shall fully cooperate with all Persons as may be
necessary to ensure that each Credit Party receives any notices due to such
Credit Party pursuant to the Transaction Documents. Each of the parties agrees
that money damages would not be a sufficient remedy for any breach of this
Section 13.2
and
Section 6.19(b)
and agrees that in addition to
all other remedies, any court or arbitrator may award specific performance or
other equitable relief as a remedy for any such breach.
13.3
Delay and
Waiver
.
No delay or omission in exercising any right, power, privilege
or remedy under this Loan Guarantee Agreement or any other Loan Document,
including any rights and remedies in connection with the occurrence of an Event
of Default or Potential Default shall impair any such right, power, privilege or
remedy of the Credit Parties, nor shall it be construed to be a waiver of any
right, power, privilege or remedy or of any breach or default, or an
acquiescence therein, or in any similar breach or default thereafter occurring,
nor shall any waiver of any single right, power, privilege or remedy, or of any
breach or default be deemed a waiver of any other right, power, privilege or
remedy or of any other breach or default therefore or thereafter occurring.
96
Any waiver, permit, consent or approval of any kind or
character on the part of any of the Credit Parties of any right, power,
privilege or remedy including any rights and remedies in connection with the
occurrence of an Event of Default or Potential Default or of any other breach or
default under this Loan Guarantee Agreement or any other Loan Document, or any
waiver on the part of any of the Credit Parties of any provision or condition of
this Loan Guarantee Agreement or any other Transaction Document, must be in
writing and shall be effective only to the extent in such writing specifically
set forth. All rights, powers, privileges and remedies, either under this Loan
Guarantee Agreement or any other Loan Document or by law or otherwise afforded
to any of the Credit Parties, shall be cumulative and not alternative and not
exclusive of any other rights, powers, privileges and remedies that such Credit
Parties may otherwise have.
13.4
Right of
Set-Off
.
In addition to any rights now or hereafter granted under
Governmental Rules or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
each Credit Party is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special, time or
demand, provisional or final) and any other Indebtedness at any time held or
owing by such Credit Party (including by any branches and agencies of such
Credit Party wherever located) to or for the credit or the account of the
Borrower against and on account of the Secured Obligations and liabilities of
the Borrower to such Credit Party under this Loan Guarantee Agreement or any
other Loan Document.
13.5
Amendment or
Waiver
.
Except as otherwise provided herein, neither this Loan
Guarantee Agreement nor any of the terms hereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing and signed by the Borrower and the Loan Servicer and, to the extent
it effects their respective rights or obligations, the Collateral Agent, the
Administrative Agent or DOE. Any amendment to or waiver of this Loan Guarantee
Agreement or any of the terms hereof that constitutes a 'modification' within
the meaning set forth in Section 502(9) of the Federal Credit Reform Act of 1990
and OMB Circular A-11 may be subject to the availability to DOE of funds
appropriated by Congress to meet an increase, if any, in the Credit Subsidy
Cost.
13.6
Entire
Agreement
.
This Loan Guarantee Agreement, including any agreement,
document or instrument attached hereto or referred to herein, integrates all the
terms and conditions mentioned herein or incidental hereto and supersedes all
oral negotiations and prior agreements and understandings of the parties hereto
in respect to the subject matter hereof.
13.7
Governing
Law
.
This Loan Guarantee Agreement and the rights and obligations of
the parties hereunder shall be governed by, and construed and interpreted in
accordance with, the federal law of the United States of America. To the extent
that federal law does not specify the appropriate rule of decision for a
particular matter at issue, it is the intention and agreement of the parties
hereto that the law of the State of New York (without regard to any choice
of law provision that would require the application of the laws of another
jurisdiction) shall be adopted as the governing federal rule of decision.
97
13.8
Severability
.
In case any one or more of the provisions contained in any Loan
Document should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the parties thereto shall enter
into good faith negotiations to replace the invalid, illegal or unenforceable
provision.
13.9
Calculations
.
All financial data submitted pursuant to this Loan Guarantee
Agreement and the other Loan Documents shall be prepared in accordance with
GAAP, and all financial ratio tests applicable to the Borrower shall be based on
definitions consistent with GAAP.
13.10
Limitation on
Liability
.
No claim shall be made by the Borrower or any of its Affiliates
against any Credit Party or any of their Affiliates, directors, employees,
attorneys or agents, including the Agents and the Independent Consultants, for
any special, indirect, consequential or punitive damages (whether or not the
claim therefor is based on contract, tort or duty imposed by law), in connection
with, arising out of or in any way related to the transactions contemplated by
this Loan Guarantee Agreement or the other Transaction Documents or any act or
omission or event occurring in connection therewith; and the Borrower hereby
waives, releases and agrees not to sue upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
13.11
Waiver of Jury
Trial
.
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
LOAN GUARANTEE AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE
BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH CREDIT PARTY TO ENTER
INTO THIS LOAN GUARANTEE AGREEMENT AND THE OTHER LOAN DOCUMENTS.
13.12
Consent to
Jurisdiction
.
By execution and delivery of this Loan Guarantee Agreement, the
Borrower irrevocably and unconditionally:
(a) submits
for itself and its property in any legal action or proceeding against it arising
out of or in connection with this Loan Guarantee Agreement or any other Loan Document, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of (i) the courts of
the United States of America for the District of Columbia, (ii) any other
federal court of competent jurisdiction in any other jurisdiction where it or
any of its property may be found, and (iii) appellate courts from any of the
foregoing;
98
(b) consents
that any such action or proceeding may be brought in or removed to such courts,
and waives any objection, or right to stay or dismiss any action or proceeding,
that it may now or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Borrower at its address set forth
in
Schedule 11.1
to the Disclosure Letter or at such other address of
which the Loan Servicer shall have been notified pursuant thereto;
(d) agrees
that nothing herein shall (i) affect the right of any Credit Party to effect
service of process in any other manner permitted by law or (ii) limit the right
of any Credit Party to commence proceedings against or otherwise sue the
Borrower or any other Person in any other court of competent jurisdiction nor
shall the commencement of proceedings in any one or more jurisdictions preclude
the commencement of proceedings in any other jurisdiction (whether concurrently
or not) if, and to the extent, permitted by the Governmental Rules; and
(e) agrees
that judgment against it in any such action or proceeding shall be conclusive
and may be enforced in any other jurisdiction within or without the U.S. by suit
on the judgment or otherwise as provided by law, a certified or exemplified copy
of which judgment shall be conclusive evidence of the fact and amount of the
Borrower's obligation.
13.13
Successors and
Assigns
.
(a) The
provisions of this Loan Guarantee Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
(b) The
Borrower may not assign or otherwise transfer any of its rights or obligations
under this Loan Guarantee Agreement or under any Transaction Document without
the prior written consent of the Loan Servicer and DOE.
(c)
FFB may assign any or all of its rights, benefits and obligations under the Loan
Documents and with respect to the Collateral to any Person that acquires an
interest in the DOE Guaranteed Loan in accordance with the provisions of the DOE
Credit Facility Documents.
(d) The
Loan Servicer, acting for this purpose as an agent of the Borrower, shall
maintain a register for the recordation of the names and addresses of each
Person that acquires an interest in the DOE Guaranteed Loan in accordance with
the provisions of the DOE Credit Facility Documents and the principal amounts of
the Advances owing to each such Person pursuant to the terms hereof from time to
time (the "
Register
"). The entries in the Register shall be conclusive,
and the Borrower, any Agent and the Credit Parties may treat each Person whose
name is recorded in the Register as having an interest in the DOE Guaranteed
Loan for all purposes of this Loan Guarantee Agreement, notwithstanding
notice to the contrary. The register shall be available for inspection by the
Borrower and any Credit Party, at any reasonable time and from time to time upon
reasonable prior notice.
99
13.14
Participations
.
FFB may from time to time sell or otherwise grant
participations in any or all of its rights and obligations under the Loan
Documents and with respect to the Collateral without the consent of the Borrower
or any Agent. In such case, the Borrower and any Agent party hereto shall
continue to deal exclusively with FFB and the provisions of this Loan Guarantee
Agreement shall apply as if no such participation had been sold or granted.
13.15
Reinstatement
.
This Loan Guarantee Agreement shall continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of the
Borrower's obligations hereunder, or any part thereof, is, pursuant to
Governmental Rules, rescinded or reduced in amount, or must otherwise be
restored or returned by any Credit Party. In the event that any payment or any
part thereof is so rescinded, reduced, restored or returned, such obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
13.16
No Partnership;
Etc
.
The Credit Parties and the Borrower intend that the
relationship between them shall be solely that of creditor and debtor. Nothing
contained in this Loan Guarantee Agreement or in any other Loan Document shall
be deemed or construed to create a partnership, tenancy-in-common, joint
tenancy, joint venture or co-ownership by, between or among the Credit Parties
and the Borrower or any other Person. The Credit Parties shall not be in any way
responsible or liable for the indebtedness, losses, obligations or duties of the
Borrower or any other Person with respect to the Project or otherwise. All
obligations to pay real property or other taxes, assessments, insurance
premiums, and all other fees and Periodic Expenses arising from the ownership,
operation or occupancy of the Project and to perform all obligations under the
agreements and contracts relating to the Project shall be the sole
responsibility of the Borrower.
13.17
Payment of Costs and
Expenses
.
(a)
(i) The Borrower shall, whether or not the
transactions herein contemplated are consummated, pay or reimburse: all
reasonable out-of-pocket costs and expenses of each Credit Party (including all
commissions, charges, costs and expenses for the conversion of currencies and
all other costs, charges and expenses, including all fees and Periodic Expenses
of the Independent Consultants and other legal counsel, consultants and advisors
for any of the foregoing) made, paid, suffered or incurred in connection with
(A) the translation, negotiation, preparation, execution and delivery and, where
appropriate, authentication, registration and recordation of this Loan Guarantee
Agreement, the other Transaction Documents and any other documents and
instruments related hereto or thereto (including legal opinions), and (B) the
authentication, registration, translation and recordation (where appropriate) of
any of the Transaction Documents and the delivery of the evidences of
Indebtedness relating to the Advances and the disbursements thereof.
100
(ii) The
Borrower shall also pay or reimburse all out-of-pocket costs and expenses of
each Credit Party (including all commissions, charges, costs and expenses for
the conversion of currencies and all other costs, charges and expenses including
all fees and Periodic Expenses of the legal counsel, consultants and advisors
for any of the foregoing) made, paid, suffered or incurred in connection with
(A) any amendment or modification to, or the protection or preservation of any
right or claim under, or consent or waiver in connection with, this Loan
Guarantee Agreement or any other Transaction Document, any such other document
or instrument related hereto or thereto or any Collateral, and (B) the
administration, preservation in full force and effect and enforcement (including
with respect to a work out) of this Loan Guarantee Agreement, the other
Transaction Documents and any other documents and instruments referred to herein
or therein (including the fees and disbursements of counsel for each Credit
Party and travel costs), and (C) the fees and expenses of the Independent
Engineer and other Independent Consultants from time to time retained pursuant
to the Loan Documents.
(b) The
Borrower shall, whether or not the transactions herein contemplated are
consummated, (i) indemnify each of the Credit Parties (each an "
Indemnified
Person
") and each of its respective officers, directors, employees,
representatives, attorneys and agents from and hold each of them harmless
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses and disbursements incurred by
any of them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding or inquiry (whether
or not such Indemnified Person is a party thereto) related to the entering into
and performance of any Transaction Document or the disbursement of, or use of
the proceeds of, any Advances or the consummation of any transactions
contemplated herein or in any Transaction Document, including the fees and
Periodic Expenses of counsel selected by such Indemnified Person incurred in
connection with any such investigation, litigation or other proceeding or in
connection with enforcing the provisions of this
Section 13.17
(but
excluding any such liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements to the extent
incurred by reason of the gross negligence or willful misconduct of the
Indemnified Person or its officers, directors, employees, representatives,
attorneys or agents, as the case may be, as determined pursuant to a final,
non-appealable judgment by a court of competent jurisdiction) (collectively,
"
Indemnity Claims
").
(c) Without
limitation to the provisions of
clause (b)
above, the Borrower agrees to
defend, indemnify and hold harmless each Indemnified Person and each of its
respective directors, officers, shareholders, agents, employees, participants,
successors and assigns, from and against any and all Indemnity Claims.
(d) All
sums paid and costs incurred by any Indemnified Person with respect to any
matter indemnified hereunder shall bear interest at the Late Charge Rate
applicable to the DOE Guaranteed Loans from the date the Borrower receives
notice thereof from such Indemnified Person, until reimbursed by the Borrower,
and all such sums and costs shall be added to the Secured Obligations and be
secured by the Security Documents and shall be immediately due and payable on
demand. Each such Indemnified Person shall promptly notify the Borrower in a
timely manner of any such amounts payable by the Borrower hereunder;
provided
that any failure to provide such notice shall not affect the Borrower's
obligations under this
Section 13.17
.
101
(i)
Each Indemnified Person within ten days after the receipt by it of notice of the
commencement of any action for which indemnity may be sought by it, or by any
Person controlling it, from the Borrower on account of the agreements contained
in this
Section 13.17
, shall notify the Borrower in writing of the
commencement thereof, but the failure of such Indemnified Person to so notify
the Borrower of any such action shall not release the Borrower from any
liability that it may have to such Indemnified Person.
(ii)
To the extent that the undertaking in the preceding clauses of this
Section
13.17
may be unenforceable because it is violative of any law or public
policy, the Borrower shall contribute the maximum portion that it is permitted
to pay and satisfy under Governmental Rules to the payment and satisfaction of
such undertakings.
(iii) The
provisions of this
Section 13.17
shall survive foreclosure under the
Security Documents and the Security Discharge Date, and shall be in addition to
any other rights and remedies of any Indemnified Person.
(iv)
Any amounts payable by the Borrower pursuant to this
Section 13.17
shall be payable within the later to occur of (i) ten Business Days after
the Borrower receives an invoice for such amounts from any applicable
Indemnified Person, and (ii) five Business Days prior to the date on which such
Indemnified Person expects to pay such costs on account of which the Borrower's
indemnity hereunder is payable, and if not paid by such applicable date shall
bear interest at the Late Charge Rate from and after such applicable date until
paid in full.
(v)
The Borrower shall be entitled, at its expense, to participate in the defense
thereof;
provided
that such Indemnified Person shall have the right to
retain its own counsel, at the Borrower's expense, and such participation by the
Borrower in the defense thereof shall not release the Borrower of any liability
that it may have to such Indemnified Person. Any Indemnified Person against whom
any Indemnity Claim is made shall be entitled, after consultation with the
Borrower and upon consultation with legal counsel wherein such Indemnified
Person is advised that such Indemnity Claim is meritorious, to compromise or
settle any such Indemnity Claim. Any such compromise or settlement shall be
binding upon the Borrower for purposes of this
Section 13.17
.
(vi)
Upon payment of any Indemnity Claim by the Borrower pursuant to this
Section
13.17
, the Borrower, without any further action, shall be subrogated to any
and all claims that such Indemnified Person may have relating thereto, and such
Indemnified Person shall at the request and expense of the Borrower cooperate
with the Borrower and give at the request and expense of the Borrower such
further assurances as are necessary or advisable to enable the Borrower
vigorously to pursue such claims.
(vii) Notwithstanding
any other provision of this
Section 13.17
, the Borrower shall not be
entitled to any (i) notice, (ii) participation in the defense of, (iii) consent
rights with respect to any compromise or settlement, or (iv) subrogation rights,
in each case except as otherwise provided for pursuant to this
Section 13.17
with respect to any action, suit or proceeding against the Borrower, the
Operator, the Sponsor or the Investor.
102
13.18
Counterparts
.
This Loan Guarantee Agreement may be executed in one or more
counterparts and when signed by all of the parties shall constitute a single
binding agreement. The delivery of an executed counterpart of this Loan
Guarantee Agreement by electronic means, including by telecopy, facsimile or by
portable document format (PDF) attachment to email, shall be as effective as
delivery of an original executed counterpart of this Loan Guarantee
Agreement.
(Remainder of page intentionally blank. Next page is signature
page.)
103
Exhibit A
to Loan
Guarantee Agreement
DEFINITIONS
"
Account
Proceeds
" Interest or any other income arising out of the investment of the
Project Accounts, including all amounts credited to or otherwise deposited
therein (including Permitted Investments) and all of the Borrower's right, title
and interest in and to such accounts and any other amounts that the Collateral
Agent may receive under the terms of the Loan Guarantee Agreement.
"
Additional
Project Documents
" All of the contracts necessary for or material to the
construction and operation of the Project entered into by the Borrower
subsequent to the Financial Closing Date.
"
Administrative
Agent
" Midland, as appointed pursuant to
Section 9.1(c)
of the Loan
Guarantee Agreement.
"
Advance
"
The Initial Advance or a Subsequent Advance, as applicable.
"
Advance
Conditions Precedent
" As defined in
Section 4.3
of the Loan Guarantee
Agreement.
"
Advance
Date
" A Business Day on which FFB makes an Advance (including the Initial
Advance) in accordance with
Article 2
of the Loan Guarantee
Agreement.
"
Advance
Notice
" An Initial Advance Notice or a Subsequent Advance Notice, as
applicable.
"
Advance
Notice Date"
With respect to any Advance, the date of submission of the
Advance Notice for such Advance.
"
Affiliate
"
As to any Person, any other Person that directly or indirectly controls, or is
under common control with, or is controlled by, such Person. As used in this
definition, "control" (including, with its correlative meanings, "controlled by"
and "under common control with") as used with respect to any Person means
possession, directly or indirectly, of the power to direct or cause the
direction of management or policies of such Person (whether through ownership of
voting securities or partnership or other ownership interests, by contract or
otherwise);
provided
,
however
, that, in any event and for all
purposes of the Loan Documents, except where otherwise specified: (i) the
Sponsor or any Affiliate of the Sponsor and the Investor and any Affiliate of
the Investor shall be deemed an "Affiliate" of the Borrower; and (ii) any Person
that owns directly or indirectly 20% or more of the securities having ordinary
voting powers for the election of directors or other applicable governing body
of another Person (but excluding limited partnership interests) shall be deemed
to control such other Person.
"
Agents
"
Collectively, the Loan Servicer, the Collateral Agent, the Administrative Agent
and the Depositary Bank (and each, individually, an "
Agent
").
"
Agents'
Fees
" All fees payable to the Agents by the Borrower from time to time
pursuant to
Section 9.7
of the Loan Guarantee Agreement.
"
ALTA
Survey
" The ALTA survey prepared by CK3, LLC with respect to the Project
Site.
"
Anticipated
Completion Date
" November 30, 2012.
"
Applicable
Loan Guarantee Requirements
" The final regulations with respect to Title
XVII, at 10 C.F.R. Part 609, and any other Applicable Loan Guarantee
Requirements from time to time promulgated to implement Title XVII.
"
Application
"
The Loan Guarantee Application of the Sponsor, dated February 24, 2009, for a
DOE Guarantee under Title XVII.
"
Approved
Construction Changes
" As defined in
Section 6.9(b)
of the Loan
Guarantee Agreement.
"
Approved
Reservoir Engineer
" GeotherMex, Inc., as Approved Reservoir Engineer to the
Loan Servicer.
"
Approved
Reservoir Engineer's Report
" The report of the Approved Reservoir Engineer
delivered on or before the Initial Advance Date with respect to the
construction, development and operation of the Project.
"
Atlas
Copco
" Atlas Copco Mafi-Trench Company LLC, a Delaware limited liability
company.
"
Atlas
Copco Mafi-Trench Turboexpander Supply Contract
" The Purchase Contract
between Atlas Copco and Turbine Air Systems.
"
Authorized
Official
" With respect to any Person, (i) the President, the Vice President,
the Assistant Vice President, the Treasurer, the Assistant Treasurer, or any
other Financial Officer of such Person, and (ii) with respect to the Borrower,
the Operator the Sponsor and the Investor, only those individuals holding any of
the foregoing positions whose name appears on a certificate of incumbency
delivered concurrently with the execution of the Loan Guarantee Agreement, as
such certificate of incumbency may be amended from time to time to identify
names of the individuals then holding such offices and the capacity in which
they are acting.
"
Bankruptcy
Law
" Any insolvency, reorganization, moratorium or similar law for the
general relief of debtors in any relevant jurisdiction.
"
Base
Case Projections
" A projection of operating results for the Project over a
period ending no sooner than twelve fiscal months after the Maturity Date,
showing on a basis consistent with the Operating Plan, the Operating Forecast,
and the Transaction Documents the Borrower's good faith projections based on
assumptions that were believed by the Borrower to be reasonable as of the date
made, as of the Financial Closing Date of revenues, expenses, cash flow, Debt
Service Coverage Ratios, sources and uses of revenues over the forecast period
and other forecasts as may reasonably be requested by DOE, as
updated from time to time in accordance with the terms of the Loan Guarantee
Agreement (including
Section 6.1(b)(vii)
thereof).
2
"
Base
Equity
" Equity funding to be provided to the Borrower by the Sponsor (or by
the Sponsor through Holdco) prior to the Initial Advance Date, in an amount not
less than the Base Equity Commitment.
"
Base
Equity Commitment
" The obligation of the Sponsor (or by the Sponsor through
Holdco) to fund the sum of (i) the aggregate amount of Eligible Base Project
Costs, less the Guaranteed Loan Amount, and (ii) 100% of all Ineligible Base
Project Costs, which amount shall be funded on or before the Initial Advance
Date by a combination of cash and the maximum amount a beneficiary may draw
under one or more Base Equity Letters of Credit (if any) provided by the Sponsor
or Holdco;
provided
that the maximum value of such Base Equity Letters of
Credit for purposes of this definition shall not exceed in the aggregate the
Base Equity LC Amount.
"
Base
Equity LC Amount
" Three million nine hundred thousand Dollars
($3,900,000).
"
Base
Equity Letter of Credit
" An unconditional, irrevocable, direct-pay, letter
of credit that is denominated in Dollars, that is issued in favor of the
Collateral Agent by a bank with a branch or representative office in New York,
New York and that is organized under or licensed as a branch or agency under the
laws of the United States or any state thereof that has (a) outstanding
unguaranteed and unsecured long-term Indebtedness that is rated "A-" or better
by S&P and/or "A3" or better by Moody's (and if the applicable rating is
"A-" by S&P or "A3" by Moody', such rating is not on negative watch); or (b)
that is otherwise acceptable to the Loan Servicer and the Collateral Agent. In
either case the unconditional, irrevocable, direct-pay, letter of credit must
meet each of the following requirements and is otherwise in form and substance
satisfactory to the Loan Servicer in its sole discretion:
(i)
the initial expiration date thereof shall be at least twelve months beyond
the date of issuance, and shall automatically renew upon its expiration (which
renewal period shall be for at least six months until the occurrence of the
Project Completion Date) unless, at least forty-five days prior to any such
expiration, the issuer shall provide the Collateral Agent with a notice of
non-renewal of such letter of credit;
(ii)
upon any failure to renew such Base Equity Letter of Credit at least thirty days
prior to its expiration date (unless the Project Completion Date has occurred
prior to such expiration date), or if the issuer of such Base Equity Letter of
Credit shall fail to meet the credit rating requirements with respect thereto,
the entire face amount thereof may be drawn upon by the Collateral Agent (unless
the Collateral Agent shall have received a replacement letter of credit meeting
the conditions herein imposed or amounts equal to the undrawn amount of such
Base Equity Letter of Credit shall have been contributed as equity to the
Borrower and deposited in the Construction Account);
(iii)
such Base Equity Letter of Credit shall reflect that (A) it shall be drawable in
whole or in part, in addition to the drawing conditions set forth in clause (ii)
above, (1) at any time if an Event of Default or Potential Default has occurred
and is continuing, (2) at any time any Project Costs are due and payable and
adequate cash is not available in the Construction Account (either from proceeds
of Advances or equity contributions) to pay such Project Costs and (3) at any
time, if necessary to maintain (in connection with an Advance Request or
otherwise) the ratio of the aggregate amount of all (x) Advances outstanding
under the DOE Guaranteed Loans (plus Interest During Construction) to (y) Equity
Contributions with respect to Eligible Project Costs made in cash by the Sponsor
(or by the Sponsor through Holdco) to the Borrower of no greater than 75 to 25,
and (B) there shall be no other conditions to any drawing thereunder other than
the submission of a drawing request substantially in the form attached to such
Base Equity Letter of Credit; and
3
(iv) no
agreement, instrument or document executed in connection with such Base Equity
Letter of Credit shall provide the issuer thereof or any other Person with any
claim against the Borrower, the Collateral Agent, the Loan Servicer or any other
Secured Party, or against any Collateral, whether for costs of maintenance,
reimbursement of amounts drawn under such letter of credit or otherwise.
"
Base
Project Costs
" The Borrower's estimate as of the Financial Closing Date of
Total Project Costs, which is an aggregate amount of one hundred and thirty
million, seven hundred eighty thousand, seven hundred ninety three Dollars
($130,780,793) (which for avoidance of doubt includes five million, four hundred
and ninety four thousand, three hundred Dollars ($5,494,300) of Budgeted
Contingencies).
"
Base
Quarter
" The calendar quarter ending September 30 in any given calendar
year.
"
Borrower
"
As defined in the Preamble to the Loan Guarantee Agreement.
"
Borrower
Reimbursement Obligations
" As defined in
Section 12.2.1
of the Loan
Guarantee Agreement.
"
Borrower
Reimbursement Payment
" As defined in
Section 12.2.2
of the Loan
Guarantee Agreement.
"
Borrower's
Accountant
" BehlerMick PS or such other firm of independent public
accountants of recognized international standing as may be appointed by the
Borrower as accountant of the Borrower, from time to time with the approval of
the Loan Servicer.
"
Borrower's
LLC Agreement
" The limited liability company agreement of the Borrower,
dated as of August 12, 2009.
"
Budgeted
Contingencies
" The line item for "Contingency" included in the Financial
Plan.
"
Business
Day
" Any day other than a Saturday, Sunday or any other day on which either
FFB or the Federal Reserve Bank of New York are not open for business.
"
Cap-Ex
Reserve Account
" The account set forth in Section 3.1 of the Depositary
Agreement.
4
"
Capital
Expenditures
" All expenditures that should be capitalized in accordance with
GAAP.
"
Capital
Lease
" Any lease of (or other agreement conveying the right to use)
property, real or personal, which would be required, in accordance with GAAP, to
be capitalized and accounted for as a capital lease on a balance sheet of the
lessee.
"
Cash
Flow Available for Debt Service
" For any period, Net Income plus
depreciation and amortization and other non-cash charges plus/minus changes in
working capital plus interest and fees paid, minus capital expenditures
(excluding capital expenditures made from existing funded reserves).
"
Cash
Grant
" Any cash grant under Section 1603 of the Recovery Act or any other
similar provision.
"
Cash
Grant Guidance
" means the guidance issued on July 9, 2009, by the U.S.
Department of Treasury for payments for specified energy property in lieu of tax
credits under the Recovery Act and any clarification, addition or supplement
thereto issued by the U.S. Department of Treasury or any other Governmental
Authority; including any similar guidance concerning a refundable tax credit
that replaces such grant program.
"
Cash
Grant Proceeds Account
" The account set forth in Section 3.1 of the
Depositary Agreement.
"
Cash
Grant Recapture Liabilities
" shall mean any loss or liability resulting from
all or any portion of a Cash Grant being "recaptured" as a result of any Project
or any part thereof or any interest in the Borrower being disposed of, all or
any portion of the Project ceasing to be specified energy property, or
otherwise, including any interest and penalties related thereto as described in
the Cash Grant Guidance.
"
Cash
Grant Prepayment Amount
" Any proceeds of a Cash Grant required to be
mandatorily prepaid according to priorities First or Seventh of the Cash Grant
Waterfall.
"
Cash
Grant Terms and Conditions
" means the terms and conditions that an applicant
for a Cash Grant must agree to in order to receive a Cash Grant, as provided by
the Cash Grant Guidance.
"
Cash
Grant Waterfall
" Each of priorities First through Eighth of Section 12.1.2
of the Depositary Agreement.
"
Change
of Control
" An event whereby any person or group acquires stock of the
Sponsor having in excess of 50% of the outstanding voting power of the Sponsor,
other than a merger of the Sponsor with another entity or acquisition of or by
another entity, or other similar transaction (a "
Merger Event
") in which
the following conditions are met:
(i)
the result of the Merger Event is to increase the market cap size of the Sponsor
or the surviving or acquiring entity of the Merger Event;
5
(ii)
the entity other than the Sponsor involved in the Merger Event is an owner or
operator of geothermal projects in the United States with experience at least
substantially comparable to that of the Sponsor or otherwise acceptable to the
Loan Servicer;
(iii) the
Merger Event could not reasonably be expected to result in an adverse effect on
the Sponsor or the Project;
(iv)
the Merger Event could not reasonably be expected to result in an adverse
effect on the ability of the Borrower to comply with its obligations under the
Loan Documents;
(v)
all necessary permits, licenses, and regulatory and Governmental Approvals
for the Merger Event have been obtained;
(vi)
the Sponsor's or surviving entity's ability to satisfy its obligations under the
Overrun Equity Commitment will not be adversely affected as a result of the
Merger Event;
(vii) the
Merger Event will not cause or could not be reasonably be expected to result in
Recapture Liabilities, and
(viii)
following the Merger Event, no owner of an equity interest in the Sponsor or the
entity surviving the Merger Event, or any of its employees, officers, directors,
representatives or agents, or any entity or person who is the beneficial owner
of more than 5% of any class of equity securities or other equity interest
issued by such owner of an equity interest or its Affiliates, shall be (A) a
Person or entity with whom U.S. persons or entities are restricted from doing
business under OFAC regulations (including those named in OFAC's Specially
Designated Nationals and Blocked Persons List) or under any statute, executive
order (including the September 24, 2001, Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism), or other governmental action or (B) an entity or person doing
business in any country subject to a sanctions program identified on the list
maintained by OFAC in violation of the economic sanctions of the United States
administered by OFAC.
"
Change
of Law
" Any change in any Governmental Rule or the application or
requirements thereof, or compliance by any Person with any request or directive
(whether or not having the force of law but if not having the force of law,
being of a type with which they customarily comply) of any Governmental
Authority issued after the Financial Closing Date.
"
Change
Orders
" means (a) each "Change Order" (if any) as defined in the EPC
Contract or the Equipment Contract and (b) each "Change Order" (if any) (or
analogous term) howsoever described in any other Construction Contract.
"
Collateral
"
All real, personal or intellectual property whether now existing or hereinafter
acquired, that is subject to or intended to be or become subject to the security
interest or Lien granted (or intended to be granted) to the Collateral Agent, or
otherwise for the benefit of DOE or the Secured Parties, under the Security
Documents.
"
Collateral
Agent
" Midland, as appointed pursuant to
Section 9.1(b)
of the Loan
Guarantee Agreement.
6
"
Commencement
of Construction
" (i) The Borrower has (1) completed all pre-construction
engineering and design, (2) received all necessary licenses, permits and local
and national environmental clearances, (3) engaged all contractors and ordered
all essential equipment and supplies that, in each case of clauses (1), (2) and
(3), are reasonably necessary to begin (or, if previously interrupted or
suspended, resume) physical work of a significant nature on the Project and to
proceed to completion without foreseeable interruption of a material duration;
and (ii) the Borrower or relevant sub-contractor has begun (or resumed) such
physical work.
"
Comptroller
General
" The Comptroller General of the United States.
"
Conditional
Commitment
" The Conditional Commitment, dated as of May 27, 2010.
"
Construction
Account
" The account set forth in Section 3.1 of the Depositary
Agreement.
"
Construction
Budget
" The Construction Budget delivered by the Borrower to the Independent
Engineer and the Loan Servicer pursuant to
Section 4.1.4(iii)
of the Loan
Guarantee Agreement, as amended from time to time by Approved Construction
Changes, setting forth all Project Costs (each by category on an aggregate
basis) to design, develop, construct, and start up the Project through the
Project Completion Date (inclusive of the cost of all Punch List Items) under
the Construction Contracts.
"
Construction
Change
" As defined in
Section 6.9(b)
of the Loan Guarantee
Agreement.
"
Construction
Contractor
" Each of (i) Turbine Air Systems, (ii) Industrial Builders, Inc.,
(iii) Atlas Copco, and (iv) any other material subcontractor or supplier under
any Construction Contract, including any material subcontractor or supplier
under any Well Drilling Contract.
"
Construction
Contracts
" The documents listed in
Section 4.1.2(b)
of the Loan
Guarantee Agreement and all other contracts required for construction,
procurement, installation, and improvement of land, buildings, wells, equipment,
and manufacturing facilities for the Project entered into prior to, on, or after
the Financial Closing Date.
"
Construction
Manager
" An experienced Person appointed by the Borrower to supervise and
coordinate Project Site construction, Project interconnection, and Project
commissioning activities on behalf of Borrower and to act as "Owner's
Representative" under the Equipment Contract and the EPC Contract.
"
Construction
Notice to Proceed
" With respect to each Construction Contract, as defined in
such Construction Contract.
"
Construction
Progress Report
" A construction progress report in the form attached as
Exhibit D
to the Loan Guarantee Agreement, prepared monthly by the
Borrower, addressing the progress of construction to date and the expected
progress of construction, including Budgeted Contingencies and Overrun Project
Costs incurred or reasonably expected to be incurred, any events that have
occurred or are reasonably expected to occur that would materially affect
the construction schedule, including regulatory issues with
Government Authorities, along with an explanation of material delays from the
then existing construction schedule.
7
"
Contingent
Obligation
" As to any Person, any obligation of such Person with respect to
any Indebtedness ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
obligation of such Person, whether or not contingent, as a guarantee or
otherwise; (i) for the purchase, payment or discharge of any such primary
obligation; (ii) to purchase, repurchase or otherwise acquire such primary
obligations or any property constituting direct or indirect security therefor,
including the obligation to make take-or-pay or similar payments; (iii) to
advance or supply funds; (iv) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor; (v) to purchase property, securities or services primarily for the
purpose of assuring the holder of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation; (vi) otherwise
to assure or hold harmless the holder of such primary obligation against loss in
respect thereof, including with respect to letter of credit obligations, swap
agreements, foreign exchange contracts and other similar agreements (including
agreements relating to derivative instruments);
provided
,
however
,
that the term "Contingent Obligation" shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"
Corrupt
Practices Laws
" (i) the Foreign Corrupt Practices Act of 1977 (Pub. L. No.
95-213, §§101-104), as amended, and (ii) any equivalent U.S. or foreign
Governmental Rule.
"
Cost
Segregation Report
" means a report detailing the cost of each item of
property in the Project, dated on or about the date of the Cash Grant
Application.
"
Cost
Overrun
" Any Project Cost in excess of the Base Project Cost (excluding the
Budgeted Contingencies) amount budgeted therefor in the relevant line item of
the Construction Budget as in effect on the Financial Closing Date (after taking
into account any reallocations (other than from Budgeted Contingencies) among
line items permitted pursuant to
Section 6.9(b)
of the Loan Guarantee
Agreement.)
"
Covered
Taxes
" As defined in
Section 3.1.2(a)
of the Loan Guarantee
Agreement.
"
Credit
Parties
" DOE, the Administrative Agent, the Collateral Agent and the Loan
Servicer.
"
Credit
Subsidy Cost
" As defined in §609.2 of the Applicable Loan Guarantee
Requirements.
"
Davis-Bacon
Act
" Subchapter IV of Chapter 31 of Part A of Subtitle II of Title 40 of the
United States Code, including and as implemented by the regulations set forth in
Parts 1, 3 and 5 of title 29 of the Code of Federal Regulations.
8
"
Davis-Bacon
Act Covered Contract
" As defined in
Exhibit C
to the Loan Guarantee
Agreement.
"
Davis-Bacon
Requirements
" means the requirement that all laborers and mechanics employed
by contractors and subcontractors in the performance of construction work
financed in whole or in part by the DOE Guaranteed Loans shall be paid wages at
rates not less than those prevailing on projects similar in the locality as
determined by the Secretary of Labor in accordance with the Davis-Bacon Act, and
all regulations related thereto, including those set forth in 29 CFR 5.5(a)(1)
to (10), and all notice, reporting and other obligations related thereto as
required by DOE, including the obligations under
Section 6.26
and the
inclusion of the provisions in
Exhibit C
and the appropriate wage
determination(s) of the Secretary of Labor in each Davis-Bacon Act Covered
Contract.
"
DBA
Bid Information
" As defined in
Section 6.26(d)
of the Loan Guarantee
Agreement.
"
DBA
Contract Party
" means any contractor, subcontractor (including any lower
tier subcontractor) or other entity (other than the Borrower but including, if
applicable, the Sponsor or any other Affiliates of the Borrower or the Sponsor)
that is party to a Davis-Bacon Act Covered Contract.
"
Debarment
Regulations
" (i) The Government-wide Debarment and Suspension
(Non-procurement) regulations (Common Rule), 53 Fed. Reg. 19204 (May 26, 1988),
(ii) Subpart 9.4 (Debarment, Suspension, and Ineligibility) of the Federal
Acquisition Regulations, 48 C.F.R. 9.400 - 9.409, and (iii) the revised
Government-wide Debarment and Suspension (Non-procurement) regulations (Common
Rule), 60 Fed. Reg. 33037 (June 26, 1995).
"
Debt
Collection Improvement Act
" The Debt Collection Improvement Act of 1996, as
amended from time to time.
"
Debt
Service
" means, for any period, all principal and interest which came due
(or are scheduled to come due) under all Indebtedness for such period.
"
Debt
Service Coverage Ratio
" With respect to any computation period, the ratio of
(i) Cash Flow Available for Debt Service for such period, to (ii) Debt Service
for such period.
"
Debt
Service Payment Account
" The account set forth in Section 3.1 of the
Depositary Agreement.
"
Debt
Service Reserve
" As defined in
Section 6.15
of the Loan Guarantee
Agreement.
"
Debt
Service Reserve Account
" The account set forth in Section 3.1 of the
Depositary Agreement.
"
Debt
Service Reserve Requirement
" An amount equal to the amount of Debt Service
due on the immediately succeeding six months.
9
"
Depositary
Agreement
" The Depositary Agreement, dated on or before the Financial
Closing Date, among the Borrower, the Collateral Agent and the Administrative
Agent, pursuant to which the Project Accounts are established and will be
managed.
"
Depositary
Accounts Control Agreement
" The Depositary Accounts Control Agreement, dated
on or before the Financial Closing Date, among the Borrower, the Depositary Bank
and the Collateral Agent, pursuant to which control is provided with respect to
the Project Accounts.
"
Depositary
Bank
" PNC Bank, National Association.
"
Development
Costs
" All reasonable out-of pocket expenses related to the Project that
constitute Project Costs and which have been incurred prior to the date
specified in the Development Costs Statement by the Borrower, the Sponsor or any
Affiliate of the Sponsor in the development of the Project, but not including
technology development costs, general administrative and overhead costs or other
Ineligible Project Costs.
"
Development
Costs Statement
" The statement, in form and substance satisfactory to the
Loan Servicer, summarizing the amount of Development Costs incurred prior to the
Initial Advance Date, subject to the requirements of
Section 4.2.3(a)
of
the Loan Guarantee Agreement.
"
Direct
Agreements
" The documents listed in
Section 4.2.12
of the Loan
Guarantee Agreement and all other agreements entered into prior to, on, or after
the Initial Advance Date, pursuant to which a Material Project Party consents to
the assignment to the Secured Parties (or any of them) of the Borrower's
interest in any Project Documents, satisfactory to the Loan Servicer and the
Collateral Agent and substantially in the form attached as
Exhibit I
to
the Loan Guarantee Agreement, together with such document-specific provisions as
the Loan Servicer may require.
"
Disclosure
Letter
" The disclosure letter dated as of the Financial Closing Date
delivered by the Borrower to the Loan Servicer and containing certain schedules
of information required pursuant to the Loan Guarantee Agreement.
"
Dishonored
Base Equity Letter of Credit Amount
" An aggregate amount equal to the value
of one or more Base Equity Letters of Credit (in accordance with its terms) for
which payment has been refused by the issuing bank when such Base Equity Letters
of Credit have been presented for payment in accordance with their terms.
"
Disqualified
Person
" means (a) any federal, State, or local government (or any political
subdivision, agency, or instrumentality thereof); (b) any organization described
in Section 501(c) of the Code and exempt from tax under Section 501(a) of the
Code; (c) any entity referred to in paragraph (4) of Section 54(j) of the Code;
and (d) any real estate investment trusts, as defined in Section 856(a) of the
Code; (e) any other Person that is ineligible to receive the Cash Grant under
Section 1603(g) of the Recovery Act; and (f) any partnership or other
pass-through entity (including a single-member disregarded entity), any partner
(or other holder of an equity or profits interest) of which is a Disqualified
Person;
provided
that with respect to a taxable C corporation whereby
such shareholders are not eligible to receive proceeds of a Cash Grant by virtue
of this definition will not be a Disqualified Person; provided, further, that if
and to the extent the definition of "Disqualified Person" under Section
1603(g) of the Recovery Act is amended after the Financial Closing Date, the
definition of "Disqualified Person" provided in this Agreement shall be
interpreted to conform to such amendment and any U.S. Department of the Treasury
guidance with respect thereto.
10
"
DOE
"
As defined in the Preamble to the Loan Guarantee Agreement.
"
DOE
Credit Facility Commitment
" The commitment of FFB to make Advances to the
Borrower pursuant to the terms of the FFB Note Purchase Agreement in an
aggregate principal amount not to exceed the Maximum Principal Amount.
"
DOE
Credit Facility Documents
" The documents listed in
Section 4.1.1(b)
of the Loan Guarantee Agreement, and each other related agreement identified
by DOE from time to time as a DOE Credit Facility Document.
"
DOE
Credit Facility Fees
" All fees payable by the Borrower to DOE or FFB under
the Loan Guarantee Agreement, the DOE Credit Facility Documents or related side
letters, including the DOE Loan Facility Fee, the DOE Maintenance Fee and the
DOE Modification Payment and any other fees payable by Borrower pursuant to
Section 3.5
of the Loan Guarantee Agreement.
"
DOE
Guarantee
" The guarantee provided by DOE for the benefit of FFB pursuant to
the DOE Credit Facility Documents.
"
DOE
Guarantee Payment
" As defined in
Section 12.1
of the Loan Guarantee
Agreement.
"
DOE
Guarantee Payment Amount
" As defined in
Section 12.1
of the Loan
Guarantee Agreement.
"
DOE
Guaranteed Loans
" The Advances made pursuant to the DOE Credit Facility
Documents and, as the context requires, the principal amount of such Advances
(including interest that has been capitalized) outstanding from time to
time.
"
DOE
Loan Facility Fee
" A fee payable to DOE by the Borrower in the amount of
$968,233.42, which is equal to 1% of the DOE Guaranteed Loans, $510,630 of which
has been paid by the Sponsor prior to the Financial Closing Date and the
remaining balance of which shall be payable not later than the Financial Closing
Date.
"
DOE
Maintenance Fee
" A fee payable to DOE by the Borrower for DOE's
administrative expenses in servicing and monitoring the Project and the DOE
Guaranteed Loans during the construction, startup, commissioning and operation
of the Project in the amount of fifty thousand Dollars ($50,000) prorated for
the number of days between the Financial Closing Date and the end of the
calendar year in which the Financial Closing Date occurs, and thereafter fifty
thousand Dollars ($50,000) for the first full calendar year after the Financial
Closing Date, subject to escalation on January 1 of each year thereafter as
determined in the following sentence for each remaining calendar year over the
scheduled term of the DOE Guaranteed Loan. The DOE Maintenance Fee shall be
modified in an amount equal to the percentage determined by the sum of (i) the
percentage (rounded to the nearest 1/10%) by which the ECI for the Base Quarter
of the year before the preceding calendar year deviates from
the ECI for the Base Quarter of the second year before the preceding calendar
year, if at all,
plus
(ii) the percentage (rounded to the nearest 1/10%)
by which the amount of the comparability payment for federal government
employees in the Washington Metropolitan Area (as defined by the United States
Office of Management and Budget) recommended by the President's Pay Agent, if
any, for the calendar year before the preceding calendar year deviates from the
amount of such comparability payment, if any, recommended by the President's Pay
Agent for the second calendar year before the preceding calendar year.
11
"
DOE
Modification Payment
" Amounts payable to DOE or the Secured Parties in the
event that the Project experiences technical, financial, legal or other events,
including if any such event requires DOE or the Secured Parties to incur time or
expenses (including third-party expenses) beyond standard monitoring of the Loan
Documents: (a) reimbursing DOE in full for such amounts as DOE reasonably
determines are its additional internal administrative costs and any costs
associated in reviewing whether such events would alter the Credit Subsidy Cost
and (b) payment of related Periodic Expenses of Independent Consultants, to the
extent that such third parties are not paid directly by the Borrower or the
Sponsor.
"
Dollars
"
or "
$
" The lawful currency of the United States of America.
"
Drawstop
Notice
" A notice issued by the Loan Servicer pursuant to
Section 2.4.2
of the Loan Guarantee Agreement.
"
ECI
"
The Employment Cost Index, as published by the Bureau of Labor Statistics for
the relevant period.
"
Eligible
Base Project Costs
" The portion of Base Project Costs that are Eligible
Project Costs, in an aggregate amount not to exceed one hundred and twenty nine
million, ninety seven thousand, seven hundred and eighty nine Dollars
($129,097,789) (which for avoidance of doubt includes approximately five
million, four hundred and ninety four thousand, three hundred Dollars
($5,494,300) of Budgeted Contingencies).
"
Eligible
Project Costs
" Those portions of Project Costs that are eligible for funding
as "Project Costs" as defined in the Applicable Loan Guarantee Requirements.
"
Employee
Benefit Plan
" (i) All "employee benefit plans" (as defined in Section 3(3)
of ERISA) other than any Multiemployer Plans which are or at any time have been
maintained or sponsored by the Borrower or any of its Subsidiaries or to which
the Borrower or any of its Subsidiaries has ever made, or been obligated to
make, contributions or with respect to which the Borrower or any of its
Subsidiaries has incurred any material liability or obligation, (ii) all Pension
Plans, and (iii) all Qualified Plans.
"
Environmental
Affiliate
" The Operator, the Construction Contractor and any Person, to the
extent the Borrower could reasonably be expected to have liability as a result
of the Borrower retaining, assuming, accepting or otherwise being subject to
liability for Environmental Claims relating to such Person, whether the source
of the Borrower's obligation is by contract or operation of law.
12
"
Environmental
Approval
" Any Required Consent required under applicable Environmental Laws,
including the issuance of any Governmental Approvals required pursuant to the
National Environmental Policy Act.
"
Environmental
Claim
" Any and all obligations, liabilities, losses, administrative,
regulatory or judicial actions, suits, demands, decrees, claims, liens,
judgments, notices of noncompliance or violation, investigations (excluding
routine inspections), proceedings, cleanup, removal or remedial actions or
orders, or damages (foreseeable and unforeseeable, including consequential and
punitive damages), penalties, fees, out-of-pocket costs, expenses,
disbursements, attorneys' or consultants' fees, relating in any way to any
violation of Environmental Law or any violation of any Governmental Approval
issued under any such Environmental Law including (a) any and all Indemnity
Claims by any Governmental Authority for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Indemnity Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances, the violation or alleged
violation of any Environmental Law or Governmental Approval issued thereunder,
or arising from alleged injury or threat of injury to health, safety or the
environment.
"
Environmental
Indemnity Agreement
" The Environmental Indemnity Agreement to be made by the
Borrower in favor of the Collateral Agent and other Indemnified Parties (as
defined therein).
"
Environmental
Laws
" Any Governmental Rule in effect as of the Financial Closing Date or
thereafter, and in each case as amended, regulating, relating to or imposing
obligations, liability or standards of conduct concerning (A) environmental
impacts resulting from the use of the Project Site or environmental conditions
present on, in or under the Project Site, or (B) pollution, protection of human
health or safety or the environment, including flora and fauna, or Releases or
threatened Releases of pollutants, contaminants, chemicals, radiation or
industrial, toxic or hazardous substances or wastes, including Hazardous
Substances, or otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, recycling, disposal, transport, or
handling of pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes, including Hazardous Substances.
"
EPC
Contract
" means the Engineering, Procurement and Construction Contract,
dated February 3, 2011, between the Borrower and Industrial Builders, Inc.
"
Equipment
Contract
" The Equipment Supply Agreement, dated December 22, 2010, between
the Borrower and Turbine Air Systems.
"
Equity
Commitments
" The Base Equity Commitment and the Overrun Equity
Commitment.
"
Equity
Contributions
" The aggregate equity contributed as Base Equity and Overrun
Equity.
"
Equity
Funding and Recapture Obligation Agreement
" The Equity Funding and Recapture
Obligation Agreement, dated as of the Financial Closing Date, among the
Borrower,
13
Sponsor, Investor, the DOE and the Loan Servicer, pursuant to
which the Sponsor will commit to provide the Overrun Equity Commitment and the
Sponsor and the Investor will make certain additional undertakings for the
duration of the DOE Guaranteed Loans.
"
Equity
Distribution Account
" The account set forth in Section 3.1 of the Depositary
Agreement.
"
Equity
Interests
" Any and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated and whether voting or economic) the common or preferred equity or
equity or preference share capital of a Person, including partnership interests
and limited liability company interests.
"
Equity
Pledge Agreement
" The Equity Pledge Agreement to be entered into by Holdco,
the Borrower and the Collateral Agent on or before the Financial Closing Date by
which Holdco pledges all of the Equity Interests in the Borrower.
"
ERISA
"
The Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations promulgated, and any publicly available rulings
issued, thereunder.
"
ERISA
Affiliate
" As applied to any person (as defined in Section 3(9) of ERISA),
means (i) any corporation that is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of which that
person is a member, (ii) any trade or business (whether or not incorporated)
that is a member of a group of trades or business under common control within
the meaning of Section 414(c) of the Internal Revenue Code or Section 4001(b) of
ERISA of which that person is a member, (iii) any member of an affiliated
service group within the meaning of Section 414(m) and (o) of the Internal
Revenue Code of which that person, any corporation described in clause (i) above
or any trade or business described in clause (ii) above is a member.
"
ERISA
Event
" (a) A reportable event as defined in Section 4043 of ERISA and the
regulations issued under such Section with respect to a Pension Plan; (b) the
applicability of the requirements of Section 4043(b) of ERISA with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, to any Pension
Plan where an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
plan within the following thirty days; (c) a withdrawal by the Borrower or an
ERISA Affiliate from a Pension Plan or the termination of any Pension Plan
resulting in liability under Sections 4063 or 4064 of ERISA; (d) the withdrawal
of the Borrower or an ERISA Affiliate in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefore, or the receipt by the
Borrower or an ERISA Affiliate of notice from any Multiemployer Plan that it is
in reorganization or insolvency pursuant to Sections 4241 or 4245 of ERISA, (e)
the filing of a notice of intent to terminate, the treatment of a plan amendment
as a termination under Sections 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (f)
the imposition of liability on the Borrower or an ERISA Affiliate pursuant to
Sections 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (g) the failure by the Borrower or an ERISA Affiliate to make
any required contribution to a Plan, or the failure to meet the minimum
funding standard of Section 412 or 430 of the Internal Revenue Code with respect
to any Pension Plan (whether or not waived) or the failure to make by its due
date a required installment under the Internal Revenue Code with respect to any
Pension Plan or the failure to make any required contribution to a Multiemployer
Plan; (h) an event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; (i) the
imposition of any material liability under Title I or Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the
Borrower or an ERISA Affiliate; (j) an application for a funding waiver under
ERISA or an extension of any amortization period pursuant to the Internal
Revenue Code with respect to any Pension Plan; (k) the imposition of any lien on
any of the rights, properties or assets of the Borrower or an ERISA Affiliate,
in either case pursuant to Title I or IV of ERISA or to the Internal Revenue
Code; (l) the making of any amendment to any Pension Plan that could directly
result in the imposition of a lien or the posting of a bond or other security;
(m) the occurrence of a nonexempt prohibited transaction (within the meaning of
Section 4975 of the IRC or Section 406 of ERISA) involving the assets of a Plan;
or (n) the final determination that a Qualified Plan's qualification or tax
exempt status should be revoked.
14
"
Event
of Default
" Any of the events described in
Section 8.1
of the Loan
Guarantee Agreement.
"
Event
of Default Notice
" A written notice to the Collateral Agent from the Loan
Servicer stating that an Event of Default has occurred and is continuing.
"
Event
of Force Majeure
" Any event, circumstance or condition in the nature of
force majeure that would entitle any Project Participant to any abatement,
postponement, or other relief from any of its contractual obligations under any
Project Document to which such Person is party, including with respect to FFB an
"Uncontrollable Cause" as defined in the FFB Note Purchase Agreement.
"
Event
of Loss
" Any event that causes any portion of the Project or any other
property of the Borrower to be damaged, destroyed or rendered unfit for normal
use for any reason whatsoever, including through a failure of title, any loss of
such property or a condemnation.
"Extraordinary
Proceeds Release Certificate " Written instructions, in substantially the form
of
Exhibit M
to the Depositary Agreement, for disbursements, transfers
and payments from the Extraordinary Proceeds Account.
"
FERC
"
The Federal Energy Regulatory Commission and its successors.
"
FFB
"
The Federal Financing Bank, a body corporate and instrumentality of the United
States of America.
"
FFB
Advance Request
" A request for an Advance delivered to FFB pursuant to the
FFB Note Purchase Agreement.
"
FFB
Advance Request Approval Notice
" An "Advance Request Approval Notice" as
defined in the FFB Note Purchase Agreement, signed by DOE.
15
"
FFB
Loan Transfer
" Any transfer pursuant to the FFB Note Purchase Agreement of
all or any part of the promissory note evidencing the DOE Guaranteed Loans.
"
FFB
Note Purchase Agreement
" The Note Purchase Agreement, dated as of the
Financial Closing Date, among the Borrower, FFB, and DOE.
"
FFB
Program Financing Agreement
" The Program Financing Agreement to be entered
into between FFB and DOE.
"
FFB
Promissory Note
" The Promissory Note to be entered into by the Borrower in
favor of FFB and guaranteed by DOE.
"
Final
Advance
" As defined in
Section 2.3.1(b)(vi)
of the Loan Guaranty
Agreement.
"
Financial
Closing Date
" The date on which all the conditions set forth in
Section
4.1
of the Loan Guarantee Agreement have been satisfied or, in the sole
discretion of the Loan Servicer, waived.
"
Financial
Officer
" With respect to any Person, General Manager, any director, the
chief financial officer, the Controller, the Treasurer or any Assistant
Treasurer, any Vice President-Finance or any Assistant Vice President-Finance or
any other Vice President or Assistant Vice President with significant
responsibility for the financial affairs of such Person.
"
Financial
Plan
" The Financial Plan included in
Section 2.1
of the Loan
Guarantee Agreement, as amended from time to time in accordance with
Section
6.1(b)(i)
of the Loan Guarantee Agreement, setting forth all sources of
funds needed to pay Total Project Costs, including the DOE Guaranteed Loans,
Base Equity and Overrun Equity.
"
Financial
Statements
" With respect to any Person, such Person's quarterly or annual
balance sheet and statements of income, retained earnings, and sources and
application of funds for such fiscal period, together with all notes thereto and
with comparable figures for the corresponding period of its previous fiscal
period, each prepared in Dollars and in accordance with GAAP (except for the
absence of footnotes and normal year-end adjustments in the case of unaudited
Financial Statements), it being agreed that for purposes of the Loan Documents
(i) the Financial Statements of the Sponsor shall be prepared on a consolidated
basis (including the Borrower) and (ii) separate Financial Statements of the
Borrower shall be prepared and delivered.
"
First
Principal Payment Date
" The "First Principal Payment Date" as set forth in
the FFB Promissory Note.
"
Fiscal
Year
" The accounting year of the Borrower beginning on and including the
Sunday nearest December 31 and ending on and including the Saturday nearest to
the following December 31.
"
Fitch
"
Fitch Ratings, Ltd., so long as it is a rating agency.
16
"
Foreign
Asset Control Regulations
" The United States Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 C.F.R. Subtitle B, Chapter V, as amended), or any ruling
issued thereunder or any enabling legislation or Presidential Executive Order
granting authority therefore.
"
GAAP
"
Generally accepted accounting principles in the U.S. in effect from time to time
including, where appropriate, generally accepted auditing standards, including
the pronouncements and interpretations of appropriate accountancy administrative
bodies (including the Financial Accounting Standards Board and any predecessor
and successor thereto), applied on a consistent basis both as to classification
of item and amounts, it being understood that unaudited Financial Statements
will not include footnotes and will be subject to normal year-end
adjustments.
"
Governmental
Approval
" Any approval, consent, authorization, license, permit, order,
certificate, qualification, waiver, exemption, or variance, or any other action
of a similar nature, of or by a Governmental Authority and including approval of
the Power Purchase Agreement by the Idaho Public Utilities Commission, including
any of the foregoing that are or may be deemed given or withheld by failure to
act within a specified time period.
"
Governmental
Authority
" Any federal, state, county, municipal, or regional authority, or
any other entity of a similar nature, exercising any executive, legislative,
judicial, regulatory, or administrative function of government.
"
Governmental
Judgment
" With respect to any Person, any judgment, order, decision, or
decree, or any action of a similar nature, of or by a Governmental Authority
having jurisdiction over such Person or any of its properties.
"
Governmental
Rule
" With respect to any Person, any statute, law, rule, regulation, code,
or ordinance of a Governmental Authority having jurisdiction over such Person or
any of its properties, including principles of common law (including
Environmental Laws and Corrupt Practices Laws).
"
Guaranteed
Loan Amount
" An amount, including Interest During Construction, that is not
more than the lesser of (i) 75% of Eligible Base Project Costs, and (ii) the sum
of (a) the Maximum Principal Amount and (b) the aggregate amount of interest
actually added to the unpaid principal of all Advances on or prior to the
Interest Capitalization End Date.
"
Guaranteed
Loan Availability Period
" The period from the Financial Closing Date until
the earliest to occur of (i) the Project Completion Date and (ii) April 10,
2013.
"
Hazardous
Substance
" Any hazardous or toxic substances, chemicals, materials,
pollutants or wastes defined, listed, classified or regulated as such in or
under any Environmental Laws, including (i) any petroleum or petroleum products
(including gasoline, crude oil or any fraction thereof), flammable, explosive or
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation and polychlorinated biphenyls; (ii) any
chemicals, materials or substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import, under any applicable Environmental Law; and (iii) any other
chemical, material or substance, import, storage, transport, use or disposal of,
or exposure to or Release of which is prohibited, limited or otherwise regulated
under, or for which liability is imposed pursuant to, any Environmental Law.
17
"
Hedging
Agreement
" Any agreement or instrument (including a cap, swap, collar,
option, forward purchase agreement or other similar derivative instrument)
relating to the hedging of any interest under any Indebtedness.
"
Holdco
"
Oregon USG Holdings LLC, a Delaware limited liability company.
"
Idaho
Power
" Idaho Power Company, the offtaker under the Power Purchase
Agreement.
"
Improvements
"
The buildings, fixtures and other improvements to be situated on the Project
Site, including the Units (as defined in the EPC Contract).
"
Indebtedness
"
At any date, all or any liabilities, obligations and reserves, contingent or
otherwise, which, in accordance with GAAP, would be reflected as a liability on
a balance sheet, including without limitation: (1) any Indebtedness for Borrowed
Money; (2) any obligation of the Borrower evidenced by bonds, debentures, notes
or other similar instruments; (3) any obligation of the Borrower to pay the
deferred purchase price of property or services (other than amounts due to trade
creditors and accrued expenses, in each case arising in the ordinary course of
business and on terms reasonable and customary for the industry, unless such
amounts and expenses are accrued and unpaid for more than ninety days); (4) any
obligation of the Borrower under conditional sales or other title retention
agreements; (5) the net aggregate rentals under any lease by the Borrower as
lessee that under GAAP would be capitalized on the books of the lessee or is the
substantial equivalent of the financing of the property so leased; (6) any
obligation of the Borrower to purchase securities or other property which arises
out of or in connection with the sale of the same or substantially similar
securities or property; (7) any obligation of the Borrower secured by any lien
upon property of the Borrower; (8) any Indebtedness of others secured by a lien
on any assets of the Borrower; and (9) any Indebtedness of others guaranteed,
directly or indirectly by the Borrower.
"
Indebtedness
for Borrowed Money
" As to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees, and charges) of such Person
for borrowed money or for the deferred purchase price of property or services
(other than any deferral (x) in connection with the provision of credit in the
ordinary course of business by any trade creditor or utility or (y) of any
amounts payable under the Project Documents) or (ii) the aggregate amount
required to be capitalized under any Capital Lease under which such Person is
the lessee.
"
Indemnified
Person
" As defined in
Section 13.17(b)
of the Loan Guarantee
Agreement.
"
Indemnity
Claims
" As defined in
Section 13.17(b)
of the Loan Guarantee
Agreement.
"
Independent
Consultants
" Collectively the Independent Engineer, the Insurance Advisor,
the Market Advisor, Chadbourne & Parke LLP as legal counsel to DOE, the
Approved Reservoir Engineer, any subcontractors of such consultants, and any
other advisor or consultant retained by the Credit Parties with the consent (during any
period when no Potential Default or Event of Default has occurred and in
continuing) of the Borrower, not to be unreasonably withheld.
18
"
Independent
Engineer
" Luminate, LLC, as independent engineer to DOE.
"
Independent
Engineer Report
" A report or reports of the Independent Engineer delivered
(i) on or before the Financial Closing Date, as to matters set forth in
Section 4.1.16
of the Loan Guarantee Agreement, and (ii) on or before the
Project Completion Date as to matters set forth in the definition of Project
Completion.
"
Ineligible
Base Project Costs
" The portion of Base Project Costs that are Ineligible
Project Costs, in an aggregate amount not to exceed one million, six hundred and
eighty three thousand, and four Dollars ($1,683,004).
"
Ineligible
Project Costs
" Those portions of Project Costs that are not Eligible Project
Costs, including Ineligible Base Project Costs and Overrun Project Costs.
"
Initial
Advance
" The initial advance or a borrowing under the DOE Credit Facility
Commitment made pursuant to the Loan Guarantee Agreement and the DOE Credit
Facility Documents.
"
Initial
Advance Date
" A Business Day on which FFB makes the Initial Advance in
accordance with
Article 2
of the Loan Guarantee Agreement.
"
Initial
Advance Conditions Precedent
" As defined in
Section 4.2
of the Loan
Guarantee Agreement.
"
Initial
Advance Notice
" A request for the Initial Advance delivered by the Borrower,
substantially in the form attached as
Exhibit E
to the Loan Guarantee
Agreement, as may be modified from time to time by the Loan Servicer in its sole
discretion.
"
Initial
Advance Notice Date
" The date of submission of the Initial Advance
Notice.
"
Initial
Cap-Ex Funding Amount
" Three million Dollars ($3,000,000), to be funded to
the extent available, from proceeds of the Cash Grant and (unless fully funded)
from equity and Advances (to the extent available), on a pro rata basis, not
later than the Project Completion Date.
"
Initial
Long-Term Wellfield Drilling Funding Amount
" One million Dollars
($1,000,000), to be funded to the extent available, from proceeds of the Cash
Grant and (unless fully funded) from equity and Advances (to the extent
available), on a pro rata basis, not later than the Project Completion Date.
"
Insolvency
Proceedings
" Any bankruptcy, insolvency, liquidation, company
reorganization, restructuring, controlled management, suspension of payments,
scheme of arrangement, appointment of provisional liquidator, receiver or
administrative receiver, notification, resolution, or petition for winding up or similar
proceeding, under any applicable law, in any jurisdiction and whether voluntary
or involuntary.
19
"
Insurance
Advisor
" The insurance advisor or expert appointed by the Loan Servicer or
the Administrative Agent.
"
Intellectual
Property Rights
" Any and all rights in, to, arising out of, or associated
with the following, whether now or hereafter existing, created, acquired or
held: (i) all U.S., international and foreign patents and patent applications
and all reissues, divisions, renewals, extensions, provisionals, continuations
and continuations-in-part thereof; (ii) all trade secret rights; (iii) all
copyrights or other rights associated with works of authorship, including all
copyright registrations and applications for copyright registration, renewals
and extensions thereof, and all other rights corresponding thereto throughout
the world; (iv) all mask work rights, mask work registrations and applications
therefor, and any equivalent or similar rights in semiconductor masks, layouts,
architectures or topology; (v) all rights in industrial designs and any
registrations and applications therefor throughout the world; (vi) all rights to
trade names, logos, trademarks and service marks, including registered
trademarks and service marks and all applications to register trademarks and
service marks throughout the world; (vii) all rights to any databases and data
collections throughout the world; (viii) all moral, industrial and economic
rights of authors and inventors, however denominated, throughout the world; and
(ix) any similar or equivalent rights to any of the foregoing anywhere in the
world.
"
Interest
Capitalization End Date
" means the date on which the amount of interest that
has been capitalized pursuant to Section 7(b) of the FFB Promissory Note equals
the Maximum Capitalized Interest Amount.
"
Interest
During Construction
" Interest accruing on the DOE Guaranteed Loans during
the Guaranteed Loan Availability Period, which interest will accrue from the
applicable Advance Date and, which shall prior to the Interest Capitalization
End Date, be capitalized and added to the principal of each such Advance on the
last Business Day of each calendar quarter therein; provided that in no event
shall Interest During Construction actually added to the unpaid principal of all
Advances exceed the Maximum Capitalized Interest Amount.
"
Internal
Revenue Code
" The United States Internal Revenue Code of 1986, as amended
from time to time.
"
Investor
"
Enbridge (U.S.) Inc., a Delaware corporation and owner as of the Financial
Closing Date of 20% of the Equity Interests in Holdco
"
Investor
Support Letter
" The written undertaking of the Investor, dated February 23,
2011 and addressed to DOE, to invest an additional five million Dollars
($5,000,000) in Holdco to fund cost overruns as may be required by capital
calls.
"
Investment
"
For any Person: (i) the acquisition (whether for cash, property, services or
securities or otherwise) or holding of Equity Interests, bonds, notes,
debentures, partnership or other ownership interests or other securities of or
in any other Person; (ii) the making of any deposit with, or advance, loan or
other extension of credit to, any other Person or any guarantee of, or other
Contingent Obligation with respect to, any Indebtedness or other liability of
any other Person and (without duplication) any amount committed to
be advanced, lent or extended to any other Person; and (iii) the acquisition of
any similar property, right or interest of or in any other Person.
20
"
Investment
Company Act
" The United States Investment Company Act of 1940, as amended
from time to time.
"
Knowledge
"
With respect to the Borrower, the actual knowledge of the Principal Persons or
any knowledge which should have been obtained by any of the Principal Persons
upon reasonable investigation and inquiry.
"
Late
Charge Rate
" The interest rate applicable from time to time under the DOE
Credit Facility Documents with respect to Overdue Amounts.
"
Lease
"
(i) Each of the documents listed in
Sections 4.1.2(a)(ii), (v) and (vi)
of the Loan Guarantee Agreement, (ii) any other real property or mineral
rights lease entered into after the date hereof, and (iii) any agreement that
would be characterized under GAAP as an operating lease.
"
LGIA
"
The Large Generator Interconnection Agreement, dated December 16, 2009, between
the Sponsor and Idaho Power, following FERC approved format, and assigned by the
Sponsor to the Borrower on or before the Financial Closing Date.
"
Lien
"
Any lien (statutory or other), pledge, mortgage, charge, security interest, deed
of trust, assignment, hypothecation, title retention, fiduciary transfer,
deposit arrangement, easement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
in respect of an asset, whether or not filed, recorded or otherwise perfected or
effective under applicable law, as well as the interest of a vendor or lessor
under any conditional sale agreement, Capital Lease or other title retention
agreement relating to such asset (including any conditional sale or other title
retention agreement, any Capital Lease having substantially the same economic
effect as any of the foregoing, or any preferential arrangement having the
practical effect of constituting a security interest with respect to the payment
of any obligation with, or from the proceeds of, any asset or revenue of any
kind).
"
Loan
Documents
" The Loan Guarantee Agreement, the DOE Credit Facility Documents,
the Equity Funding and Recapture Obligation Agreement, the Security Documents,
the Direct Agreements, the Warrant Agreement, and any documents and agreements
delivered in connection therewith that are agreed in writing by the Loan
Servicer and the Borrower to be Loan Documents, but in all cases excluding any
Project Documents.
"
Loan
Guarantee Agreement
" The Loan Guarantee Agreement, dated as of February 23,
2011, among the Borrower, DOE, the Collateral Agent, and Administrative Agent to
which this
Exhibit A
is appended. The Loan Guarantee Agreement
constitutes the "Loan Guarantee Agreement" referred to in the Applicable Loan
Guarantee Requirements.
"
Loan
Servicer
" As defined in the Preamble to the Loan Guarantee Agreement, or its
successor, as appointed pursuant to
Section 9.1(a)
of the Loan Guarantee
Agreement.
21
"
Local
Account
" means any local bank account (other than the Project Accounts) in
the name of the Borrower or the Project for which a Local Accounts Control
Agreement has been executed.
"
Local
Accounts Control Agreement
" An agreement with respect to a Local Account to
be entered into by and among the Borrower, Bank of America, N.A. or other bank
holding such Local Account and the Collateral Agent, in form and substance
reasonably satisfactory to the Loan Servicer and the Collateral Agent.
"
Long-Term
Wellfield Drilling Reserve Account
" The account set forth in Section 3.1 of
the Depositary Agreement.
"
Loss
Proceeds
" All proceeds (other than any proceeds of business interruption
insurance, advance loss of profit insurance, and proceeds covering liability of
the Borrower to third parties) resulting from an Event of Loss.
"
Loss
Proceeds Account
" The account set forth in Section 3.1 of the Depositary
Agreement.
"
Major
Maintenance
" Major maintenance of the Project and other Project capital
investment, including replacement of pumps, power plant equipment, resource
gathering equipment and wellfield drilling and related activities at any time
after the Project Completion Date, that is included in the then-current
Operating Plan and which is approved by the Independent Engineer as being
reasonably necessary for the long term safe and efficient operation of the
Project in accordance with the "reasonable and prudent operator standard".
"
Major
Project Participant
" The Borrower, Holdco, the Sponsor, the Operator, any
Material Project Party, and any other any other project participant designated
by the Administrative Agent.
"
Management
Services Agreement
" The Management Services Agreement, dated as of February
1, 2011, between the Borrower and the Operator.
"
Market
Advisor
" National Economic Research Associates, Inc., as market advisor to
DOE.
"
Market
Advisor's Report
" A report or reports of the Market Advisor delivered on or
before the Financial Closing Date, as to matters set forth in
Section 4.1.13
of the Loan Guarantee Agreement.
"
Material
Adverse Effect
" As of any date of determination, in the sole discretion of
the Loan Servicer, (i) a material and adverse change in, or a material and
adverse effect upon, the operations, business, assets, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Borrower,
Holdco, the Project or the Sponsor (as applicable; but
provided
that such
effect shall only apply to the Sponsor prior to the Project Completion Date),
(ii) a material impairment of (a) the rights or remedies of FFB or DOE under the
applicable Loan Documents or (b) the ability of the Borrower, Holdco, Sponsor or
the Investor to observe and perform its obligations under the Transaction
Documents to which it is a party or (c) the security or Liens of the Secured Parties on any of the Collateral, or (iii) a
material and adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower, the Sponsor, the Investor or any Material
Project Party of any applicable Transaction Document to which it is a party.
22
"
Material
Project Party
" Each Person (other than the Borrower) who is a party to a
Principal Project Document.
"
Maturity
Date
" means February 10, 2035.
"
Maximum
Capitalized Interest Amount
" An amount equal to three million, sixty two
thousand, and fourteen Dollars ($3,062,014).
"
Maximum
Principal Amount
" An amount equal to ninety three million, seven hundred and
sixty one thousand, three hundred and twenty seven Dollars ($93,761,328).
"
Midland
"
has the meaning set forth in the Recitals to the Loan Guarantee Agreement.
"
Moody's
"
Moody's Investors Service, Inc., so long as it is a rating agency.
"
Mortgage
"
The Deed of Trust made by the Borrower, in favor of the Collateral Agent, dated
on or before the Financial Closing Date, pursuant to which the Borrower grants
to the Collateral Agent for the benefit of DOE a security title and a security
interest in the Project Site.
"
Multiemployer
Plan
" A "multiemployer plan" (within the meaning of Section 3(37) of ERISA)
which the Borrower or any ERISA Affiliate contributes to or participates in, or
with respect to which the Borrower or any ERISA Affiliate has any material
liability or other obligation (whether accrued, absolute, contingent or
otherwise).
"
National
Environment Policy Act
" The National Environmental Policy Act of 1969 of the
United States, as amended from time to time, and the regulations promulgated,
and any publicly available rulings issued, thereunder.
"
Net
Income
" For any period, the net income (or loss) of the Borrower for such
period, as determined in accordance with GAAP, provided, that there shall be
excluded in such determination: (1) any aggregate net gain or net loss during
such period arising from the sale, conversion, exchange, or other disposition of
capital assets; (2) any gains or losses resulting from the write-up of any
assets; (3) any net gain or net loss arising from the extinguishment, under
GAAP, of any Indebtedness of the Borrower; and (4) any net income, gain or loss
during such period resulting from (A) any extraordinary items, or (B) any
discontinued operations or the disposition thereof.
"
OFAC
"
Office of Foreign Assets Control, agency of the U.S. Department of the Treasury
under the auspices of the Under Secretary of the Treasury for Terrorism and
Financial Intelligence.
"
OMB
"
The Office of Management and Budget of the Executive Office of the President of
the United States of America.
23
"
OMB
Implementing Guidance
" The OMB's Initial Implementing Guidance for the
Recovery Act, M-09-10 (February 18, 2009), Updated Implementing Guidance for the
Recovery Act, M-09-15 (April 3, 2009), Updated Implementing Guidance for the
Recovery Act, M-09-21 (June 22, 2009) and, in each case, any amendment,
supplement or successor thereto.
"
Operating
Account
" The account set forth in Section 3.1 of the Depositary
Agreement.
"
Operating
Costs
" For any period with respect to which such Operating Costs are being
calculated, all amounts paid (or projected to be paid) by the Borrower for the
administration, management, and operation and maintenance of the Project,
including, in each case to the extent attributable to the Borrower: (i) amounts
payable under the Management Services Agreement; (ii) Capital Expenditures;
(iii) premiums and other costs related to the maintenance of Required Insurance;
and (iv) taxes.
"
Operating
Documents
" The documents listed in
Section 4.1.2(c)
of the Loan
Guarantee Agreement and all other contracts required for operation and
maintenance of the Project entered into prior to, on, or after the Financial
Closing Date.
"
Operating
Forecast
" The periodic forecast prepared by the Borrower (on an aggregate
and month-by-month basis) in connection with the operation of the Project, and
delivered from time to time pursuant to
Section 6.1(j)(ii)
of the Loan
Guarantee Agreement, which (i) shall be the Borrower's good faith projections at
such time taking into account all facts and circumstances then existing and
assumptions believed by the Borrower to be reasonable on the date made,
complete, fair and accurate estimates of all Operating Revenues reasonably
expected to be received and all Operating Costs (by category) reasonably
expected to be incurred, (ii) shall reflect Debt Service due during each period,
and pro forma Cash Flow Available for Debt Service projections for each period,
(iii) shall include such other information as may be reasonably requested by the
Loan Servicer or the Independent Engineer, and (iv) shall be prepared on a basis
consistent from period to period, and consistent with the Operating Plan, in
sufficient detail to permit meaningful comparisons, and shall include a
statement of the assumptions on which it is based.
"
Operating
Period
" The period from the Project Completion Date to the Security
Discharge Date.
"
Operating
Plan
" The periodic operating plan for the Project prepared by the Borrower
in connection with the operation of the Project, and delivered from time to time
pursuant to
Section 6.1(b)(vii)
of the Loan Guarantee Agreement which (i)
shall describe the Project's operating plan for the relevant period, (ii) shall
summarize any changes in the Project's maintenance plan, including the Project's
program for spare parts, inventory management, and supply management, (iii)
shall include such other information as may be reasonably requested by the Loan
Servicer, and (iv) shall be prepared on a basis consistent from period to
period, and consistent with the Operating Forecast, in sufficient detail to
permit meaningful comparisons, and include a statement of the assumptions on
which it is based.
"
Operating
Revenues
" All cash receipts (or projected receipts) of the Borrower
deposited in the Project Accounts, including revenues from: (i) the sales under
the Power Purchase Agreement; (ii) proceeds from business interruption and delay
in start-up insurance policies; (iii) delay liquidated damages payable under any
Construction Contract that are not used to pay Project Costs and (iv) interest
and other income earned and received on the Project Accounts;
provided
,
however, that Operating Revenues shall not include proceeds (x) from casualty
and event of loss insurance or (y) that are subject to a mandatory prepayment
pursuant to
Section 3.4.3
of the Loan Guarantee Agreement.
24
"
Operational
Completion
" Satisfaction of the elements described in the clause (b) of the
definition of Project Completion.
"
Operator
"
U.S. Geothermal Services LLC, a Delaware limited liability company.
"
Organizational
Documents
" With respect to any Person, its charter, articles of
incorporation and by-laws, memorandum and articles of association, statute,
partnership agreement, limited liability company agreement or similar
instruments that are required to be registered or lodged in the place of
organization of such Person and that establish the legal personality of such
Person.
"
Overdue
Amounts
" Any amounts owing under the FFB Promissory Note that are not paid
when and as due.
"
Overnight
Investment
" A deposit in a money market deposit account with the Depositary
Bank.
"
Overrun
Contingencies
" The line item for "Overrun Contingencies" in the Construction
Budget.
"
Overrun
Equity
" Equity funding to be provided to the Borrower by the Sponsor
pursuant to the Overrun Equity Commitment.
"
Overrun
Equity Commitment
" The obligation of the Sponsor under the Equity Funding
and Recapture Obligation Agreement to fund all Overrun Project Costs, from
sources other than the DOE Guaranteed Loans, until the Project Completion
Date.
"
Overrun
Project Costs
" (x) All Total Project Costs in excess of Base Project Costs,
(and including all Ineligible Project Costs in excess of Ineligible Base Project
Costs, even if Total Project Costs in the aggregate have not yet exceeded Base
Project Costs in the aggregate) whether Eligible Project Costs or Ineligible
Project Costs, and including (i) costs associated with the design, engineering,
financing, construction, startup, commissioning and shakedown of the Project,
(ii) shortfalls from anticipated revenues, increases from anticipated costs, and
other working capital needs of the Borrower prior to Project Completion, (iii)
amounts arising from timing differences in disbursement of cash to pay expenses
and receipt of cash associated with revenues prior to Project Completion, and
(iv) any other amounts required to achieve Project Completion or otherwise
incurred that are attributable or otherwise related to the Borrower's business
or are obligations of the Borrower, including all amounts payable on the DOE
Guaranteed Loans and (y) any Dishonored Base Equity Letter of Credit Amount, in
each such case prior to the Project Completion Date.
25
"
Owner's
Engineer
" A Person appointed by the Borrower to provide engineering support
on behalf of Borrower in the design, construction, and commissioning of the
Project.
"
Patriot
Act
" The Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, and all regulations
promulgated thereunder.
"
Payment
Date
" Each Principal Payment Date and Semi-Annual Payment Date.
"
PBGC
"
The Pension Benefit Guaranty Corporation or any entity succeeding to any or all
of its functions under ERISA.
"
Pension
Plan
" An employee benefit plan (as defined in Section 3(3) of ERISA) other
than a Multiemployer Plan (i) that is or was at any time maintained or sponsored
by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA
Affiliate has ever made, or was obligated to make, contributions, and (ii) that
is or was subject to Section 412 of the Internal Revenue Code, Section 302 of
ERISA or Title IV of ERISA
"
Periodic
Expenses
" All of the following amounts from time to time due under or in
connection with the Loan Documents: (i) all recordation and other costs, fees
and charges in connection with the execution, delivery, filing, registration, or
performance of the Transaction Documents or the perfection of the security
interests in the Collateral, (ii) all fees charges, and expenses of any
Independent Consultants, legal counsel, accountants, and other advisors to the
Credit Parties, and (iii) all other fees, charges, expenses and other amounts
(other than interest and principal on the DOE Guaranteed Loans) from time to
time due under or in connection with the Loan Documents.
"
Permitted
Indebtedness
" (i) Indebtedness incurred under the Loan Documents; and (ii)
Indebtedness in respect of amounts due to trade creditors and accrued expenses,
in each case arising in the ordinary course of business, to the extent such
amounts and expenses are not paid more than ninety days past the due date
therefor.
"
Permitted
Investments
":
(a)
Readily marketable direct obligations of the government of the United States of
America or any agency or instrumentality thereof, or obligations unconditionally
guaranteed by the full faith and credit of the government of the United States,
in each case maturing within one (1) year from the date of acquisition
thereof;
(b)
securities issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof having
maturities of not more than one (1) year from the date of acquisition thereof
and, at the time of acquisition, having a rating of AA- or higher from S&P
or Aa3 or higher from Moody's (or, if at any time neither S&P nor Moody's
shall be rating such obligations, an equivalent rating from another nationally
recognized rating service);
(c)
investments in commercial paper maturing within one hundred eighty days from the
date of acquisition thereof and having, at such date of acquisition, a rating of
at least A-1 or P-1 from either S&P or Moody's (or, if at any time neither
S&P nor Moody's shall be rating such obligations, an equivalent rating from
another nationally recognized rating service);
26
(d)
investments in certificates of deposit, banker's acceptances and time deposits
maturing within two hundred and seventy days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, the Administrative Agent or any domestic office
of any commercial bank organized under the laws of the United States of America,
any State thereof, any country that is a member of the Organization for Economic
Co-Operation and Development or any political subdivision thereof, that has a
combined capital and surplus and undivided profits of not less than five hundred
million Dollars ($500,000,000);
(e)
fully collateralized repurchase agreements with a term of not more than thirty
days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria of clause (d) of this
definition;
(f)
readily marketable direct obligations issued or guaranteed by any state of the
United States or any political subdivision thereof (including municipalities),
in either case having one of the two highest rating categories obtainable from
any of Moody's, S&P or Fitch; and
(g)
investments in "money market funds" within the meaning of Rule 2a-7 of the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through (g) of
this definition.
"
Permitted
Leases
" (a) Leases of office space, office equipment or motor vehicles with
respect to which the aggregate lease payments do not exceed fifty thousand
Dollars ($50,000) per Fiscal Year, in each case as required in connection with
the construction or operation of the Project, and (b) the Leases.
"
Permitted
Liens
" (i) The rights and interests of the Secured Parties as provided in
the Transaction Documents; (ii) Liens for any tax, assessment or other
governmental charge not yet due, or being diligently contested in good faith and
by appropriate proceedings timely instituted, so long as (A) such proceedings
shall not involve any danger of the sale, forfeiture or loss of the Project, or
any easements, as the case may be, title thereto or any interest therein and
shall not interfere with the use or disposition of the Project or any easements;
(B) such tax, assessment or other governmental charge is not more than sixty
days delinquent; and (C) a bond, adequate reserves or other security acceptable
to the Loan Servicer has been posted or provided in such manner and amount as to
assure DOE that any taxes, assessments or other charges determined to be due
will promptly be paid in full when such contest is determined; (iii) Liens in
favor of materialmen, workers or repairmen, or other like Liens arising in the
ordinary course of business or in connection with the construction of the
Project, occurring after the Financial Closing Date, either for amounts not yet
due or for amounts being diligently contested in good faith and by appropriate
proceedings timely instituted so long as (x) such proceedings shall not involve
any danger of the sale, forfeiture or loss of any part of the Project, or any
easements, as the case may be, title thereto or any interest therein and shall
not interfere with the use or disposition of the Project, or any easements, and
(y) a bond or other security acceptable to the Loan Servicer has been posted or
provided in such manner and amount as to assure DOE that any amounts determined to be due will promptly be paid in full when such
contest is determined, and (iv) Liens identified in the ALTA Form 2006 Mortgagee
Policy of Title Insurance (or similar policy form) issued by the Title Company;
(v) zoning, entitlement, building and other land use regulations imposed by
Governmental Authorities having jurisdiction over the Project Site which do not
and will not materially impair the use, development or operation of the Project
Site for its intended purpose; (vi) covenants, conditions, restrictions,
easements and other similar matters of record as of the Financial Closing Date
affecting title to the Project Site that do not and will not materially impair
the use, development or operation of the Project Site for its intended purpose;
(vii) any other Lien affecting the Project Site the existence of which does not
and will not materially impair the use, development or operation of the Project
Site for its intended purpose; (viii) Liens (not securing Indebtedness) of
depository institutions and securities intermediaries (including rights of
set-off or similar rights) with respect to deposit accounts or securities
accounts; (ix) Liens securing judgments for the payment of money not
constituting an Event of Default under
Section 8.1(m)
of the Loan
Guarantee Agreement or securing appeal or other surety bonds related to such
judgments; and (x) deposits to secure the performance of bids, trade contracts
and leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
provided
,
however
, that, notwithstanding the foregoing, Permitted
Liens shall not include any Lien on any Equity Interests of the Borrower (other
than any such Lien made for the benefit of the Secured Parties).
27
"
Person
"
Any individual, firm, corporation, company, voluntary association, partnership,
limited liability company, joint venture, trust, unincorporated organization,
Governmental Authority, committee, department, authority or any other body,
incorporated or unincorporated, whether having distinct legal personality or
not.
"
Physical
Completion
" Satisfaction of the elements described in clause (a) of the
definition of Project Completion.
"
Placed
in Service Date
" means the date on which the Project is considered to be
placed in service for federal income tax purposes.
"
Potential
Default
" An event that, with the giving of notice or passage of time or
both, would become an Event of Default.
"
Power
Purchase Agreement
" The Power Purchase Agreement, dated December 11, 2009,
between the Borrower and Idaho Power.
"
Prepayment
Election Notice
" Written notification delivered by the Borrower of any
intended prepayment of all or part of the DOE Guaranteed Loans, as specified in
the FFB Promissory Note.
"
Prepayment
Price
" With respect to any Advance, the price paid by the Borrower to the
Holder (as defined in the FFB Promissory Note) for the prepayment of such
Advance as specified in the FFB Promissory Note.
"
President's
Pay Agent
" The Secretary of Labor and the Directors of the Office of
Management and Budget and the Office of Personnel Management, or such other
individuals designated as the President's Pay Agent pursuant to Section
5304(d)(1) of Title 5, United States Code.
28
"
Principal
Payment Date
" The First Principal Payment Date and each Semi-Annual Payment
Date occurring after the First Principal Payment Date, or in each case if not a
Business Day, the next Business Day.
"
Principal
Persons
" Any officer, director, owner, key employee or other Person with
primary management or supervisory responsibilities with respect to the Borrower
or the Operator, or any other Person (whether or not an employee), who has
critical influence on or substantive control over the Project.
"
Principal
Project Documents
" The Real Property Rights, the Construction Contracts, the
Operating Documents, the Power Purchase Agreement and any guarantee, letter of
credit, surety bond or other performance security posted by any party to any of
the foregoing in favor of any other party.
"
Program
Requirements
" (i) The provisions of Title XVII and the Applicable Loan
Guarantee Requirements and (ii) all DOE and FFB legal and financial
requirements, policies, and procedures applicable to the Title XVII program from
time to time;
provided
,
however
, that Program Requirements shall
not include DOE and FFB legal and financial requirements, policies and
procedures referenced in clause (ii) above not having the force of law that are
established, adopted or otherwise come into effect after the Financial Closing
Date.
"
Prohibited
Jurisdiction
" Any country or jurisdiction, from time to time, that is the
subject of sanctions or restrictions promulgated or administered by any federal
Governmental Authority of the United States.
"
Prohibited
Person
" Any person (i) that is named, or is owned or controlled by, or,
where applicable, acting for or on behalf of, any person or entity that is named
on, the most current list of "Specially Designated Nationals and Blocked
Persons" (Appendix A to 31 C.F.R. chapter V) as published by the OFAC at its
official website, http://www.treas.gov/offices/enforcement/ ofac/sdn/, or at any
replacement website or other replacement official publication of such list (the
"
SDN List
"), or (ii) who is an Affiliate of or affiliated with a Person
listed above. Solely for the purposes of the definition of "Prohibited Person,"
"Affiliate" means, with respect to any person, any other Person which, directly
or indirectly, controls, is controlled by, or is under common control with, such
person. Solely for the purposes of this definition of "Affiliate," "control"
(together with the correlative meanings of "controlled by" and "under common
control with') means possession, directly or indirectly, to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract, or otherwise.
"
Project
"
As defined in the Recitals to the Loan Guarantee Agreement.
"
Project
Account
" Each of the Construction Account, Project Revenue Account,
Short-Term Wellfield Drilling Reserve Account, the Long-Term Wellfield Drilling
Reserve Account, Cap-Ex Reserve Account, the Debt Service Payment Account, the
Operating Account, the Debt Service Reserve Account, the Cash Grant Proceeds Account, the
Equity Distribution Account, the Extraordinary Proceeds Account and the Loss
Proceeds Account.
29
"
Project
Completion
" As set forth in
Exhibit A-1
to the Loan Guarantee
Agreement.
"
Project
Completion Date
" The date on which all the conditions for Project Completion
have been met, as certified by the Loan Servicer in writing.
"
Project
Costs
" All costs incurred by the Borrower attributable to, or otherwise
relating to, the Borrower's business or obligation to acquire, develop, finance
and construct the Project, including (i) amounts payable under the Construction
Contracts; (ii) interest, fees and expenses payable in connection with the DOE
Credit Facility Commitment and the DOE Guaranteed Loans prior to the end of the
Guaranteed Loan Availability Period; (iii) principal payments on the DOE
Guaranteed Loans occurring prior to the Project Completion Date; (iv) costs to
acquire leasehold title or use rights to the Project Site and geothermal
resource rights, necessary easements and other real property interests; (v)
costs and expenses of legal, engineering, accounting, construction management
and other advisors or Independent Consultants incurred in connection with the
Project; (vi) fees, commissions and expenses payable to the Credit Parties at or
prior to the Initial Advance Date; (vii) Development Costs to the extent
permitted to be paid under the Loan Documents; (viii) construction insurance
premiums for coverage obtained prior to the Project Completion Date; (ix) the
Borrower's and the Operator's labor costs and general and administration costs;
(x) costs incurred under the Equipment Contract, EPC Contract, each Well
Drilling Contract, Management Services Agreement and mobilization costs included
in the Base Case Projections; (xi) amounts required to fund the Reserve Accounts
as set forth in the definition of "Project Completion", and (xii) such other
costs or expenses approved by the Loan Servicer.
"
Project
Documents
" The Principal Project Documents and the Additional Project
Documents.
"
Project
Document Replacement Plan
" A plan, satisfactory to the Loan Servicer in
consultation with the Independent Engineer, for replacement of a Project
Document following a termination, repudiation or breach of such Project
Document, demonstrating that replacement of such Project Document is (i)
economically and technically feasible, (ii) can be accomplished in a timely
manner, (iii) contains terms and conditions that are satisfactory to the Loan
Servicer, and (iv) that the proposed replacement contractor under such
replacement Project Document has the financial and technical capability to
satisfactorily perform its obligations under such replacement Project
Document.
"
Project
Facility
" The Project Site and the Improvements.
"
Project
Participant
" Any party to a Principal Project Document and any party to a
Loan Document, other than the Credit Parties.
"
Project
Plans
" Project plans satisfactory to DOE for the design, development,
financing, construction, implementation, operation and management of the
Project, including updates and supplements to information submitted in response
to "Attachment B" to the instructions for Application.
30
"
Project
Revenue Account
" The account set forth in Section 3.1 of the Depositary
Agreement.
"
Project
Site
" The real property located near Vale in Malheur County, Oregon upon
which the Project is located, and any other land necessary for the Project.
"
Public
Utility Holding Company Act
" or "
PUHCA
" The United States Public
Utility Holding Company Act of 2005, as amended from time to time.
"
Punch
List Items
" Items listed on the construction punchlist that are approved by
the Independent Engineer.
"
Qualifying
Costs
" means the actual, documented costs expended by the Borrower for
specified energy property that is an integral portion of the facility for
purposes of Section 45 of the Internal Revenue Code and which is eligible to be
included in the cost basis under Section 1603 of the Internal Revenue Code, as
determined pursuant to the Cost Segregation Report consistent with the Cash
Grant Guidance, Cash Grant Terms and Conditions and other regulations or
guidance issued with respect to the Cash Grant.
"
Qualified
Plan
" An employee benefit plan (as defined in Section 3(3) of ERISA) other
than a Multiemployer Plan (i) that is or was at any time maintained or sponsored
by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA
Affiliate has ever made, or was ever obligated to make, contributions, and (ii)
that is intended to be tax-qualified under Section 401(a) of the Internal
Revenue Code.
"
Quarterly
Reporting Certificate
" A certificate executed by an Authorized Official of
the Borrower delivered pursuant to
Section 6.1(b)
of the Loan Guarantee
Agreement, substantially in the form attached as
Exhibit G
to the Loan
Guarantee Agreement.
"
Quarterly
Reporting Package
" The items specified in
Section 6.1(b)
of the Loan
Guarantee Agreement as being delivered quarterly under cover of a Quarterly
Reporting Certificate.
"
Rating
Agency
" Moody's, S&P or Fitch.
"
Real
Property Rights
" The Real Property Rights listed in
Section 4.1.2(a)
of the Loan Guarantee Agreement, and all other contracts and documents
entered into prior to, on, or after the Financial Closing Date required for the
acquisition of land or mineral rights and rights to land or mineral rights for
the Project, all easements, licenses, and covenants, conditions and restrictions
in connection with the Project Site, and any and all other documents (including
estoppel certificates from landlords) affecting an interest in or right to use
the Project Site.
"
Recapture
Period
" means the period from the Placed in Service Date until the fifth
anniversary thereof, or such longer period during which a Cash Grant may be
required to be repaid to the U.S. Department of Treasury pursuant to the Cash
Grant Guidance.
"
Recovery
Act
" The American Recovery and Reinvestment Act of 2009, P.L. No. 111-5.
31
"
Register
"
As defined in
Section 13.13(d)
of the Loan Guarantee Agreement.
"
Release
"
Disposing, discharging, injecting, spilling, leaking, leaching, dumping,
pumping, pouring, emitting, escaping, emptying, seeping, placing and the like,
into or upon any land or water or air, or otherwise entering into the
environment.
"
Remediation
Plan
" With respect to any Event of Default under
Section 8.1(e)
or
8.1(y)(iii)
of the Loan Guarantee Agreement, a plan of correction with a
timetable for curing such Event of Default that has been approved by a court of
competent jurisdiction, or the lead Governmental Authority with enforcement
responsibility with respect to such matter, or the Loan Servicer, as the case
may be.
"
Remedies
Instructions
" Written instructions to the Collateral Agent or Depositary
Bank from the Loan Servicer directing the Collateral Agent to exercise or
refrain from exercising any rights, remedies, powers or privileges with respect
to the Collateral or otherwise under this Agreement or any other Loan Document
to which it is a party.
"
Requested
Advance Date
" As defined in the FFB Note Purchase Agreement.
"
Required
Consents
" As defined in
Section 5.10(a)
of the Loan Guarantee
Agreement.
"
Required
Insurance
" Insurance coverage for the Project satisfying the requirements
set forth in
Schedule 6.3(b)
to the Disclosure Letter.
"
Reserve
Account
" Each of the Debt Service Reserve Account, the Short-Term Wellfield
Drilling Reserve Account, the Long-Term Wellfield Drilling Reserve Account, and
the Cap-Ex Reserve Account.
"
Reserve
Letter of Credit
" An unconditional, irrevocable, direct-pay, letter of
credit that is denominated in Dollars, that is issued in favor of the Collateral
Agent by a bank with a branch or representative office in New York, New York and
that is organized under or licensed as a branch or agency under the laws of the
United States or any state thereof that has (a) outstanding unguaranteed and
unsecured long-term Indebtedness that is rated "A-" or better by S&P and/or
"A3" or better by Moody's (and if the applicable rating is "A-" by S&P or
"A3" by Moody', such rating is not on negative watch) ); or (b) that is
otherwise acceptable to the Loan Servicer and the Collateral Agent. In either
case the unconditional, irrevocable, direct-pay, letter of credit must meet each
of the following requirements and is otherwise in form and substance
satisfactory to the Loan Servicer in its sole discretion:
(i)
the initial expiration date thereof shall be at least twelve months beyond
the date of issuance, and shall automatically renew upon its expiration (which
renewal period shall be for at least twelve months) unless, at least forty-five
days prior to any such expiration, the issuer shall provide the Collateral Agent
with a notice of non-renewal of such letter of credit;
(ii)
upon any failure to renew such Reserve Letter of Credit at least thirty
days prior to such expiration date, or if the issuer of such Reserve Letter of
Credit shall fail to meet the requirements with respect thereto the entire face
amount thereof may be drawn by the Collateral Agent (unless the Collateral Agent
shall have received a replacement letter of credit meeting the conditions herein imposed or amounts shall have been deposited
in (i) the Debt Service Reserve Account such that the amount on deposit therein,
when aggregated with the face amount available to be drawn under any applicable
Reserve Letter of Credit then outstanding (other than such Reserve Letter of
Credit that is not to be renewed or that no longer meets the criteria) is equal
to the amount required to be on deposit in the Debt Service Reserve), and (ii)
the Operating Account such that the amount on deposit therein, when aggregated
with the face amount available to be drawn under any applicable Reserve Letter
of Credit then outstanding (other than such Reserve Letter of Credit that is not
to be renewed or that no longer meets the criteria) is equal to at least the
Operating Account Minimum Balance;
32
(iii) such
Reserve Letter of Credit shall additionally be drawable in all cases in which
the Loan Guarantee Agreement provides for a transfer of funds from the Debt
Service Reserve Account or Operating Account (as applicable) and there shall be
no conditions to any drawing thereunder other than the submission of a drawing
request substantially in the form attached to such Reserve Letter of Credit;
and
(iv) no
agreement, instrument or document executed in connection with such Reserve
Letter of Credit shall provide the issuer thereof or any other Person with any
claim against the Borrower, the Collateral Agent, the Loan Servicer or any other
Secured Party, or against any Collateral, whether for costs of maintenance,
reimbursement of amounts drawn under such letter of credit or otherwise.
"
Restoration
or Replacement Plan
" A plan and time schedule, reasonably satisfactory to
the Loan Servicer, in consultation with the Independent Engineer, for the
application of Loss Proceeds arising from any Event of Loss, and any other funds
available to the Borrower from sources satisfactory to the Loan Servicer with
which to restore or replace the portion of the Project affected by such Event of
Loss, and such plan shall, at a minimum, demonstrate that:
(a)
the Project can be repaired or replaced prior to the Maturity Date in a manner
that is satisfactory to the Loan Servicer;
(b)
the repair or replacement of the Project will not violate any applicable Law and
will otherwise be permitted under existing Governmental Approvals or other
replacement Governmental Approvals that have been obtained or are reasonably
expected to be obtained (if necessary) prior to the time needed;
(c)
after taking into account the Loss Proceeds, as applicable, and other funds
available to the Borrower from sources satisfactory to the Loan Servicer or
otherwise permitted under the Loan Documents, there will be adequate funds
available to pay, when due, all ongoing expenses of the Project, including Debt
Service and penalties or damages payable to third parties during the period of
repair or replacement, and pay all costs of repairing or replacing the Project
to the condition specified in (a) above;
(d)
the Event of Loss (including the non-operation of the Project during any period
of repair or restoration), has not resulted or is not reasonably expected to
result in a default giving rise to a termination of, or a materially adverse
modification of, one or more of the Governmental Approvals or Principal Project
Documents; and
33
(e) construction
contractors and vendors of recognized skill, reputation and creditworthiness and
reasonably acceptable to the Loan Servicer and the Independent Engineer have
executed reconstruction contracts, purchase orders or similar arrangements for
the repair, rebuilding or restoration on terms and conditions reasonably
acceptable to the Loan Servicer and the Independent Engineer.
"
Restricted
Payment
" As defined in
Section 7.10.1
of the Loan Guarantee
Agreement.
"
S&P
"
Standard & Poor's Rating Services, a division of The McGraw Hill Companies,
Inc., so long as it is a rating agency.
"
Secured
Obligations
" All amounts owing to the Secured Parties under the Loan
Documents, including (i) all loans, advances, debts, liabilities, and
obligations, howsoever arising, owed by the Borrower under the DOE Credit
Facility Documents or the Loan Guarantee Agreement or otherwise to the Secured
Parties (whether or not evidenced by any note or instrument and whether or not
for the payment of money), direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, pursuant to any of the
Transaction Documents, including all interest, fees and Periodic Expenses
chargeable to the Borrower and payable by the Borrower hereunder or thereunder;
(ii) any and all sums advanced by any Agent or any other Secured Party in order
to preserve the Collateral or preserve the Secured Parties' security interest in
the Collateral; and (iii) in the event of any proceeding for the collection or
enforcement of the obligations after an Event of Default shall have occurred and
be continuing, the expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, or of any
exercise by any Secured Party of its rights under the Security Documents,
together with any Periodic Expenses, including attorney's fees and court
costs.
"
Secured
Parties
" DOE, the Collateral Agent and any other Credit Party, as their
respective interests may appear.
"
Security
Agreement
" The Security Agreement, dated on or before the Financial Closing
Date, between the Borrower and the Collateral Agent.
"
Security
Discharge Date
" means the date on which (i) all outstanding DOE Credit
Facility Commitments have been terminated and (ii) all amounts payable in
respect of the Secured Obligations have been paid in full in cash (other than
inchoate indemnity obligations and other obligations under the DOE Loan
Documents that by their terms survive and with respect to which no claim has
been made by the Secured Parties).
"
Security
Documents
" The documents listed in
Sections 4.1.1(c)
,
4.1.35
and 4.2.14 of the Loan Guarantee Agreement and all other contracts and
documents entered into prior to, on, or after the Initial Advance Date that
provide any Lien, pledge, charge or security interest to the Collateral Agent
for the benefit of the Secured Parties (any of them) to secure the Secured
Obligations.
"
Semi-Annual
Payment Date
" Each date of payment of principal and interest after the First
Principal Payment Date as specified in the DOE Credit Facility Documents or in
each case, if not a Business Day, the next Business Day.
34
"
Short-Term
Wellfield Drilling Reserve Account
" The account set forth in Section 3.1 of
the Depositary Agreement.
"
Short-Term
Wellfield Funding Amount
" Four million five hundred thousand Dollars
($4,500,000).
"
Sponsor
"
U.S Geothermal, Inc., a Delaware corporation and owner as of the Financial
Closing Date of 80% of the Equity Interests in Holdco.
"
Sponsor
Affiliate
" Each Affiliate of the Sponsor providing services for the
Project.
"
Sponsor
Support Letter
" The written undertaking of the Sponsor addressed to DOE and
the Loan Servicer, to raise sufficient funds to meet any Overrun Equity
Commitment, signed by the Chief Executive Officer of the Sponsor and in form and
substance reasonably satisfactory to DOE and the Loan Servicer.
"
Sponsor's
Accountant
" BehlerMick PS or such other firm of independent public
accountants of recognized international standing as may be appointed by the
Borrower as accountant of the Borrower, from time to time with the approval of
the Loan Servicer.
"
Subsequent
Advance
" An advance or a borrowing made after the Initial Advance under the
DOE Credit Facility Commitment made pursuant to the Loan Guarantee Agreement and
the DOE Credit Facility Documents.
"
Subsequent
Advance Notice
" A request for an Advance subsequent to the Initial Advance,
delivered by the Borrower executed by an Authorized Official of the Borrower,
substantially in the form attached as
Exhibit F
to the Loan Guarantee
Agreement, as may be modified from time to time by the Loan Servicer in its sole
discretion.
"
Technology
"
Regardless of form, any invention (whether or not patentable or reduced to
practice), discovery, information, work of authorship, articles of manufacture,
machines, methods, processes, models, procedures, protocols, designs, diagrams,
drawings, documentation, flow charts, network configurations and architectures,
schematics, specifications, concepts, data, databases and data collections,
algorithms, formulas, know-how, and techniques, software code, including all
source code, object code, firmware, development tools and application
programming interfaces (APIs), tools, materials, marketing and development
plans, and other forms of technology and all media on which any of the foregoing
is recorded.
"
Third-Party
IP License Agreements
" Any agreements providing Intellectual Property Rights
to the Borrower, other than the Equipment Contract.
"
Title
Company
" Chicago Title Company of Oregon, Commercial Escrow Division, with
an address of 1211 S.W. Fifth Avenue, Suite 2130, Portland, Oregon 97204.
"
Title
XVII
" Title XVII of the Energy Policy Act of 2005, Pub. L. 109-58, as
amended by Section 406 of Div A of Title IV of Pub. L. 111-5 and Section 310 of
Title III of Pub. L. 111-85, as may be amended from time to time.
35
"
Total
Funding Available
" The aggregate of all funds that are (i) undrawn but
committed, or reasonably expected to be available, under the DOE Credit Facility
Commitment and the Base Equity Commitments, (ii) the Base Equity contributed but
not yet applied to pay Project Costs (including the remaining undrawn value of
any Base Equity Letter of Credit, the proceeds of any draw of a Base Equity
Letter of Credit, any contribution made in respect of a Dishonored Base Equity
Letter of Credit Amount and any cash contributed as equity by the Sponsor or
Holdco and deposited in the Construction Account to replace the undrawn portion
of any Base Equity Letter of Credit) plus Overrun Equity contributed but not yet
applied to pay Project Costs (iii) all Overrun Equity Commitments, with respect
to which Holdco or the Sponsor has funds (and not debt commitments) available in
cash or Permitted Investments for contribution to the Borrower.
"
Total
Project Costs
" The total amount of Project Costs required for completion of
the Project.
"
Transaction
Documents
" The Project Documents and the Loan Documents.
"
Turbine
Air Systems
" Turbine Air Systems, Ltd., a Texas limited partnership.
"
Uniform
Commercial Code
" The Uniform Commercial Code of the jurisdiction the law of
which governs the document in which such term is used.
"
Unrestricted
Local Account
" Any bank account in the name of the Borrower that is not a
Local Account or Project Account;
provided
that each Unrestricted Local
Account shall be either closed or converted to a Local Account by the execution
of a Local Accounts Control Agreement on or before the Initial Advance Date.
"
U.S.
"
The United States of America.
"
U.S.
Government
" The federal government of the United States of America.
"
Warrant
Agreement
" The Warrant Agreement to be entered into on or before the Initial
Advance Date between the Sponsor and DOE, providing for the issuance of warrants
to purchase 500,000 shares of common stock of the Sponsor and substantially in
the form attached as
Exhibit H
to the Loan Guarantee Agreement.
"
Well
Drilling Contract
" Each contract required for well drilling and related
construction, procurement, installation and equipment to be entered into by the
Borrower prior to, on, or after the Financial Closing Date.
36
Exhibit A1
to Loan Guarantee Agreement
DEFINITION OF PROJECT COMPLETION
"
Project
Completion
" The satisfaction of the following conditions, as evidenced
by the written notification from the Loan Servicer to the Borrower in accordance
with clause (e)(iii) of this definition:
(a)
Physical Completion
.
All facilities and equipment necessary for the Project to operate as
contemplated under the Project Plans:
(i)
shall have been completely constructed, installed, completed, tested, and
commissioned, all utilizing first-class standards of workmanship and materials
and in accordance with the Project Plans and the terms of applicable
construction agreements, subject to Punch List Items for which adequate reserves
have been established, as verified by the Independent Engineer;
(ii) shall
be operating in accordance with applicable guidelines;
(iii) shall
have been accepted and paid for, as evidenced by the Borrower having issued
acceptance certificates relating to each of the major engineering, procurement
and construction contracts, subject to Punch List Items for which adequate
reserves have been established, as verified by the Independent Engineer; and
(A) are
being properly operated and maintained in all respects.
(b)
Operational
Completion
.
(i)
During the start up and test period, the Project shall pass (a) the
continuous integrated operational reliability test developed by the Borrower
satisfactory to the Independent Engineer no later than one hundred eighty days
prior to the anticipated date of Physical Completion and (b) other performance
tests specified in the Equipment Contract, Construction Contracts, and (c) any
additional continuous operational reliability tests, including without
limitation production output tests that are (x) to be developed by the Borrower
and (y) to be incorporated as modifications to the terms of the applicable
Equipment Contract and Construction Contracts or other tests specified by the
Independent Engineer (in the event that the tests in the Equipment Contract and
Construction Contracts are not satisfactory to DOE);
(ii)
shall have received an Operation Date (as defined in the Power Purchase
Agreement) on or prior to the Scheduled Operation Date (as defined in the Power
Purchase Agreement) and the Borrower shall deliver to DOE evidence that it shall
have requested and obtained written confirmation from Idaho Power that all
conditions to receiving an Operation Date have been fulfilled; and
(iii) in
addition to the conditions for receipt of an Operation Date under the Power
Purchase Agreement, the generator, turbines, extraction wells, injection wells
and other associated equipment enabling the Facility (as defined in
the Power Purchase Agreement) to deliver at least 18,000 kw of Net Energy (as
defined in the Power Purchase Agreement) in a stable, reliable, consistent and
safe manner and the Project shall have been installed, tested and shall have
been determined to be functioning properly.
(c)
Financial
Completion
.
(i)
The First Principal Payment Date shall have occurred; and
(ii)
The Loan Servicer shall have received a certificate from an Authorized Officer
of the Borrower providing calculations showing a projected minimum annual Debt
Service Coverage Ratio of 1.15 to 1 for the period commencing with the year in
which such calculation is made and continuing until the scheduled repayment in
full of the DOE Guaranteed Loan.
(d)
Reserve Accounts
. Each of the following Reserve Accounts shall be funded
as follows:
(i)
the Debt Service Reserve Account in an amount equal to the Debt Service Reserve
Requirement;
(ii)
the Short-Term Wellfield Drilling Reserve Account in an amount not less than the
Short-Term Wellfield Funding Amount;
(iii)
the Long-Term Wellfield Drilling Reserve Account in an amount equal to the
Initial Long-Term Wellfield Reserve Requirement; and
(iv) the
Cap-Ex Reserve Account in an amount equal to the Initial Cap-Ex Funding
Amount.
(e)
Operating Account
.
The Operating Account shall be funded with a minimum balance of two hundred and
seventy thousand Dollars ($270,000).
(f)
Legal
Conditions
.
(i)
The Borrower shall have met all of its financial and other contractual
obligations contained in any Transaction Document through the Project Completion
Date;
(ii)
all Transaction Documents shall be in full force and effect and not in default,
all representations and warranties in each Loan Guarantee Document shall be true
and correct, no default or event of default shall then exist under any Loan
Document, and DOE shall have received satisfactory opinions from the Borrower's
legal counsel with respect to certain matters;
(iii)
Title to Assets
. The Borrower shall have good freehold or valid leasehold
interests free and clear of all Liens and encumbrances (except for Permitted
Liens) in the Project Facilities and all of the land and all buildings,
equipment, and facilities referred to above, and to all other facilities now or
then known to be required for the Project;
2
(iv)
Liens Under Security Documents
. The Borrower shall have granted
Liens in favor of the Collateral Agent for the benefit of the Secured Parties
with respect to all of the assets required to be subject to the Security
Documents;
(v)
Transaction Documents
. Each Transaction Document shall have been executed
and delivered by all parties thereto and shall remain in full force (except to
the extent that its term has expired in accordance with the Loan Guarantee
Agreement) and effect and no party thereto shall be in material breach of any
obligation thereunder;
(vi)
Representations and Warranties
. All representations and warranties in the
Loan Documents shall be true and correct in all material respects (other than
those qualified by materiality or Material Adverse Effect, which shall be true
and correct in all respects) as of the Project Completion Date (other than those
that expressly relate to an earlier date);
(vii)
Approvals, Permits and Licenses
. All such Governmental Approvals required
as of the Project Completion Date (including any Governmental Approvals
disclosed in writing by the Borrower and required on that date) by the Borrower,
the Operator or the Project have been obtained and are in full force and effect
and are not then under appeal or subject to other proceedings or unsatisfied
conditions that could reasonably be expected to result in a material
modification or cancellation as of such date. The Borrower, the Operator and the
Project, as applicable, are in compliance with all such Governmental Approvals,
the non-compliance with which could reasonably be expected to have a Material
Adverse Effect.
(g)
Insurance Program for Operating Period
. The Loan Servicer shall have
received, in form and substance satisfactory to the Loan Servicer, an Insurance
Advisor's Certificate (A) describing in reasonable detail the Borrower's and the
Project's insurance program with respect to the Operating Period (including
without limitation with respect to any new insurance since the date of the final
Advance, copies of certificates or policies with respect thereto, designating
the Collateral Agent as loss payee, as appropriate, all certified by the
Borrower or the Operator, as applicable, as being true and complete), and (B)
certifying that it has reviewed and analyzed such insurance program and that in
its opinion such insurance program satisfies all the requirements of
Schedule
6.3(b)
.
(h)
No Event of Default or Default
. No Event of Default or Potential Default
shall exist.
(i)
Delivery of Project
Completion Certificate
. The Borrower shall have furnished the Loan Servicer
with a Project Completion Certificate certifying that each of the requirements
set forth in clauses (a) through (d) above has been satisfied as of the date of
the Project Completion Certificate.
(j)
Independent Engineer Report
. The Loan Servicer shall have received a
Independent Engineer Report addressing such matters as the Loan Servicer may reasonably request, including without
limitation the satisfaction of the requirements set forth in clauses (a) through
(d), as appropriate.
3
(k)
Notice of Project
Completion
. Following receipt of the Project Completion Certificate, the
Loan Servicer shall have determined that each of the requirements set forth in
clauses (a) through (d) above has been satisfied and shall have so notified the
Borrower in writing;
provided
,
however
, that:
(i)
the Loan Servicer may require confirmation, at the Borrower's
expense, of any provision of such Project Completion Certificate, including by
requesting delivery to the Loan Servicer of an independent consultant's report
or an opinion of counsel satisfactory to the Loan Servicer;
(ii)
the Loan Servicer shall have the right to make requests for additional
information or documents from the Borrower to substantiate the accuracy or
completeness of the Project Completion Certificate;
(iii)
the Loan Servicer shall use all reasonable efforts to notify the Borrower within
thirty days following receipt of the Project Completion Certificate either (i)
that Project Completion has been achieved, in which case the Project Completion
Date shall be deemed to be the date of such notice, or (ii) that the Loan
Servicer objects to the Project Completion Certificate or such certificate is
inaccurate or incomplete, which notice shall set forth the basis for such
objection or determination, as the case may be.
4
Exhibit B
to Loan Guarantee Agreement
RULES OF INTERPRETATION
For all purposes of the Loan Guarantee Agreement, including
Exhibits, Schedules, Annexes and Appendices hereto, unless otherwise indicated
or required by the context:
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1.
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Plurals and Gender
. Defined terms in the singular
shall include the plural and vice versa, and the masculine, feminine or
neuter gender shall include all genders.
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2.
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Use of Or
. The word "or" is not
exclusive.
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3.
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Change of Law
. Each reference to a Governmental
Rule or Environmental Law includes any amendment, supplement or
modification of such Governmental Rule or Environmental Law, as the case
may be, and all regulations, rulings and other Governmental Rules or
Environmental Laws promulgated thereunder.
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4.
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Successor and Assigns
. A reference to a Person
includes its successors and permitted assigns.
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5.
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Including
. The words "include," "includes" and
"including" are not limiting and mean include, includes and including
"without limitation" and "without limitation by specification".
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6.
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Hereof, Herein, Hereunder
. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in any
document shall refer to such document as a whole and not to any particular
provision of such document.
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7.
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Articles, Sections, Exhibits
. A reference in a
document to an Article, Section, Exhibit, Schedule, Annex or Appendix is
to the Article, Section, Exhibit, Schedule, Annex or Appendix of such
document unless otherwise indicated.
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8.
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Attachments, Replacements, Amendments
. References
to any document, instrument or agreement (a) shall include all exhibits,
schedules, annexes and appendices thereto, and all exhibits, schedules,
annexes or appendices to any document shall be deemed incorporated by
reference in such document, (b) shall include all documents, instruments
or agreements issued or executed in replacement thereof, and (c) shall
mean such document, instrument or agreement, or replacement thereto, as
amended, modified and supplemented from time to time and in effect at any
given time.
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9.
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Periods and Time
. References to "days," "weeks,"
"months" and "years" shall mean calendar days, weeks, months and years,
respectively. References to a period of "days," "weeks," "months" and
"years" shall mean consecutive days, weeks, months and years,
respectively, and such period shall be deemed to begin on the day that the
event to which the period relates first occurs. References to a time of
day shall mean such time in Washington, D.C.
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10.
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Ambiguities
. The Loan Documents are the result of
negotiations among, and have been reviewed by each party to the Loan
Documents and their respective counsel. Accordingly, the Loan Documents
shall be deemed to be the product of all parties thereto, and no ambiguity
shall be construed in favor of or against any Person.
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11.
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Continuing Definitions
. With respect to any term
that is defined by reference to any document, for purposes hereof, such
term shall continue to have the original definition notwithstanding any
termination, expiration or modification of such document.
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12.
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Terms Defined Elsewhere
. Terms that are defined in
the preamble, the recitals, or the Sections of the Loan Guarantee
Agreement have the meanings ascribed to them therein.
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13.
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Headings
. The table of contents and article and
section headings and other captions have been inserted as a matter of
convenience for the purpose of reference only and do not limit or affect
the meaning of the terms and provisions thereof.
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14.
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Accounting Terms
. All accounting terms not
specifically defined shall be construed in accordance with GAAP.
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15.
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Forward-Looking Statements
. With respect to
preparation or update by any Person of budgets, projections or other
forward-looking plans and forecasts, such Person shall be deemed to
represent only that such budgets, projections and forward-looking plans
and forecasts were prepared in good faith based upon assumptions believed
by such Person to be reasonable at the time of their preparation or
update.
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2
Exhibit C
to Loan
Guarantee Agreement
Page 1 of 10
DAVIS-BACON REQUIREMENTS
Davis Bacon Provisions for Davis-Bacon Act Covered Contracts
(a)
Definitions
.
For purposes of this
Exhibit C
, and as required by subparagraph
(b)(8) below of this
Exhibit C
, the definitions set forth in Section 5.2
of title 29 of the Code of Federal Regulations (CFR) are incorporated by
reference herein, some of which are set forth below, except to the extent
modified below, in addition to certain newly defined terms set forth below for
purposes of Davis-Bacon Act compliance under Section 1705 of Title XVII:
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(1)
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"
Davis-Bacon Act Covered Contract
" means any
contract, agreement or other arrangement for the "construction,
prosecution, completion or repair" (as such term is defined below) of the
Project (including the Loan Guarantee Agreement) in connection with
section 1705(c), as enacted by the American Recovery and Reinvestment Act
of 2009.
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(2)
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"
Contract Party
" means any contractor,
subcontractor (including any lower tier subcontractor) or other entity
(other than USG Oregon LLC but including, if applicable, the project
sponsor or affiliate) that is party to a Davis Bacon Covered Contract; it
being understood that the foregoing exclusion of USG Oregon LLC from the
definition of Contract Party in no way affects USG Oregon LLC's Davis
Bacon Act obligations as set forth in this
Exhibit C
.
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(3)
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"
Construction, prosecution, completion, or repair
"
or "
performance of the Project
" means the
following:
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(1) All types of work done on a
particular building or work at the site thereof, including work at a facility
which is deemed a part of the site of the work within the meaning of (paragraph
(l) of 29 CFR 5.2) by laborers and mechanics employed by a construction
contractor or construction subcontractor, including without limitation:
(i)
Altering, remodeling, installation (where
appropriate) on the site of the work of items fabricated off-site;
(ii)
Painting and decorating;
(iii) Manufacturing
or furnishing of materials, articles, supplies or equipment on the site of the
building or work (or, under the United States Housing Act of 1937; the Housing
Act of 1949; and the Native American Housing Assistance and Self-Determination Act of
1996 in the construction or development of the project);
Page 2 of 10
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(iv) (A)
Transportation between the site of the work within the meaning of
paragraph (l)(1) of 29 CFR 5.2 and a facility which is dedicated to the
construction of the building or work and deemed a part of the site of the
work within the meaning of paragraph (l)(2) of 29 CFR 5.2; and (B)
Transportation of portion(s) of the building or work between a site where
a significant portion of such building or work is constructed, which is a
part of the site of the work within the meaning of paragraph (l)(1) of 29
CFR 5.2, and the physical place or places where the building or work will
remain.
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(2) Except as provided in paragraph (j)(1)(iv)(A) of 29
CFR 5.2, the transportation of materials or supplies to or from the site
of the work by employees of the construction contractor or a construction
subcontractor is not "construction, prosecution, completion, or
repair".
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(4)
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"
Contracting officer
" means the individual, a duly
appointed successor, or authorized representative who is designated and
authorized to enter into contracts on behalf of the Federal agency or any
representative designated by DOE to USG Oregon LLC from time to time for
purposes of Davis-Bacon Act compliance.
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(5)
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"
Laborer or mechanic
" includes at least those
workers whose duties are manual or physical in nature (including those
workers who use tools or who are performing the work of a trade), as
distinguished from mental or managerial. The term laborer or mechanic
includes apprentices, trainees, and helpers. The term does not apply to
workers whose duties are primarily administrative, executive, or clerical,
rather than manual. Persons employed in a bona fide executive,
administrative, or professional capacity as defined in part 541 of title
29 of the Code of Federal Regulations are not deemed to be laborers or
mechanics. Working foremen who devote more than 20 percent of their time
during a workweek to mechanic or laborer duties, and who do not meet the
criteria of part 541, are laborers and mechanics for the time so
spent.
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(6)
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"
Site of the work
" is defined as
follows:
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(i) The site of the work is the physical place or places
where the building or work called for in the Davis-Bacon Act Covered
Contract will remain; and any other site where a significant portion of
the building or work is constructed, provided that such site is
established specifically for the performance of such contract or
project;
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C-2
Page 3 of 10
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(ii) Except as provided in subparagraph (a)(6)(iii) of
this
Exhibit C
, job headquarters, tool yards, batch plants, borrow
pits, etc., are part of the site of the work, provided they are dedicated
exclusively, or nearly so, to performance of the Davis Bacon Act Covered
Contract or project, and provided they are adjacent or virtually adjacent
to the site of the work as defined in subparagraph (a)(6)(i) of this
Exhibit C
;
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(iii) Not included in the site of the work are permanent
home offices, branch plant establishments, fabrication plants, tool yards,
etc., of USG Oregon LLC or a Contract Party whose location and continuance
in operation are determined wholly without regard to a particular Federal
or federally assisted contract, such as the Loan Guarantee Agreement, or
project. In addition, fabrication plants, batch plants, borrow pits, job
headquarters, tool yards, etc., of a commercial or material supplier,
which are established by a supplier of materials for the project before
opening of bids and not on the site of the work as stated in subparagraph
(a)(6)(i) of this
Exhibit C
, are not included in the site of the
work. Such permanent, previously established facilities are not part of
the site of the work, even where the operations for a period of time may
be dedicated exclusively, or nearly so, to the performance of a
Davis-Bacon Act Covered Contract.
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(7)
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"
Wage determination
" includes the original
decision and any subsequent decisions modifying, superseding, correcting,
or otherwise changing the provisions of the original decision. The
application of the wage determination shall be in accordance with the
provisions of Sec. 1.6 of title 29 of the Code of Federal
Regulations.
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(b)(1)
Minimum wages
.
(i)
All laborers and mechanics employed or working on the site of the work, will be
paid unconditionally and not less often than once a week, and without subsequent
deduction or rebate on any account (except such payroll deductions as are
permitted by regulations issued by the Secretary of Labor under the Copeland Act
(29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or
cash equivalents thereof) due at time of payment computed at rates not less than
those contained in the wage determination of the Secretary of Labor which is
attached hereto as Schedule 1 and made a part hereof, regardless of any
contractual relationship which may be alleged to exist between USG Oregon LLC
and such laborers and mechanics, or between any Contract Party and such laborers
and mechanics.
Contributions made or costs reasonably anticipated for bona
fide fringe benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of
laborers or mechanics are considered wages paid to such laborers or mechanics,
subject to the provisions of subparagraph (b)(1)(iv) of this
Exhibit C
;
also, regular contributions made or costs incurred for more than a weekly period
(but not less often than quarterly) under plans, funds, or programs which cover
the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics
shall be paid the appropriate wage rate and fringe benefits on the wage
determination for the classification of work actually performed, without regard
to skill, except as provided in paragraph (b)(4) below. Laborers or mechanics
performing work in more than one classification may be compensated at the rate
specified for each classification for the time actually worked therein, provided
that the employer's payroll records accurately set forth the time spent in each
classification in which work is performed. The wage determination (including any
additional classification and wage rates conformed under subparagraph (b)(1)(ii)
of this
Exhibit C
) as attached hereto as Schedule 1 and the Davis-Bacon
poster (WH-1321) shall be posted at all times by USG Oregon LLC and each
Contract Party at the site of the work in a prominent and accessible place where
it can be easily seen by the workers.
C-3
Page 4 of 10
(ii) (A)
The contracting officer shall require that any class of laborers or mechanics,
including helpers, which is not listed in the wage determination and which is to
be employed under the Davis-Bacon Act Covered Contract shall be classified in
conformance with the wage determination. The contracting officer shall approve
an additional classification and wage rate and fringe benefits therefore only
when the following criteria have been met:
(1)
The work to be performed by the classification requested is not performed by a
classification in the wage determination; and
(2)
The classification is utilized in the area by the construction industry; and
(3)
The proposed wage rate, including any bona fide fringe benefits, bears a
reasonable relationship to the wage rates contained in the wage
determination.
(B)
If USG Oregon LLC or any Contract Party, as the case may be, and the respective
laborers and mechanics to be employed in the classification (if known), or their
representatives, and the contracting officer agree on the classification and
wage rate (including the amount designated for fringe benefits where
appropriate), a report of the action taken shall be sent by the contracting
officer to the Administrator of the Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, Washington, DC 20210. The
Administrator, or an authorized representative, will approve, modify, or
disapprove every additional classification action within 30 days of receipt and
so advise the contracting officer or will notify the contracting officer within
the 30-day period that additional time is necessary.
(C)
In the event USG Oregon LLC or any Contract Party, as the case may be, the
laborers or mechanics to be employed in the classification or their
representatives, and the contracting officer do not agree on the proposed
classification and wage rate (including the amount designated for fringe
benefits, where appropriate), the contracting officer shall refer the questions,
including the views of all interested parties and the recommendation of the
contracting officer, to the Administrator for determination. The Administrator,
or an authorized representative, will issue a determination within 30 days of receipt and so advise the contracting officer or will notify
the contracting officer within the 30-day period that additional time is
necessary.
C-4
Page 5 of 10
(D)
The wage rate (including fringe benefits where appropriate) determined pursuant
to subparagraphs (b)(1)(ii) (B) or (C) of this
Exhibit C
, shall be paid
to all workers performing work in the classification under any Davis-Bacon Act
Covered Contract from the first day on which work is performed in the
classification.
(iii)
Whenever the minimum wage rate prescribed in any Davis-Bacon Act Covered
Contract for a class of laborers or mechanics includes a fringe benefit which is
not expressed as an hourly rate, USG Oregon LLC or any Contract Party shall
either pay the benefit as stated in the wage determination or shall pay another
bona fide fringe benefit or an hourly cash equivalent thereof.
(iv)
If USG Oregon LLC or any Contract Party does not make payments to a trustee or
other third person, USG Oregon LLC or any Contract Party may consider as part of
the wages of any laborer or mechanic the amount of any costs reasonably
anticipated in providing bona fide fringe benefits under a plan or program;
provided, that the Secretary of Labor has found, upon the written request of USG
Oregon LLC or any Contract Party, that the applicable standards of the
Davis-Bacon Act have been met. The Secretary of Labor may require USG Oregon LLC
or any Contract Party to set aside in a separate account assets for the meeting
of obligations under the plan or program.
(2)
Withholding
.
The DOE contracting officer shall upon its
own action or upon written request of an authorized representative of the
Department of Labor withhold or cause to be withheld from USG Oregon LLC or a
Contract Party, as the case may be, under this Contract or any other Federal
contract with USG Oregon LLC or the same Contract Party, or any other
federally-assisted contract subject to Davis-Bacon prevailing wage requirements,
which is held by USG Oregon LLC or the same Contract Party, so much of the
accrued payments or advances as may be considered necessary to pay laborers and
mechanics, including apprentices, trainees, and helpers, employed or working on
the site of the work the full amount of wages required by the Contract. In the
event of failure to pay any laborer or mechanic, including any apprentice,
trainee, or helper, employed or working on the site of the work, all or part of
the wages required by the Davis-Bacon Act Covered Contract, DOE may, after
written notice to USG Oregon LLC take such action as may be necessary to cause
the suspension of any further disbursement under the DOE-Guaranteed Loan until
such violations have ceased, it being understood that any such suspension shall
not affect the validity of the DOE Guarantee on the portions of the
DOE-Guaranteed Loan that have been disbursed prior to the date of such
suspension and remain outstanding as of such date.
(3)
Payrolls and basic records
.
(i)
Payrolls and basic records relating thereto shall be maintained by USG Oregon
LLC and each Contract Party during the course of the work and preserved for a
period of three years thereafter for all of their respective laborers and
mechanics employed or working at the site of the work. Such records shall
contain the name, address, and social security number of each such worker, his or
her correct classification, hourly rates of wages paid (including rates of
contributions or costs anticipated for bona fide fringe benefits or cash
equivalents thereof of the types described in section 1(b)(2)(B) of the
Davis-Bacon Act), daily and weekly number of hours worked, deductions made and
actual wages paid. Whenever the Secretary of Labor has found under 29 CFR
5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of
any costs reasonably anticipated in providing benefits under a plan or program
described in section 1(b)(2)(B) of the Davis-Bacon Act, USG Oregon LLC and each
Contract Party shall maintain records which show that the commitment to provide
such benefits is enforceable, that the plan or program is financially
responsible, and that the plan or program has been communicated in writing to
the laborers or mechanics affected, and records which show the costs anticipated
or the actual cost incurred in providing such benefits. USG Oregon LLC and any
Contract Party employing apprentices or trainees under approved programs shall
maintain written evidence of the registration of apprenticeship programs and
certification of trainee programs, the registration of the apprentices and
trainees, and the ratios and wage rates prescribed in the applicable
programs.
C-5
Page 6 of 10
(ii)(A)
The Contract Party shall submit weekly for each week in which any Davis-Bacon
Act Covered Contract work is performed a copy of all payrolls to USG Oregon LLC.
The highest tier Contract Party is responsible for the submission of copies of
payrolls by all subcontractors and lower tier subcontractors. Unless otherwise
directed by DOE, USG Oregon LLC shall submit weekly for each week in which any
Contract work is performed a copy of all of its payrolls, as well as all
payrolls of each Contract Party, to the DOE contracting officer. The payrolls
submitted shall set out accurately and completely all of the information
required to be maintained under subparagraph (b)(3)(i) of this
Exhibit C
,
except that full social security numbers and home addresses shall not be
included on weekly transmittals. Instead the payrolls shall only need to include
an individually identifying number for each employee (e.g., the last four digits
of the employee's social security number). The required weekly payroll
information may be submitted in any form desired. Optional Form WH-347 is
available for this purpose from the Wage and Hour Division Web site at
http://www.dol.gov/esa/whd/forms/wh347instr.htm
or its
successor site. USG Oregon LLC is responsible for the submission of copies of
its own payrolls and the payrolls of each Contract Party, in each case, to the
extent each employs laborers and mechanics in the performance of the Project.
Each Contract Party is responsible for the submission of copies of payrolls by
all subcontract or lower-tier Contract Parties. USG Oregon LLC and each Contract
Party shall maintain the full social security number and current address of each
of its own covered workers, and shall provide them upon request, in the case of
the Contract Party, to USG Oregon LLC, for transmission to the DOE or the Wage
and Hour Division of the Department of Labor for purposes of an investigation or
audit of compliance with prevailing wage requirements. It is not a violation of
this subparagraph (b)(3)(ii)(A) of this
Exhibit C
for a higher-tiered
Contract Party to require a lower-tiered Contract Party to provide addresses and
social security numbers to such Davis-Bacon Act Covered Contract Party for its
own records, without weekly submission to the DOE or USG Oregon LLC.
C-6
Page 7 of 10
(B)
Each payroll submitted shall be accompanied by a "Statement of Compliance",
signed by USG Oregon LLC or Contract Party or his or her agent who pays or
supervises the payment of the laborer or mechanic employed under the Davis-Bacon
Act Covered Contract and shall certify the following:
(1)
That the payroll for the payroll period contains the information required to be
provided under subparagraph (b)(3)(ii) of this
Exhibit C
, the appropriate
information is being maintained under subparagraph (b)(3)(i) of this
Exhibit
C
, and that such information is correct and complete;
(2)
That each laborer or mechanic (including each helper, apprentice, and trainee)
employed under the Davis-Bacon Act Covered Contract during the payroll period
has been paid the full weekly wages earned, without rebate, either directly or
indirectly, and that no deductions have been made either directly or indirectly
from the full wages earned, other than permissible deductions as set forth in
Regulations, 29 CFR part 3;
(3)
That each laborer or mechanic has been paid not less than the applicable wage
rates and fringe benefits or cash equivalents for the classification of work
performed, as specified in the applicable wage determination incorporated into
the Loan Guarantee Agreement and any other Davis-Bacon Act Covered Contract.
(C)
The weekly submission of a properly executed certification set forth on the
reverse side of Optional Form WH-347 shall satisfy the requirement for
submission of the "Statement of Compliance" required by subparagraph
(b)(3)(ii)(B) of this
Exhibit C
.
(D)
The falsification of any of the above certifications may subject USG Oregon LLC
or any Contract Party to civil or criminal prosecution under section 1001 of
title 18 and section 3729 of title 31 of the United States Code.
(iii)
USG Oregon LLC and each Contract Party shall make the records required under
subparagraph (b)(3)(i) of this
Exhibit C
available for inspection,
copying, or transcription by authorized representatives of the DOE or the
Department of Labor, and shall permit such representatives to interview
employees during working hours on the job. If USG Oregon LLC or any Contract
Party fails to submit the required records or to make them available, the DOE
may, after written notice to USG Oregon LLC take such action as may be necessary
to cause the suspension of any further disbursement under the DOE-Guaranteed
Loan, it being understood that any such suspension shall not affect the validity
of the DOE Guarantee on the portions of the DOE-Guaranteed Loan that have been
disbursed prior to the date of such suspension and remain outstanding as of such
date. Furthermore, failure to submit the required records upon request or to
make such records available may be grounds for debarment action pursuant to 29
CFR 5.12.
(4)
Apprentices and trainees
(i)
Apprentices
. Apprentices will be permitted to work at less than the
predetermined rate for the work they performed when they are employed pursuant
to and individually registered in a bona fide apprenticeship program registered
with the U.S. Department of Labor, Employment and Training Administration,
Office of Apprenticeship Training, Employer and Labor Services, or with a State
Apprenticeship Agency recognized by the Office, or if a person is employed in
his or her first 90 days of probationary employment as an apprentice in such an
apprenticeship program, who is not individually registered in the program, but
who has been certified by the Office of Apprenticeship Training, Employer and
Labor Services or a State Apprenticeship Agency (where appropriate) to be
eligible for probationary employment as an apprentice. The allowable ratio of
apprentices to journeymen on the job site in any craft classification shall not
be greater than the ratio permitted to USG Oregon LLC or Contract Party as to
the entire work force under the registered program. Any worker listed on a
payroll at an apprentice wage rate, who is not registered or otherwise employed
as stated above, shall be paid not less than the applicable wage rate on the
wage determination for the classification of work actually performed. In
addition, any apprentice performing work on the job site in excess of the ratio
permitted under the registered program shall be paid not less than the
applicable wage rate on the wage determination for the work actually performed.
Where USG Oregon LLC or a Contract Party is performing construction on a project
in a locality other than that in which its program is registered, the ratios and
wage rates (expressed in percentages of the journeyman's hourly rate) specified
in USG Oregon LLC's or Contract Party's registered program shall be observed.
Every apprentice must be paid at not less than the rate specified in the
registered program for the apprentice's level of progress, expressed as a
percentage of the journeymen hourly rate specified in the applicable wage
determination. Apprentices shall be paid fringe benefits in accordance with the
provisions of the apprenticeship program. If the apprenticeship program does not
specify fringe benefits, apprentices must be paid the full amount of fringe
benefits listed on the wage determination for the applicable classification. If
the Administrator determines that a different practice prevails for the
applicable apprentice classification, fringes shall be paid in accordance with
that determination. In the event the Office of Apprenticeship Training, Employer
and Labor Services, or a State Apprenticeship Agency recognized by the Office,
withdraws approval of an apprenticeship program, USG Oregon LLC or the Contract
Party will no longer be permitted to utilize apprentices at less than the
applicable predetermined rate for the work performed until an acceptable program
is approved.
C-7
Page 8 of 10
(ii)
Trainees
. Except as provided in 29 CFR 5.16, trainees will not be
permitted to work at less than the predetermined rate for the work performed
unless they are employed pursuant to and individually registered in a program
which has received prior approval, evidenced by formal certification by the U.S.
Department of Labor, Employment and Training Administration. The ratio of
trainees to journeymen on the job site shall not be greater than permitted under
the plan approved by the Employment and Training Administration. Every trainee
must be paid at not less than the rate specified in the approved program for the
trainee's level of progress, expressed as a percentage of the journeyman hourly
rate specified in the applicable wage determination. Trainees shall be paid
fringe benefits in accordance with the provisions of the trainee program. If the
trainee program does not mention fringe benefits, trainees shall be paid the
full amount of fringe benefits listed on the wage determination unless the
Administrator of the Wage and Hour Division determines that there is an
apprenticeship program associated with the corresponding journeyman wage rate on
the wage determination which provides for less than full fringe benefits for apprentices. Any employee listed
on the payroll at a trainee rate who is not registered and participating in a
training plan approved by the Employment and Training Administration shall be
paid not less than the applicable wage rate on the wage determination for the
classification of work actually performed. In addition, any trainee performing
work on the job site in excess of the ratio permitted under the registered
program shall be paid not less than the applicable wage rate on the wage
determination for the work actually performed. In the event the Employment and
Training Administration withdraws approval of a training program, USG Oregon LLC
or the Contract Party will no longer be permitted to utilize trainees at less
than the applicable predetermined rate for the work performed until an
acceptable program is approved.
C-8
Page 9 of 10
(iii)
Equal employment opportunity
. The utilization of apprentices, trainees
and journeymen under this part shall be in conformity with the equal employment
opportunity requirements of Executive Order 11246, as amended, and 29 CFR part
30.
(5)
Compliance with Copeland Act requirements
.
USG Oregon
LLC and any Contract Party shall comply with the requirements of 29 CFR part 3,
which are incorporated by reference in this Loan Guarantee Agreement and any
other Davis-Bacon Act Covered Contract.
(6)
Subcontracts
.
USG Oregon LLC and any higher or lower
tier Contract Party shall insert in any Davis-Bacon Act Covered Contract the
clauses contained in subparagraphs (b)(1) through (10) of this
Exhibit C
and such other clauses as the DOE may by appropriate instructions require,
and also a clause requiring the higher tier Contract Party to include these
clauses in any lower tier Davis-Bacon Act Covered Contract. USG Oregon LLC shall
be responsible for the compliance by any Contract Party with all the contract
clauses in (1) through (10) of this
Exhibit C
.
(7)
Contract termination: debarment
.
A breach of any of the
contract clauses in (1) through (10) of subparagraph (b) in this
Exhibit C
will constitute an Event of Default by USG Oregon LLC under
Article 8
of the Loan Guarantee Agreement and may be grounds for termination of any
Davis-Bacon Act Covered Contract, and for debarment as a contractor, a
subcontractor or other entity as provided in 29 CFR 5.12; provided, however,
that the termination provision in this subparagraph (b)(7) shall not apply to
the Loan Guarantee Agreement but that, in lieu of the application of such
termination provision of subparagraph (b)(7), the remedies available to DOE
under
Section 8.2
of the Loan Guarantee Agreement shall apply upon such
an Event of Default.
(8)
Compliance with Davis-Bacon and Related Act requirements
.
All rulings and interpretations of the Davis-Bacon and Related Acts
contained in 29 CFR parts 1, 3, and 5 (other than Section 5.5(b) of 29 CFR part
5) are herein incorporated by reference in this Loan Guarantee Agreement and any
other Davis-Bacon Act Covered Contract.
(9)
Disputes concerning labor standards
.
Disputes arising
out of the labor standards provisions of this Loan Guarantee Agreement or any
other Davis-Bacon Act Covered Contract shall not be subject to the general disputes
clause of such contract. Such disputes shall be resolved in accordance with the
procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7.
Disputes within the meaning of this clause include disputes between USG Oregon
LLC or any Contract Party and DOE, the U.S. Department of Labor, or the
employees or their representatives.
C-9
Page 10 of 10
(10)
Certification of eligibility
.
(i)
By entering into this Loan Guarantee Agreement and any other Davis-Bacon Covered
Contract, USG Oregon LLC and the Contract Party each certifies that neither it
(nor he or she) nor any person or firm who has an interest in USG Oregon LLC or
the Contract Party's firm is a person or firm ineligible to be awarded
Government contracts by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR
5.12(a)(1) .
(ii)
No part of this Loan Guarantee Agreement or any other Davis-Bacon Covered
Contract shall be assigned or subcontracted, as the case may be, to any person
or firm ineligible for award of a Government contract by virtue of section 3(a)
of the Davis-Bacon Act or 29 CFR 5.12(a)(1) .
(iii)
The penalty for making false statements is prescribed in the U.S. Criminal Code,
18 U.S.C. 1001.
C-10
Schedule 1
to Exhibit Cto Loan Guarantee
Agreement
DAVIS-BACON ACT WAGE DETERMINATIONS
|
1.
|
Incorporate the “Heavy” wage determination schedule
attached hereto as Schedule 1(a) into Davis-Bacon Act Covered Contracts
for “construction, prosecution, completion, or repair” as defined in
Exhibit C (“
Davis-Bacon Construction
”), to include installation
(where appropriate), and to be applied to all Davis-Bacon Construction
contract work except for that work set forth in Number 2 below. For
purposes of incorporating the wage determination schedule attached hereto
as Schedule 1(a), Davis-Bacon Act Covered Contracts include contracts for
drilling work that is ongoing as of, or commences on, the Financial
Closing Date. Davis-Bacon Construction occurring on the gravel pit, batch
plant, and/or fabrication plant will be covered by the wage determination
schedule attached hereto as Schedule 1(a) if the United States Department
of Labor (DOL) determines that such sites are part of the Davis-Bacon
“site of the work” as defined in DOL regulations.
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2.
|
Incorporate the “Building” wage determination schedule
attached hereto as Schedule 1(b) into Davis-Bacon Act Covered Contracts
for Davis-Bacon Construction, to be applied to all Davis-Bacon
Construction contract work on sheltered enclosures with walk-in access, to
include installation (where appropriate).
|
Exhibit D
to Loan Guarantee Agreement
[FORM OF] CONSTRUCTION PROGRESS REPORT
(Delivered pursuant to Section 6.1(a)(i) of the Loan Guarantee
Agreement for each month prior to the Project Completion Date)
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
Ladies and Gentlemen:
Pursuant
to Section 6.1(a)(i) of that certain Loan Guarantee Agreement, dated as of
February 23, 2011 among USG Oregon, LLC, a limited liability company organized
and existing under the laws of the State of Delaware, the U.S. Department of
Energy, an agency of the United States of America, acting by and through the
Secretary of Energy ("
DOE
"), as provider of the DOE Guarantee, DOE,
acting by and through authority delegated by the Secretary of Energy to its Loan
Programs Office, as loan servicer, PNC Bank, National Association, doing
business as Midland Loan Services, a division of PNC Bank, National Association
("
Midland
"), as administrative agent for DOE and loan servicer, and
Midland, as collateral agent for the Secured Parties (as amended, amended and
restated, restated, supplemented or otherwise modified from time to time, the
"
Loan Guarantee Agreement
"), attached hereto as
Annex A
is a
Construction Progress Report for the month ended [_________], 20[__] (the
"
Construction Progress Report
"). The Construction Progress Report
includes the following information:
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(i)
|
[a description of all construction activities to date][an
update of construction progress to date since the Construction Progress
Report, dated [___________]] their status, and any related material
issues, including, but not limited to overall integration, well field
development and testing, and [the progress of the activities][an update of
the progress to date since the Construction Progress Report, dated
[___________]] contemplated under each of the Equipment Contract, the EPC
Contract and the LGIA; and
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(ii)
|
a description of the expected progress of future
construction.
|
All
capitalized terms used herein shall have their respective meanings specified in
the Loan Guarantee Agreement.
The
Independent Engineer hereby certifies for the benefit of each Credit Party that,
as of the date hereof:
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(i)
|
the Construction Progress Report includes any anticipated
Overrun Project Costs and is accurate and complete in all material
respects;
|
D-1
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(ii)
|
[
construction of the Project is proceeding in
accordance with the Construction Budget and the construction milestones
set forth in Section 3.1 of the Power Purchase
Agreement
][
construction of the Project is not proceeding in
accordance with the Construction Budget, and the Construction Progress
Report describes any variances from the Construction Budget or the
construction milestones set forth in Section 3.1 of the Power Purchase
Agreement
]
;
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(iii)
|
[
the Project is expected to achieve completion by
the Anticipated Completion Date
][
the Project is not expected to
achieve completion by the Anticipated Completion Date due to
[
explain the reason for any projected delay
] and the Project
is now expected to achieve completion by [
insert date
]
]
;
and
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(iv)
|
the Total Funding Available is sufficient to pay all
remaining Total Project Costs (including Interest During Construction, DOE
Credit Facility Fees, Agents' Fees, Periodic Expenses, and identified Cost
Overruns).
|
Attached
hereto as
Annex B
is evidence that as of the date of the Construction
Progress Report, (A) each Construction Contractor, and any subcontractors (other
than subcontractors who, in the aggregate, [performed][are performing] work of a
value not exceeding a
de minimis
amount), have irrevocably waived and
released all Liens, statutory or otherwise, that any of them may have or acquire
on the Collateral or the Project with respect to work completed prior to the
last submission for payment, except for Permitted Liens, and (B) any unpaid
balances, other than retainage not required to be paid at the time of such
certification pursuant to the terms of the relevant Principal Project Document,
or unsettled claims with any Construction Contractor or subcontractor or
supplier, if any, have been adequately paid and that those being contested or
negotiated in good faith and where a bond, adequate reserves or other security
acceptable to the Loan Servicer has been posted or provided in such manner and
amount as to assure DOE that any amounts determined to be due will promptly be
paid in full when such contest is determined or negotiations are completed.
[
Attached
hereto as
Annex C
are [
include documents, certifications or consents
relating to the Project or matters contemplated by the Transaction Documents,
that the Loan Servicer reasonably requested, if any.
]
]
D-2
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date first written above.
LUMINATE, LLC,
as
Independent Engineer
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By:
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Name:
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[_______]
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Title:
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[_______]
|
The Construction Progress Report attached hereto as
Annex A
is based upon the Borrower's good faith reasonable estimates of the
information contained therein. The undersigned certifies that such Construction
Progress Report is accurate and complete in all material respects as of the date
of its submission to the Loan Servicer.
USG OREGON LLC,
as
Borrower
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By:
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Name:
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[_______]
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Title:
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[_______]
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D-3
Annex A
Construction Progress Report
D-4
Annex B
Evidence of Released Liens and Payments
D-5
Annex C
Other Documents
D-6
Exhibit E
to the Loan Guarantee
Agreement
[FORM OF] INITIAL ADVANCE NOTICE
(Delivered pursuant to Sections 2.3, 4.2 and 4.3 of the Loan
Guarantee Agreement)
Date of this Notice: [___]
Requested Initial Advance Date: [___]
To:
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U.S. Department of
Energy, as Guarantor
|
U.S. Department of Energy, as Loan
Servicer
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Loan Programs
Office, Loan Guarantee
|
Loan Programs Office, Loan
Guarantee
|
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Program
|
Program
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1000 Independence
Ave., S.W.
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1000 Independence Ave., S.W.
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Washington, D.C.
20585
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Washington, D.C. 20585
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Attn: Director,
Portfolio Management
|
Attn: Director, Portfolio
Management
|
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Re: DOE Loan
Guarantee, Loan Programs
|
Re: DOE Loan Guarantee, Loan
Programs
|
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Office Loan #1052
|
Office Loan #1052
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PNC Bank, National Association,
doing business as Midland
Loan Services, a division of PNC Bank, National Association,
as Collateral
Agent
10851 Mastin Street, Suite 700
Overland Park, KS 66210
Attention:
Government Services
Re: DOE Loan Guarantee, Loan Programs Office Loan #1052
cc:
PNC Bank, National Association,
doing business as Midland
Loan Services, a division of PNC Bank, National Association,
as
Administrative Agent
10851 Mastin Street, Suite 700
Overland Park, KS
66210
Attention: Government Services
Re: DOE Loan Guarantee, Loan Programs Office Loan #1052
Luminate, LLC, as Independent Engineer
1891 Broadway, Suite
1620
Denver, Colorado 80202
Attn: John Neff
Re: DOE Loan Guarantee, Loan Programs Office Loan #1052
Ladies and Gentlemen:
E-1
This Initial Advance Notice is delivered to you pursuant to the
Loan Guarantee Agreement, dated as of February 23, 2011, among USG Oregon LLC, a
limited liability company organized and existing under the laws of the State of
Delaware, the U.S. Department of Energy, an agency of the United States of
America, acting by and through the Secretary of Energy (“
DOE
”), as
provider of the DOE Guarantee, DOE, acting by and through authority delegated by
the Secretary of Energy to the Loan Programs Office, as Loan Servicer, Midland
Loan Services, Inc., as administrative agent for DOE and Loan Servicer, and
Midland Loan Services, Inc., as collateral agent for the Secured Parties (as
amended, amended and restated, restated, supplemented or otherwise modified from
time to time, the “
Loan Guarantee Agreement
”).
All capitalized terms used in this Initial Advance Notice shall
have their respective meanings specified in the Loan Guarantee Agreement.
The undersigned has read the provisions of the Loan Guarantee
Agreement and the other Loan Documents that are relevant to the furnishing of
this Initial Advance Notice. To the extent that this Initial Advance Notice
evidences, attests or confirms compliance with any covenants or conditions
precedent provided for in the Loan Guarantee Agreement or any other Loan
Documents, the Borrower has made such examination or investigation as was, in
its opinion, necessary to enable it to express an opinion as to whether such
covenants or conditions have been complied with.
The undersigned, an Authorized Official of the Borrower, HEREBY
CERTIFIES for the benefit of each of DOE, the Loan Servicer and the Collateral
Agent that, as of the date hereof and on the Advance Date for such Initial
Advance:
|
1.
|
this Initial Advance Notice constitutes a request for an
Advance of $[___] under the DOE Credit Facility Commitment made pursuant
to the Loan Guarantee Agreement and the DOE Credit Facility Documents,
such amount being in accordance with the minimum amount and increments
required by the DOE Credit Facility Documents;
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2.
|
the requested Initial Advance Date for the Initial
Advance is [___];
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3.
|
Annex 1
attached hereto sets forth with respect to
the Initial Advance:
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•
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the amount of Base Equity contributed on, or prior to,
the Initial Advance Date, to the Borrower, including the amount
contributed in the form of Base Equity Letters of Credit;
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•
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the amount of Overrun Equity that has been directly or
indirectly contributed by the Sponsor to the Borrower in connection with
the Initial Advance or which will concurrently with the Initial Advance be
contributed directly or indirectly by the Sponsor to the Borrower;
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•
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the aggregate amount, on a prospective basis after giving
effect to the requested Initial Advance and Equity Contributions made on,
or prior to, the date hereof, of (a) all Advances outstanding under the
DOE Credit Facility Documents and (b) all Equity Contributions;
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E-2
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•
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the Project Costs being financed or reimbursed using the
proceeds of the Initial Advance; and
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•
|
the payees to whom the proceeds of the requested Initial
Advance are to be paid, including [(a) each Material Project Party
[(including Turbine Air Systems)] to whom the proceeds of the requested
Advances are to be paid directly, and the amount of such payments, (b) the
required Reserve Accounts to be funded and the amount to be funded into
each such Reserve Account, (c) the amount to be paid to the Borrower, to
reimburse the Borrower for Eligible Project Costs previously paid by the
Borrower, in each case in accordance with the Construction Budget, taking
into account any Approved Budget Changes and (d) interest to be
capitalized];
1
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4.
|
attached hereto as
Annex 2
is an executed copy of
the FFB Advance Request dated [ ] and delivered to the Loan Servicer on [
] (with copies to DOE and FFB), with respect to the requested Initial
Advance, together with any information necessary for FFB and DOE to
process such request, including all wire transfer information for the
designated payees of the proceeds of such Advance;
2
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5.
|
attached hereto as
Annex 3
are true, correct and
complete copies of all Additional Project Documents entered into since the
Financial Closing Date and any other Additional Project Documents that
have not previously been delivered to the Loan Servicer, and a list of
such Additional Project Documents is included as the first page(s) of
Annex 3;
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6.
|
attached hereto as
Annex 4
are true, correct and
complete copies of each contract with a Major Vendor (as defined in the
Equipment Contract), together with evidence demonstrating that each such
contract is assignable to the Borrower and the designee of the Loan
Servicer, and a list of such Major Vendor contracts is included as the
first page(s) of Annex 4;
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7.
|
attached hereto as
Annex 5
is a reasonably
detailed description of the Eligible Project Costs that have been or will
be incurred by the Initial Advance Date;
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8.
|
(a) attached hereto as
Annex 6
are true, correct
and complete copies of all material third party consents and Governmental
Approvals not previously delivered, and a list of such consents and
Governmental Approvals is included as the first page(s) of Annex 6 and (b)
all consents and approvals of third parties as may be required as of the
Initial Advance Date and all Governmental Approvals required as of the
Initial Advance Date have been duly obtained and are in full force and
effect and are not under appeal or subject to other proceedings or
unsatisfied conditions that could reasonably be expected to result in a
material modification or cancellation thereof;
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9.
|
attached hereto as
Annex 7
are true, correct and
complete copies of each payment and performance bond (or letter of credit
or other performance security) in respect of
the Construction Contracts that is an “instrument” (as
defined in the Uniform Commercial Code), together with any endorsements
reasonably requested in connection therewith have been delivered to the
Collateral Agent and are in full force and effect, other than those
previously delivered and a list of such instruments is included in the
first page(s) of Annex 7;
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________________________________
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1
|
Note: Conform as necessary, and include only those
relevant clauses.
|
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2
|
Note: Date of delivery to Loan Servicer must be no less
than six Business Days prior to the Requested Advance
Date.
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E-3
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10.
|
(a) attached hereto as
Annex 8
are true, correct
and complete copies of all certificates or policies with respect to any
additional renewal or substitute insurance obtained by the Borrower since
the Financial Closing Date, designating the Collateral Agent as loss
payee, as appropriate, and the Secured Parties as additional insured, and
a list of such certificates and policies is included as the first page(s)
of Annex 8 and (b) all Required Insurance is in place, in good standing
and in full force and effect without default and all premiums due thereon
[
have been paid in full
] [
are to be paid with the proceeds
of the requested Initial Advance
] [
are to be paid by other
arrangements satisfactory to the Loan Servicer, consisting of
[
describe
]]
3
;
|
|
|
|
|
11.
|
attached hereto as
Annex 9
are all other
certificates and documentation required in respect of such Initial Advance
under the FFB Documents and the Loan Documents, including invoices
evidencing the Project Costs being financed using the proceeds of the
requested Advance, and a list of such invoices and other materials is
included as the first page(s) of Annex 9;
|
|
|
|
|
12.
|
all applicable conditions precedent described in Section
4.2 and 4.3 of the Loan Guarantee Agreement have been satisfied, or as of
the Initial Advance Date will be satisfied
[
or waived by
DOE
]
4
in accordance with the terms of the Loan Guarantee
Agreement
[
, and a reasonably detailed description of such waiver(s)
is attached hereto as
Annex 10
]
;
|
|
|
|
|
13.
|
the Project Costs being financed or reimbursed using the
proceeds of the requested Initial Advance are Eligible Project Costs that
have been or will be incurred by the Initial Advance Date;
|
|
|
|
|
14.
|
the aggregate amount expended for each type of Project
Cost does not exceed the aggregate amount budgeted for such type of cost
in the Construction Budget, except for Approved Construction
Changes;
|
|
|
|
|
15.
|
all required taxes, all DOE Credit Facility Fees, Agents’
Fees, all Periodic Expenses, and all recordation and other costs and fees
including those due in connection with the execution, delivery, filing,
registration, or performance of the Transaction Documents, the creation
and perfection of the security interests in the Collateral, or otherwise
incurred and invoiced prior to the Initial Advance Notice Date
[
have been paid in full
] [
are to be paid with proceeds of
the requested Initial Advance (only in the event that such
amounts are Eligible Project Costs)
] [
are to be paid by
other arrangements satisfactory to the Loan Servicer, consisting of
[
describe
]
;
5
|
________________________________
|
3
|
Note: Include only those bracketed clauses that are
relevant.
|
|
4
|
If a condition has not been satisfied but has been waived
by DOE, provide details of any waiver.
|
E-4
|
16.
|
on both the Initial Advance Notice Date and the Initial
Advance Date, the representations and warranties in the Loan Documents
(other than those that speak only as to an earlier date, which shall be
true and correct as of such earlier date) are true and correct in all
material respects (other than those qualified by materiality or Material
Adverse Effect, which shall be true and correct in all respects) and no
Event of Default or Potential Default has occurred and is
continuing;
|
|
|
|
|
17.
|
since the Financial Closing Date, no event (including any
legal, arbitral or other dispute review proceeding, whether proceeding,
pending or threatened, or any Change of Law) has occurred or could
reasonably be expected to occur, that has had or could reasonably be
expected to have a Material Adverse Effect;
|
|
|
|
|
18.
|
the Advance will not result in a violation of any law,
Transaction Document, Governmental Approval, or any other agreement or
consent to which the Borrower is a party or any judgment or approval to
which it is subject;
|
|
|
|
|
19.
|
the Borrower has not received a Drawstop Notice with
respect to the Initial Advance;
|
|
|
|
|
20.
|
the Borrower is in compliance with (a) its obligations
under the Loan Documents, including all affirmative covenants and negative
covenants, and has furnished all information requested under the Loan
Documents, and (b) all Program Requirements required to have been
satisfied as of the Requested Advance Date;
|
|
|
|
|
21.
|
the Borrower has timely complied in all material respects
with (a) the requirements set forth in
Section 6.26
and
Exhibit
C
of the Loan Guarantee Agreement with respect to the Davis-Bacon Act,
including the requirements set out in
Section 6.26(c)
with respect
to the payment of back wages pursuant to the Davis-Bacon Act or has
obtained an exemption from such requirement, and (b) its reporting
requirements under
Section 6.24(a)
with respect to the Recovery
Act;
|
|
|
|
|
22.
|
the Borrower has delivered to the Loan Servicer, the
Collateral Agent and DOE the most recent Construction Progress Report
required to be provided pursuant to Section 6.1(a)(i) of the Loan
Guarantee Agreement;
|
|
|
|
|
23.
|
the Borrower has otherwise complied with the procedures,
conditions and requirements specified in the Loan Guarantee Agreement and
the other Loan Documents in connection with the Advance requested
hereunder.
|
|
|
|
|
24.
|
the Borrower has otherwise complied with the procedures,
conditions and requirements specified in the Loan Guarantee Agreement and
the other Loan Documents in connection with the Advance requested
hereunder.
|
[Signature page
follows]
________________________________
|
5
|
Note: Include only those bracketed clauses that are
relevant.
|
E-5
IN WITNESS WHEREOF, the undersigned has executed this Initial
Advance Notice as of the date hereof.
|
|
USG OREGON LLC
|
|
|
|
|
|
|
|
|
By
______________________________________________
|
|
|
Name:
[
]
|
|
|
Title:
[
]
|
Attachments:
Annex 1: Initial Advance Amounts
Annex 2:
FFB Advance Request
Annex 3: Additional Project Documents
Annex 4:
Contracts with Major Vendors
Annex 5: Description of Eligible Project
Costs
Annex 6: Third-Party Consents and Governmental Approvals
Annex 7:
Payment and Performance Bonds
Annex 8: Required Insurance
Annex 9: Other
Certificates and Documentation
[Annex 10: Waiver of Conditions Precedent]
F-6
Annex 1
to Exhibit E
of the Loan Guarantee Agreement
Initial Advance Amounts
|
Amount of Base Equity
contributed on, or prior to,
the date hereof to the
Borrower
|
Balance of Base Equity for
Eligible Project Costs
|
|
Financial Closing Date
|
|
|
|
Initial Advance Date
|
|
|
|
Amount of Overrun Equity that has been
or
will be concurrently with the Initial
Advance,
directly or indirectly contributed
by the Sponsor to the
Borrower
|
|
Financial Closing Date
|
|
|
Initial Advance Date
|
|
|
Amount of Initial Advance requested
pursuant to this Initial Advance Notice
|
|
Initial Advance Date
|
|
E-7
|
Amount of Equity
Contribution
to be made
concurrently with the
submission of this
Initial
Advance Notice
|
Aggregate amount of all
Equity
Contributions made,
including the Equity
Contribution to be made
concurrently with the
submission of this Initial
Advance Notice
|
|
Initial Advance Date
|
|
|
|
Description of each Project
Cost being financed with
proceeds of this Initial
Advance Notice
|
Amount of each Project Cost
being financed with
proceeds of this Initial
Advance Notice
|
|
Initial Advance Date
|
|
|
|
Identity of each payee to be
paid with proceeds of this
Initial Advance Notice
|
Amount of payment to be
made to
each payee with
proceeds of this Initial
Advance
Notice
|
|
Initial Advance Date
|
|
|
E-8
Annex 2
to Exhibit E
of the Loan
Guarantee Agreement
FFB Advance Request
Attached
E-9
Annex 3
to Exhibit E
of the Loan
Guarantee Agreement
Additional Project Documents
E-10
Annex 4
to Exhibit E
of the Loan
Guarantee Agreement
Contracts with Major Vendors
E-11
Annex 5
to Exhibit E
of the Loan
Guarantee Agreement
Description of Eligible Project Costs
E-12
Annex 6
to Exhibit E
of the Loan
Guarantee Agreement
Third-Party Consents and Governmental Approvals
E-13
Annex 7
to Exhibit E
of the Loan
Guarantee Agreement
Payment and Performance Bonds
E-14
Annex 8
to Exhibit E
of the Loan
Guarantee Agreement
Required Insurance
E-15
Annex 9
to Exhibit E
of the Loan
Guarantee Agreement
Other Certificates and Documents
E-16
[Annex 10
to Exhibit E
of the Loan
Guarantee Agreement
Waiver of Conditions Precedent]
E-17
Exhibit F
to the Loan Guarantee
Agreement
[FORM OF] ADVANCE NOTICE
(Delivered pursuant to Sections 2.3 and 4.3 of the Loan
Guarantee Agreement)
Date of this Notice: [___]
Requested Advance Date: [___]
To:
|
U.S. Department of
Energy, as Guarantor
|
U.S. Department of Energy, as Loan
Servicer
|
|
Loan Programs
Office, Loan Guarantee Program
|
Loan Programs Office, Loan
Guarantee Program
|
|
1000 Independence
Ave., S.W.
|
1000 Independence Ave., S.W.
|
|
Washington, D.C.
20585
|
Washington, D.C. 20585
|
|
Attn: Director,
Portfolio Management
|
Attn: Director, Portfolio
Management
|
|
Re: DOE Loan
Guarantee, Loan Programs
|
Re: DOE Loan Guarantee, Loan
Programs
|
|
Office Loan #1052
|
Office Loan #1052
|
PNC Bank, National Association,
doing business as Midland Loan Services, a division of PNC Bank, National Association,
as Collateral Agent
10851 Mastin Street, Suite 700
Overland Park, KS 66210
Attention: Government Services
Re: DOE Loan Guarantee, Loan Programs Office Loan #1052
cc:
PNC Bank, National Association,
doing business as Midland Loan Services, a division of PNC Bank, National Association,
as Administrative Agent
10851 Mastin Street, Suite 700
Overland Park, KS 66210
Attention: Government Services
Re: DOE Loan Guarantee, Loan Programs Office Loan #1052
Luminate, LLC, as Independent Engineer
1891 Broadway, Suite
1620
Denver, Colorado 80202
Attn: John Neff
Re: DOE Loan Guarantee, Loan Programs Office Loan #1052
Ladies and Gentlemen:
F-1
This Advance Notice is delivered to you pursuant to the Loan
Guarantee Agreement, dated as of February 23, 2011, among USG Oregon LLC, a
limited liability company organized and existing under the laws of the State of
Delaware, the U.S. Department of Energy, an agency of the United States of
America, acting by and through the Secretary of Energy ("
DOE
"), as
provider of the DOE Guarantee, DOE, acting by and through authority delegated by
the Secretary of Energy to the Loan Programs Office, as Loan Servicer, Midland
Loan Services, Inc., as administrative agent for DOE and Loan Servicer, and
Midland Loan Services, Inc., as collateral agent for the Secured Parties (as
amended, amended and restated, restated, supplemented or otherwise modified from
time to time, the "
Loan Guarantee Agreement
").
All capitalized terms used in this Advance Notice shall have
their respective meanings specified in the Loan Guarantee Agreement.
The undersigned has read the provisions of the Loan Guarantee
Agreement and the other Loan Documents that are relevant to the furnishing of
this Advance Notice. To the extent that this Advance Notice evidences, attests
or confirms compliance with any covenants or conditions precedent provided for
in the Loan Guarantee Agreement or any other Loan Documents, the Borrower has
made such examination or investigation as was, in its opinion, necessary to
enable it to express an opinion as to whether such covenants or conditions have
been complied with.
The undersigned, an Authorized Official of the Borrower, HEREBY
CERTIFIES for the benefit of each of DOE, the Loan Servicer and the Collateral
Agent that, as of the date hereof and on the Requested Advance Date for such
Advance:
|
1.
|
this Advance Notice constitutes a request for an Advance
of $[___] under the DOE Credit Facility Commitment made pursuant to the
Loan Guarantee Agreement and the DOE Credit Facility Documents, such
amount being in accordance with the minimum amount and increments required
by the DOE Credit Facility Documents;
|
|
|
|
|
2.
|
the Requested Advance Date for the Advance is
[___];
|
|
|
|
|
3.
|
Annex 1
attached hereto sets forth with respect to
the Advance:
|
|
|
•
|
the amount of Base Equity contributed on, or prior to,
the date hereof to the Borrower, including the amount contributed in the
form of Base Equity Letters of Credit;
|
|
|
|
|
|
|
•
|
the amount of Overrun Equity that has been directly or
indirectly contributed by the Sponsor to the Borrower in connection with
the Advance or which will concurrently with the Advance be contributed
directly or indirectly by the Sponsor to the Borrower;
|
|
|
|
|
|
|
•
|
the aggregate amount, on a prospective basis after giving
effect to the requested Advance and Equity Contributions made on, or prior
to, the Requested Advance Date, of (a) all Advances outstanding under the
DOE Credit Facility Documents and (b) all Equity Contributions;
|
F-2
|
|
•
|
the Project Costs being financed
or reimbursed using the proceeds of the Advance; and
|
|
|
|
|
|
|
•
|
the payees to whom the proceeds
of the requested Advance are to be paid, including
[
(a) each
Material Project Party [(including Turbine Air Systems)] to whom the
proceeds of the requested Advances are to be paid directly, and the amount
of such payments, (b) the required Reserve Accounts to be funded and the
amount to be funded into each such Reserve Account, (c) the amount to be
paid to the Borrower, to reimburse the Borrower for Eligible Project Costs
previously paid by the Borrower, in each case in accordance with the
Construction Budget, taking into account any Approved Budget Changes and
(d) interest to be capitalized
]
;
1
|
|
4.
|
attached hereto as
Annex 2
is an executed copy of
the FFB Advance Request dated [ ] and delivered to the Loan Servicer on [
] (with copies to DOE and FFB), with respect to the requested Advance,
together with any information necessary for FFB and DOE to process such
request, including all wire transfer information for the designated payees
of the proceeds of such Advance;
2
|
|
|
|
|
5.
|
attached hereto as
Annex 3
are true, correct and
complete copies of all Additional Project Documents entered into since the
most recent Requested Advance Date and any other Additional Project
Documents that have not previously been delivered to the Loan Servicer,
and a list of such Additional Project Documents is included as the first
page(s) of Annex 3;
|
|
|
|
|
6.
|
attached hereto as
Annex 4
are copies of invoices
evidencing that the proceeds of all Advances made since the Advance Notice
Date for the previous Advance have been applied to Project Costs in
accordance with the applicable Advance Notice or as otherwise approved by
the Loan Servicer, and a list of such invoices is included as the first
page(s) of Annex 4;
|
|
|
|
|
7.
|
attached hereto as
Annex 5
is a reasonably
detailed description of the Eligible Project Costs that have been or will
be incurred by the Requested Advance Date;
|
|
|
|
|
8.
|
attached hereto as
Annex 6
are all other
certificates and documentation required in respect of such Advance under
the FFB Documents and the Loan Documents, including invoices evidencing
the Project Costs being financed using the proceeds of the requested
Advance, and a list of such certificates and documentation is included as
the first page(s) of Annex 6;
|
|
|
|
|
9.
|
(a) attached hereto as
Annex 7
are true, correct
and complete copies of all certificates or policies with respect to any
additional renewal or substitute insurance obtained by the Borrower since
the previous Advance Date, designating the Collateral Agent as loss payee,
as appropriate, and the Secured Parties as additional insured and a list
of such certificates and or policies is included as the first page(s) of
Annex 6and (b) all Required Insurance is in place, in good standing and in
full force and effect without default and all premiums due
thereon
[
have been paid in full
] [
are to be
paid with the proceeds of the requested Advance
] [
are to be paid by
other arrangements satisfactory to the Loan Servicer
]
3
;
|
_________________________________________
|
1
|
Note: Conform as necessary.
|
|
2
|
Note: Date of delivery to Loan Servicer must be no less
than six Business Days prior to the Requested Advance
Date.
|
F-3
|
10.
|
attached hereto as
Annex 8
is a pro forma date
down title endorsement or title continuation dated as of a recent date,
which, when issued, will evidence the Borrower's continued ownership of
unencumbered leasehold title (subject only to Permitted Liens), under the
relevant laws of the State of Oregon, of the Project Site as are necessary
for the development of the Project; the undersigned further certifies that
the Borrower shall submit to the Loan Servicer a date down title
endorsement or title continuation dated no earlier than one Business Day
prior to the Requested Advance Date as evidence of the Borrower's
continued ownership of unencumbered leasehold title (subject only to
Permitted Liens), under the relevant laws of the State of Oregon, of the
Project Site as are necessary for the development of the
Project;
|
|
|
|
|
11.
|
[
attached hereto as
Annex 9
is evidence
that Base Equity in the amount of $[___________], such amount being equal
to or greater than twenty five percent (25%) of the total funds needed as
of the Requested Advance Date to fund the Initial Cap-Ex Funding Amount,
the Short-Term Wellfield Funding Amount or the Initial Long-Term Wellfield
Drilling Funding Amount, shall have been or will be funded into the Cap-Ex
Reserve Account, the Short-Term Wellfield Drilling Reserve Account or the
Long-Term Wellfield Drilling Reserve Account prior to, or on, the
Requested Advance Date;
]
|
|
|
|
|
12.
|
all applicable conditions precedent described in Section
4.3 of the Loan Guarantee Agreement have been satisfied, or as of the
Requested Advance Date will be satisfied
[
or waived by
DOE
]
4
in accordance with the terms of the Loan Guarantee
Agreement
[
, and a reasonably detailed description of such waiver(s)
is attached hereto as
Annex 10
]
;
|
|
|
|
|
13.
|
the Project Costs being financed or reimbursed using the
proceeds of the requested Advance are Eligible Project Costs;
|
|
|
|
|
14.
|
(a) there have been no changes to the Construction Budget
since the previous Advance Date, except for Approved Construction Changes
and (b) the aggregate amount expended for each type of Project Cost does
not exceed the aggregate amount budgeted for such type of cost in the
Construction Budget, except for Approved Construction Changes;
|
|
|
|
|
15.
|
all required taxes, all DOE Credit Facility Fees, Agents'
Fees, all Periodic Expenses, and all recordation and other costs and fees
including those due in connection with the execution, delivery, filing,
registration, or performance of the Transaction Documents, the creation
and perfection of the security interests in the Collateral, or otherwise
incurred and invoiced prior to the Advance Notice Date
[
have been
paid in full
][
are to be paid with proceeds of the requested Initial
Advance (only in the event that such amounts are Eligible Project
Costs)
][
are to be paid by other arrangements satisfactory to the
Loan Servicer
]
;
5
|
|
|
|
|
16.
|
on both the Advance Notice Date and the Requested Advance
Date, the representations and warranties in the Loan Documents (other than
those that speak only as to an earlier
date, which shall be true and correct as of such earlier date)
are true and correct in all material respects (other than those qualified
by materiality or Material Adverse Effect, which shall be true and correct
in all respects) and no Event of Default or Potential Default has occurred
and is continuing;
|
_________________________________________
|
3
|
Note: Include only those bracketed clauses that are
relevant.
|
|
4
|
Note: If a condition has not been satisfied but has been
waived by DOE, provide details of any waiver by attaching Annex
8.
|
|
5
|
Note: Include only those bracketed clauses that are
relevant.
|
F-4
|
17.
|
since the Financial Closing Date, no event (including any
legal, arbitral or other dispute review proceeding, whether proceeding,
pending or threatened, or any Change of Law) has occurred or could
reasonably be expected to occur, that has had or could reasonably be
expected to have a Material Adverse Effect;
|
|
|
|
|
18.
|
the Advance will not result in a violation of any law,
Transaction Document, Governmental Approval, or any other agreement or
consent to which the Borrower is a party or any judgment or approval to
which it is subject;
|
|
|
|
|
19.
|
the Borrower has not received a Drawstop Notice with
respect to the Advance;
|
|
|
|
|
20.
|
the Borrower is in compliance with (a) its obligations
under the Loan Documents, including all affirmative covenants and negative
covenants, and has furnished all information requested under the Loan
Documents, and (b) all Program Requirements required to have been
satisfied as of the Requested Advance Date;
|
|
|
|
|
21.
|
the Borrower has timely complied in all material respects
with (a) the requirements set forth in
Section 6.26
and
Exhibit
C
of the Loan Guarantee Agreement with respect to the Davis- Bacon
Act, including the requirements set out in
Section 6.26(c)
with
respect to the payment of back wages pursuant to the Davis-Bacon Act or
has obtained an exemption from such requirement, and (b) its reporting
requirements under
Section 6.24(a)
with respect to the Recovery
Act;
|
|
|
|
|
22.
|
the Borrower has delivered to the Loan Servicer, the
Collateral Agent and DOE the most recent Construction Progress Report
required to be provided pursuant to Section 6.1(a)(i) of the Loan
Guarantee Agreement;
|
|
|
|
|
23.
|
[the "Prepayment Election" (as defined in the FFB
Promissory Note) for the requested Advance, as set forth in the FFB
Advance Request, is [_____________];]
6
|
|
|
|
|
24.
|
the Borrower has otherwise complied with the procedures,
conditions and requirements specified in the Loan Guarantee Agreement and
the other Loan Documents in connection with the Advance requested
hereunder.
|
[Signature page
follows]
_________________________________________
|
6
|
Note: Only include if applicable.
|
F-5
IN WITNESS WHEREOF, the undersigned has executed this Advance
Notice as of the date hereof.
USG OREGON LLC
By:
____________________________________
Name:
[
]
Title:
[
]
Attachments:
Annex 1: Advance Amounts
Annex 2: FFB
Advance Request
Annex 3: Additional Project Documents
Annex 4:
Invoices
Annex 5: Description of Eligible Project Costs
Annex 6: Other
Certificates and Documentation
Annex 7: Required Insurance
Annex 8: Pro
Forma Date Down Title Endorsement or Title Continuation
[Annex 9: Overrun
Equity Funding Certain Reserve Accounts]
[Annex 10: Waiver of Conditions Precedent]
F-6
Annex 1
to Exhibit F
of the Loan
Guarantee Agreement
Advance Amounts
|
Amount of Base Equity
contributed on, or prior to,
the date hereof to
the
Borrower
|
Balance of Base Equity for
Eligible Project Costs
|
|
Financial Closing Date
|
|
|
|
Advance Date
|
|
|
|
[date]
|
|
|
|
[date]
|
|
|
|
Amount of Overrun Equity that has been
or will be concurrently with the Advance,
directly or
indirectly contributed by the
Sponsor to the Borrower
|
|
Financial Closing Date
|
|
|
Advance Date
|
|
|
[date]
|
|
|
[date]
|
|
|
Amount of Advance
requested
pursuant to this
Advance Notice
|
Aggregate amount of all
Advances requested,
including the Advance
requested pursuant to this
Advance Notice
|
|
Advance Date
|
|
|
|
[date]
|
|
|
|
[date]
|
|
|
F-7
|
Amount of Equity
Contribution
to be made
concurrently with the
submission of
this
Advance Notice
|
Aggregate amount of all
Equity
Contributions
made, including the Equity
Contribution to be made
concurrently with the
submission of this
Advance Notice
|
|
Advance Date
|
|
|
|
[date]
|
|
|
|
[date]
|
|
|
|
Description of each Project
Cost being financed with
proceeds of this
Advance Notice
|
Amount of each Project
Cost
being financed with
proceeds of this
Advance
Notice
|
|
Advance Date
|
|
|
|
[date]
|
|
|
|
[date]
|
|
|
|
Identity of each payee to be
paid with proceeds of this
Advance Notice
|
Amount of payment to be
made to
each payee with
proceeds of this
Advance Notice
|
|
Advance Date
|
|
|
|
[date]
|
|
|
|
[date]
|
|
|
F-8
Annex 2
to Exhibit F
of the Loan
Guarantee Agreement
FFB Advance Request
Attached
F-9
Annex 3
to Exhibit F
of the Loan
Guarantee Agreement
Additional Project Documents
F-10
Annex 4
to Exhibit F
of the Loan
Guarantee Agreement
Invoices
F-11
Annex 5
to Exhibit F
of the Loan
Guarantee Agreement
Description of Eligible Project Costs
F-12
Annex 6
to Exhibit F
of the Loan
Guarantee Agreement
Other Certificates and Documentation
F-13
Annex 7
to Exhibit F
of the Loan
Guarantee Agreement
Required Insurance
F-14
Annex 8
to Exhibit F
of the Loan
Guarantee Agreement
Pro Forma Date Down Title Endorsement or Title
Continuation
F-15
[
Annex 9
to Exhibit F
of
the Loan Guarantee Agreement
Overrun Equity Funding Certain Reserve Accounts]
F-16
[
Annex 10
to Exhibit F
of
the Loan Guarantee Agreement
Waiver of Conditions Precedent]
F-17
Exhibit G
to the Loan Guarantee
Agreement
[FORM OF] QUARTERLY REPORTING CERTIFICATE
(Delivered pursuant to Section 6.1(b) of the Loan Guarantee
Agreement)
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
Ladies and Gentlemen:
This Quarterly Reporting Certificate (the "
Certificate
")
is delivered to you pursuant to Section 6.1(b) of that certain Loan Guarantee
Agreement, dated as of February 23, 2011, among USG Oregon, LLC, a limited
liability company organized and existing under the laws of the State of
Delaware, the U.S. Department of Energy, an agency of the United States of
America, acting by and through the Secretary of Energy ("
DOE
"), as
provider of the DOE Guarantee, DOE, acting by and through authority delegated by
the Secretary of Energy to its Loan Programs Office, as loan servicer, Midland
Loan Services, Inc., as administrative agent for DOE and loan servicer, and
Midland Loan Services, Inc., as collateral agent for the Secured Parties (as
amended, amended and restated, restated, supplemented or otherwise modified from
time to time, the "
Loan Guarantee Agreement
").
All capitalized terms used in this Certificate which are not
defined herein shall have their respective meanings specified in Exhibit A to
the Loan Guarantee Agreement. Unless otherwise specified, all section references
herein refer to sections of the Loan Guarantee Agreement.
The undersigned, an Authorized Official of the Borrower, HEREBY
CERTIFIES for the benefit of each Secured Party that, as of the date hereof:
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1.
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[For each fiscal quarter prior to the Project
Completion Date]
Pursuant to Section 6.1(b)(i), [attached hereto as
Schedule 6.1(b)(i)
are true and complete copies of the updated
Financial Plan and the Construction Budget, as updated or supplemented by
all Approved Construction Changes] [no changes or updates to the Financial
Plan and the Construction Budget are required for the fiscal quarter
ending [ _________ ], 20[__]].
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2.
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[For each fiscal quarter prior to the Project
Completion Date]
Pursuant to Section 6.1(b)(ii), attached hereto as
Schedule 6.1(b)(ii)
is a certification of an Authorized Official of
the Borrower and the Independent Engineer that (i) the proceeds of all
Advances to be made with respect to the fiscal quarter ending [ _________
], 20[__] will be needed for Eligible Project Costs that have been or will
be incurred and attached thereto is a description in reasonable detail of
such Eligible Project Costs and (ii) all Advances made with respect to the
immediately preceding fiscal quarter have been applied as set forth in the
prior certification with respect to such fiscal quarter, or as otherwise
approved by the Loan Servicer.
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G-1
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3.
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[For each fiscal quarter prior to the Project
Completion Date]
Pursuant to Section 6.1(b)(iii), attached hereto as
Schedule 6.1(b)(iii)
are unaudited quarterly Financial Statements
of the Sponsor prepared in accordance with GAAP and certified by a
Financial Officer of the Sponsor as having been prepared in accordance
with GAAP (except for changes with which the Sponsor’s Accountant concurs)
on a consistent basis and as fairly presenting in all material respects
the financial condition of the Sponsor as of the date thereof and the
results of operations and cash flows of the Sponsor for the periods
presented.
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4.
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[For each fiscal quarter prior to the Project
Completion Date]
Pursuant to Section 6.1(b)(iv), attached hereto as
Schedule 6.1(b)(iv)
is a certification of an Authorized Official of
the Insurance Advisor, that (i) all Required Insurance is in place, in
good standing and in full force and effect without default and all
premiums due thereon have been paid in full or are to be paid by
arrangements satisfactory to the Loan Servicer and (ii) all certificates
or policies with respect to any additional renewal or substitute insurance
obtained by the Borrower since the later of the Financial Closing Date or
the date of the previous certificate delivered pursuant to Section
6.1(b)(iv), designate the Collateral Agent as loss payee, as appropriate,
and the Secured Parties as additional insured.
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5.
|
Pursuant to Section 6.1(b)(v), attached hereto as
Schedule 6.1(b)(v)
are unaudited Financial Statements and reports
of the Borrower as of the end of such quarterly period.
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6.
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Pursuant to Section 6.1(b)(vi), attached hereto as
Schedule 6.1(b)(vi)
is a discussion and analysis by a Financial
Officer of the Borrower of the business and operations of the Borrower
with respect to the fiscal quarter ending [ _________ ], 20[ __ ],
including (i) a statement of all material financial transactions (other
than any transactions contemplated under the Transaction Documents)[,]
[and] (ii) a report of all transactions involving the Borrower, on the one
hand, and on the other hand the Sponsor or Investor or any Affiliate of
the Sponsor (other than transactions directly pursuant to and in
accordance with the Management Services Agreement) or Investor [and (iii)
(for each fiscal quarter that includes all or a portion of the
Operating Period)
calculations showing compliance with the
requirements of Section 7.14 and certification of such compliance
(or
if such certification cannot be made, an explanation therefor and what
corrective action the Borrower has taken or proposes to take with respect
thereto)
].
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7.
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[For each fiscal quarter that includes all or a
portion of the Operating Period]
Pursuant to Section 6.1(b)(vii),
attached hereto as
Schedule 6.1(b)(vii)
is a summary operating
report, which includes a detailed assessment of the Project’s performance
in comparison with the Operating Forecast and Operating Plan then in
effect for the fiscal quarter ending [ _________ ], 20[__], including
basic data relating to the operation of the Project, pricing information,
unusual maintenance activity, material casualty losses, material disputes
between the Borrower and any Person, and material non-compliance with any
Governmental Approvals.
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8.
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[For each fiscal quarter that includes all or a
portion of the Operating Period]
Pursuant to Section 6.1(b)(viii),
attached hereto as
Schedule 6.1(b)(viii)
is an updated
Operating Plan for the next four fiscal
quarters[,] [and] an updated Operating Forecast for the next four fiscal
quarters [and
(if requested by the Loan Servicer)
updated Base Case
Projections], in each case in form and substance satisfactory to the Loan
Servicer.
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G-2
IN WITNESS WHEREOF, the undersigned has executed this Quarterly
Reporting Certificate as of the date first written above.
USG OREGON LLC
____________________________________
Name:
[
]
Title:
[
]
G-3
Schedule 6.1(b)(i)
to Exhibit G to the Loan Guarantee
Agreement
Updated Financial Plan and Construction Budget
[For each fiscal quarter prior to the Project Completion
Date]
[Attach copies of the updated Financial Plan and the
Construction Budget]
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
The undersigned, an Authorized Official of the Borrower, HEREBY
CERTIFIES for the benefit of each Secured Party that, as of the date hereof:
1. Pursuant to Section 6.1(b)(i)
of the Loan Guarantee Agreement, [attached hereto are true and complete copies
of an updated Financial Plan and Construction Budget, as updated or supplemented
by all Approved Construction Changes] [no changes or updates to the Financial
Plan and the Construction Budget are required for the fiscal quarter ending [
_________ ], 20[__].
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date first written above.
USG OREGON LLC
____________________________________
Name:
[
]
Title:
[
]
G-4
Schedule 6.1(b)(ii)
to Exhibit G to the Loan Guarantee
Agreement
Certification by Authorized Officials of the Borrower
and
the Independent Engineer Regarding Advances
[For each fiscal quarter prior to the Project Completion
Date]
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
The undersigned, Authorized Officials of the Borrower and the
Independent Engineer, HEREBY CERTIFY for the benefit of each Secured Party that,
as of the date hereof:
1. Pursuant to Section 6.1(b)(ii)
of the Loan Guarantee Agreement, (i) the proceeds of all Advances to be made
with respect to the fiscal quarter ending [ _________ ], 20[ __ ] will be needed
for Eligible Project Costs that have been or will be incurred and attached
hereto is a description in reasonable detail of such Eligible Project Costs and
(ii) all Advances made with respect to the immediately preceding fiscal quarter
have been applied as set forth in the prior certification with respect to such
fiscal quarter, or as otherwise approved by the Loan Servicer.
IN WITNESS WHEREOF, the undersigned have executed this
certificate as of the date first written above.
USG OREGON LLC,
as
Borrower
____________________________________
Name:
[
]
Title:
[
]
LUMINATE, LLC,
as
Independent Engineer
____________________________________
Name:
[
]
Title:
[
]
G-5
Schedule 6.1(b)(iii)
to Exhibit G to the Loan Guarantee
Agreement
Certification by Financial Officer of Sponsor
Regarding
Unaudited Quarterly Financial
Statements
[For each fiscal quarter prior to the Project Completion
Date]
[Attach unaudited quarterly Financial Statements]
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
Pursuant to Section 6.1(b)(iii) of the Loan Guarantee
Agreement, the undersigned, a Financial Officer of the Sponsor, HEREBY CERTIFIES
for the benefit of each Secured Party that, as of the date hereof:
1. The Financial Statements of
the Sponsor as of [ _________ ], 20[__] have been prepared in accordance with
GAAP (except for changes with which the Sponsor’s Accountant concurs) on a
consistent basis and fairly present in all material respects the financial
condition of the Sponsor as of the date thereof and the results of operations
and cash flows of the Sponsor for the periods presented.
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date first written above.
US GEOTHERMAL, INC.
____________________________________
Name:
[
]
Title:
[
]
G-6
Schedule 6.1(b)(iv)
to Exhibit G to the Loan Guarantee
Agreement
Certification by Authorized Official of the Insurance
Advisor
[For each fiscal quarter prior to the Project Completion
Date]
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
Pursuant to Section 6.1(b)(iv) of the Loan Guarantee Agreement,
the undersigned, an Authorized Official of the Insurance Advisor, HEREBY
CERTIFIES for the benefit of each Secured Party that, as of the date hereof:
1. All Required Insurance is in
place, in good standing and in full force and effect without default and all
premiums due thereon have been paid in full or are to be paid by arrangements
satisfactory to the Loan Servicer.
2. All certificates or policies
with respect to any additional renewal or substitute insurance obtained by the
Borrower since the later of the Financial Closing Date or the date of the
previous certificate delivered pursuant to Section 6.1(b)(iv) designate the
Collateral Agent as loss payee, as appropriate, and the Secured Parties as
additional insured.
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date first written above.
[INSURANCE ADVISOR]
___________________________________
Name:
[
]
Title:
[
]
G-7
Schedule 6.1(b)(v)
to Exhibit G to the Loan Guarantee
Agreement
Unaudited Financial Statements and Reports of the
Borrower
[For every fiscal quarter]
[Attach unaudited Financial Statements and reports]
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
The undersigned, an Authorized Official of the Borrower, HEREBY
CERTIFIES for the benefit of each Secured Party that, as of the date hereof:
1. Pursuant to
Section 6.1(b)(v) of the Loan Guarantee Agreement, attached hereto are true and
complete copies of the unaudited Financial Statements and reports of the
Borrower as of the end of the fiscal quarter ending [ _________ ], 20[__].
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date first written above.
USG OREGON LLC
____________________________________
Name:
[
]
Title:
[
]
G-8
Schedule 6.1(b)(vi)
to Exhibit G to the Loan Guarantee
Agreement
Discussion and Analysis by Financial Officer of
Borrower
[For every fiscal quarter]
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
Pursuant to Section 6.1(b)(vi) of the Loan Guarantee Agreement,
the undersigned, a Financial Officer of the Borrower, HEREBY REPORTS with
respect to the fiscal quarter ending [
_________ ], 20[__] as follows:
1. The following is a
summary of all material financial transactions (other than transactions
contemplated under the Transaction Documents):
[Describe
transactions]
2. The following are all of
the transactions involving the Borrower, on the one hand, and on the other hand
the Sponsor of Investor or any Affiliate of the Sponsor (other than transactions
directly pursuant to and in accordance with the Management Services Agreement)
or Investor:
[Describe
transactions]
3.
[For each
fiscal quarter that includes all or a portion of the Operating Period]
The
undersigned certifies that the following calculations show compliance with the
requirements of Section 7.14:
[Show
or attach calculations of the Debt Service Coverage Ratio]
[Or
if such certification cannot be made, provide an explanation therefor and what
corrective action the Borrower has taken or proposes to take with respect
thereto]
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date first written above.
USG OREGON LLC
____________________________________
Name:
[
]
Title:
[
]
G-9
Schedule 6.1(b)(vii)
to Exhibit G to the Loan Guarantee
Agreement
Summary Operating Report
[For each fiscal quarter that includes all or a portion of
the Operating Period]
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
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The undersigned, an Authorized Official of the Borrower,
HEREBY CERTIFIES for the benefit of each Secured Party that, as of the
date hereof:
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Pursuant to Section 6.1(b)(vii) of the Loan Guarantee
Agreement, attached is a summary operating report for the fiscal quarter
ending [ ________ ], 20[__] that provides a detailed assessment of the Project’s
performance in comparison with the Operating Forecast and Operating Plan
in effect for such period, including a description of:
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(i)
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basic data relating to operation and maintenance of the
Project, including, but not limited to:
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a.
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production well performance data, including (I) monthly
per well flow/temperature, monthly total flow/temperature to the power
plant, (II) annual flow summary by month per well and total monthly supply
to the power plant, and cumulative annual totals by well and supply to the
power, (III) description and status of any material problems with the
production wells, (IV) description and status of maintenance activities,
including any required pump maintenance, and (V) description of look ahead
activities;
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b.
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injection well performance data, including (I) monthly
per well flow/temperature, monthly injection total flow/temperature, (II)
annual injection summary by month per well and total monthly injection
flow, and cumulative annual totals by well and total injection, (III)
description and status of maintenance activities, (IV) description of look
ahead activities, and (V) monthly total injection data;
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c.
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material information regarding the operations and
maintenance of the gathering system;
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d.
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data regarding power plant status and performance,
including (I) unit performance and total plant performance, (II) unit
availabilities/plant availability by month and any planned or unplanned
outages/cumulative annual availabilities, (III) by unit and total plant
equipment problems and status, (IV) planned maintenance activities and
status, and (V) actions identifying and addressing trends or reoccurring
issues;
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e.
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data regarding plant generation performance, including
overall availability and any planned or unplanned outages, (I) plant
gross/net generation, (II) net generation sold to Idaho Power, (III) any material
transmission or supply problems;
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G-10
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(ii)
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pricing information;
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(iii)
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unusual operating or maintenance activity not already
included;
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(iv)
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material casualty losses;
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(v)
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material disputes between the Borrower and any Person;
and
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(vi)
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material non-compliance with any Governmental
Approvals.
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IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date first written above.
USG OREGON LLC
____________________________________
Name:
[
]
Title:
[
]
G-11
Schedule 6.1(b)(viii)
to Exhibit G to the Loan Guarantee
Agreement
Updated Operating Plan
[For each fiscal quarter that includes all or a portion of
the Operating Period]
[Attach (i) updated Operating Plan and Operating Forecast for
the next four fiscal quarters and (ii) Base Case Projections if requested by the
Loan Servicer]
Date: [___]
U.S. Department of Energy, as Loan Servicer
Attn: [
____________]
Re: [ _________________], [ ____________]
The undersigned, an Authorized Official of the Borrower, HEREBY
CERTIFIES for the benefit of each Secured Party that, as of the date hereof:
1. Pursuant to Section
6.1(b)(viii) of the Loan Guarantee Agreement, attached hereto are an updated
Operating Plan for the next four fiscal quarters[,] [and] an updated Operating
Forecast for the next four fiscal quarters [and
(if requested by the Loan
Servicer)
updated Base Case Projections], in each case in form and substance
satisfactory to the Loan Servicer.
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the date first written above.
USG OREGON LLC
____________________________________
Name:
[
]
Title:
[
]
G-12
Exhibit H
to the Loan Guarantee
Agreement
[FORM OF] WARRANT AGREEMENT
NEITHER THIS COMMON STOCK PURCHASE WARRANT ("
WARRANT
")
NOR THE SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "
ACT
"), OR
APPLICABLE STATE SECURITIES LAWS AND NEITHER MAY BE OFFERED, PLEDGED, SOLD,
ASSIGNED, OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS, OR UNLESS SUCH OFFER, PLEDGE, SALE, ASSIGNMENT
OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH
STATE SECURITIES LAWS.
|
Warrant No. [____]
|
Number of Shares:
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As indicated below
|
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Date of Issuance: _____________, 20111
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U.S. GEOTHERMAL, INC.
COMMON STOCK PURCHASE WARRANT (THE "WARRANT")
1. U.S.
Geothermal, Inc., a Delaware corporation (the "
Company
"), for value
received, hereby certifies that the U.S. Department of Energy, an agency of the
United States of America, acting by and through the Secretary of Energy
("
DOE
") or its registered assigns (the "
Holder
"), is entitled,
subject to the terms below, to purchase from the Company, at any time after the
date hereof and on or before the Expiration Date (as defined in
Section 7
(
Expiration
)
), five hundred thousand (500,000) shares
of common stock of the Company, par value $0.001 per share (the "
Common
Stock
"), subject to adjustment as provided herein, at an exercise price of
$5.00 per share, subject to adjustment as provided herein (the "
Exercise
Price
"). This Warrant is issued in connection with that certain Loan
Guarantee Agreement, dated as of February 23, 2011 (as amended, amended and
restated, restated, supplemented or otherwise modified from time to time, the
"
Loan Guarantee Agreement
"), among USG Oregon, LLC, a limited liability
company organized and existing under the laws of the State of Delaware, an
indirect subsidiary of the Company (the "
Borrower
"), DOE, acting by and
through the Secretary of Energy as provider of the DOE Guarantee, DOE, acting by
and through authority delegated by the Secretary of Energy to its Loan Programs
Office, as loan servicer, PNC Bank, National Association, doing business as
Midland Loan Services, a division of PNC Bank, National Association
("
Midland
"), as administrative agent for DOE and loan servicer, and
Midland, as collateral agent for the Secured Parties, pursuant to which DOE will
guarantee certain loans made by the Federal Financing Bank to the Borrower. The shares of the Common Stock to be issued to the
Holder upon exercise of this Warrant, as adjusted from time to time pursuant to
the provisions of this Warrant, are hereinafter referred to as the "
Warrant
Shares
." Capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in the Loan Guarantee Agreement.
2.
Exercise
.
(a)
Manner of Exercise
.
This Warrant may be exercised by the
Holder in whole or in part at any time or from time to time on any business day
during the Exercise Period (as defined in
Section 7
(
Expiration
)
), by surrendering this Warrant, with the
exercise form appended hereto as
Exhibit A
, duly executed by such Holder
or by such Holder's duly authorized attorney, at the principal office of the
Company at the address set forth in
Section 14 (
Notices and Other
Communications
), accompanied by payment of the Exercise Price (which may
be made by wire transfer as described in
Section 2(b)
). If this Warrant
shall be exercised in part, the Holder shall be entitled to receive a new
Warrant covering the number of Warrant Shares in respect of which this Warrant
shall not have been exercised. A Warrant surrendered for exercise shall be
canceled (and in the case of a partial exercise, such cancellation shall occur
simultaneously with the issuance of the new Warrant covering the unexercised
Warrant Shares). Payment of the Exercise Price may also be made by means of a
"cashless exercise" to the extent provided in the exercise form appended hereto
as
Exhibit A
.
(b)
Payment
of Exercise Price
.
Unless and to the extent payment of the
Exercise Price is made by means of a "cashless exercise", the Exercise Price
shall be paid (i) by cash or check or (ii) by wire transfer of immediately
available funds to an account of the Company as designated by the Company.
(c)
Effectiveness
.
The exercise of this Warrant shall be deemed to have been effected
immediately prior to 5:00 p.m., New York City time, on the day on which this
Warrant shall have been surrendered to the Company as provided in
Section
2(a)
. At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as provided
in
Section 2(d)
shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates, whether or not
the stock transfer books of the Company shall then be closed.
(d)
Delivery to the Holder
.
Promptly after the exercise of this
Warrant, and in any event within five (5) days after the exercise thereof, the
Company, at the Holder's expense, will cause to be issued in the name of and
delivered to the Holder, or as the Holder may direct, a certificate or
certificates for the number of Warrant Shares to which such Holder shall be
entitled.
- H-2 -
3.
Adjustments
.
(a)
Stock Splits and Dividends
.
If the Company, at any time
while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock
or otherwise makes a distribution in any class of capital stock that is payable
in shares of the Common Stock, (ii) subdivides outstanding shares of the Common
Stock into a greater number of shares, or (iii) combines outstanding shares of
the Common Stock into a smaller number of shares, then the number of the Warrant
Shares for which this Warrant is exercisable at the time of the record date for
such dividend or of the effective date of such subdivision or combination shall
be proportionately adjusted so that the Holder of this Warrant shall be entitled
to receive the aggregate number of the outstanding shares of the Common Stock of
the Company which, if this Warrant had been exercised immediately prior to such
time, it would have owned upon such exercise and been entitled to receive upon
such dividend, subdivision or combination. Such adjustments shall be made
successively whenever any event listed above shall occur, but no duplicative
adjustment shall be made hereunder.
(b)
Fundamental
Transactions
. If at any time while this Warrant is outstanding, (i) the
Company effects any merger or consolidation of the Company with any other
Person, (ii) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange, pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision, dividend
or combination of shares of Common Stock covered by
Section 3(a)
above)
(in any such case, a "
Fundamental Transaction
"), then the Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the same
amount and kind of securities, cash or property as it would have been entitled
to receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of the number of
Warrant Shares then issuable upon exercise in full of this Warrant (the
"
Alternate Consideration
"). The aggregate Exercise Price for this Warrant
will not be affected by any such Fundamental Transaction, but the Company shall
apportion such aggregate Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction. In the event of a Fundamental Transaction, the Company or the
successor or purchasing Person, as the case may be, shall execute with the Holder a
written agreement providing that:
- H-3 -
(A) this
Warrant shall thereafter entitle the Holder to purchase the Alternate
Consideration in accordance with this
Section 3(b)
;
(B)
in the case of any such successor or purchasing Person, upon such consolidation,
merger, statutory exchange, combination, sale or conveyance such successor or
purchasing Person shall be jointly and severally liable with the Company for the
performance of all of the Company’s obligations under this Warrant; and
(C) if
registration or qualification is required under the 1933 Act, the 1934 Act or
applicable state law for the public resale by the Holder of shares of stock and
other securities so issuable upon exercise of this Warrant, such registration or
qualification shall be completed prior to such reclassification, change,
consolidation, merger, statutory exchange, combination or sale.
If, in the case of any Fundamental Transaction, the Alternate
Consideration includes shares of stock, other securities, other property or
assets of a Person other than the Company or any such successor or purchasing
Person, as the case may be, in such Fundamental Transaction, then such written
agreement shall also be executed by such other Person and shall contain such
additional provisions to protect the interests of the Holder as the Board of
Directors of the Company shall reasonably consider necessary by reason of the
foregoing. At the Holder’s request, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the Holder’s right to
purchase the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this
Section 3(b)
and
insuring that the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
If any Fundamental Transaction constitutes or results in a "Rule 13e-3
transaction" as defined in Rule 13e-3 under the 1934 Act with respect to the
Company in which the consideration issued consists principally of cash or stock
in a non-public company, then at the request of the Holder delivered before the
90th day after such Fundamental Transaction, the Company (or any such successor
or surviving entity) will purchase the Warrant from the Holder for a purchase
price, payable in cash within five Trading Days after such request (or, if
later, on the effective date of the Fundamental Transaction), equal to the
Black-Scholes value of the remaining unexercised portion of this Warrant on the
date of such request.
- H-4 -
(c)
Adjustment Certificate
.
When any adjustment is required to
be made with respect to the Warrant Shares pursuant to this
Section 3
,
the Company shall promptly deliver to the Holder a certificate explaining the
facts requiring such adjustment, and the description and quantity of stock or
other securities or property into which this Warrant shall be exercisable after
such adjustment.
4.
Issuance
Upon Exercise
.
All Warrant Shares that may be issued upon the
exercise of this Warrant by the Holder, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances (other than those created by the Holder) except for
restrictions on transfer provided for herein or under applicable federal and
state securities laws.
5.
Transfers
.
(a)
Transfer
of the Warrant
.
Subject to compliance with applicable federal and
state securities laws, this Warrant and all rights hereunder are transferable,
in whole or in part, at any time by the Holder to any other federal agency of
the United States government or any other Person upon prior written notice to
the Company. Within a reasonable time after the Company’s receipt of an executed
Assignment Form in the form appended hereto as
Exhibit B
, the transfer
shall be recorded on the books of the Company upon the surrender of this
Warrant, properly endorsed, to the Company at its principal offices, and the
payment to the Company of all transfer taxes (if any) and other governmental
charges imposed on such transfer. In the event of a partial transfer, the
Company shall issue to the new holders one or more appropriate new warrants.
Each holder of the Warrant Shares and each subsequent transferee consents to the
Company making a notation on its records and giving instructions to any transfer
agent of the Warrant Shares in order to implement the restrictions on transfer
established in
Section 5(b)
.
(b)
Unregistered
Security
In addition to the foregoing, the Holder acknowledges that this
Warrant and the Warrant Shares have not been registered under the Act, and
agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise
dispose of this Warrant or any Warrant Shares issued upon its exercise except if
a registration statement is in effect thereto or if such sale, transfer or other
disposition is exempt from registration under the Act and applicable state
securities laws. Each certificate or other instrument for Warrant Shares issued
upon the exercise of this Warrant (unless registered under the Act and any
applicable state securities laws) shall be stamped or imprinted with a legend in
substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO THEIR DISTRIBUTION OR RESALE,
AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS
NOT REQUIRED.
- H-5 -
Said
legend shall be removed by the Company, upon the request of the Holder, at such
time as the restrictions on the transfer of the applicable security shall have
terminated.
(c)
Warrant
Register
.
The Company will maintain a register containing the
name and address of the Holder of this Warrant and shall update such register
promptly upon notice from the Holder of any transfer of this Warrant made in
accordance with
Sections 5(a)
and
5(b)
. Until any transfer of this
Warrant is made in the warrant register, or until notice has been given by the
Holder of a transfer of this Warrant that is in accordance with
Sections 5(a)
and
5(b)
, the Company may treat the Holder of this Warrant as the
absolute owner hereof for all purposes;
provided
,
however
, that if
this Warrant is properly assigned in blank, the Company may (but shall not be
required to, unless the transfer is in accordance with
Sections 5(a)
and
5(b)
) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary. The Holder may change its
address as shown on the warrant register by written notice to the Company
requesting such change.
6.
No
Impairment
.
The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate in order to protect the rights of the Holder
against impairment.
7.
Expiration
.
This Warrant (and the right to purchase Warrant
Shares upon exercise hereof) shall be effective during the period (the
"
Exercise Period
") commencing on the date hereof and ending at 5:00 p.m., New York City time,
on [_______]
1
(the "
Expiration Date
");
provided
,
however
, that if such date shall in the State of New York or in
Washington, D.C. be a holiday or a day on which banks are authorized to close,
then the Expiration Date shall be 5:00 p.m., New York City time, on the next day
that in the State of New York or Washington, D.C. is not a holiday or a day on
which banks are authorized to close.
- H-6 -
8.
Notices
of Certain Transactions
.
In case:
(a) the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time deliverable upon the exercise of this Warrant) for the
purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right, to
subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or
(b) of
any Fundamental Transaction (other than a consolidation or merger in which the
Company is the surviving entity), or
(c) of
the voluntary or involuntary dissolution, liquidation or winding-up of the
Company;
then, and in each such case, the Company will mail or cause to
be mailed to the Holder a notice specifying, as the case may be, (i) the date on
which a record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, or (ii) the effective date on which such reorganization,
reclassification, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place, and the time, if any is to be fixed, as of which
the holders of record of the Common Stock (or such other stock or securities at
the time deliverable upon such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation or winding-up) are to be determined.
Such notice shall be mailed at least twenty (20) days prior to the record date
or effective date for the event specified in such notice.
____________________________________________
1
Insert date that is 2 years from the Financial
Closing Date.
- H-7 -
9.
Reservation
of Stock; Stock Listing
.
(a) The
Company will at all times reserve and keep available out of its authorized but
unissued shares, solely for the issuance and delivery upon the exercise of this
Warrant, such Warrant Shares and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant. The Company
covenants and represents that all Warrant Shares issuable hereunder shall be
duly and validly issued and fully paid and nonassessable, and free from all
taxes, liens, charges or rights with respect to the issue thereof. The Company
shall not take any action which results in any adjustment of the Exercise Price
if the total number of the shares of the Common Stock of the Company issuable
after such action upon exercise of this Warrant would exceed the total number of
the shares of the Common Stock of the Company then authorized by the Company’s
certificate of incorporation and charter, as the same may be amended from time
to time.
(b)
Prior to any issuance of Warrant Shares, the Company shall use its best efforts
to list the Warrant Shares upon each stock exchange where the outstanding shares
of Common Stock of the Company are listed, and to comply with all applicable
laws, regulations and exchange requirements for each such listing.
10.
No Rights as Shareholder
.
The Holder of this Warrant,
as such, shall not be entitled to vote or receive dividends or be deemed the
holder of the Warrant Shares for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the Holder of this Warrant, as such,
any of the rights of a shareholder of the Company or any right to vote, give or
withhold consent to any action by the Company (whether upon any
recapitalization, issue of shares, reclassification of shares, consolidation,
merger, conveyance or otherwise), receive notice of meetings or other action
affecting shareholders (except for notices provided for in this Warrant),
receive dividends or subscription rights, or otherwise until this Warrant shall
have been exercised and the Warrant Shares purchasable upon the exercise hereof
shall have become deliverable as provided herein, at which time the person or
persons in whose name or names the certificate or certificates for the Warrant
Shares being purchased are to be issued shall be deemed the holder or holders of
record of Shares for all purposes.
11.
Replacement of Warrants
.
Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and (in the case of loss, theft or destruction) upon
delivery of an indemnity agreement (with surety if reasonably requested by the
Company) in an amount mutually agreeable to the Company and the Holder, or (in
the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.
- H-8 -
12.
No Fractional Shares
.
No fractional Warrant Shares will be
issued in connection with the exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the fair market value of one
share of the Common Stock (if the shares are publicly traded) or the book value
of one share of the Common Stock (if the shares are not publicly traded) upon
the date of exercise, as determined in good faith by the Company's Board of
Directors.
13.
Amendment or Waiver
.
No amendment or waiver of any
provision of this Warrant and no consent to any departure by the Company shall
be effective unless in writing signed by the Holder and, in the case of an
amendment, the Company and the Holder. Each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
14.
Notices and Other Communications
.
(a) All
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier or electronic mail as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:
If to the Company:
USG Oregon LLC
C/O U.S. Geothermal, Inc.
1505 Tyrell Lane
Boise, Idaho 87306
Attn: Jonathan Zurkoff
Telephone: (208) 424-1027
Facsimile: (208) 424-1030
Email: jzurkoff@usgeothermal.com
If to the Holder:
U.S. Department of Energy
Office of Loan Programs
1000
Independence Ave., SW
Washington DC 20585
Attention: Portfolio Manager
- H-9 -
Telephone: (202) 287-6738
Facsimile: (202)
287-5816
Email: lpo.portfolio@hq.doe.gov
(b) All
notices or other communications required or permitted to be given hereunder
shall be considered as properly given (i) if delivered in person, (ii) if sent
by overnight delivery service for inland delivery or international courier for
international delivery, (iii) in the event overnight delivery service or
international courier service is not readily available, if mailed by first class
mail (or airmail for international delivery), postage prepaid, registered or
certified with return receipt requested, (iv) if sent by facsimile or telecopy
(with such transmission subsequently verified by return transmission by first
class mail, airmail, facsimile, telecopy, or electronic mail) or (v) if
transmitted by electronic mail (with such transmission subsequently verified by
return transmission by first class mail, airmail, facsimile, telecopy, or
electronic mail). Notice so given shall be effective upon delivery to the
addressee, except that communications or notices transmitted by facsimile or
telecopy, electronic mail or other direct written electronic means shall be
deemed to have been validly and effectively given on the day (if a business day
and, if not, on the next following business day) on which it is validly
transmitted if received (with such transmission subsequently verified by return
transmission by first class mail, airmail, facsimile, telecopy, or electronic
mail) before 2:00 p.m., recipient's time, and if received after that time, on
the next following business day;
provided
,
however
, that if any
notice is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender. Any party shall have
the right to change its address for notice hereunder to any other location by
giving prior written notice to the other parties in the manner set forth
above.
15.
Applicable Law; Jurisdiction; Etc
.
(a)
Governing
Law.
This Warrant and all acts and transactions pursuant hereto and the
rights and obligations of the parties hereunder shall be governed by, and
construed and interpreted in accordance with, the federal law of the United
States of America. To the extent that federal law does not specify the
appropriate rule of decision for a particular matter at issue, it is the
intention and agreement of the parties hereto that the law of the State of New
York (without regard to any choice of law provision that would require the
application of the laws of another jurisdiction) shall be adopted as the
governing federal rule of decision.
(b)
Consent to Jurisdiction
.
By execution and delivery of this
Warrant, each party irrevocably and unconditionally:
- H-10 -
(i)
submits for itself and its property in any legal action or proceeding against it
arising out of or in connection with this Warrant, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of (i) the courts of the United States of America for the District
of Columbia, (ii) any other federal court of competent jurisdiction in any other
jurisdiction where it or any of its property may be found, and (iii) appellate
courts from any of the foregoing;
(ii)
consents that any such action or proceeding may be brought in or removed
to such courts, and waives any objection, or right to stay or dismiss any action
or proceeding, that it may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or proceeding was brought in
an inconvenient court and agrees not to plead or claim the same;
(iii) agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such party, as applicable, at its
address set forth in, or otherwise provided pursuant to,
Section 14
(
Notices and other Communications
)
;
(iv) agrees
that nothing herein shall (A) affect the right of any Credit Party to effect
service of process in any other manner permitted by law or (B) limit the right
of any Credit Party to commence proceedings against the Company or any other
person in any other court of competent jurisdiction nor shall the commencement
of proceedings in any one or more jurisdictions preclude the commencement of
proceedings in any other jurisdiction (whether concurrently or not) if, and to
the extent, permitted by the Governmental Rules; and
(v) agrees
that judgment against it in any such action or proceeding shall be conclusive
and may be enforced in any other jurisdiction within or without the U.S. by suit
on the judgment or otherwise as provided by law, a certified or exemplified copy
of which judgment shall be conclusive evidence of the fact and amount of the
Company's or Holder's obligation, as applicable.
16.
WAIVER
OF JURY TRIAL
.
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS WARRANT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE COMPANY OR THE HOLDER,
AS APPLICABLE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY TO EXECUTE
THIS WARRANT.
- H-11 -
17.
Benefits of Security Agreement
.
Nothing in this Warrant,
express or implied, shall give to any person, other than the parties hereto and
their respective successors and assigns permitted hereunder any benefit or any
legal or equitable right or remedy under or by reason of this Warrant.
18.
Severability
.
In case any one or more of the provisions contained in this Warrant should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and the parties hereto shall enter into good faith
negotiations to replace the invalid, illegal or unenforceable provision.
19.
Headings
Descriptive
.
Article and Section headings have been inserted in
this Warrant as a matter of convenience for reference only and it is agreed that
such article and section headings are not a part of this Warrant and shall not
be used in the interpretation of any provision of this Warrant.
20.
Entire
Agreement
.
This Warrant is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
[Signature Page Follows]
- H-12 -
IN
WITNESS WHEREOF, the Company has caused this Warrant to be issued as of the date
first above written.
U.S. GEOTHERMAL, INC.,
as
Company
Agreed and accepted:
U.S. DEPARTMENT OF ENERGY,
as Holder
Exhibit A
to Exhibit H to the Loan Guarantee Agreement
EXHIBIT A
PURCHASE/EXERCISE FORM
|
To:
U.S. Geothermal, Inc.
|
Dated:
|
The undersigned, pursuant to the provisions in the attached
Warrant No. [___], hereby irrevocably elects to exercise such Warrant for
[indicate number] shares of the Common Stock covered by the Warrant and herewith
makes payment of the purchase price for the shares as follows:
[ ] 1. Cash in the amount of $[_____]. [Insert
method of payment--e.g., by cash, check or wire transfer to specified
account].
[ ] 2. "Cashless exercise", in which the Company
shall issue to the Holder a number of Warrant Shares (X) determined as
follows:
X = Y[(A-B)/A]
Where:
X = the number of Warrant Shares to be
issued to the Holder;
Y = the number of Warrant Shares with
respect to which the Warrant is being exercised, or [____][the Holder to provide
number of Warrant Shares in respect of which Warrant is being exercised];
A = the arithmetic average of the
closing prices of the Warrant Shares on the NYSE Amex or any other securities
exchange, quotation system or market on which similar securities issued by the
Company are then listed for the five trading days immediately prior to (but not
including) the exercise date; and
B = the Exercise Price per Warrant
Share.
[ ] 3. Combination of cash, in the
amount of $[_____], and "cashless exercise" with the Company for any remaining
Warrant Shares with respect to which the Warrant is being exercised, determined
using the formula in clause 2 above.
[HOLDER]
Exhibit B
to Exhibit H to the Loan Guarantee
Agreement
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply
required information. Do not use this form to purchase shares.)
F
OR
V
ALUE
R
ECEIVED
, the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
Name:_____________________________________________________________________________________________
(Please Print)
Address:___________________________________________________________________________________________
(Please Print)
Dated: _________________
Holder’s
Signature:___________________________________________________
Holder’s
Address:____________________________________________________
NOTE
: The signature to this Assignment Form must
correspond with the name as it appears on the face of the Warrant. Officers of
corporations and those acting in a fiduciary or other representative capacity
should provide proper evidence of authority to assign the foregoing Warrant.
Exhibit I
to the Loan Guarantee
Agreement
[FORM OF] CONSENT AND AGREEMENT
This
CONSENT AND AGREEMENT (this "
Consent
"), dated as of
[
_______
]
, 2011, among
[
CONTRACTOR
]
, a
[
__________
]
(the "
Consenting Party
"), USG Oregon LLC, a
Delaware limited liability company (the "
Borrower
"), and PNC Bank,
National Association, doing business as Midland Loan Services, a division of PNC
Bank, National Association ("
Midland
"), as collateral agent (together
with its successors in such capacity, the "
Collateral Agent
") for the
Secured Parties identified in the Loan Guarantee Agreement (as defined
below).
RECITALS
WHEREAS,
the Borrower is designing, developing, financing and constructing and intends to
own and operate the approximately 22 megawatt Neal Hot Springs Geothermal
Project, including its associated diesel cold start generator, located near
Vale, in Malheur County, Oregon (the "
Project
");
WHEREAS
the Consenting Party and the Borrower, have entered into the
____________
[
CONTRACT
]
, dated ____________, (as amended, restated,
modified or otherwise supplemented from time to time, the "
Assigned
Agreement
").
WHEREAS,
the Borrower has entered into that certain Loan Guarantee Agreement, dated as of
February 23, 2011 (the "
Loan Guarantee Agreement
"), among the Borrower,
the U.S. Department of Energy, an agency of the United States of America, acting
by and through the Secretary of Energy as provider of the DOE Guarantee (in such
capacity "
DOE
"), the U.S. Department of Energy, an agency of the United
States of America, acting by and through authority delegated by the Secretary of
Energy to its Loan Programs Office, as loan servicer in accordance with the
terms of the Loan Guarantee Agreement (the "
Loan Servicer
"); Midland, as
the Administrative Agent, and the Collateral Agent, pursuant to which, among
other things, DOE has committed to guarantee the DOE Guaranteed Loans (as
defined in the Loan Guarantee Agreement) to, and for the benefit of, the
Borrower for the development and construction of the Project;
WHEREAS,
as security for the DOE Guaranteed Loans and all other obligations under the
Loan Guarantee Agreement and related financing documents, the Borrower has
collaterally assigned all of its right, title and interest in, to and under, and
granted a security interest in, the Assigned Agreement to the Collateral Agent
pursuant to the Security Agreement, dated
[
_________
]
, between the
Borrower and the Collateral Agent (as amended, restated, modified or otherwise
supplemented from time to time, the "
Security Agreement
"); and
WHEREAS,
it is a requirement under the Loan Guarantee Agreement that the Borrower and the
Consenting Party execute and deliver this Consent.
NOW,
THEREFORE, as an inducement to DOE to guarantee the DOE Guaranteed Loans, and in
consideration of good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound, the parties
hereto hereby agree as follows:
1.
CONSENT TO ASSIGNMENT,
ETC.
(a)
Consent to Assignment
. The Consenting Party (i) acknowledges that the
Collateral Agent and DOE have entered into the Loan Guarantee Agreement and
guaranteeing the DOE Guaranteed Loans in reliance upon the execution and
delivery by the Consenting Party of the Assigned Agreement and this Consent,
(ii) consents in all respects to the pledge and assignment to the Collateral
Agent of all of the Borrower's right, title and interest in, to and under the
Assigned Agreement pursuant to the Security Agreement, (iii) acknowledges the
right, but not the obligation, of the Collateral Agent or the Collateral Agent's
designee, in the exercise of the Collateral Agent's rights and remedies under
the Security Agreement, to make all demands, give all notices, take all actions,
exercise all rights of the Borrower in accordance with the Assigned Agreement,
and agrees that in such event the Consenting Party shall continue to perform its
obligations under the Assigned Agreement and accept as valid any such notices or
demands made by the Collateral Agent, or the Collateral Agent's designee, and
(iv) undertakes to observe and perform all obligations to be observed and
performed by it in the Assigned Agreement.
(b)
Right
to Cure
. (i) Notwithstanding anything to the contrary contained in the
Assigned Agreement, the Consenting Party shall not claim prevention or
interference with performance of its obligations under the Assigned Agreement,
nor shall the Consenting Party exercise any right it may have under the Assigned
Agreement, at law or in equity, to cancel, suspend or terminate the Assigned
Agreement or any of its obligations under the Assigned Agreement, as the result
of any default or other action or omission of the Borrower in the performance of
any of its obligations under the Assigned Agreement, or upon the occurrence or
non-occurrence of any event or condition under the Assigned Agreement that would
immediately or with the passage of any applicable grace period or the giving of
notice, or both, enable the Consenting Party to terminate or suspend its
obligations or exercise any other right or remedy under the Assigned Agreement
or under applicable law (hereinafter an "
Assigned Agreement Default
"),
until it first gives prompt written notice of the Assigned Agreement Default to
the Collateral Agent and affords the Collateral Agent, the Collateral Agent's
designee and the Loan Servicer a period of at least one hundred and eighty (180)
days (or, if such default is a payment default, thirty (30) days) to cure such
default, commencing from the later to occur of (x) the Collateral Agent's
receipt of such notice and (y) the expiration of any notice periods or cure
periods provided for in the Assigned Agreement;
provided
,
however
,
that if any such party is prohibited from curing any such Assigned Assignment
Default by any process, stay or injunction issued by any governmental authority
or pursuant to any bankruptcy or insolvency proceeding involving the Borrower,
then the time periods specified in this
Section 1(b)
for curing the
Assigned Agreement Default shall be extended for the period of such
prohibition.
(ii)
No cancellation, suspension or termination of the Assigned Agreement by the
Consenting Party, or any other actions taken by the Consenting Party under the
Assigned Agreement, shall be binding upon the Collateral Agent without the
notice and extended cure period specified in this
Section 1(b)
. Any dispute that
may arise under the Assigned Agreement notwithstanding, the Consenting Party
shall continue performance under the Assigned Agreement and resolve any dispute
without discontinuing such performance until the lapse of the notice and
extended cure period specified in this
Section 1(b)
.
2
(c)
Additional
Obligor
.
(i)
The Consenting Party agrees that, during the pendency of any notice and extended
cure period set forth in
Section 1(b)
and prior to the substitution of a
Substitute Owner (as defined below) with respect to the Assigned Agreement, the
Collateral Agent may, with notice to the Consenting Party, and with the limited
consent of the Consenting Party as set forth in this
Section 1(c)(i)
,
appoint a person, other than the Borrower, to assume and discharge the
Borrower's rights and obligations under the Assigned Agreement jointly and
severally with the Borrower (such person, an "
Additional Obligor
");
provided
, however, that the Consenting Party may withhold consent to such
person as an Additional Obligor on the basis solely of such person's (A) legal
capacity, power and authorization, including, if necessary, its ability to
obtain and maintain in force if necessary authorizations and consents; (B)
financial ability, or in the event of any guarantee being offered in support,
the financial ability of any guarantor to perform the Borrower's obligations
under the Assigned Agreement, or (C) technical competence to perform the
Borrower's obligations under the Assigned Agreement. Following the procurement
of an Additional Obligor and until the discharge of such Additional Obligor by
the Collateral Agent or assignment of its rights and obligations under the
Assigned Agreement to a Substitute Owner (including during the period during
which the Consenting Party is considering its consent to the appointment of such
Additional Obligor), the Consenting Party will continue to perform its
obligations under the Assigned Agreement in favor of such Additional
Obligor.
(ii)
If the Consenting Party does not consent to an Additional Obligor (A) the
Consenting Party will notify the Collateral Agent in writing of its decision to
withhold consent to such Additional Obligor, setting forth its reasons, which
shall be in accordance with
Section 1(c)(i)
, (B) any such decision to
withhold consent will be without prejudice to the Collateral Agent's rights to
appoint another Additional Obligor with respect to the Assigned Agreement, and
(C) any notice and extended cure period under
Section 1(b)
will be
extended by the number of days equal to the number of days between the delivery
of the notice by the Collateral Agent to the Consenting Party regarding the
appointment of an Additional Obligor and the day upon which the Consenting Party
gave notice to the Collateral Agent that it withheld its consent to such
appointment. If the Consenting Party does not give notice to the Collateral
Agent within five (5) days of delivery of the notice from the Collateral Agent
to the Consenting Party of the appointment of the Additional Obligor, then it
will be deemed to have consented to the Additional Obligor on the expiry of that
five (5) day period.
(iii) Upon
the earlier to occur of the expiration of any notice and extended cure period
under
Section 1(b)
or transfer or assignment by the Additional Obligor of
its rights and obligations under the Assigned Agreement to a Substitute Owner,
then such Additional Obligor shall, subject to
Section 1(g)
, be released
from all obligations and liabilities under or in connection with the Assigned
Agreement.
3
(d)
Substitute
Owner
. The Consenting Party agrees that, if the Collateral Agent notifies
the Consenting Party that an event of default under the Loan Guarantee Agreement
has occurred and is continuing and that the Collateral Agent has exercised its
rights (i) to have itself or its designee substituted for the Borrower and any
Additional Obligor (if applicable) under the Assigned Agreement or (ii) to sell,
assign, transfer or otherwise dispose of the Assigned Agreement to a third
party, then the Collateral Agent, the Collateral Agent's designee or such third
party (each, a "
Substitute Owner
") shall be substituted for the Borrower
and any such Additional Obligor under the Assigned Agreement and, in such event,
the Consenting Party will continue to perform its obligations under the Assigned
Agreement in favor of the Substitute Owner.
(e)
No
Termination, Assignment or Amendments
. The Consenting Party will not,
without the prior written consent of the Collateral Agent, enter into any
consensual cancellation or termination of the Assigned Agreement (except with
respect to termination in the event of a default by the Borrower, subject to the
limitations and notice and extended cure periods provided for in
Section
1(b)
), or assign or otherwise transfer any of its right, title or interest
thereunder or consent to any such assignment or transfer by the Borrower. The
Consenting Party will not enter into or agree to any amendment, supplement or
other modification to, or benefit from any waiver under, the Assigned Agreement
without the prior written consent of the Collateral Agent.
(f)
Replacement
Agreement
. In the event that the Assigned Agreement is rejected or otherwise
terminated as a result of any bankruptcy or insolvency proceeding affecting the
Borrower, the Consenting Party will, at the option of the Collateral Agent,
enter into a new agreement with the Collateral Agent, any Additional Obligor or
any Substitute Owner (or any transferee or other nominee of the Collateral Agent
who owns, operates or leases the Project) having terms substantially the same as
the terms of the Assigned Agreement.
(g)
No
Liability
. The Consenting Party acknowledges and agrees that none of the
Collateral Agent, the Collateral Agent's designee, DOE or the Loan Servicer
shall have any liability or obligation under the Assigned Agreement as a result
of this Consent, the Security Agreement or otherwise, nor shall the Collateral
Agent, the Collateral Agent's designee, DOE or the Loan Servicer be obligated or
required to (i) perform any of the Borrower's obligations under the Assigned
Agreement, except, in the case of the Collateral Agent or the Collateral Agent's
designee, during any period in which the Collateral Agent, or the Collateral
Agent's designee, is a Substitute Owner pursuant to
Section 1(d)
or
Additional Obligor pursuant to
Section 1(c)
, in which case (A) the
obligations of such Substitute Owner or Additional Obligor shall be no more than
those of the Borrower under the Assigned Agreement, (B) such Substitute Owner or
Additional Obligor shall have no personal liability to the Consenting Party for
the performance of such obligations and (C) the sole recourse of the Consenting
Party for the performance of such obligations shall be to such Substitute
Owner's or Additional Obligor's interest in the Project, or (ii) take any action
to collect or enforce any claim for payment assigned under the Security
Agreement.
(h)
Delivery of Notices
. The Consenting Party shall deliver to the Collateral
Agent, concurrently with the delivery thereof to the Borrower, a copy of each
notice, request or demand given by the Consenting Party pursuant to the Assigned
Agreement.
4
(i)
Acknowledgments
.
The Consenting Party agrees to execute such acknowledgments or other similar
instruments as the Collateral Agent may reasonably request in connection with
the transactions contemplated by this Consent.
2.
CERTAIN PROVISIONS OF
THE ASSIGNED AGREEMENT
(a)
[
Specific provisions to be added (if
any)
]
3.
PAYMENTS UNDER THE ASSIGNED
AGREEMENT
(a)
Payments
.
The Consenting Party will pay all amounts payable by it under the Assigned
Agreement, if any, in lawful money of the United States of America, in
immediately available funds, directly into the account specified on Exhibit A
hereto, or to such other person or account as may be specified from time to time
by the Collateral Agent to the Consenting Party in writing.
(b)
No Offset, etc
. All payments required to be made by the Consenting Party
under the Assigned Agreement shall be made without any offset, recoupment,
abatement, withholding, reduction or defense whatsoever.
(c)
Assignment of Claims
. If the Collateral Agent makes any payment to the
Consenting Party pursuant to this Consent or the Assigned Agreement originally
required to be made by the Borrower, the Consenting Party shall, within ten (10)
days after receipt of written request therefor, execute and deliver to the
Collateral Agent an assignment of the Consenting Party's claims against the
Borrower for such payment in form and substance reasonably satisfactory to the
Collateral Agent.
4.
LOAN SERVICER'S
CONSULTANTS
Notwithstanding
anything in the Assigned Agreement to the contrary, the Collateral Agent, the
Consenting Party and the Borrower agree that:
(a) The
Independent Engineer (as defined in the Loan Guarantee Agreement) shall have the
right, upon request, to receive copies of any reports, records or other
information produced by the Consenting Party in the performance of its
obligations under the Assigned Agreement.
(b) The
Independent Engineer shall have the same notice from the Consenting Party as the
Borrower of any and all inspections or tests of the Project or related
facilities, and the Independent Engineer shall have the right to be present at
any such inspections or tests and receive any reports or other information
produced in connection with such inspections or tests. Notices to the
Independent Engineer shall be delivered to the address below (in accordance with
Section 7(e)
, or at such other address as may be notified by the
Collateral Agent to the Consenting Party from time to time:
Luminate, LLC
1801 Broadway, Suite
1620
Denver, Colorado 80202
5
Attention: John Neff
Telephone:
(303) 928-7011
Fax: (303) 860-7647
5.
REPRESENTATIONS AND
WARRANTIES OF THE CONSENTING PARTY
In
order to induce the Collateral Agent, DOE and the Loan Servicer to enter into
the Loan Guarantee Agreement and to guarantee the DOE Guaranteed Loans, the
Consenting Party makes the following representations and warranties, which shall
survive the execution and delivery of this Consent and the Assigned Agreement
and the consummation of the transactions contemplated hereby and thereby.
(a)
Organization; Power and Authority
. The Consenting Party is a
[
corporation
] [
limited liability company
]
duly organized,
validly existing and in good standing under the laws of the State of
[
_____
]
, and is duly qualified, authorized to do business and in
good standing in every jurisdiction in which it owns or leases real property or
in which the nature of its business requires it to be so qualified, and has all
requisite power and authority to enter into and to perform its obligations under
this Consent and the Assigned Agreement, and to carry out the terms hereof and
thereof and the transactions contemplated hereby and thereby.
(b)
Authorization
.
The execution, delivery and performance by the Consenting Party of this Consent
and the Assigned Agreement have been duly authorized by all necessary
[
corporate
] [
limited liability company
]
action on the part
of the Consenting Party and do not require any approval or consent of any holder
(or any trustee for any holder) of any indebtedness or other obligation of (i)
the Consenting Party or (ii) any other person or entity, except approvals or
consents which have previously been obtained.
(c)
Execution
and Delivery; Binding Agreements
. Each of this Consent and the Assigned
Agreement is in full force and effect, has been duly executed and delivered on
behalf of the Consenting Party and constitutes the legal, valid and binding
obligation of the Consenting Party, enforceable against the Consenting Party in
accordance with its terms except as the enforceability hereof or thereof may be
limited by (i) bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
equitable principles (whether considered in a proceeding in equity or at
law).
(d)
Litigation
.
There is no legislation, litigation, action, suit, proceeding or investigation
pending or (to the best of the Consenting Party's knowledge after due inquiry)
threatened against the Consenting Party before or by any court, collateral
agency, arbitrator or governmental authority, body or agency that could
reasonably be expected to, individually or in the aggregate, (i) adversely
affect the performance by the Consenting Party of its obligations under this
Consent or the Assigned Agreement, or modify or otherwise adversely affect the
Approvals (as defined in
Section 5(f)
), (ii) question the validity,
binding effect or enforceability of this Consent or the Assigned Agreement, any
action taken or to be taken pursuant hereto or thereto or any of the
transactions contemplated hereby or thereby or (iii) could have a material
adverse effect upon (A) the ability of the Consenting Party to perform under the
Assigned Agreement or this Consent, (B) the value, validity, perfection or
enforceability of the liens granted to the Collateral Agent under the Security
Agreement and other security documents or (C) the ability of the Collateral Agent or DOE to enforce any
of their rights and remedies under the Assigned Agreement or this Consent.
6
(e)
Compliance
with Other Instruments, etc.
The Consenting Party is not in violation of its
[
charter or by-laws
]
, and the execution, delivery and performance
by the Consenting Party of this Consent and the Assigned Agreement and the
consummation of the transactions contemplated hereby and thereby will not result
in any violation of, breach of or default under any term of its
[
charter
or by-laws
]
, or of any contract or agreement to which it is a party or by
which it or its property is bound, or of any license, permit, franchise,
judgment, writ, injunction, decree, order, charter, law, ordinance, rule or
regulation applicable to it.
(f)
Government
Consent
. No consent, order, authorization, waiver, approval or any other
action, or registration, declaration or filing with, any person, board or body,
public or private (collectively, the "
Approvals
"), is required to be
obtained by the Consenting Party in connection with the execution, delivery or
performance of the Assigned Agreement or the consummation of the transactions
contemplated thereunder, except as listed in Exhibit B hereto. All such
Approvals listed on Exhibit B, except for those set forth in Part II thereof
(the "
Deferred Approvals
"), are Final (as defined below). An Approval
shall be "
Final
" if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with the terms
thereof), does not impose restrictions or requirements inconsistent with the
terms of the Assigned Agreement, and is final and not subject to any appeal. The
Consenting Party reasonably believes that each Deferred Approval will be
obtained prior to the time when such Deferred Approval is required to be
Final.
(g)
No
Default or Amendment
. Neither the Consenting Party nor, to the best of the
Consenting Party's knowledge after due inquiry, any other party to the Assigned
Agreement is in default of any of its obligations thereunder and no party has
claimed force majeure as an excuse for performance or experienced circumstances
that could form the basis for a claim of force majeure, in either case, the
effects of which force majeure or experienced circumstance are continuing. The
Consenting Party has no existing counterclaims, offsets or defenses against the
Borrower. The Consenting Party and, to the best of the Consenting Party's
knowledge after due inquiry, each other party to the Assigned Agreement have
complied with all conditions precedent to the respective obligations of such
party to perform under the Assigned Agreement. To the best of the Consenting
Party's knowledge after due inquiry, no event or condition exists that would
either immediately or with the passage of any applicable grace period or giving
of notice, or both, enable either the Consenting Party or the Borrower to
terminate or suspend its obligations (or the performance of such obligations)
under the Assigned Agreement. The Assigned Agreement has not been amended,
modified or supplemented in any manner.
(h)
No Previous Assignments
. The Consenting Party has no notice of, and has
not consented to, any previous assignment of all or any part of its right, title
or interest in, to or under the Assigned Agreement.
(i)
Representations and Warranties
. All representations, warranties and other
statements made by the Consenting Party in the Assigned Agreement were true and
correct as of the date when made and are true and correct as of the date of this
Consent.
7
6.
OPINION OF
COUNSEL
The
Consenting Party shall, on the date hereof, deliver an opinion of counsel
relating to the Assigned Agreement and this Consent, reasonably satisfactory to
the Collateral Agent, which opinion shall be substantially in the form attached
hereto as
Exhibit C
.
7.
MISCELLANEOUS
(a)
Applicable Law; Submission to Jurisdiction
. This Consent and the rights
and obligations of the parties hereunder shall be governed by, and construed and
interpreted in accordance with, the federal law of the United States of America.
To the extent that federal law does not specify the appropriate rule of decision
for a particular matter at issue, it is the intention and agreement of the
parties hereto that the law of the State of New York (without regard to any
choice of law provision that would require the application of the laws of
another jurisdiction) shall be adopted as the governing federal rule of
decision.
(b)
Waiver
of Jury Trial
.
(i)
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS CONSENT OR
ANY OTHER LOAN DOCUMENT (AS DEFINED IN THE LOAN GUARANTEE AGREEMENT), OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF THE BORROWER OR THE CONSENTING PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR EACH CREDIT PARTY (AS DEFINED IN THE LOAN GUARANTEE AGREEMENT) TO
ENTER INTO THE OTHER LOAN DOCUMENTS.
(ii)
EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY
WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THE ASSIGNED
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ACTIONS OF THE BORROWER OR THE CONSENTING PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR EACH CREDIT PARTY (AS DEFINED IN THE LOAN
GUARANTEE AGREEMENT) TO ENTER INTO THE OTHER LOAN DOCUMENTS.
(c)
Consent
to Jurisdiction
.
By execution and delivery of this Consent, each of the
Consenting Party and the Borrower irrevocably and unconditionally:
(i)
submits for itself and its property in any legal action or proceeding against it
arising out of or in connection with this Consent or any other Loan Document, or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of (A) the courts of the United States of
America for the District of Columbia, (B) any other federal court of competent jurisdiction in any
other jurisdiction where it or any of its property may be found, and (iii)
appellate courts from any of the foregoing;
8
(ii)
consents that any such action or proceeding may be brought in or removed to such
courts, and waives any objection, or right to stay or dismiss any action or
proceeding, that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii)
agrees that service of process in any such action or proceeding may be effected
by mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to the Consenting Party or the Borrower
(as applicable) at its address set forth in
Section 7(e)
, or at such
other address of which the Collateral Agent shall have been notified pursuant
thereto;
(iv)
agrees that nothing herein shall (A) affect the right of the Collateral
Agent to effect service of process in any other manner permitted by law or (B)
limit the right of the Collateral Agent to commence proceedings against or
otherwise sue the Consenting Party or the Borrower or any other person in any
other court of competent jurisdiction nor shall the commencement of proceedings
in any one or more jurisdictions preclude the commencement of proceedings in any
other jurisdiction (whether concurrently or not) if, and to the extent,
permitted by applicable law; and
(d)
agrees that judgment against it in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction within or without the
U.S. by suit on the judgment or otherwise as provided by law, a certified or
exemplified copy of which judgment shall be conclusive evidence of the fact and
amount of the Consenting Party's or the Borrower's obligation.
(e)
Notices
and Other Communications
. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier or
electronic mail as follows, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:
If to the Consenting Party with respect to the Assigned
Agreement:
[
CONTRACTOR
]
[
Address
]
Attention:
[
_______
]
Telephone: (___) _________
Facsimile: (___)
__________
If to the Borrower:
USG Oregon LLC
C/O U.S. Geothermal, Inc.,
9
1505 Tyrell Lane
Boise, Idaho
87306-4046
Attn: Jonathan Zurkoff
Telephone: (208) 424-1027
Facsimile:
(208) 424-1030
Email: jzurkoff@usgeothermal.com
If to the Collateral Agent:
PNC Bank, National
Association,
doing business as Midland Loan Services, a division of PNC Bank,
National
Association
10851 Mastin Street, Suite 700
Overland Park, KS
66210
Attention: Government Services
Telephone: (913)
253-9000
Facsimile: (913) 253-9709
Email address: governmentservices@midlandls.com
with a copy to (which copy shall not
constitute notice):
PNC Bank, National
Association,
doing business as Midland Loan Services, a division of PNC Bank,
National
Association
10851 Mastin Street, Suite 700
Overland Park, KS
66210
Attention: General Counsel
Telephone: (913) 253-9000
Facsimile:
(913) 253-9709
Email address: governmentservices@midlandls.com
(b) All notices or other
communications required or permitted to be given under this Consent shall be
considered as properly given (i) if delivered in person, (ii) if sent by
overnight delivery service for inland delivery or international courier for
international delivery, (iii) in the event overnight delivery service or
international courier service is not readily available, if mailed by first class
mail (or airmail for international delivery), postage prepaid, registered or
certified with return receipt requested, (iv) if sent by facsimile or telecopy
(with such transmission subsequently verified by return transmission by first
class mail, airmail, facsimile, telecopy, or electronic mail), or (v) if
transmitted by electronic mail (with such transmission subsequently verified by
return transmission by first class mail, airmail, facsimile, telecopy, or
electronic mail). Notice so given shall be effective upon delivery to the
addressee, except that communications or notices transmitted by facsimile or
telecopy or other direct written electronic means shall be deemed to have been
validly and effectively given on the day (if a Business Day and, if not, on the
next following Business Day) on which it is validly transmitted if received
(with such receipt subsequently verified by return transmission by first class
mail, airmail, facsimile, telecopy, or electronic mail) before 2:00 p.m.,
recipient's time, and if received after that time, on the next following
Business Day;
provided
,
however
, that if any notice is
tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender. For the purposes of
this Consent, a "Business Day" shall mean any day other than a Saturday, Sunday
or any other day on which either the Federal Financing Bank or the Federal
Reserve Bank of New York are not open for business. Any party shall have the
right to change its address for notice under any of the Loan Documents to any
other location by giving prior written notice to the other parties in the manner
set forth hereinabove.
10
(f)
Inconsistency
with Assigned Agreement
. In the event and to the extent that any provision
of this Consent is inconsistent with any provision of the Assigned Agreement,
the provisions of this Consent shall prevail.
(g)
Amendments,
Etc
. No amendment or waiver of any provision of this Consent and no consent
to any departure by the Borrower shall be effective unless in writing signed by
the Collateral Agent and, in the case of an amendment, the Borrower, the
Collateral Agent and the Consenting Party. Each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(h)
Delay
and Waiver
. No delay or omission in exercising any right, power, privilege
or remedy under this Consent shall impair any such right, power, privilege or
remedy of the Collateral Agent, nor shall it be construed to be a waiver of any
right, power, privilege or remedy or of any breach or default, or an
acquiescence therein, or in any similar breach or default thereafter occurring,
nor shall any waiver of any single right, power, privilege or remedy, or of any
breach or default be deemed a waiver of any other right, power, privilege or
remedy or of any other breach or default therefore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of the
Collateral Agent of any right, power, privilege or remedy or of any other breach
or default under this Consent, or any waiver on the part of any of the
Collateral Agent of any provision or condition of this Consent must be in
writing and shall be effective only to the extent in such writing specifically
set forth. All rights, powers, privileges and remedies, either under this
Consent or by law or otherwise afforded to the Collateral Agent, shall be
cumulative and not alternative and not exclusive of any other rights, powers,
privileges and remedies that the Collateral Agent may otherwise have.
(i)
Counterparts;
Effectiveness
. This Consent may be executed in one or more counterparts and
when signed by all of the parties shall constitute a single binding agreement.
The delivery of an executed counterpart of this Consent by electronic means,
including by telecopy, facsimile or by portable document format (PDF) attachment
to email, shall be as effective as delivery of an original executed counterpart
of this Consent.
(j)
Headings Descriptive
. The headings of the several sections and
subsections of this Consent are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Consent.
(k)
Severability
. In case any one or more of the provisions contained in this
Consent should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the parties thereto shall enter
into good faith negotiations to replace the invalid, illegal or unenforceable
provision.
11
(l)
Successors
and Assigns
. This Consent shall be binding upon the parties hereto and their
permitted successors and assigns and shall inure to the benefit of the parties,
their designees and their respective permitted successors and assigns;
provided
,
however
, that no party or its respective successor or
assign shall assign any of its interest in this Consent except in connection
with an assignment of its interests in the Assigned Agreement and then only to
the same person(s) or entity (its) to which its interest in the Assigned
Agreement is so assigned.
(m)
Survival
.
All agreements, statements, representations and warranties made by the
Consenting Party herein shall be considered to have been relied upon by the
Collateral Agent and DOE and shall survive the execution and delivery of this
Consent.
(n)
Further Assurances
. The parties hereto hereby agree to execute and
deliver all such instruments and take all such action as may be necessary to
effectuate fully the purposes of this Consent.
(o)
Termination.
(i)
Each party's obligations hereunder are absolute and unconditional, and no
party has the right to terminate this Consent or to be released, relieved or
discharged from any obligation or liability hereunder until the Security
Discharge Date (as defined in the Loan Guarantee Agreement), notice of which
will be provided by the Collateral Agent when such obligations have been
satisfied (the "
Termination Notice
").
(ii) If
the DOE Guaranteed Loans or the DOE Guarantee (as defined in the Loan Guarantee
Agreement) are refinanced or replaced by other credit facilities, this Consent
will continue in effect for the benefit of the Consenting Party, the Borrower
and the providers or guarantors of such new credit facilities (the "
New
Credit Parties
");
provided
, that (A) within five (5) days following
delivery by the Collateral Agent to the Consenting Party of a Termination
Notice, the New Credit Parties or an agent, trustee or other representative of
the New Credit Parties, will notify the Consenting Party that it assumes the
rights and prospective obligations of the Administrative Agent under this
Consent, and will supply substitute notice address information for
Section
7(e)
and (B) thereafter, (1) the term "DOE Guaranteed Loans" under this
Consent will be deemed to refer to the new credit facilities, (2) the term "DOE
Guarantee" will be deemed to refer to any guarantee of the loans under the new
credit facilities, (3) the term "Collateral Agent", "Loan Servicer" or "DOE"
will be deemed to refer to the New Credit Parties or any agent or trustee of the
New Credit Parties, (4) the term "Loan Guarantee Agreement" will be deemed to
refer to the credit agreement, indenture, guarantee and/or other instruments
providing for the new credit facilities and (5) the term "Security Agreement"
will be deemed to refer to the security agreement under which the Assigned
Agreement is assigned as collateral to secure performance of the obligations of
the Borrower under the new credit facilities.
[
The remainder of this page is intentionally left
blank
.
]
12
IN
WITNESS WHEREOF, the Consenting Party, the Borrower and the Collateral Agent
have caused this Consent to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
|
|
[
CONTRACTOR
]
as Consenting Party
By:
___________________________________
Name:
Title:
USG OREGON, LLC,
as Borrower
By:
___________________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
doing business as Midland
Loan Services, a division
of PNC Bank, National Association,
as Collateral
Agent
By:
___________________________________
Name:
Title:
|
Exhibit A to
Form of Consent
PAYMENT INSTRUCTIONS
A-1
Exhibit B to
Form of Consent
APPROVALS
B-1
Exhibit C to
Form of Consent
FORM OF OPINION OF COUNSEL
1
Midland Loan Services, Inc., as the Collateral Agent
10851
Mastin Street, Suite 700
Overland Park, KS 66210
Attention:
President
|
|
Re:
|
the approximately 22 megawatt Neal Hot Springs
Geothermal Project, including
its associated diesel cold start
generator, located near Vale, in Malheur County,
Oregon (the
"Project")
|
Ladies and Gentlemen:
I
have acted as
[
__________
]
counsel to
[
________
]
, a
[
_________
]
(the "
Company
"), in connection with that
certain
[
__________
]
, dated as of
[
__________
]
(as
amended, restated, modified or otherwise supplemented from time to time in
accordance with the terms thereof, the "
Agreement
"). This opinion is
being provided in connection with that certain Consent and Agreement, entered
into by the Borrower, the Company, and Midland Loan Services, Inc.
,
as
collateral agent for the Secured Parties (together with its successors in such
capacity, the "
Collateral Agent
"), dated as of
[
________
]
(the "
Consent
").
In
connection with this opinion, I have examined originals or copies, certified or
otherwise identified to my satisfaction, of the following:
|
|
(i)
|
the Agreement;
|
|
|
|
|
|
|
(ii)
|
the Consent;
|
|
|
|
|
|
|
(iii)
|
[
the Certificate of Incorporation and By-laws of
the Company or Certificate of Formation and Operating Agreement of the
Company
]
; and
|
|
|
|
|
|
|
(iv)
|
[
the resolutions authorizing the execution and
delivery of the Agreement and the Consent, duly adopted by the Board of
Directors or Board of Managers of the
Company
]
.
|
The
documents referred to in items (iii) and (iv) above are hereinafter collectively
referred to as the "
Governing Documents
" and the Agreement and the
Consent are hereinafter collectively referred to as the "
Documents
." In
addition, I have examined and am familiar with originals or copies, certified or
otherwise identified to my satisfaction, of such other documents as I have
deemed necessary or appropriate as a basis for the opinions set forth
below.
__________________________________
|
1
|
This opinion is drafted to be appropriate for in-house
counsel. If external counsel provides the opinion, certain conforming
changes may be discussed.
|
C-1
In
my examination I have assumed the genuineness of all signatures, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such copies. In rendering the
opinions expressed below, I have further assumed, without any independent
investigation or verification of any kind, that each Document I have examined is
the valid and binding obligation of each party thereto other than the
Company.
I
am admitted to the bar of the States of New York and
[
_____
]
. I
express no opinion as to the law of any jurisdiction other than (i) the laws of
the States of New York and
[
_____
]
and (ii) the federal laws of
the United States of America.
Based
upon the foregoing and subject to the limitations, qualifications, exceptions
and assumptions set forth herein, I am of the opinion that:
i.
The Company is a
[
corporation
] [
limited liability company
]
duly organized, validly existing and in good standing under the laws of the
State of
[
____
]
. The Company is duly qualified to transact
business in each jurisdiction in which it owns or leases real property or in
which the nature of its business requires it to be so qualified.
ii.
The Company has full
[
corporate
] [
limited liability company
]
power and authority to enter into, deliver and perform its obligations under
each of the Documents.
iii. The
Company has taken all necessary
[
corporate
] [
limited liability
company
]
action to authorize the execution, delivery and performance by
it of each Document.
iv. The
Company has duly executed and delivered each Document.
v.
Each Document constitutes the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
vi. The
execution, delivery and performance by the Company of the Documents will not:
(a) contravene any applicable provision of any law, regulation, ruling, order or
decree of any governmental authority to which or by which the Company or any of
its property or assets is subject or bound or (b) violate any provision of the
Governing Documents of the Company. The execution, delivery and performance by
the Company of the Documents do not and will not, to the best of my knowledge
after due inquiry, conflict with, result in any breach of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any lien or encumbrance upon any of the property or assets of
the Company pursuant to any provision of any securities issued by the Company,
or any indenture, mortgage, deed of trust, contract, undertaking, document, instrument or other agreement to which
the Company is a party or by which it or any of its property or assets is
bound.
C-2
vii. No
consent, order, authorization, waiver, approval or any other action, or
registration, declaration or filing with, any person, board or body, public or
private (collectively, the "
Approvals
"), is required to be obtained by
the Company in connection with the execution, delivery or performance of the
Documents or the consummation of the transactions contemplated thereby, except
as listed on Schedule A hereto. All such Approvals listed on Schedule A, except
for those set forth in Part II thereof, are Final (as defined below). An
Approval shall be Final if it has been validly issued, is in full force and
effect, is not subject to any condition (other than compliance with terms
thereof), does not impose restrictions or requirements inconsistent with the
terms of the Documents, and is final and not subject to any appeal. The
Approvals listed in Part II of Schedule A are not required to be Final as of the
date of this opinion.
viii. To
the best of my knowledge after due inquiry, there are no pending or threatened
actions or proceedings affecting the Company or any of its properties or assets
that individually or in the aggregate could prohibit or limit in any way the
execution, delivery and performance by the Company of any of the Documents.
This
opinion is being furnished only to the Collateral Agent, the Borrower and the
Secured Parties (as defined in the Consent) and their respective successors and
assigns and is solely for the benefit of such parties;
provided
, that
assignees of, or participants in, the interests of the Secured Parties may rely
on this opinion as if it were addressed to them.
Very truly yours,
C-3
Schedule A to
Opinion
APPROVALS
A-1
