**Exhibit 10.1**

 

 

**Beacon Power Corporationhas requested that portions of this document be accorded confidential treatmentpursuant to Rule 24b-2 promulgated under the Securities Exchange Act of1934, as amended.**

 

 

**COMMONAGREEMENT**

 

**dated as of August 6**, **2010**

 

**among**

 

**STEPHENTOWN REGULATION SERVICES LLC, as Borrower**

 

**U.S. DEPARTMENT OF ENERGY, as Credit Party,**

 

**U.S. DEPARTMENT OF ENERGY, as Loan Servicer,**

 

**and**

 

**MIDLAND LOAN SERVICES, INC.,**

**as Administrative Agent in its capacity as the Collateral Agent**

 

 

**BEACON POWER PROJECT**

 

**STEPHENTOWN, NEW YORK**

 

 

**Confidential materials omitted and filed separately with the Securitiesand Exchange Commission.  Asterisksdenote such omission.**

 

----

 

**Table of Contents**

 
| ** **                                           | ** **                                             | **Page** |
|------------------------------------------------------|--------------------------------------------------------|----------|
|                                                 |                                                   |     |
| ARTICLE 1 DEFINITIONS; RULES  OF INTERPRETATION | 2                                                      |
|                                                 |                                                   |
| 1.1.                                                 | Definitions                                            | 2        |
| 1.2.                                                 | Rules of Interpretation                           | 2        |
| 1.3.                                                 | Conflict with DOE Credit Facility Documents            | 2        |
|                                                 |                                                   |
| ARTICLE 2 FUNDING                               | 2                                                      |
|                                                 |                                                   |
| 2.1.                                                 | Financial Plan; Advance and Equity Advance Schedule    | 2        |
| 2.2.                                                 | Availability of Advances                               | 3        |
| 2.3.                                                 | Mechanics for Requesting Advances and Equity Advances  | 4        |
| 2.4.                                                 | Mechanics for Funding Advances and Equity Advances     | 5        |
| 2.5.                                                 | Advance Requirements under the DOE Credit Facility     | 7        |
| 2.6.                                                 | No Approval of Work                                    | 7        |
|                                                 |                                                   |     |
| ARTICLE 3 PAYMENTS;  PREPAYMENTS                | 8                                                      |
|                                                 |                                                   |
| 3.1.                                                 | Place and Manner of Payments                           | 8        |
| 3.2.                                                 | Interest Provisions Relating to All Advances           | 10       |
| 3.3.                                                 | Change of Circumstances                                | 10       |
| 3.4.                                                 | Prepayments                                            | 11       |
| 3.5.                                                 | Reserved                                               | 13       |
| 3.6.                                                 | Payment of DOE Credit Facility Fees                    | 13       |
| 3.7.                                                 | Evidence of Debt                                       | 13       |
|                                                 |                                                   |     |
| ARTICLE 4 CONDITIONS  PRECEDENT TO ADVANCES     | 14                                                     |
|                                                 |
| 4.1.                                                 | Initial Conditions Precedent to Financial Closing Date | 14       |
| 4.2.                                                 | Conditions Precedent to Advances                       | 27       |
|                                                 |                                                   |     |
| ARTICLE 5 REPRESENTATIONS  AND WARRANTIES       | 34                                                     |
|                                                 |                                                   |
| 5.1.                                                 | Organization                                           | 34       |
| 5.2.                                                 | Authorization; No Conflict                             | 35       |
| 5.3.                                                 | Legality, Validity and Enforceability                  | 35       |
| 5.4.                                                 | Capitalization                                         | 35       |
| 5.5.                                                 | Investments; Subsidiaries                              | 36       |
| 5.6.                                                 | Title                                                  | 36       |
| 5.7.                                                 | Leases                                                 | 36       |
| 5.8.                                                 | Security Interests                                     | 36       |
| 5.9.                                                 | Liens                                                  | 37       |
| 5.10.                                                | Permits; Other Required Consents                       | 37       |
| 5.11.                                                | Litigation, Labor Disputes                             | 37       |
| 5.12.                                                | Tax                                                    | 38       |
| 5.13.                                                | Business, Indebtedness, Contracts, Etc.      | 38       |
| 5.14.                                                | Transactions with Affiliates                           | 38       |
| 5.15.                                                | Compliance with Governmental Rules                     | 38       |
| 5.16.                                                | Environmental Laws                                     | 39       |

 

i

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| ** **                            | ** **                                                                                    | **Page** |
|---------------------------------------|-----------------------------------------------------------------------------------------------|----------|
|                                  |                                                                                          |     |
| 5.17.                                 | Investment Company Act                                                                        | 39       |
| 5.18.                                 | Regulation of Parties                                                                         | 39       |
| 5.19.                                 | Corrupt Practices Laws                                                                        | 40       |
| 5.20.                                 | ERISA                                                                                         | 40       |
| 5.21.                                 | Insurance                                                                                     | 41       |
| 5.22.                                 | Intellectual Property                                                                         | 41       |
| 5.23.                                 | No Defaults                                                                                   | 41       |
| 5.24.                                 | No Judgment Liens                                                                             | 41       |
| 5.25.                                 | Sufficiency of Project Documents                                                              | 42       |
| 5.26.                                 | Financial Statements                                                                          | 43       |
| 5.27.                                 | Project Milestone Schedule and Project Budget; Operating  Forecasts and Base Case Projections | 43       |
| 5.28.                                 | Sufficient Funds                                                                              | 44       |
| 5.29.                                 | Fees and Enforcement                                                                          | 44       |
| 5.30.                                 | Immunity                                                                                      | 44       |
| 5.31.                                 | No Other Powers-of-Attorney, Etc.                                                        | 44       |
| 5.32.                                 | No Additional Fees                                                                            | 44       |
| 5.33.                                 | OFAC and USA PATRIOT Act                                                                      | 44       |
| 5.34.                                 | U.S. Government Requirements                                                                  | 45       |
| 5.35.                                 | Insolvency Proceedings                                                                        | 46       |
| 5.36.                                 | Use of Proceeds                                                                               | 46       |
| 5.37.                                 | No Material Adverse Effect                                                                    | 46       |
| 5.38.                                 | Certain Program Requirements                                                                  | 46       |
| 5.39.                                 | Davis-Bacon Act                                                                               | 47       |
| 5.40.                                 | Buy American Provisions                                                                       | 47       |
| 5.41.                                 | Recovery Act Reporting                                                                        | 47       |
| 5.42.                                 | Full Disclosure                                                                               | 47       |
| 5.43.                                 | Force Majeure                                                                                 | 48       |
|                                  |                                                                                          |     |
| ARTICLE 6 AFFIRMATIVE  COVENANTS | 48                                                                                            |
|                                  |                                                                                          |
| 6.1.                                  | Information Covenants                                                                         | 48       |
| 6.2.                                  | Books, Records and Inspections; Accounting and Auditing  Matters                              | 56       |
| 6.3.                                  | Maintenance of Property and Insurance                                                         | 57       |
| 6.4.                                  | Maintenance of Existence; Conduct of Business                                                 | 57       |
| 6.5.                                  | Compliance with Governmental Rules; Environmental Laws;  Governmental Approvals               | 58       |
| 6.6.                                  | Compliance with Debarment Regulations                                                         | 58       |
| 6.7.                                  | Tax, Duties, Proper Legal Form                                                                | 58       |
| 6.8.                                  | Approved Project Changes                                                                      | 59       |
| 6.9.                                  | Operating Forecasts                                                                           | 59       |
| 6.10.                                 | Diligent Construction and Installation of Project and  Operations                             | 59       |
| 6.11.                                 | Ineligible and Overrun Project Costs                                                          | 60       |
| 6.12.                                 | Cost Overruns and Contingencies                                                               | 60       |
| 6.13.                                 | Use of Proceeds; Repayment of Indebtedness                                                    | 60       |
| 6.14.                                 | Performance of Obligations                                                                    | 60       |
| 6.15.                                 | Project Documents                                                                             | 60       |
| 6.16.                                 | Cash Deposits                                                                                 | 60       |

 

ii

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| ** **                        | ** **                                                                                     | **Page** |
|-----------------------------------|------------------------------------------------------------------------------------------------|----------|
|                              |                                                                                           |     |
| 6.17.                             | Debt Service Reserve                                                                           | 61       |
| 6.18.                             | Safety Audit                                                                                   | 61       |
| 6.19.                             | Replacement of Certain Project Participants                                                    | 61       |
| 6.20.                             | Security Interest in Newly Acquired Property; Additional  Project Documents                    | 61       |
| 6.21.                             | Title; Rights to Land                                                                          | 62       |
| 6.22.                             | Independent Consultants                                                                        | 62       |
| 6.23.                             | Additional Documents; Filings and Recordings                                                   | 62       |
| 6.24.                             | Intercompany Project Documents                                                                 | 63       |
| 6.25.                             | Event of Loss                                                                                  | 64       |
| 6.26.                             | Application of Loss Proceeds                                                                   | 65       |
| 6.27.                             | Acceptance and Startup Testing                                                                 | 66       |
| 6.28.                             | Technology                                                                                     | 66       |
| 6.29.                             | Compliance With Certain U.S. Government Requirements                                           | 66       |
| 6.30.                             | Davis-Bacon Act                                                                                | 67       |
| 6.31.                             | ERISA Covenants                                                                                | 68       |
| 6.32.                             | [Reserved.]                                                                                    | 69       |
| 6.33.                             | Financial Covenants                                                                            | 69       |
| 6.34.                             | Access to Project Site                                                                         | 70       |
| 6.35.                             | Key Employees                                                                                  | 70       |
| 6.36.                             | Central Contractor Registration                                                                | 71       |
|                              |                                                                                           |     |
| ARTICLE 7 NEGATIVE COVENANTS | 71                                                                                             |
|                              |                                                                                           |     |
| 7.1.                              | Indebtedness                                                                                   | 71       |
| 7.2.                              | Liens                                                                                          | 72       |
| 7.3.                              | [Reserved.]                                                                                    | 72       |
| 7.4.                              | Loans, Advances and Investments                                                                | 72       |
| 7.5.                              | Capital Expenditures                                                                           | 72       |
| 7.6.                              | Subsidiaries; Partnerships                                                                     | 72       |
| 7.7.                              | Ordinary Course of Conduct; No Other Business                                                  | 73       |
| 7.8.                              | Merger, Bankruptcy, Dissolution or Transfer of Assets                                          | 73       |
| 7.9.                              | Organizational Documents of Borrower and Holdings; Fiscal  Year; Legal Form; Capital Structure | 73       |
| 7.10.                             | Restricted Payments                                                                            | 73       |
| 7.11.                             | Redemption or Issuance of Stock; Changes to Capital  Structure                                 | 74       |
| 7.12.                             | Other Transactions                                                                             | 74       |
| 7.13.                             | Accounts                                                                                       | 74       |
| 7.14.                             | Disbursement of Funds                                                                          | 74       |
| 7.15.                             | Commissions                                                                                    | 75       |
| 7.16.                             | Amendment of and Notices Under Transaction Documents                                           | 75       |
| 7.17.                             | Other Agreements                                                                               | 75       |
| 7.18.                             | Hedging Agreements                                                                             | 76       |
| 7.19.                             | Compromise or Settlement of Disputes                                                           | 76       |
| 7.20.                             | Abandonment of Project                                                                         | 76       |
| 7.21.                             | Improper Use                                                                                   | 76       |
| 7.22.                             | Assignment                                                                                     | 76       |
| 7.23.                             | Margin Regulations                                                                             | 77       |
| 7.24.                             | Environmental Laws                                                                             | 77       |

 

iii

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| ** **                                     | ** **                                                | **Page** |
|------------------------------------------------|-----------------------------------------------------------|----------|
|                                           |                                                      |     |
| 7.25.                                          | ERISA                                                     | 77       |
| 7.26.                                          | Investment Company Act                                    | 77       |
| 7.27.                                          | Public Utility Holding Company Act                        | 77       |
| 7.28.                                          | Powers of Attorney                                        | 77       |
| 7.29.                                          | Debarment Regulations                                     | 77       |
| 7.30.                                          | Corrupt Practices and Foreign Asset Control Regulations   | 78       |
| 7.31.                                          | OFAC and USA PATRIOT Act                                  | 78       |
| 7.32.                                          | U.S. Government Requirements                              | 79       |
| 7.33.                                          | Federal Indebtedness                                      | 79       |
|                                           |                                                      |     |
| ARTICLE 8 EVENTS OF DEFAULT;  REMEDIES    | 80                                                        |
|                                           |                                                      |     |
| 8.1.                                           | Events of Default                                         | 80       |
| 8.2.                                           | Remedies for Events of Default                            | 85       |
| 8.3.                                           | Automatic Acceleration                                    | 87       |
| 8.4.                                           | Event of Default Notice                                   | 87       |
| 8.5.                                           | Remedies Instructions                                     | 87       |
| 8.6.                                           | Appointment of a Receiver                                 | 88       |
| 8.7.                                           | DOE                                                       | 88       |
|                                           |                                                      |     |
| ARTICLE 9 AGENTS AND  ADVISORS            | 89                                                        |
|                                           |                                                      |
| 9.1.                                           | Appointment of Agents                                     | 89       |
| 9.2.                                           | Duties and Responsibilities                               | 90       |
| 9.3.                                           | Rights and Obligations                                    | 91       |
| 9.4.                                           | No Responsibility for Certain Conduct                     | 93       |
| 9.5.                                           | Defaults                                                  | 94       |
| 9.6.                                           | No Liability                                              | 94       |
| 9.7.                                           | Fees and Expenses of Agents                               | 95       |
| 9.8.                                           | Resignation and Removal                                   | 96       |
| 9.9.                                           | Successor Agents                                          | 96       |
| 9.10.                                          | Due Authorization, Execution and Delivery                 | 97       |
| 9.11.                                          | Appointment of Independent Consultants                    | 97       |
| 9.12.                                          | Actions                                                   | 98       |
| 9.13.                                          | Delegation of Duties                                      | 98       |
| 9.14.                                          | Certain Rights of the Agents                              | 98       |
| 9.15.                                          | Authority of the Agents                                   | 99       |
| 9.16.                                          | Force Majeure                                             | 99       |
| 9.17.                                          | Agents and Independent Consultants Not Prohibited Persons | 99       |
| 9.18.                                          | Survival                                                  | 99       |
|                                           |                                                      |     |
| ARTICLE 10 REGARDING THE COLLATERAL AGENT | 99                                                        |
|                                           |                                                      |     |
| 10.1.                                          | Administration of the Collateral                          | 99       |
| 10.2.                                          | Own Funds                                                 | 100      |
| 10.3.                                          | Waiver of Setoff by Collateral Agent                      | 100      |
| 10.4.                                          | Patriot Act                                               | 100      |
| 10.5.                                          | Survival                                                  | 100      |

 

iv

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| ** **                                                    | ** **                     | **Page** |
|---------------------------------------------------------------|--------------------------------|----------|
|                                                          |                           |     |
| ARTICLE 11 REPRESENTATIONS  AND WARRANTIES OF THE AGENTS | 100                            |
|                                                          |                           |
| 11.1.                                                         | Organization, Power and Status | 101      |
| 11.2.                                                         | Power and Authority            | 101      |
| 11.3.                                                         | No Consents                    | 101      |
| 11.4.                                                         | Proceedings                    | 101      |
| 11.5.                                                         | No Agents’ Liens          | 101      |
|                                                          |                           |     |
| ARTICLE 12 REIMBURSEMENT  AGREEMENT                      | 101                            |
|                                                          |                           |     |
| 12.1.                                                         | Reimbursement Obligation       | 101      |
| 12.2.                                                         | Payments and Computations      | 102      |
| 12.3.                                                         | Obligations Absolute           | 102      |
| 12.4.                                                         | Security                       | 104      |
| 12.5.                                                         | DOE Rights                     | 104      |
| 12.6.                                                         | Further Assurances             | 105      |
|                                                          |                           |     |
| ARTICLE 13 MISCELLANEOUS                                 | 105                            |
|                                                          |                           |
| 13.1.                                                         | Addresses                      | 105      |
| 13.2.                                                         | Further Assurances             | 105      |
| 13.3.                                                         | Delay and Waiver               | 106      |
| 13.4.                                                         | Right of Set-Off               | 106      |
| 13.5.                                                         | Amendment or Waiver            | 106      |
| 13.6.                                                         | Entire Agreement               | 107      |
| 13.7.                                                         | Governing Law                  | 107      |
| 13.8.                                                         | Severability                   | 107      |
| 13.9.                                                         | Calculations                   | 107      |
| 13.10.                                                        | Limitation on Liability        | 107      |
| 13.11.                                                        | Waiver of Jury Trial           | 108      |
| 13.12.                                                        | Consent to Jurisdiction        | 108      |
| 13.13.                                                        | Successors and Assigns         | 109      |
| 13.14.                                                        | Participations                 | 109      |
| 13.15.                                                        | Reinstatement                  | 109      |
| 13.16.                                                        | No Partnership; Etc.           | 109      |
| 13.17.                                                        | Payment of Costs and Expenses  | 110      |
| 13.18.                                                        | Counterparts                   | 112      |

 

v

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| **Exhibits**  |                                                                  |
|---------------|-----------------------------------------------------------------------|
| ** **    |                                                                  |   |
| **A**         | Definitions                                                           |   |
| **A1**        | Financial  Plan                                                       |   |
| **A2**        | Definition  of Physical Completion and Project Completion             |   |
| **A3**        | Definition  of DOE Requirements                                       |   |
| **A4**        | Davis-Bacon  Provisions for Davis-Bacon Act Covered Contracts         |   |
| **A5**        | Disclosure  Letter                                                    |   |
| **B**         | Rules of  Interpretation                                         |   |
| **C1**        | Form of  Borrower Certificate (Initial Closing)                  |   |
| **C2**        | Form of  Borrower Certificate (Periodic Closing)                 |   |
| **D1**        | Form of  Lender’s Engineer Certificate (Initial Closing)    |   |
| **D2**        | Form of  Lender’s Engineer Certificate (Periodic Closing)   |   |
| **E1**        | Form of  Sponsor’s Certificate (Initial Closing)            |   |
| **E2**        | [Intentionally  Omitted]                                              |   |
| **E3**        | Form of  Certificate of Holdings (Initial Closing)               |   |
| **F1**        | Form of  Insurance Consultant Certificate (Initial Closing)      |   |
| **F2**        | Form of  Insurance Consultant Certificate (Periodic Closing)     |   |
| **G**         | Form of  Collateral Agent Certificate (Initial Closing)          |   |
| **H**         | Form of  Major Project Participant Certificate (Initial Closing) |   |
| **I**         | Form of  Financial Officer Certificate (Initial Closing)         |   |
| **J**         | [Intentionally  Omitted]                                              |   |
| **K**         | [Intentionally  Omitted]                                              |   |
| **L**         | [Intentionally  Omitted]                                              |   |
| **M**         | Form of  Master Advance Notice                                   |   |
| **N**         | Form of  Drawstop Notice                                         |   |
| **O**         | Form of  Quarterly Reporting Certificate                         |   |
| **P**         | Form of  Physical Completion Certificate                         |   |
| **Q**         | Form of  Project Completion Certificate                          |   |
| ** **    |                                                                  |   |
| **Schedules** |                                                                  |
| ** **    |                                                                  |   |
| **2.1(b)**    | Advance  Schedule                                                     |   |
| **6.3(b)**    | Insurance  Requirements                                               |   |
| **6.30(d)**   | Davis-Bacon  Act Wage Determination                                   |   |
| **13.1**      | Notice  Addresses                                                     |   |

 

vi

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**COMMON AGREEMENT**

 

ThisCOMMON AGREEMENT (the “Common Agreement”), dated as of August 6,2010, is by and among (i) **STEPHENTOWNREGULATION SERVICES LLC**, a limited liability company organized andexisting under the laws of Delaware, as Borrower, (ii) the **U.S. DEPARTMENT OF ENERGY**, acting by and through theSecretary of Energy, for itself as a Credit Party and as guarantor of theAdvances made under the DOE Credit Facility Documents (in such capacity, “DOE”),(iii) the**U.S. DEPARTMENT OF ENERGY**, actingthrough its Loan Guarantee Program Office, as the Loan Servicer (in suchcapacity, the “Loan Servicer”), and (iv) **MIDLAND LOANSERVICES, INC.**, a corporation organized and existing under thelaws of Delaware, as the Administrative Agent in its capacity as the CollateralAgent.

 

**RECITALS**

 

WHEREAS,the Borrower intends to develop, design, construct, own and operate aflywheel-based frequency regulation plant designed to enhance gridstabilization and optimization, to be located in Stephentown, New York (the “Project”).

 

WHEREAS,the Equity Interests of the Borrower are currently held by Holdings, as soleEquity Owner of the Borrower, and the Equity Interests of Holdings arecurrently held by the Sponsor as the sole Equity Owner of Holdings.

 

WHEREAS,the Borrower, in furtherance of its obligations with respect to the Project hasrequested that:

 

(i)                                     FFB make theAdvances pursuant to the DOE Credit Facility Documents in the aggregateprincipal amount not exceeding $43,137,019, and

 

(ii)                                  DOE guaranteethe repayment of the DOE-Guaranteed Loan pursuant to the DOE Guarantee.

 

WHEREAS,the execution of this Common Agreement, which provides for, inter alia(i) certain common representations, warranties and covenants of theBorrower, (ii) certain uniform conditions of disbursement for theAdvances, and (iii) certain common events of default, is a conditionprecedent to the obligations of the Credit Parties under the DOE CreditFacility Documents.

 

**AGREEMENT**

 

NOW,THEREFORE, in consideration of the foregoing, the Credit Parties entering intothe DOE Credit Facility Documents, and other good and valid consideration, thereceipt and adequacy of which are hereby expressly acknowledged, the partieshereby agree as follows:

 

**Confidential materials omitted and filed separately with the Securitiesand Exchange Commission.  Asterisks denote such omission.**

 

----

 

**ARTICLE 1DEFINITIONS; RULES OF INTERPRETATION**

 

**1.1.****                           ****Definitions.**

 

Exceptas otherwise expressly provided herein, capitalized terms used in this CommonAgreement and its exhibits and schedules shall have the meanings given in Exhibit Ahereto.

 

**1.2.****                           ****Rules ofInterpretation.**

 

Exceptas otherwise expressly provided herein, the rules of interpretation setforth in Exhibit B hereto shall apply to this Common Agreement.

 

**1.3.****                           ****Conflictwith DOE Credit Facility Documents.**

 

Exceptas otherwise expressly provided hereunder, in the case of any conflict betweenthe terms of this Common Agreement and the terms of any DOE Credit FacilityDocument to which Borrower is a party, the terms of such DOE Credit FacilityDocument, as between the Borrower and the Credit Parties party thereto, shallcontrol.

 

**ARTICLE 2FUNDING**

 

**2.1.****                           ****FinancialPlan; Advance and Equity Advance Schedule.**

 

(a)                                  The proposedsources and uses of financing with respect to the Project are set forth on theFinancial Plan.  This Article 2does not represent any undertaking of any of the Credit Parties to make anyAdvances to the Borrower.

 

(b)                                 Attached heretoas Schedule 2.1(b) is an initial Advance Schedule, whichrepresents the Borrower’s best estimate in all material respects as of theCommon Agreement Date, based on all facts and circumstances existing and Knownto the Borrower, of the timing and amount of proposed Advances and EquityAdvances for the Project set forth on a monthly basis.  The Advance Schedule shall be amendedfrom time to time as set forth in Section 4.2.2.  All Base Equity shall be provided by Borroweron or prior to the Financial Closing Date.

 

(c)                                  Eligible BaseProject Costs shall be funded as follows:

 

(i)                                     Until satisfaction(or waiver in writing) as determined by each Relevant Credit Party in its solediscretion (or reasonable discretion, if expressly so provided herein) of eachof the Advance Conditions Precedent for the initial Advance, one hundredpercent (100%) of Eligible Base Project Costs shall be funded with the proceedsof Equity Advances.

 

(ii)                                  Aftersatisfaction (or waiver in writing) as determined by each Relevant Credit Partyin its sole discretion (or reasonable discretion, if expressly so provided herein)of each of the Advance Conditions Precedent for the initial Advance, onehundred percent (100%) of Eligible Base Project Costs shall be funded with theproceeds of Advances, until such time as 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

2

----

 

sixty-two and one-half percent (62.5%) of theaggregate of all Eligible Base Project Costs that have been funded, directlywith the proceeds of Advances and Equity Advances or indirectly by means ofcontributions of assets by Sponsor or Holdings to Borrower (collectively, the “FundedEligible Base Project Costs”) shall have been funded with proceeds ofAdvances.

 

(iii)                               After sixty-twoand one-half percent (62.5%) of the aggregate of all Funded Eligible BaseProject Costs shall have been funded with proceeds of Advances,(A) sixty-two and one-half percent (62.5%) of each request for fundingunder a Master Advance Notice shall be funded with the proceeds of an Advanceand (B) thirty-seven and one-half percent (37.5%) of each request forfunding under a Master Advance Notice shall be funded with the proceeds of anEquity Advance.

 

(d)                                 Notwithstandinganything contained in this Agreement to the contrary:  (i) no Advances may be used to fund anyportion of the Debt Service Reserve Requirement prior to the PhysicalCompletion Date; and (ii) the aggregate amount of all Advances prior tothe Physical Completion Date shall not exceed the maximum principal amount ofthe DOE Credit Facility minus one hundred ten percent (110%) of the DebtService Reserve Requirement.

 

**2.2.****                           ****Availabilityof Advances.**

 

2.2.1                        Availability.

 

Subjectto the satisfaction (or waiver by the Relevant Credit Party in writing) of eachapplicable condition precedent set forth in Article 4 and in theDOE Credit Facility, Advances under the DOE Credit Facility shall be madeduring the applicable Availability Period; provided, however, that,notwithstanding anything to the contrary contained in the FFB Promissory Note,no Advances under the DOE Credit Facility will be made to pay interest on theDOE Credit Facility after December 15, 2011.

 

2.2.2                        Loan CommitmentReductions and Cancellations.

 

TheBorrower may, on not less than fifteen (15) days prior written notice to theLoan Servicer and upon the satisfaction of any consent requirement or otherapplicable provisions of each DOE Credit Facility Document, permanently reducethe unutilized portions of the DOE Credit Facility Commitment, in whole or inpart, but only if:

 

(a)                                  each partialreduction is in an amount permitted under the DOE Credit Facility Documents;

 

(b)                                 the LoanServicer, in consultation with the Lender’s Engineer, is satisfied that suchcancellation or reduction will not result in the Borrower having insufficientfunds to complete the construction or development of the Project; and

 

(c)                                  upon suchcancellation or reduction, the Borrower pays all fees, Periodic Expenses, andother amounts then due with respect to such cancellation or reduction under theDOE Credit Facility Documents.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

3

----

 

Oncereduced or canceled, the DOE Credit Facility Commitment may not be reinstated.

 

**2.3.****                           ****Mechanicsfor Requesting Advances and Equity Advances.**

 

2.3.1                        Master AdvanceNotice.

 

(a)                                  The Borrowermay request an Advance under the DOE Credit Facility and/or an Equity Advanceby delivering to the Credit Parties and the Lender’s Engineer, not less thaneleven (11) Business Days prior to the Requested Advance Date, an appropriatelycompleted Master Advance Notice with respect to such Advance and/or EquityAdvance.  The Borrower may request anAdvance and/or an Equity Advance no more frequently than once per calendarmonth.

 

(b)                                 Each MasterAdvance Notice shall specify:

 

(i)                                     the amount ofthe Advance requested under the DOE Credit Facility, if any, which shall be inthe minimum amount and increments required by the DOE Credit Facility Documentsand the amount of the Equity Advance requested, if any;

 

(ii)                                  the RequestedAdvance Date, if the Master Advance Notice includes a request for an Advance,or the requested date for the Equity Advance, if the Master Advance Notice doesnot include a request for an Advance, which, in each case, shall be anyBusiness Day;

 

(iii)                               pursuant to Section 2.4.2,the amount of Base Equity and Overrun Equity to be disbursed from the BaseEquity Account and the Overrun Equity Account on the Requested Advance Date, ifthe Master Advance Notice includes a request for an Advance, or the requesteddate for the Equity Advance, if the Master Advance Notice does not include arequest for an Advance;

 

(iv)                              the aggregateamount, on a prospective basis after giving effect to the requested Advance, ifany, and the requested Equity Advance, if any, of (A) all Advancesoutstanding under the DOE Credit Facility, (B) the amount of the ApprovedPre-Closing Equity Credit, and (C) all Base Equity and Overrun Equity (ifany) disbursed from the Base Equity Account and the Overrun Equity Account orin cash;

 

(v)                                 the ProjectCosts being financed using the proceeds of the requested Advance, and/or EquityAdvance, which shall be only Eligible Base Project Costs;

 

(vi)                              [Reserved];

 

(vii)                           that(A) the representations and warranties of the Borrower contained in theLoan Documents to which the Borrower is a party are true, correct and completein all material respects on and as of the Requested Advance Date, if the MasterAdvance Notice includes a request for an Advance, or the requested date for theEquity Advance, if the Master Advance Notice does not include a requested foran Advance (other than to the extent such 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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representations and warranties relate solely to anearlier date), (B) no Event of Default or Potential Default has occurredand is continuing, and (C) such other matters as are required to becertified by the Borrower pursuant to Section 4.2; and

 

(viii)                        Such otherinformation as may be required in the form of Master Advance Notice.

 

(c)                                  The Borrowershall include as attachments to each Master Advance Notice, and shall deliverthe same to the Loan Servicer:

 

(i)                                     a draft of theFFB Advance Request with respect to any requested Advance, together with anyinformation necessary for FFB and the Loan Servicer to process such request;and

 

(ii)                                  all othercertificates and documentation required in respect of such Advance under theDOE Credit Facility Documents and the related Loan Documents.

 

**2.4.****                           ****Mechanicsfor Funding Advances and Equity Advances.**

 

2.4.1                        DOE-GuaranteedLoan Funding.

 

(a)                                  Satisfaction ofConditions Precedent.

 

(i)                                     Promptly afterreceipt of a Master Advance Notice, the Loan Servicer shall review such MasterAdvance Notice and the attachments thereto to determine whether all certificatesand documentation required under Section 2.3 have been delivered toit.  At such time as the Loan Servicerhas determined that it has received all such required certificates anddocumentation, it shall promptly so notify the other Credit Parties and theBorrower;

 

(ii)                                  No later thansix (6) Business Days prior to the Requested Advance Date, the Borrowershall deliver to the Loan Servicer a completed FFB Advance Request with respectto the requested Advance, including all wire transfer information for thedesignated payees of the proceeds of such Advance, together with any otherinformation required on such FFB Advance Request; and

 

(iii)                               As soon as theLoan Servicer determines that (A) all conditions precedent set forth in Article 4in respect of the requested Advance have been satisfied (or waived),(B) the required Equity Contributions have been made in accordance with Section 2.4.2,and (C) the FFB Advance Request and all other certificates anddocumentation required under the DOE Credit Facility in respect of therequested Advance have been provided and are satisfactory (or that suchrequirement has been waived), then DOE shall sign the FFB Advance RequestApproval Notice attached to the FFB Advance Request and forward both to theFFB, with a copy to the Borrower, the Administrative Agent in its capacity asthe Collateral Agent and the Lender’s Engineer, it being agreed that if theLoan Servicer makes such determination at least six (6) Business Daysprior to the Requested Advance Date, then DOE shall use reasonable 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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commercial efforts to sign and forward such FFBAdvance Request Approval Notice at least five (5) Business Days prior tothe Requested Advance Date.

 

(b)                                 FFB Funding.  For any requested Advance for which a FFBAdvance Request Approval Notice has been issued pursuant to this Section 2.4.1and for which no Drawstop Notice has been issued pursuant to Section 2.4.3,in accordance with the terms of the FFB Note Purchase Agreement, FFB has agreedto fund such Advance on the Requested Advance Date in accordance with the DOECredit Facility Documents.  Such fundsshall be applied as specified in the applicable FFB Advance Request; provided,however, that if any Drawstop Notice has been issued and is in effect on theRequested Advance Date with respect to any funds received by the AdministrativeAgent in its capacity as the Collateral Agent, such funds shall be appliedpursuant to Section 2.4.3(c).

 

2.4.2                        EquityContributions.

 

(a)                                  Confirmation.  As of the date that is eight (8) BusinessDays prior to the requested date for the Equity Advance, to the extent that theAdministrative Agent in its capacity as the Collateral Agent has determinedthat the amount on deposit in the Base Equity Account and the Overrun EquityAccount are not sufficient to satisfy the requirements of Section 2.1(c),the Administrative Agent in its capacity as the Collateral Agent shall sonotify the Borrower, the Sponsor and the Credit Parties.  If as of the date six (6) Business Daysprior to the requested date for the Equity Advance there continues to be ashortfall in the amounts on deposit in the Base Equity Account and the OverrunEquity Account and the Borrower has not provided evidence satisfactory to theLoan Servicer it its sole discretion that such shortfall will be cured prior tothe requested date for the Equity Advance, the Administrative Agent in itscapacity as the Collateral Agent shall send a Drawstop Notice to the Borrowerand the other Credit Parties.

 

(b)                                 Disbursements:  On the requested date for the Equity Advance,provided that the Collateral Agent has not received a Drawstop Notice, theCollateral Agent shall cause Equity Contributions to be disbursed (i) fromthe Base Equity Account and, (ii) if the amount on deposit in the BaseEquity Account shall be insufficient, after application of all monies ondeposit in the Base Equity Account for such purpose, from the Overrun EquityAccount, in the amounts required pursuant to Section 2.1(c).

 

(c)                                  Reserve Letterof Credit.  In lieu ofmaintaining the required amounts in the Base Equity Account, the Sponsor maysubstitute a Reserve Letter of Credit.

 

(d)                                 PhysicalCompletion.  UponPhysical Completion, at the request of the Borrower, provided that no PotentialDefault or Event of Default then exists, any remaining balance in the BaseEquity Account and the Overrun Equity Account not otherwise used to fund TotalProject Costs may be disbursed to the Borrower for distribution to the EquityOwners of the Borrower, without regard to the limitations set forth in Section 7.10hereof (except for Section 7.10(a)(ii) hereof).

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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2.4.3                        DrawstopNotices.

 

(a)                                  Issuance.  At any time after the issuance of a MasterAdvance Notice up to the date that is one Business Day prior to the RequestedAdvance Date, if the Master Advance Notice includes a request for an Advance,or the requested date for the Equity Advance, if the Master Advance Notice doesnot include a request for an Advance, whether or not DOE has issued an FFBAdvance Request Approval Notice, any Relevant Credit Party may, from time totime, issue a notice substantially in the form attached hereto as Exhibit N(a “Drawstop Notice”) to the Borrower and the other Credit Parties, ifsuch Relevant Credit Party determines that:

 

(i)                                     the conditionsin Article 4 with respect to such Advance or Equity Advance are notmet, or having been met, are no longer met; or

 

(ii)                                  the conditionsprecedent to such Advance contained in the DOE Credit Facility are not met, orhaving been met, are no longer met.

 

(b)                                 Consequences.  If a Drawstop Notice is issued, FFB shall notbe obligated to make the requested Advance, if applicable; and the CollateralAgent shall not be obligated to make the requested Equity Advance, ifapplicable.

 

(c)                                  Funds Advanced.  If any Drawstop Notice has been issued, fundsdelivered to the Administrative Agent in its capacity as the Collateral Agentpursuant to Section 2.4.1(b) shall not be applied and shall bereturned promptly to the respective Credit Parties.

 

(d)                                 Costs.  The Borrower shall pay all costs in respectof any Advance failed to be made under this Section 2.4.3.

 

2.4.4                        No Liability.

 

Withoutlimiting the generality of Section 9.6, no Credit Party shall haveany liability to the Borrower or any Affiliate thereof or to any other CreditParty solely arising from the issuance of or failure to issue any FFB AdvanceRequest Approval Notice, Drawstop Notice, or any other notice contemplated bythis Section 2.4.

 

**2.5.****                           ****AdvanceRequirements under the DOE Credit Facility.**

 

Notwithstandinganything to the contrary contained in this Article 2, the Borroweralso shall comply with all separate disbursement requirements set forth hereinand in the DOE Credit Facility Documents. Unless otherwise specified in the DOE Credit Facility Documents, alldeterminations to be made with respect to the DOE Credit Facility shall be madeby DOE.

 

**2.6.****                           ****NoApproval of Work.**

 

Themaking of any Advance or Equity Advance under the Loan Documents shall not bedeemed an approval or acceptance by any Credit Party of any work, labor,supplies, materials or equipment furnished or supplied with respect to theProject.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**ARTICLE 3PAYMENTS; PREPAYMENTS**

 

**3.1.****                           ****Placeand Manner of Payments.**

 

3.1.1                        Generally.

 

Allpayments due under the DOE Credit Facility shall be made by the Borrowerpursuant to the terms of the DOE Credit Facility Documents and as specifiedherein.

 

3.1.2                        Net of Tax, Etc.

 

(a)                                  Tax.  Any and all payments to any Secured Party orFFB by the Borrower hereunder or under any other Loan Document shall be madefree and clear of, and without deduction for, any and all taxes, levies,imposts, deductions, charges or withholdings imposed by any central bank orother Governmental Authority, and all liabilities with respect thereto,excluding (i) taxes imposed on or measured by the net income (howeverdenominated) of such Secured Party or FFB by any jurisdiction or any politicalsubdivision or taxing authority thereof or therein solely as a result of apresent or former connection between such Secured Party or FFB and such jurisdictionor political subdivision (other than any connection arising as a result of thetransactions contemplated by the Loan Documents), and (ii) any withholdingtaxes or other tax based on gross income imposed by the United States ofAmerica that are not attributable to any Change of Law or the interpretation oradministration of any Governmental Rule by any Governmental Authority (allsuch non-excluded taxes, levies, imposts, deductions, charges, withholdings andliabilities being hereinafter referred to as “Covered Taxes”).  If the Borrower shall be required by law towithhold or deduct any Covered Taxes from or in respect of any sum payablehereunder 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 aftermaking all such required deductions (including deductions applicable toadditional sums payable under this Section 3.1.2), such SecuredParty or FFB receives an amount equal to the sum it would have received had nosuch deductions been made, (B) the Borrower shall make such deductions and(C) Borrower shall pay the full amount deducted to the relevant taxationauthority or other authority in accordance with all Governmental Rules.  If the Borrower shall make any payment withrespect to Covered Taxes under this Section 3.1.2(a) to or forthe benefit of any Secured Party or FFB and if such Secured Party or FFB shallclaim any credit or deduction for such Covered Taxes against any other taxespayable by such Secured Party or FFB then such Secured Party or FFB shall payto the Borrower an amount equal to the amount the Secured Party determines inits reasonable discretion is the amount by which such other taxes are actuallyreduced; provided that the aggregate amount payable by such Secured Party orFFB pursuant to this sentence shall not exceed the aggregate amount previouslypaid by the Borrower with respect to such Covered Taxes.

 

(b)                                 Indemnity.  The Borrower shall indemnify each SecuredParty for the full amount of Covered Taxes (including any Covered Taxes imposedby any jurisdiction on amounts payable under this Section 3.1.2paid by any Secured Party), whether or not such Covered Taxes were correctly orlegally asserted.  Each Secured Partyshall give notice to the Borrower of the assertion of any claim against suchSecured Party relating to such Secured Party’s Covered 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Taxes as promptly as is practicable after beingnotified of such assertion; provided that any failure to notify the Borrowerpromptly of such assertion shall not relieve the Borrower of its obligationunder this Section 3.1.2, except, with respect to any such noticegiven by a Secured Party more than ninety (90) days after such Secured Partyhas notice or knowledge of such claim, to the extent that the Borrower isactually prejudiced by such failure. Payments by the Borrower pursuant to this indemnification shall be madewithin ten (10) days after the date such Secured Party makes writtendemand therefor (submitted through the Loan Servicer), which demand shall beaccompanied by a certificate describing in reasonable detail the basis thereof.  Each Secured Party agrees to repay to theBorrower any refund (including that portion of any interest that was includedas part of such refund with respect to Covered Taxes paid by the Borrowerpursuant to this Section 3.1.2), received by such Secured Party forCovered Taxes that were paid by the Borrower pursuant to this Section 3.1.2,and to provide reasonable assistance to the Borrower (and at the expense of theBorrower) to contest any such Covered Taxes that such Secured Party or theBorrower reasonably believes not to have been properly assessed.

 

(c)                                  Notice.  Within ten (10) days after the date ofany payment of Covered Taxes by the Borrower, the Borrower shall furnish to theLoan Servicer and each affected Secured Party the original or a certified copyof a receipt evidencing such payment, or if the relevant tax authority has notprovided the Borrower with such a receipt, shall furnish such other evidence ofsuch payment as may be available to the Borrower (in which case the Borrowershall promptly request a receipt from the relevant tax authority, and sofurnish the original or a certified copy thereof promptly on receiptthereof).  The Borrower shall compensateeach Secured Party for all reasonable losses and expenses sustained by suchSecured Party as a result of any failure by the Borrower to so furnish suchcopy of such receipt.

 

(d)                                 Survival ofObligations.  Theobligations of the Borrower under this Section 3.1.2 shall survivethe termination of this Common Agreement and the repayment of the SecuredObligations.

 

(e)                                  Documentation.  Any foreign Secured Party that is entitled toan exemption from or reduction of withholding tax under the law of thejurisdiction in which the Borrower is resident for tax purposes, or any treatyto which such jurisdiction is a party, with respect to payments hereunder orunder any other Loan Document shall deliver to the Borrower, at the time ortimes prescribed by applicable law or reasonably requested by the Borrower,such properly completed and executed documentation prescribed by applicable lawas will permit such payments to be made without withholding or at a reducedrate of withholding.  In addition, anySecured Party, if requested by the Borrower, shall deliver such otherdocumentation prescribed by applicable law or reasonably requested by theBorrower as will enable the Borrower to determine whether or not such SecuredParty is subject to backup withholding or information reportingrequirements.  Each Secured Party shallpromptly (i) notify the Borrower of any change in circumstances that wouldmodify or render invalid any such claimed exemption or reduction and (ii) takesuch steps as shall not be disadvantageous to it, in the sole judgment of suchSecured Party, and as may be reasonably necessary (including the re-designationof its lending office) to avoid any requirement of applicable laws of any suchjurisdiction that the 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Borrower make any deduction or withholding for taxesfrom amounts payable to such Secured Party.

 

**3.2.****                           ****InterestProvisions Relating to All Advances.**

 

3.2.1                        InterestAccount and Interest Computations.

 

Inaccordance with Section 609.10(e)(1) of the Applicable Loan GuaranteeRequirements, interest shall accrue on the unpaid principal amount of eachAdvance from the date such Advance is disbursed to the Borrower pursuant to theDOE Credit Facility Documents, to the date such Advance is paid in full, at arate per annum relating thereto as specified in the DOE Credit FacilityDocuments.  The Borrower herebyauthorizes each Credit Party to record in an account or accounts maintained bysuch Credit Party on its books (A) the interest rates applicable to allAdvances, (B) the interest periods for each Advance outstanding,(C) the date and amount of each principal and interest payment on eachAdvance outstanding, and (D) such other information as such Credit Party maydetermine is necessary for the computation of interest payable by the Borrowerhereunder.  The Borrower agrees that allcomputations of interest by a Credit Party pursuant to this Section 3.2.1shall, absent manifest error, constitute prima facie evidence of the amountthereof, and shall be conclusive absent manifest error.  All computations of interest shall be made asset forth in the relevant DOE Credit Facility Documents.

 

3.2.2                        InterestPayment Dates.

 

Subjectto the terms of the DOE Credit Facility, the Borrower shall pay accruedinterest on the outstanding principal amount of each Advance on each QuarterlyPayment Date, on prepayment (on the principal amount prepaid), and at maturity(whether by acceleration or otherwise).

 

**3.3.****                           ****Changeof Circumstances.**

 

3.3.1                        AlternateOffice; Minimization of Costs.

 

Uponany FFB Loan Transfer or receipt by the Borrower or any Credit Party of noticeof FFB’s intention to make any FFB Loan Transfer in accordance with the FFBNote Purchase Agreement, the Borrower, DOE, the Loan Servicer and theAdministrative Agent shall cooperate with the transferee of the DOE-GuaranteedLoans to amend this Common Agreement and any other Loan Documents toincorporate customary provisions for a commercial loan transaction of this typereasonably satisfactory to such transferee lender with respect to suchtransferee lender designating an alternative lending office with respect to itsDOE-Guaranteed Loan to mitigate costs or to avoid any circumstances that mightmake it unlawful or impossible for such transferee lender to maintain aDOE-Guaranteed Loan.

 

3.3.2                        Illegality.

 

Uponany FFB Loan Transfer or receipt by the Borrower or any Credit Party of noticeof FFB’s intention to make any FFB Loan Transfer in accordance with the FFBNote Purchase 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Agreement,the Borrower and DOE shall cooperate with the transferee of the FFB Loan toamend this Common Agreement and any other Loan Documents to incorporatecustomary provisions for a commercial loan transaction of this type reasonablysatisfactory to such transferee with respect to any Change of Law that makes itunlawful or impossible for any lender to make or maintain any FFB Loans.

 

3.3.3                        Modificationsupon Transfer.

 

Uponany FFB Loan Transfer or receipt by the Borrower or any Credit Party of noticeof FFB’s intention to make any FFB Loan Transfer in accordance with the FFBNote Purchase Agreement, the Borrower, DOE, the Loan Servicer and theAdministrative Agent shall cooperate with the transferee of the FFB Loans toamend this Common Agreement and any other Loan Documents to incorporatecustomary provisions reasonably satisfactory to such transferee with respect toany Change of Law that subjects such transferee lender to any tax, duty orother charge with respect to any FFB Loans.

 

**3.4.****                           ****Prepayments.**

 

3.4.1                        Terms of allPrepayments.

 

(a)                                  With respect toany prepayment of any Advance of the DOE-Guaranteed Loans, whether suchprepayment is voluntary or mandatory, including a prepayment upon acceleration,the Borrower shall comply with all applicable terms and provisions of the FFBNote Purchase Agreement.

 

(b)                                 All prepaymentsof the DOE Credit Facility shall be applied in accordance with the DOE CreditFacility Documents.

 

(c)                                  The Borrowermay not reborrow the principal amount of any DOE-Guaranteed Loan that isprepaid.

 

3.4.2                        VoluntaryPrepayments.

 

(a)                                  Without the consentof the Loan Servicer, the Borrower may not prepay the DOE-Guaranteed Loans inpart prior to the end of the Availability Period.  Any prepayment in whole or in part with theconsent of the Loan Servicer prior to the end of the Availability Period shallbe subject to any applicable prepayment premiums, charges or other amounts asmay be required by the DOE Credit Facility Documents.

 

(b)                                 After the endof the Availability Period, the Borrower may prepay all or a portion of theprincipal amount of any Advance of the DOE-Guaranteed Loans upon prior writtennotice submitted by the Borrower to the Credit Parties not later than the fifthBusiness Day prior to the Intended Prepayment Date, and satisfaction of thefollowing conditions:

 

(i)                                     compliance withany restrictions contained in the DOE Credit Facility Documents, including(A) with respect to the DOE Credit Facility, any “No-Call Period” 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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specified in the FFB Note Purchase Agreement, and(B) satisfaction of any minimum amount requirement of the DOE CreditFacility Documents; and

 

(ii)                                  payment of allaccrued and unpaid interest on such principal amount, and any other fees andPeriodic Expenses then payable, including any prepayment premiums, or otheramounts as may be required under the DOE Credit Facility Documents.

 

3.4.3                        MandatoryPrepayments.

 

(a)                                  The Borrowershall be required to make mandatory prepayments of the DOE-Guaranteed Loansupon the occurrence of any of the following and in amounts set forth in this Section 3.4.3,minus such amounts as may be required to be deposited (i) in the DebtService Reserve Account such that the amount on deposit in the Debt ServiceReserve Account equals the Debt Service Reserve Requirement and (ii) inthe Maintenance Reserve Account such that the amount on deposit in theMaintenance Reserve Account equals the MRA Required Amount:

 

(i)                                     the receipt bythe Borrower of delay damages in excess of the amounts needed, as determined bythe Loan Servicer in consultation with the Lender’s Engineer (as appropriate)to pay financing and operating costs payable resulting from the delay;

 

(ii)                                  the receipt bythe Borrower of Loss Proceeds in an amount that exceeds the amount of such LossProceeds used or to be used to repair or restore the Project Facility;

 

(iii)                               the payment ofany amounts to the Borrower in respect of the termination or repudiation of anyProject Document or in respect of any damages paid to the Borrower as a resultof a breach of any such Project Document (in the case of damages in excess ofthe amount applied in remedying the relevant breach), in each case, afterdeduction of all costs and expenses (including reasonable attorneys’ fees)incurred in collecting such amounts;

 

(iv)                              sales of anyassets no longer used or useful in the operation of the Project Facility inexcess of [*****] in a single transaction or a series of related transactions,in an amount equal to the proceeds of such sales, after deduction of all costsand expenses (including reasonable attorneys’ fees) incurred in connection withsuch sales, unless applied or to be applied to the acquisition of replacementassets; and

 

(v)                                 to the extentany Restricted Payments or any other payments are made from the DistributionSuspense Account in accordance with Section A.14 of Appendix Ato this Agreement, then the Borrower shall, at the same time that such paymentsare made, apply an amount equal to [*****] of the amount of such paymentto the prepayment of the DOE-Guaranteed Loan (the “Prepayment Amount”), withsuch Prepayment Amount allocated to the prepayment of principal in themaximum possible amount when taken together with any associated make-wholepremiums or discounts (it being understood that (x) if there is anassociated premium, the principal amount prepaid would be less than thePrepayment Amount, and (y) if there is an associated discount, theprincipal amount prepaid would be greater than the Prepayment Amount).

 

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(b)           Any mandatory prepayments of the DOE-Guaranteed Loansshall be made no later than on the next Payment Date in accordance with the DOECredit Facility Documents, shall be applied, and shall be subject to the termsand conditions, as set forth in the DOE Credit Facility Documents.

 

**3.5.****                           ****Reserved.**

 

**3.6.****                           ****Paymentof DOE Credit Facility Fees.**

 

(a)           Borrower shall pay (i) to DOE on the FinancialClosing Date, the balance of the DOE Credit Facility Fee in an amount equal to0.8% of the maximum principal amount of the DOE Credit Facility, and(ii) to FFB, the fees payable to FFB from time to time in accordance withthe requirements of the DOE Credit Facility Documents.

 

(b)           Borrower shall pay to DOE, for its own account, the DOEMaintenance Fee each year in advance, commencing on the Financial Closing Date.

 

(c)           Borrower shall pay a [*****], if any, in the amount and atthe time reasonably determined by DOE.

 

(d)           All DOE Credit Facility Fees shall be paid on the datesdue, in immediately available funds in Dollars, to DOE.  Once paid, the DOE Credit Facility Fees shallnot be refundable under any circumstances.

 

**3.7.****                           ****Evidenceof Debt.**

 

(a)           Each of the Credit Parties shall maintain or cause to bemaintained, in accordance with its usual practice, internal records evidencingthe amounts from time to time lent by and owing to it under the DOE CreditFacility Documents and each of the payments from time to time made in respectthereof.

 

(b)           The Loan Servicer shall maintain, in accordance with itsusual practice, internal records evidencing the amounts from time to time(i) advanced by FFB under the FFB Note Purchase Agreement, and(ii) paid by DOE with respect to the DOE Guarantee and, in each case, eachof the payments made from time to time in respect thereof.

 

(c)           Except as otherwise provided in any Loan Document, theentries made in the internal records maintained by or on behalf of each of theCredit Parties, respectively, pursuant to clauses (a) and (b), aboveshall, absent manifest error, constitute prima facie evidence of the existenceand amount of Secured Obligations of the Borrower as therein recorded, andshall be conclusive absent manifest error.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**ARTICLE 4CONDITIONS PRECEDENT TO ADVANCES**

 

**4.1.****                           ****InitialConditions Precedent to Financial Closing Date.**

 

Theestablishment of the Financial Closing Date is subject to the prior satisfaction(or waiver in writing), as determined by (x) in all cases, DOE and(y) with respect to any documents or instruments addressed to FFB or towhich FFB is party, FFB (each a “Relevant Credit Party”) in its solediscretion, of each of the following conditions precedent set forth in this Section 4.1(the “Initial Conditions Precedent”). Solely for purposes of establishing the Financial Closing Date, all ofthe Initial Conditions Precedent shall be deemed satisfied or waived on thedate of execution and delivery by all parties hereto of this Common Agreement.

 

4.1.1                        Loan Documents.

 

TheLoan Servicer shall have received fully executed originals in sufficientcounterparts for each Credit Party of each of the following documents, each ofwhich shall be in form and substance satisfactory to each Relevant CreditParty:

 

(a)           Common Agreement. This Common Agreement;

 

(b)           Building Loan Agreement.  The Building Loan Agreement;

 

(c)           DOE Credit Facility Documents.  Each of the following documents and all othercontracts and documents required in connection with the DOE Credit Facility(the “DOE Credit Facility Documents”):

 

(i)            the FFB Note Purchase Agreement;

 

(ii)           the FFB Promissory Note;

 

(iii)          the DOE Guarantee; and

 

(iv)          the Administrative Agent Fee Letter and Agreement;

 

(d)           Sponsor Loan Documents.  Each of the following documents from theSponsor and all other contracts and documents required in connection with theEquity Contributions (the “Sponsor Loan Documents”):

 

(i)            the Completion Guaranty;

 

(ii)           the Corporate Guaranty;

 

(iii)          the Sponsor Technology License Agreement;

 

(iv)          the Sponsor Technology Escrow Agreement; and

 

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(v)           all other documents, certificates and instruments requiredto be delivered in connection with any of the foregoing documents.

 

(e)           Security Documents. Each of the following documents and all other contracts and documentsentered into prior to, on, or after the Financial Closing Date that provide any Lien, charge or securityinterest to the Secured Parties (or any of them) to secure the SecuredObligations (the “Security Documents”):

 

(i)            Asset Pledge Documents.  Each of the following documents and all othercontracts and documents that provideany Lien, charge or security interest to the Secured Parties (or any of them)on the assets of the Borrower to secure the Secured Obligations (the “AssetPledge Documents”):

 

(A)          the Mortgage;

 

(B)           the Security Agreement;

 

(C)           the Account Control Agreements;

 

(D)          the Collateral Assignment;

 

(E)           to the extent not included in the Mortgage or SecurityAgreement, agreements pledging all other personal property and real propertyinterests of the Borrower, including all governmental approvals, licenses andpermits for the Project, all Project Accounts, all insurance policiesmaintained by the Borrower or otherwise related to the Project, all agreements,leasehold or other property interests relating to the Project, and all relatedfixtures, easements, rights-of-way and licenses, all intellectual propertyrights of the Borrower, and general intangibles and goodwill; and

 

(F)           all other agreements and instruments, if any, necessary tocreate a first-priority perfected security interest under applicable law in theCollateral, subject to Permitted Liens.

 

(ii)           Equity Pledge Agreement.  The Equity Pledge Agreement, pursuant towhich the Equity Owners of the Borrower will pledge to the Administrative Agentin its capacity as the Collateral Agent for the benefit of the Secured Partiesall of their respective right, title and interest in the Pledged EquityInterests; and

 

(iii)          Consent and Agreement.  The Consent and Agreement among the Sponsor,the Borrower and the Collateral Agent whereby the Sponsor consents to theassignment to the Collateral Agent of the Borrower’s interest in theIntercompany Project Documents pursuant to the terms of the CollateralAssignment (the “Direct Agreement”).

 

(f)            Environmental Indemnity Agreement.  The Environmental Indemnity Agreement made bythe Borrower in favor of the Administrative Agent in its capacity as theCollateral Agent and the Indemnified Parties (as defined therein).

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.2                        ProjectDocuments.

 

TheLoan Servicer shall have received a copy of a fully executed original of eachof the following documents, each of which shall be in form and substancesatisfactory to each Relevant Credit Party, and 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 amendmentsthereto and any related protocols or side letters), (y) such document hasbeen duly executed and delivered by the parties thereto and is in full forceand effect (i) against the Borrower and (ii) against each other partythereto except, in the case of this clause (ii), for instances that would not,individually or in the aggregate, reasonably be expected to result in aMaterial Adverse Effect, and (z) to the Borrower’s Actual Knowledge, noparty to such document is, or but for the passage of time or giving of noticeor both will be, in breach of any obligation thereunder:

 

(a)           Land Documents. The deed conveying title to the Project Site to the Borrower andeasements, licenses, and covenants, conditions and restrictions in connectionwith the Project Site, and any and all other documents affecting an interest inor right to use the Project Site (the “Land Documents”).

 

(b)           Project Documents. Each of the following documents and all other contracts required for construction,procurement, installation and improvement of land, buildings, equipment andmanufacturing facilities for the Project, including related materialsubcontracts:

 

(i)            the EPC Agreement;

 

(ii)           the Engineering and Architectural Services Agreement; and

 

(iii)          the Permitting and Engineering Management Agreement.

 

(c)           Operating Documents.  Each of the following documents and all othercontracts required for the operation and maintenance of the Project (the “OperatingDocuments”):

 

(i)            the NYISO Membership Agreement;

 

(ii)           the O&M Agreement;

 

(iii)          the Technology License Agreement;

 

(iv)          the Technology Escrow Agreement;

 

(v)           the Administrative Services Agreement; and

 

(vi)          the Flywheel Repair Agreement.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.3                        AdvanceSchedule.

 

Atleast fifteen (15) days prior to the Financial Closing Date (or such shorter period as may be satisfactoryto the Loan Servicer), the Loan Servicer shall have received, in formand substance satisfactory to each Relevant Credit Party in consultation withthe Lender’s Engineer, a copy of the Advance Schedule, certified by theBorrower and the Sponsor, and certified by the Lender’s Engineer as beingconsistent with the Financial Plan and the Project Budget and consistent withthe achievement of Physical Completion within the time period specified in theProject Milestone Schedule as provided in a Lender’s Engineer Certificate,which shall be the Borrower’s reasonable estimate in all material respects,based on all facts and circumstances existing and Known to the Borrower and theSponsor, of the timing and amount of proposed Advances and Equity Contributionsfor the Project (showing the total Advances expected in each calendar month).

 

4.1.4                        Financial Plan;Base Case Projections; Project Milestone Schedule and Project Budget.

 

TheLender’s Engineer and the Loan Servicer shall have received at least ten (10) daysprior to the Financial Closing Date (orsuch shorter period as may be satisfactory to the Loan Servicer) thefollowing items (unless, with respect to any of the following items, DOE shallhave notified the Borrower that such item or items must only be received by theLender’s Engineer and not by the Loan Servicer), each in form and substancesatisfactory to each Relevant Credit Party in consultation with the Lender’sEngineer, and certified by the Borrower and the Sponsor, and certified by theLender’s Engineer as provided in a Lender’s Engineer Certificate, which shallbe the Borrower’s reasonable estimate of the information contained therein:

 

(i)            the Financial Plan (Exhibit A1), together withevidence that the DOE Credit Facility Commitment, when combined with otherfunds committed to the Project, including the Base Equity, will be availableand sufficient to carry out the Project;

 

(ii)           the Base Case Projections, including a computer filecontaining the Base Case Projections and the underlying models and assumptionsand explanations thereto;

 

(iii)          the Project Milestone Schedule;

 

(iv)          the Project Budget; and

 

(v)           a detailed description, with supporting documents as havebeen reasonably requested not less than three (3) Business Days prior tothe Financial Closing Date, of Development Costs incurred to date and aDevelopment Costs Statement summarizing those costs that the Borrower seekscredit as Approved Pre-Closing Equity Credit to be applied toward Base Equityand that are to be reviewed by the Lender’s Engineer.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.5                        FinancialStatements.

 

Atleast fifteen (15) Business Days prior to the Financial Closing Date (or such shorter period as may besatisfactory to the Loan Servicer), the Loan Servicer shall havereceived, in form and substance satisfactory to each Relevant Credit Party, themost recent audited (except in the case of the Borrower) and unauditedFinancial Statements, together with a Financial Officer Certificate, from eachof the Borrower and the Sponsor.

 

4.1.6                        Update ofConditional Commitment.

 

Either(i) the Loan Servicer shall have determined that there are not anymaterial changes to the terms and conditions of the term sheet, or (ii) atleast thirty (30) days prior to the Financial Closing Date, the Loan Servicershall have received, in form and substance satisfactory to DOE, a writtensummary of such material changes.

 

4.1.7                        Update ofCredit Rating.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, a credit rating of the Borrower from the Rating Agencydated no later than thirty (30) days prior to the Financial Closing Date, basedon the updated commitment of DOE reflected in the DOE Credit Facility Documentsand assuming that the Project does not benefit from the DOE Guarantee.

 

4.1.8                        CoverageRatios.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, a certificate setting forth calculations, consistentwith the Base Case Projections delivered pursuant to Section 4.1.4indicating that throughout the term of the DOE Credit Facility a minimum annualDebt Service Coverage Ratio of 1.30 to 1 for the period after theProject Completion Date is expected to be achieved.

 

4.1.9                        Pre-ClosingEquity; No Unapproved Charges for Budgeted Overrun Contingencies.

 

TheLoan Servicer shall have received the following items, each in form andsubstance satisfactory to each Relevant Credit Party in consultation with theLender’s Engineer:

 

(i)            the Development Costs Statement, certified by the Lender’sEngineer;

 

(ii)           certification from the Borrower and the Lender’s Engineerthat the amounts reflected in the Approved Pre-Closing Equity Credit(A) are in an amount not greater than $18,882,211, and (B) have beenapplied in accordance with the Project Budget only for Eligible Base ProjectCosts, and that no amounts in the Project Budget have been applied toIneligible Base Project Costs; and

 

(iii)          certification from the Borrower and the Lender’s Engineerthat no changes have been made to the line item for Overrun Contingencies inthe Project Budget.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.10                  Debt Repayment.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, evidence of repayment of any existing Indebtedness ofthe Borrower, other than Indebtedness permitted hereunder and release ofassociated Liens encumbering any Collateral, other than Permitted Liens.

 

4.1.11                  [Reserved.]

 

4.1.12                  Consents and Approvals.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, (i) certification from the Borrower, together withsuch other evidence as any Relevant Credit Party may request, that allGovernmental Approvals and other Required Consents listed on Schedule 5.10(except those identified on Schedule 5.10 as to be obtained at alater date), each in form and substance satisfactory to each Relevant CreditParty, have been duly obtained and are not subject to any waiting period orappeal, and (ii) a copy of each such Governmental Approval or otherRequired Consent, certified by the Borrower as being true and complete as ofthe date of such certification.

 

4.1.13                  Project Plans.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, updated Project Plans, certified by Lender’s Engineer asbeing satisfactory and sufficient for the construction of the Improvements onthe Project Site.

 

4.1.14                  Lender’s Engineer Report.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, the Lender’s Engineer Report addressing (a) ananalysis of the Project Plans, (b) an analysis of the roles andcapabilities of all Major Project Participants and (c) such other mattersas any Relevant Credit Party may reasonably request.

 

4.1.15                  Consultants’ and Advisors’Certificates.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, the following certificates, each dated the FinancialClosing Date:

 

(i)            Lender’s Engineer Certificate.  A Lender’s Engineer Certificate regarding thematters required to be certified by it as set forth in this Section 4.1and such other matters specified in the form attached as Exhibit D1;

 

(ii)           Insurance Advisor and Insurance Consultant Certificates.  An Insurance Advisor Certificate in a formacceptable to the Loan Servicer and an Insurance Consultant Certificateregarding the matters specified in Section 4.1.27 and in the formattached as Exhibit F1; and

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(iii)          Plans and Budgets; Accountant Letter.  Each of (i) a certification from theLender’s Engineer as to the Financial Plan and the Project Budget, (ii) acertification from the Borrower’s Accountant relating to the tax assumptions inthe Base Case Projections, and (iii) a certification from the Lender’sEngineer as to its independent review of the technical inputs to the Base CaseProjections.

 

4.1.16                  Fee Arrangements forIndependent Consultants.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, evidence that the Periodic Expenses of any IndependentConsultants incurred and invoiced prior to the Financial Closing Date (otherthan Periodic Expenses not then due) have been paid in full.

 

4.1.17                  Project Document Price.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party in consultation with the Lender’s Engineer, certificationfrom the Borrower and the Lender’s Engineer that the price set forth in eachProject Document has not been increased from the price as of the CommonAgreement Date.

 

4.1.18                  Payment and PerformanceBonds.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, payment and performance bonds covering all constructionwork to be performed under the EPC Agreement after the Financial Closing Dateand naming the Borrower and the Collateral Agent as co-obligees.

 

4.1.19                  Performance Targets.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party in consultation with the Lender’s Engineer, a copy of theProject Facility Performance Targets, together with a certification from theBorrower and the Lender’s Engineer that such Project Facility Performance Targetsare achievable.

 

4.1.20                  Market Studies.

 

TheLoan Servicer shall have received a report from National Economic ResearchAdvisors Incorporated in form and substance satisfactory to each RelevantCredit Party.

 

4.1.21                  Security Interests.

 

(a)           Security Interests. The Loan Servicer shall have received, in form and substancesatisfactory to each Relevant Credit Party, evidence that all securityinterests in the Collateral Security intended to be created by the SecurityDocuments in effect on the Financial Closing Date have been or will be createdand, where appropriate, been registered or otherwise perfected to create afirst priority perfected security interest and Lien, subject only to PermittedLiens, over the Collateral Security in favor of the Administrative Agent in itscapacity as the Collateral 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Agent.  Eachsuch Lien (i) to the extent it arises or attaches under the UniformCommercial Code of any jurisdiction in the United States, shall be valid andenforceable and shall constitute a first priority perfected security interest(subject to Permitted Liens), and (ii) in all other cases, shall beenforceable against the Borrower, any subsequent lienor (including a judgmentlienor), any junior lienor, or any transferee for or not for value, in bulk, byoperation of law, for the benefit of creditors, or otherwise.

 

(b)           Filings.  TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, evidence satisfactory to it that (i) each of theSecurity Documents has been or will be duly filed and registered or recorded inevery jurisdiction in which such filing and registration or recording isnecessary to make valid and effective the Liens intended to be created therebyand the rights of the Secured Parties thereunder, (ii) all fees and dutiesin connection with such registration (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 satisfactory arrangements.

 

(c)           Collateral Agent Certificate.  The Loan Servicer shall have received, inform and substance satisfactory to each Relevant Credit Party, a CollateralAgent Certificate as to all matters as are required to be certified by theAdministrative Agent in its capacity as the Collateral Agent pursuant to this Section 4.1.

 

4.1.22                  Authority and Incumbency ofMajor Project Participants.

 

TheLoan Servicer shall have received, all in form and substance satisfactory toeach Relevant Credit Party, certified copies of standard corporate, limitedliability company, partnership, or trust formation documents for each of theMajor Project Participants, including certified copies of organizationaldocuments, good standing certificates, incumbency certificates and resolutions,and any other such documents as any Relevant Credit Party may have reasonablyrequested, with respect to approval of (i) such Major Project Participant’sparticipation in the Project, (ii) to the extent applicable, the financingtherefor and the granting of Liens, and (iii) the execution, delivery andperformance by such Major Project Participant of the Transaction Documents(including a Direct Agreement) to which it is party.

 

4.1.23                  Borrower Certificate;Sponsor Certificate.

 

TheLoan Servicer shall have received (i) a Borrower Certificate regarding thematters required to be certified by it as set forth in this Section 4.1and such other certifications as are required to be made to the Credit Partiesby the Borrower as of the Financial Closing Date under the DOE Credit FacilityDocuments, and (ii) a Sponsor Certificate regarding the matters requiredto be certified by it as set forth in this Section 4.1 and suchother certifications as are required to made to the Credit Parties by theSponsor as of the Financial Closing Date under the DOE Credit FacilityDocuments, and (iii) a Holdings Certificate regarding the matters requiredto be certified by it as set forth in this Section 4.1 and suchother certifications as are required to made to the Credit Parties by Holdingsas of the Financial Closing Date under the DOE Credit Facility Documents.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.24                  Major Project ParticipantCertificates.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, a Major Project Participant Certificate from each MajorProject Participant regarding familiarity with and enforceability of documents,absence of defaults, validity of representations and warranties and othercustomary provisions.

 

4.1.25                  Legal Opinions.

 

TheLoan Servicer and the Administrative Agent in its capacity as the CollateralAgent shall have received legal opinions from Edwards Angell Palmer &Dodge LLP or other legal counsel acceptable to each Relevant Credit Party,dated the Financial Closing Date and in form and substance satisfactory to eachRelevant Credit Party, with respect to the laws of the jurisdictions governingthe Transaction Documents to which each of the Borrower, Holdings, the Sponsor,and any Sponsor Affiliate is a party and the laws of the jurisdictions oforganization of the Borrower, Holdings, the Sponsor, and any Sponsor Affiliateand such legal opinions shall include, but may not be limited to the following:(i) due authorization, execution, delivery and enforceability ofTransaction Documents to which the Borrower, Holdings, the Sponsor, and anySponsor Affiliate is a party, (ii) perfection of security interests, (iii) otherthan with respect to permits and approvals that are not necessary to beobtained until a later date, receipt of all governmental permits and approvalsnecessary to (1) construct and operate the Project, (2) enter intofinancing arrangements with respect to the Project, and (3) enter into theapplicable Transaction Documents, and that such permits and approvals are infull force and effect and all applicable appeal periods have expired, (iv) thatnone of the Credit Parties will be regulated as an electric corporation orpublic utility under the United States or New York law solely as a result ofentering into Transaction Documents, and (v) absence of conflicts withlaw, agreements or organizational documents.

 

4.1.26                  Taxes; Costs and Expenses.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, certification from the Borrower, and such other evidenceas any Relevant Credit Party may request, that all required taxes, all PeriodicExpenses, and all recordation and other costs, fees and Periodic Expenses invoicedand due in connection with the execution, delivery, filing, registration, orperformance of the Transaction Documents or the perfection of the securityinterests in the Collateral Security have been paid in full.

 

4.1.27                  Evidence of Insurance.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, certification from the Borrower and the InsuranceConsultant certificates from insurers, and such other evidence as any RelevantCredit Party may request (i) that insurance coverage for the Projectsatisfies the requirements for Required Insurance as set forth on Schedule 6.3(b),(ii) that such insurance coverage is reasonable for the Project, and(iii) that the applicable insurance policies are in full force and effect.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.28                  Project Accounts.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, certification from the Administrative Agent in itscapacity as the Collateral Agent that each of the Project Accounts shall havebeen established in accordance with the provisions of Appendix Ahereof.

 

4.1.29                  Accounting Systems.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party in consultation with the Lender’s Engineer, a reportcertified by a Financial Officer of the Borrower describing the Borrower’saccounting systems, controls, and management information systems and reasonablydemonstrating that they are satisfactory for purposes of providing informationnecessary for financial reporting in accordance with GAAP.

 

4.1.30                  Lobbying Certification.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, evidence that the Borrower has provided a StandardForm-LLL “Disclosure Form to Report Lobbying” as required.

 

4.1.31                  Land Acquisition; Title toProject Site.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, (i) evidence of the Borrower’s ownership ofunencumbered fee title (subject only to Permitted Liens), under the relevantlaws of the State of New York of the Project Site as are necessary for thedevelopment of the Project, (ii) the ALTA Survey with respect to theProject Site, and (iii) one or more ALTA loan policies (or similar policyform) issued by the Title Company, with such coinsurers or reinsurers as may bereasonably acceptable to DOE, in the aggregate amount of not less than$9,000,000 insuring as of the Financial Closing Date that (y) the BuildingLoan Mortgage creates a first and prior Lien on the Project Site subject onlyto Permitted Liens and (z) the Project Loan Mortgage creates a second Lienon the Project Site subject only to Permitted Liens and the Building LoanMortgage.

 

4.1.32                  Intellectual Property.

 

TheLoan Servicer shall have received, in form and substances satisfactory to eachRelevant Credit Party, evidence that the Borrower and the Sponsor own allintellectual property rights necessary for the operation of the Project.

 

4.1.33                  Appraisals.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, an updated listing and description of assets associated,or to be associated, with the Project and any other asset that will serve asCollateral, including appropriate data as to the value of the assets and theuseful life of any physical assets, including 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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withrespect to real property assets listed, delivery of an appraisal that isconsistent with the “Uniform Standards of Professional Appraisal Practice,”promulgated by the Appraisal Standards Board of the Appraisal Foundation, andperformed by Capstone Appraisal Group, Inc.

 

4.1.34                  Environmental.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, (i)  a Phase I environmental site assessment of theProject Site and reliance letter in connection therewith, (ii) an updatedPhase I environmental site assessment of the Project Site, (iii) a limitedPhase II environmental site assessment of the Project Site, (iv) a Findingof No Significant Impact with respect to the Project Site, and(v) evidence of satisfaction of any additional environmental requirements(including required mitigations) in accordance with applicable EnvironmentalLaws.

 

4.1.35                  Earthquake Risk Report.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party in consultation with the Lender’s Engineer, (i) anearthquake risk report prepared by an independent geologist satisfactory toeach Relevant Credit Party and approved by the Lender’s Engineer setting forth anacceptable assessment of the earthquake risk for the Project Site and any otherproperty where the Project Facility will be located and recommendations formitigation of earthquake risk, and (ii) certification from the Borrowerand the Lender’s Engineer, together with such other evidence as any RelevantCredit Party may request, that any recommendations for mitigation of earthquakerisk have been adequately addressed in the Project Plans.

 

4.1.36                  Utility Services.

 

Exceptfor the receipt of a fully executed original of the Interconnection Agreementin accordance with Section 4.2.1 hereof, the Loan Servicer shallhave received, in form and substance satisfactory to each Relevant Credit Partyin consultation with the Lender’s Engineer, certification from the Borrower andthe Lender’s Engineer, together with such other evidence as any Relevant CreditParty may request, that (i) arrangements reflected in the ProjectMilestone Schedule and the Project Budget have been made under the ProjectDocuments or are otherwise available to the extent required in Section 5.25for the provision of all services, materials and utilities necessary for theconstruction, startup, commissioning and shakedown of the Project, and(ii) arrangements reflected in the Base Case Projections have been made orcan be made under the Operating Documents or are otherwise available to theextent required in Section 5.25 for the provision of all services,materials and utilities necessary for the operation and maintenance of theProject as contemplated by the Principal Project Documents.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.37                  [Reserved.]

 

4.1.38                  Conditions Precedent inTransaction Documents.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, certification from the Borrower, together with suchother evidence as any Relevant Credit Party may request, that all conditionsprecedent required to be satisfied by any Major Project Participant under anyTransaction Document as of the Financial Closing Date have been satisfied.

 

4.1.39                  DOE Requirements.

 

AllDOE Requirements required to have been satisfied as of the Financial ClosingDate shall have been satisfied, including the payment of all applicable DOEfees.

 

4.1.40                  Confirmation ofNon-Disclosure and Assignment of Inventions Agreements.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, certification from the Borrower and the Sponsor,together with such other evidence as any Relevant Credit Party may request, ofthe existence of valid and binding non-disclosure and assignment of inventionagreements with all employees of the Borrower.

 

4.1.41                  Funding of Base EquityAmount; Equity Commitments.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, evidence in form and substance satisfactory to it thatan amount equal to (x) the Base Equity Commitment, less(y) the Approved Pre-Closing Equity Credit has been deposited in theEquity Funding Account.

 

4.1.42                  Due Diligence Review.

 

TheLoan Servicer shall have received from each Relevant Credit Party confirmationthat it has completed its due diligence review of the Project and all othermatters related thereto and that the results thereof are satisfactory to suchRelevant Credit Party.

 

4.1.43                  Review and Payment of CreditSubsidy.

 

TheLoan Servicer shall have received confirmation, in form and substancesatisfactory to each Relevant Credit Party, that (i) OMB has reviewed andapproved DOE’s calculation of the Credit Subsidy Cost for the DOE Guarantee asof the Financial Closing Date, and (ii) DOE has received payment in fullof the Credit Subsidy Cost in accordance with the Program Requirements.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.44                  No Judgment Liens.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, confirmation that that the Borrower does nothave a judgment Lien against any of its property for a debt owed to the UnitedStates of America or any other creditor.

 

4.1.45                  Recovery Act Requirements.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, a Borrower Certificate stating that the Borrower is incompliance with and has taken all necessary steps to be able to timely complyin all material respects with (A) its reporting obligations under Section 6.29(a) withrespect to the Recovery Act and (B) the requirements set forth in Section 6.30and Exhibit A4.

 

4.1.46                  Application Supplement.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, the Application Supplement.

 

4.1.47                  Commencement ofConstruction.

 

Commencementof Construction shall have occurred on or before the Financial Closing Date(such date, the “Commencement of Construction Date”).  The Borrower shall deliver to DOE a BorrowerCertificate dated as of the Financial Closing Date that Commencement ofConstruction in respect of the Project has occurred on or before theCommencement of Construction Date, and, if requested by DOE, Lender’s Engineershall provide confirmation to DOE that Commencement of Construction hasoccurred on or before the Commencement of Construction Date.

 

4.1.48                  Material Adverse Effect.

 

(a)           The Loan Servicer shall have received, in form andsubstance satisfactory to each Relevant Credit Party, certification from theBorrower, together with such other evidence as it may request, that sinceJune 29, 2009 no event has occurred with respect to the Project or anyMajor Project Participant that would reasonably be expected to have a MaterialAdverse Effect.  With respect tofinancial matters related to the Sponsor, such certification may be based uponthe most recent annual Financial Statements of Sponsor.

 

(b)           Since June 29, 2009, no event has occurred that wouldreasonably be expected to have a Material Adverse Effect.

 

4.1.49                  Central ContractorRegistration.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, evidence that the Borrower has registered in the UnitedStates federal government Central Contractor Registration (“CCR”)database.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.1.50                  Patriot Act.

 

TheLoan Servicer shall have received at least ten (10) Business Days prior tothe Financial Closing Date, all documentation and other information from theBorrower, Holdings and Sponsor required by regulatory authorities underapplicable “know-your-customer” and anti-money laundering rules andregulations, including the Patriot Act.

 

4.1.51                  Fees and Expenses.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, confirmation that all DOE Credit Facility Fees andPeriodic Expense then due, including, without limitation, (i) the balanceof the DOE Credit Facility Fee in an amount equal to 0.8% of the maximumprincipal amount of the DOE Credit Facility and (ii) the initial DOEMaintenance Fee in the amount of $25,000, have been paid in full, subject to§ 609.10(c) of the Applicable Loan Guarantee Requirements.

 

4.1.52                  No Litigation.

 

Thereshall be no pending or threatened (in writing) action, suit, or proceeding, orinvestigation by a Governmental Authority, of any kind, including any action orproceeding of or before any Governmental Authority, that (i) relates tothe Project or to any transactions contemplated by any of the TransactionDocuments or (ii) to which the Borrower, the Sponsor or, to the Borrower’sActual Knowledge, any other Major Project Participant is a party, that, in eachcase, either singly or in the aggregate, has, or could reasonably be expectedto have, a Material Adverse Effect.  TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, all such information as it shall have reasonably requested inrespect of any pending or threatened action, suit, or proceeding, orinvestigation by a Governmental Authority, of any kind, including any action orproceeding of or before any Governmental Authority, that (i) relates tothe Project or to any transactions contemplated by any of the TransactionDocuments or (ii) to which the Borrower, the Sponsor or any other MajorProject Participant is a party.

 

**4.2.****                           ****ConditionsPrecedent to Advances.**

 

(a)           The obligation of FFB to make, andDOE to guarantee, each Advance (including the Initial Advance) under the DOECredit Facility is subject to the prior satisfaction (or waiver in writing) asdetermined by each Relevant Credit Party in its sole discretion of each of theconditions precedent set forth in this Section 4.2 (the “AdvanceConditions Precedent”) as of the date of submission of the applicableMaster Advance Notice (the “Advance Notice Date”) and to their continuedsatisfaction on the Requested Advance Date for such Advance.

 

(b)           The Borrower may obtain one or moreEquity Advances on or before October 15, 2010 upon the satisfaction (orwaiver in writing) as determined by each Relevant Credit Party in its solediscretion of each of the Advance Conditions Precedent (except for the AdvanceCondition Precedent set forth in Section 4.2.1 hereof) as the AdvanceNotice Date and as of the Requested Advance Date for such Equity Advance.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.2.1                        ProjectDocuments.

 

Asconditions to the Initial Advance, the Loan Servicer shall have received, nolater than October 15, 2010, each of the following: (a) a copy of afully-executed original of each of the following documents, each of which shallbe in form and substance satisfactory to the Loan Servicer, (b) acertification by the Borrower that (i) such copy is a true, correct andcomplete copy of such document (including all schedules, exhibits, attachments,supplements and amendments thereto and any related protocols or side letters),(ii) such document has been duly executed and delivered by the partiesthereto and is in full force and effect, and (iii) to the Borrower’sActual Knowledge, no party to such document is, or but for the passage of timeor giving of notice thereunder, or both, would be in breach of any obligationthereunder and (c) such other supporting documents and/or opinions as maybe required by the Loan Servicer in connection therewith:

 

(a)           the Interconnection Agreement;

 

(b)           [*****];

 

(c)           [*****];

 

(d)           [*****].

 

Suchother supporting documents may include, without limitation (i) evidencesatisfactory to the Loan Servicer that the Collateral Agent has a perfectedsecurity interest in all of the Borrower’s right, title and interest in and tothe Interconnection Agreement and the [*****] and (ii) an opinion ofcounsel in form and substance satisfactory to the Loan Servicer as to suchperfection and the due authorization, execution, delivery and enforceabilityagainst the Sponsor or the Borrower, as applicable, of the InterconnectionAgreement, the [*****].

 

4.2.2                        Approval ofUpdated Advance Schedule.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party in consultation with the Lender’s Engineer:

 

(i)            certification from the Borrower and the Lender’s Engineerthat the updated Advance Schedule provided by the Borrower, including theestimates set forth therein, of the timing and amount of Advances required inconnection with the construction and financing of the Project is consistentwith the Project Budget, consistent with the achievement of Physical Completionwithin the time period specified in the Project Milestone Schedule andconsistent with the limitation set forth in Section 2.1(c) hereof;and

 

(ii)           certification from the Borrower that the proceeds of allAdvances to be made with respect to the updated Advance Schedule will be neededfor Eligible Project Costs that have been incurred or by the Requested AdvanceDate will be incurred, together with a description in reasonable detail of suchEligible Project Costs.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.2.3                        ProjectProgress Report.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party in consultation with the Lender’s Engineer:

 

(a)           the most recent Project Progress Report, certified by theBorrower and the Lender’s Engineer as being accurate and complete in allmaterial respects based upon the Borrower’s good faith estimates of theinformation contained therein with respect to the following:

 

(i)            Construction and installation of the Project areproceeding in accordance with the Project Milestone Schedule and the ProjectBudget, or if such construction and installation are not proceeding inaccordance with the Project Milestone Schedule and the Project Budget, then theProject Progress Report shall describe any variances and state that thevariances would not reasonably be expected to have a Material Adverse Effect;

 

(ii)           Construction and installation of the Project are expectedto be completed on or before the Anticipated Physical Completion Date;

 

(iii)          certification by the Borrower and the Lender’s Engineerthat Total Funding Available is sufficient to pay all remaining Total ProjectCosts (including Interest During Construction, DOE Credit Facility Fees,Periodic Expenses, and identified Cost Overruns); and

 

(iv)          evidence that as of the date of such Project ProgressReport (A) each Construction Contractor and the Operator shall haveirrevocably waived and released all Liens, statutory or otherwise, that any ofthem may have or acquire on the Collateral Security with respect to workcompleted prior to the last submission for payment, except for Liens in favorof any Person in an aggregate amount for such Person [*****]; and (B) allunpaid balances that are due or unsettled claims with any ConstructionContractor, if any, have been adequately paid and that those being contested ornegotiated in good faith are provisioned to the reasonable satisfaction of theLoan Servicer; and

 

(b)           certification from the Borrower and the Lender’s Engineerthat as of the date of submission of the applicable Master Advance Notice:

 

(i)            there is no reason Known to Borrower to believe thatanything is incorrect or misleading in any material respect in the most recentProject Progress Report; and

 

(ii)           nothing has occurred since the date of the most recentProject Progress Report or the date of the Lender’s Engineer’s most recent sitevisit, whichever is later, that could reasonably be expected to preventconstruction and installation of the Project within the Project MilestoneSchedule and the Project Budget.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.2.4                        Fees andExpenses.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, confirmation that all DOE Credit Facility Fees andPeriodic Expenses then due (x) have been paid in full, (y) solelywith respect to Periodic Expenses then due, are to be paid with the proceeds ofthe requested Advance, or (z) are to be paid by other satisfactoryarrangements, subject, in each case, to §609.10(c) of the Applicable LoanGuarantee Requirements.

 

4.2.5                        Consents andApprovals.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, (i) certification from the Borrower, together with suchother evidence as the Loan Servicer may reasonably request prior to theRequested Advance Date or as may be required under the Transaction Documents,that all consents and approvals of third Persons as may be required inconnection with the proposed Advances and all Governmental Approvals requiredas of the Advance Notice Date have been duly obtained and are in full force andeffect and are not under appeal or subject to other proceedings or unsatisfiedconditions that could reasonably be expected to result in a materialmodification or cancellation thereof, and (ii) copies of all materialGovernmental Approvals not previously delivered, certified by the Borrower asbeing true and complete in all material respects.

 

4.2.6                        Insurance.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, (i) certification from the Borrower and the InsuranceConsultant that all Required Insurance is in place, in good standing and infull force and all premiums due and payable thereon as of such date(x) have been paid in full, (y) are to be paid with the proceeds ofthe requested Advance, or (z) are to be paid by other satisfactoryarrangements, and (ii) certificates or policies with respect to anyadditional renewal or substitute insurance obtained by the Borrower since theprevious Advance Notice Date, designating (or evidencing the designation of)the Administrative Agent in its capacity as the Collateral Agent as loss payee,where appropriate, certified by the Borrower and the Insurance Consultant asbeing true and complete.

 

4.2.7                        Proceedings andOther Documents.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, (i) certification from the Borrower that allcorporate and similar proceedings concluded since the last Advance Notice Dateare in proper form and substance, (ii) original counterparts or copiescertified by the Borrower of all Additional Project Documents entered intosince the last Advance Notice Date, and (iii) such other evidence as anyCredit Party may reasonably request prior to the Requested Advance Date inorder to evidence the consummation of the transactions contemplated thereby andcompliance with the Advance Conditions Precedent.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.2.8                        Representationsand Warranties; No Default.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, certification from the Borrower, and such other evidencethat it may reasonably request, that the representations and warranties in theLoan Documents (other than those thatspeak only as to an earlier date) are true and correct in all material respectsand no Event of Default or Potential Default has occurred and is continuing.

 

4.2.9                        No Change inCircumstances.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer in consultation with the Lender’s Engineer, certification fromthe Borrower and the Lender’s Engineer that no changes to the technicalrequirements of the existing Governmental Approvals has occurred, that has hador could reasonably be expected to have a Material Adverse Effect.

 

4.2.10                  Performance Metrics.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer in consultation with the Lender’s Engineer, a certification fromthe Borrower and the Lender’s Engineer that the Borrower has achieved theProject Facility Performance Targets applicable to such Advance Notice Date.

 

4.2.11                  Closing Certificates.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party:

 

(i)            Borrower Certificate.  A Borrower Certificate regarding the mattersrequired to be certified by it as set forth in this Section 4.2 inthe form attached hereto as Exhibit C2;

 

(ii)           Lender’s Engineer Certificate.  A Lender’s Engineer Certificate regarding thematters required to be certified by it as set forth in this Section 4.2in the form attached hereto as Exhibit D2; and

 

(iii)          Insurance Consultant Certificate.  An Insurance Consultant Certificate regardingthe matters required to be certified by it as set forth in this Section 4.2in the form attached hereto as Exhibit F2.

 

4.2.12                  Project Budget.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, certification from the Borrower and the Lender’s Engineer that(i) there have been no changes to the Project Budget since the previousAdvance Notice Date, except for Approved Project Changes, (ii) theaggregate amount expended for each type of Project Cost does not exceed theaggregate amount budgeted for such cost in the Project Budget, includingbudgeted 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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OverrunContingencies, except for Approved Project Changes and (iii) the sum of(A) the unadvanced proceeds of the DOE Credit Facility and (B) the amounton deposit in the Base Equity Account and Overrun Equity Account is sufficientto pay all remaining Total Project Costs.

 

4.2.13                  Payment and PerformanceBonds.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, payment and performance bonds covering all constructionwork to be performed under the EPC Agreement after the Financial Closing Dateand naming the Borrower and the Collateral Agent as co-obligees.

 

4.2.14                  No Violation of Law.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, certification from the Borrower, together with suchother evidence as it may request, that the Advance will not result in aviolation of any law, any Transaction Document, any governmental approval, orany other agreement or consent to which the Borrower is a party or any judgmentor approval to which it is subject.

 

4.2.15                  Material Adverse Effect.

 

(a)           The Loan Servicer shall have received, in form andsubstance satisfactory to each Relevant Credit Party, certification from theBorrower, together with such other evidence as it may request, that sinceJune 29, 2009 no event has occurred with respect to the Project or anyMajor Project Participant that would reasonably be expected to have a MaterialAdverse Effect.  With respect tofinancial matters relating to the Sponsor, such certification may be based uponthe most recent annual Financial Statement of Sponsor.

 

(b)           Since June 29, 2009 no event has occurred that wouldreasonably be expected to have a Material Adverse Effect.

 

4.2.16                  No Litigation.

 

Thereshall be no pending or threatened (in writing) action, suit, or proceeding, orinvestigation by a Governmental Authority, of any kind, including any action orproceeding of or before any Governmental Authority, that (i) relates tothe Project or to any transactions contemplated by any of the TransactionDocuments or (ii) to which the Borrower, the Sponsor or, to the Borrower’sActual Knowledge, any other Major Project Participant is a party, that, in eachcase, either singly or in the aggregate, has, or could reasonably be expectedto have, a Material Adverse Effect.  TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, all such information as it shall have reasonably requested inrespect of any pending or threatened action, suit, or proceeding, orinvestigation by a Governmental Authority, of any kind, including any action orproceeding of or before any Governmental Authority, that (i) relates tothe Project or to any transactions contemplated by any 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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ofthe Transaction Documents or (ii) to which the Borrower, the Sponsor orany other Major Project Participant is a party.

 

4.2.17                  No Change in Law

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, certification from the Borrower, together with such otherevidence as it may request, that, since the Common Agreement Date, no change inlaw or any other event has occurred that would reasonably be expected to have aMaterial Adverse Effect.

 

4.2.18                  Compliance with Covenants.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, certification from the Borrower, together with suchother evidence as it may request, that the Borrower is in compliance with itsobligations under the Loan Documents, including all affirmative covenants andnegative covenants, and has furnished all information requested under the LoanDocuments.

 

4.2.19                  Title Continuation.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, a title continuation dated no earlier than one day prior to theRequested Advance Date showing no Liens against the Project, except forPermitted Liens and such other Liens as are satisfactory to DOE in its solediscretion.

 

4.2.20                  Governmental Requirements.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, copies of all material Governmental Approvals not previouslydelivered and required for construction or operation of the Project and suchother Governmental Approvals as DOE may reasonably request prior to theRequested Advance Date or as may be required under any of the TransactionDocuments.

 

4.2.21                  Prior Disbursements.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, evidence that the proceeds of all prior Advances havebeen applied as set forth in the Project Budget or as otherwise approved byDOE.

 

4.2.22                  Additional Documents.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, such other documents, certifications or consents relating to theProject or the matters contemplated by the Transaction Documents as DOE mayreasonably request prior to the Requested Advance Date.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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4.2.23                  Advance Request; ApprovedAdvance Schedule.

 

TheLoan Servicer shall have received, in form and substance satisfactory to eachRelevant Credit Party, a Master Advance Notice, together with all certificatesand documentation required under Section 2.3.

 

4.2.24                  Issuance of FFB AdvanceRequest Approval Notice.

 

FFBshall have received, in accordance with the DOE Credit Facility Documents, theFFB Advance Request signed by the Borrower, together with the FFB AdvanceRequest Approval Notice signed by DOE; provided that this requirement shall notapply to Equity Advances.

 

4.2.25                  Absence of Drawstop Notice.

 

TheLoan Servicer shall not have received a Drawstop Notice with respect to suchAdvance.

 

4.2.26                  Additional Recovery ActRequirements.

 

TheLoan Servicer shall have received, in form and substance satisfactory to theLoan Servicer, a Borrower Certificate stating, after due inquiry as of a datenot earlier than fifteen (15) Business Days prior to the relevant Advance Date,that the Borrower has timely complied in all material respects with(A) its reporting obligations under Section 6.29(a) withrespect to the Recovery Act, and (B) the requirements set forth in Section 6.30and Exhibit A4 withrespect to the Davis-Bacon Act.

 

**ARTICLE 5REPRESENTATIONS AND WARRANTIES**

 

TheBorrower makes all of the following representations and warranties to and infavor of each Credit Party as of (i) the Financial Closing Date,(ii) each Advance Notice Date, (iii) each Advance Date and(iv) the Project Completion Date, except as such representations andwarranties relate to an earlier date, and all of these representations andwarranties shall survive the Financial Closing Date.

 

**5.1.****                           ****Organization.**

 

TheBorrower (a) is a limited liability company duly organized, validly existingand in good standing under the laws of the State of Delaware, (b) is dulyqualified to do business and in good standing in the State of New York and ineach other jurisdiction where the failure so to qualify would reasonably beexpected to have a Material Adverse Effect, and (c) has all requisitepower and authority to (i) own or hold under lease and operate theproperty it purports to own or hold under lease, (ii) carry on itsbusiness as now being conducted and as now proposed to be conducted in respectof the Project, except for Governmental Approvals that are not necessary to beobtained until a later date, (iii) incur Indebtedness and create Liens onits properties, and (iv) 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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execute,deliver, perform and observe the terms and conditions of each of theTransaction Documents to which it is a party.

 

**5.2.****                           ****Authorization;No Conflict.**

 

TheBorrower has duly authorized, executed and delivered the Loan Documents and theother Transaction Documents to which it is a party, and neither its executionand delivery thereof nor its consummation of the transactions contemplated therebynor its compliance with the terms thereof (a) does or will contravene itsOrganizational Documents or any other Governmental Rules, (b) does or willcontravene or result in any breach or constitute any violation of anyGovernmental Judgment, (c) does or will contravene or result in any breachor constitute any default under, or result in or require the creation of anyLien upon any of its revenues, properties or assets under any agreement orinstrument 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, or (d) doesor will require the consent or approval of any Person other than the RequiredConsents and any other consents or approvals that have been obtained, and are in full force and effect, or arenot necessary to be obtained until a later date.

 

**5.3.****                           ****Legality,Validity and Enforceability.**

 

(a)           Each Transaction Document to which the Borrower is a partyis a legal, valid and binding obligation of the Borrower enforceable againstthe Borrower in accordance with its terms, subject to Bankruptcy Laws andgeneral principles of equity regardless of whether enforcement is considered ina proceeding at law or in equity.

 

(b)           To Borrower’s Actual Knowledge, each Transaction Documentis the legal, valid and binding obligation of any other party thereto (otherthan the Sponsor and Holdings), enforceable against such party in accordancewith its terms, subject to Bankruptcy Laws and general principles of equityregardless of whether enforcement is considered in a proceeding at law or inequity.

 

(c)           Each Transaction Document to which the Sponsor or Holdingsis a party is the legal, valid and binding obligation of the Sponsor orHoldings, as applicable, enforceable against such party in accordance with itsterms, subject to Bankruptcy Laws and general principles of equity regardlessof whether enforcement is considered in a proceeding at law or in equity.

 

**5.4.****                           ****Capitalization.**

 

Allof the Equity Interests of the Borrower are owned by Holdings.  As of the Common Agreement Date, all of theEquity Interests of Holdings are owned by the Sponsor.  There are no outstanding options or rightsfor conversion into or acquisition, purchase or transfer of Equity Interests ofthe Borrower or any agreements or arrangements for the issuance by the Borrowerof additional Equity Interests.  TheBorrower does not have outstanding (a) any securities convertible into orexchangeable for its Equity Interests or (b) any rights to subscribe foror to purchase, or any option for the purchase of, or any agreement,arrangement or understanding providing for the 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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issuance(contingent or otherwise) of, or any call, loan commitment or claims of anycharacter relating to, its Equity Interests.

 

**5.5.****                           ****Investments;Subsidiaries.**

 

TheBorrower has not made any Investments other than Permitted Investments.  The Borrower has no Subsidiaries and does notbeneficially own the whole or any part of the Equity Interests of any otherPerson.

 

**5.6.****                           ****Title.**

 

TheBorrower owns and has, or will have, valid legal and beneficial title to, or avalid leasehold interest in, the Project Site, the personal property and otherassets and revenues of the Borrower on which it grants Liens pursuant to theSecurity Documents, in each case free and clear of any Lien of any kind exceptfor the lien created by the Security Documents and Permitted Liens.

 

**5.7.****                           ****Leases.**

 

AnyLeases material to the Project in existence on the date of this representationand under which the Borrower is lessee are valid and subsisting, the Borroweris not in default in any material respect under any of such Leases, and theBorrower enjoys peaceful and undisturbed possession of the property subject tosuch Leases and the right to continue to enjoy such possession during the timewhen such property is necessary for the Project.

 

**5.8.****                           ****SecurityInterests.**

 

Pursuantto the Security Documents, as of the date of each Advance the AdministrativeAgent in its capacity as the Collateral Agent (for the benefit of the CreditParties) has a perfected first priority Lien in the Collateral Security,subject only to the Permitted Liens. Such security interest in the Collateral Security will, as of theFinancial Closing Date and with respect to any subsequently acquired property(absent a Change of Law), when so subsequently acquired, be superior and priorto the rights of all third Persons now existing or hereafter arising whether byway of mortgage, Lien, security interests, encumbrance, assignment orotherwise, except for any such rights of third Persons permitted pursuant tothis Common Agreement or the Security Documents.  As of the Financial Closing Date, alldocuments and instruments, including the Building Loan Agreement, the Mortgageand Financing Statements, have been recorded or filed for record in such mannerand in such places as are required, and all other action as is necessary shallhave been taken to establish and perfect the Administrative Agent in itscapacity as the Collateral Agent’s Lien in and to the Collateral Security (forthe benefit of the Secured Parties) to the extent contemplated by the Security Documents.  All taxes and filing fees and PeriodicExpenses that are due and payable in connection with the execution, deliveryand filing or recordation of the Building Loan Agreement, the Mortgage and theFinancing Statements, or the execution, issuance and delivery of the FFBPromissory Note, or the mortgaging of the mortgaged property under theMortgage, have been paid or satisfactory arrangements have been made with therelevant Credit Parties to satisfy such obligations.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**5.9.****                           ****Liens.**

 

Exceptfor Permitted Liens, the Borrower has not created, and is not under anyobligation to create, any Lien upon any of its revenues, properties orassets.  There are no Liens on thePledged Equity Interests, except for Permitted Liens.

 

**5.10.****                    ****Permits;Other Required Consents.**

 

Exceptas disclosed in writing by the Borrower from time to time, Schedule 5.10to the Disclosure Letter sets forth all consents and approvals, including allGovernmental Approvals, that are required to have been obtained or to beobtained by the Borrower in connection with the Transaction Documents and theProject either (x) as of the Common Agreement Date, or (y) to theBorrower’s Knowledge, at a later stage in the development of the Project (the “RequiredConsents”).  The Borrower has filedapplications for or obtained such Required Consents required as of the date ofrepresentation and such Required Consents then required to have been obtainedare in full force and effect and are not then under appeal or subject to otherproceedings or unsatisfied conditions that would reasonably be expected toresult in a material modification or cancellation as of such date, and Borrowerhas provided the Loan Servicer with copies of all such Required Consents.  The Borrower is in compliance with all suchRequired Consents, the non-compliance with which would reasonably be expected tohave a Material Adverse Effect, including all Federal, state, and localregulatory requirements.

 

**5.11.****                    ****Litigation,Labor Disputes.**

 

(a)           Except as set forth on Schedule 5.11 to theDisclosure Letter (or otherwise disclosed in writing to the Loan Servicerpursuant to Section 6.1(h)(ii) following the Financial ClosingDate), there is no pending or threatened (in writing) action, suit, orproceeding, or investigation by a Governmental Authority, of any kind,including any action or proceeding of or before any Governmental Authority,that (i) relates to the Project or to any transactions contemplated by anyof the Transaction Documents or (ii) to which the Borrower, the Sponsoror, to the Borrower’s Knowledge, any other Major Project Participant is aparty.  No such pending or threatenedaction, suit or proceeding, either singly or in the aggregate, has, or couldreasonably be expected to have, a Material Adverse Effect.

 

(b)           The Borrower has not failed to observe in any materialrespect any order of any court, arbitrator, administrative agency or otherGovernmental Authority that has, or could reasonably be expected to have, aMaterial Adverse Effect.  There is noinjunction, writ, or preliminary restraining order of any nature issued by anarbitrator, court or other Governmental Authority having jurisdiction over theBorrower or the Project directing that any of the transactions provided for inany of the Transaction Documents not be consummated as herein or thereinprovided.

 

(c)           There are no strikes, slowdowns or work stoppages bythe employees of any of the Borrower or, to the Borrower’s Knowledge, any MajorProject Participant on-going, or, to the Knowledge of the Borrower, currentlythreatened in writing, that wouldreasonably be expected to cause a Material Adverse Effect.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**5.12.****                    ****Tax**

 

(a)           The Borrower has filed all material tax returns requiredby Governmental Rules to be filed by it and has paid (i) all incometaxes payable by it that have becomedue pursuant to such tax returns and (ii) all other material taxes andassessments payable by it that havebecome due (other than those taxes that it is contesting in good faith and byappropriate proceedings, for which reserves have been established to the extentrequired by GAAP).  The Borrower has paidor has provided reserves adequate in the reasonable judgment of the Borrower’smanagement and consistent with GAAP for the payment of all income or othermaterial taxes imposed on it by the applicable governmental authority for allprior 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 amountof such tax.  The Borrower shall not beliable for, absent a Change of Law, any material tax liability in connectionwith the Project or the other transactions contemplated by the TransactionDocuments that is not specificallyreflected in the Base Case Projections as in effect on the Financial ClosingDate and in the Project Budget or as reflected in the assumptions in the thenapplicable Operating Forecast, as the case may be.

 

(b)           Except for those items set forth on Schedule 5.12to the Disclosure Letter as at the Financial Closing Date, no withholding taxare payable by the Borrower to any Governmental Authority in connection withany amounts payable by the Borrower under or in respect of the Loan Documents.

 

(c)           In accordance with Section 609.10(d)(21) of theApplicable Loan Guarantee Requirements, the Borrower has no delinquent federaldebt, including tax liabilities, unless the delinquency has been resolved withthe appropriate Governmental Authority in accordance with the standards of theDebt Collection Improvement Act.

 

**5.13.****                    ****Business, Indebtedness,Contracts, Etc.**

 

TheBorrower has not conducted any business other than the business contemplated bythe Transaction Documents and other business related to the Project, has nooutstanding Indebtedness other than the Indebtedness permitted under the LoanDocuments and has no other liabilities other than those permitted under theLoan Documents, and is not a party to or bound by any contract other than thosecontracts permitted under the Loan Documents.

 

**5.14.****                    ****Transactionswith Affiliates.**

 

Exceptas set forth on Schedule 5.14 to the Disclosure Letter or aspermitted by Section 7.12, the Borrower is not a party to anycontracts 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 agreementrequiring the payment of development fees.

 

**5.15.****                    ****Compliancewith Governmental Rules.**

 

Inaccordance with Section 609.10(d)(20) of the Applicable Loan GuaranteeRequirements, the Borrower is in compliance with, and has conducted itsbusiness, operations, 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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assets,equipment, property, leaseholds, and other facilities in compliance with allEnvironmental Laws and in compliance with all other Governmental Rules thenoncompliance with which could reasonably be expected to have a MaterialAdverse Effect and no notices of violation of any Governmental Rule havebeen issued, entered or received by the Borrower that have not been cured withno remaining liability to the Borrower, other than those that have beendisclosed to the extent required by the terms of the Loan Documents.  Neither the Borrower, nor, to the Knowledgeof Borrower, Holdings or the Sponsor is in default with respect to any GovernmentalJudgment which default would be reasonably expected to have a Material AdverseEffect.

 

**5.16.****                    ****EnvironmentalLaws.**

 

(a)           The Borrower (x) has been issued all GovernmentalApprovals relating to, and (y) has received no complaint, order,directive, claim, citation or notice by any Governmental Authority (that hasnot been disclosed to the extent required by the Loan Documents) relating toits then-existing obligations with respect to: (A) air emissions, (B) discharges to surface water or groundwater, (C) noise emissions, (D) solid or liquid waste disposal,(E) the use, generation, storage, transportation or disposal of toxic orHazardous Substances or wastes, or (F) other environmental, health orsafety matters.

 

(b)           Except as set forth on Schedule 5.16 to theDisclosure Letter, neither the Borrower nor, to the Borrower’s Knowledge, anythird party, has used, released, discharged, generated, manufactured, produced,stored, or disposed of in, on, under or about the Project Facility ortransported thereto or therefrom, any Hazardous Substances that couldreasonably be expected to have a Material Adverse Effect or material harm toenvironmental, health or safety matters as reasonably determined by DOE.

 

(c)           There is not and has not been any condition, circumstance,action, activity or event with respect to the Project, the Borrower or, to theBorrower’s Knowledge, the Project Site that could reasonably form the basis ofany violation of any Environmental Law or that could reasonably be expected tohave a Material Adverse Effect or material harm to environmental, health orsafety matters as reasonably determined by DOE.

 

**5.17.****                    ****InvestmentCompany Act.**

 

TheBorrower 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 theInvestment Company Act.

 

**5.18.****                    ****Regulationof Parties.**

 

TheBorrower is not subject to the PublicUtility Holding Company Act.  Noneof the Credit Parties shall by reason if its ownership or operation of theProject upon the exercise of remedies under the Security Documents be subjectto the Public Utility Holding Company Act.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**5.19.****                    ****CorruptPractices Laws.**

 

(a)           The Borrower, Holdings, the Sponsor, and their respectiveofficers, directors, employees and agents have complied with all applicableCorrupt Practices Laws in obtaining any consents, licenses, approvals, authorizations,rights, or privileges with respect to the Project; (b) the Borrower, itsofficers directors, employees and agents are otherwise conducting the Projectand the Borrower’s business in compliance with all applicable Corrupt PracticesLaws; and (c) the internal management and accounting practices andcontrols of the Borrower, Holdings and the Sponsor are adequate to ensurecompliance with all Corrupt Practices Laws.

 

**5.20.****                    ****ERISA.**

 

(a)           The Borrower and its ERISA Affiliates have operated theEmployee Benefit Plans in compliance with their terms and with all applicableprovisions and requirements of the Internal Revenue Code, ERISA, and otherapplicable Federal or state laws and have performed all their respectiveobligations under each Pension Plan, except such noncompliance as could notreasonably be expected to have a Material Adverse Effect.  As of the date hereof, there are no PensionPlans or Multiemployer Plans.

 

(b)           No ERISA Event has occurred or is reasonably expected tooccur.

 

(c)           Except to the extent required under Section 4980B ofthe Internal Revenue Code or comparable state law, no Employee Benefit Planprovides health or welfare benefits (through the purchase of insurance orotherwise) for any retired or former employee of the Borrower or any of itsERISA Affiliates.

 

(d)           The execution and delivery of this Common Agreement andthe consummation of the transactions contemplated hereunder will not involveany transaction that is subject to the prohibitions of Section 406 ofERISA or in connection with which taxes could be imposed pursuant toSection 4975(c)(1)(A)-(D) of the Internal Revenue Code.

 

(e)           All liabilities under each Pension Plan are(i) funded to at least the minimum level required by applicable law or, ifhigher, to the level required by the terms governing the Pension Plans(ii) insured with a reputable insurance company, (iii) provided foror recognized in the Financial Statements most recently delivered to the LoanServicer pursuant to Section 6.1 or (iv) estimated in the formalnotes to the Financial Statements most recently delivered to the Loan Servicerpursuant to Section 6.1.

 

(f)            There are no circumstances which may give rise to aliability in relation to any Pension Plan which is not funded, insured,provided for, recognized or estimated in the manner described in subsection (f) above.

 

(g)           (i) The Borrower is not and will not be a “plan”within the meaning of Section 4975(e) of the Internal Revenue Code; (ii) theassets of the Borrower do not and will not constitute “plan assets” within themeaning of the United States Department of Labor Regulations set forth in 29C.F.R. § 2510.3-101; (iii) the Borrower is not and will not be a 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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“governmental plan” within the meaning of Section 3(32)of ERISA; (iv) transactions by or with the Borrower are not and will notbe subject to state statutes applicable to the Borrower regulating investmentsof fiduciaries with respect to governmental plans; and (v) the Borrowershall not engage in any transaction which would cause any obligation, or actiontaken or to be taken, hereunder (or the exercise by the Credit Parties of anyof their respective rights under this Common Agreement) to be a non-exempt(under a statutory or administrative class exemption) prohibited transactionunder ERISA or Section 4975 of the Internal Revenue Code.  The Borrower further agrees to deliver toCredit Parties such certifications or other evidence of compliance with theprovisions of this Section 5.20(g) as the Credit Parties mayfrom time to time request.

 

**5.21.****                    ****Insurance.**

 

AllRequired Insurance to be obtained and maintained for the Project pursuant to Section 6.3is in full force and effect.

 

**5.22.****                    ****IntellectualProperty.**

 

(a)           The Borrower owns or holds a valid and enforceable licenseor right to use the Technology and Intellectual Property Rights necessary to dothe following in a commercially reasonable manner and as contemplated inconnection with the Project: (i) construct, operate, use and maintain the Project Facility; and(ii) exercise its rights and perform its obligations under the OperatingDocuments in connection with the Project, except, in each case, where thefailure to own or hold a valid and enforceable license or right to use suchTechnology and Intellectual Property Rights could not reasonably be expected toresult in a Material Adverse Effect.

 

(b)           To the Borrower’s Knowledge, the Technology andIntellectual Property Rights licensed to Borrower under the Technology LicenseAgreement and the use thereof by Borrower does not infringe upon ormisappropriate the Intellectual Property Rights or other rights of any otherPerson and no actions by the Borrower and no product, process, method,substance, part or other material presently contemplated to be sold or employedby the Borrower infringe upon or misappropriate the Intellectual PropertyRights of any other Person, except, in each case, where such infringement ormisappropriation of such Intellectual Property Rights or such other rightscould not reasonably be expected to result in a Material Adverse Effect.

 

**5.23.****                    ****NoDefaults.**

 

NoEvent of Default or Potential Default has occurred and is continuing.

 

**5.24.****                    ****NoJudgment Liens.**

 

TheBorrower does not have a judgment lien against any of its property for a debtowed to the United States of America or any other creditor and does not have anoutstanding debt (other than a debt under the Internal Revenue Code) owed tothe United States of America or any agency thereof that is in delinquentstatus, as the term “delinquent status” is defined in 31C.F.R.§ 285.13(d).

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**5.25.****                    ****Sufficiencyof Project Documents.**

 

(a)           All easements, leasehold and other property interests, andall utility and other services, means of transportation, facilities, othermaterials and other rights that are necessary for the construction, completionand operation of the Project in accordance with Governmental Rules and theTransaction Documents (including without limitation gas, electrical, water andsewage services and facilities) have been procured under the Project Documentsor otherwise, or are commercially available to the Project at the Project Siteon terms consistent with the Project Budget and the Base Case Projections, and,to the extent appropriate, arrangements have been made on terms consistent withthe Project Budget and the Base Case Projections for such easements, interests,services, means of transportation, facilities, materials and rights.

 

(b)           The Borrower has provided the Loan Servicer with a true,complete and correct copy of each of the Project Documents in existence as ofthe Financial Closing Date (including all exhibits, schedules, protocols andside letters referred to therein or delivered pursuant thereto, if any, and allamendments, modifications, additions, waivers thereto or thereof), and eachsuch Project Document in existence as of the Financial Closing Date (other thanthe subcontracts under the Principal Project Documents) is specifically namedand listed in Section 4.1.2. None of the Project Documents has been amended or modified, except inaccordance with this Common Agreement. Prior to the execution of each such Project Document entered into on orprior to the date this representation is made, Borrower believed, after havingmade a reasonable investigation with respect thereto, that each party to eachsuch Project Document to which the Borrower is a party would be able to carryout its obligations in accordance therewith and nothing has come to theattention of Borrower to cause it to believe that any such party will not beable to carry out its obligations in accordance therewith except as has beendisclosed to the extent required under the Loan Documents.

 

(c)           Each Project Document in existence as of the FinancialClosing Date is in full force and effect (i) against the Borrower and (ii) againsteach other party thereto except, in the case of this clause (ii), for instancesthat would not, individually or in the aggregate, reasonably be expected toresult in a Material Adverse Effect.

 

(d)           All representations and warranties made by each ofHoldings, Sponsor and Operator in each of the Project Documents to which it isa party are true and correct in all material respects.  To Borrower’s Actual Knowledge, allrepresentations and warranties made by each party (other than Borrower,Holdings, Sponsor and Operator) to each of the Project Documents in each of theProject Documents to which it is a party are true and correct in all materialrespects, except to the extent that the inaccuracy of any such representationor warranty could not reasonably be expected to have a Material Adverse Effect

 

(e)           Each of Borrower, Holdings, Sponsor and Operator hascomplied with all of its respective covenants and obligations under the ProjectDocuments to which it is a party; and, to the Knowledge of Borrower, each ofthe other parties to the Project Documents has complied with all of itsrespective covenants and obligations under the Project Documents to which it isa party, except where such non-compliance by any such other party could notreasonably be expected to have a Material Adverse Effect.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(f)            Borrower believes that it is technically feasible for theProject to be operated so as to fulfill in all material respects the designspecifications and requirements contained in the DOE Guarantee application orotherwise provided by Borrower or Sponsor to DOE and the Lender’s Engineer.

 

**5.26.****                    ****FinancialStatements.**

 

Eachof the Financial Statements of the Borrower, Holdings and the Sponsor deliveredto the Credit Parties has been prepared in accordance with GAAP and presentsfairly in all material respects the financial condition of Borrower, Holdingsor the Sponsor as of the respective dates of the balance sheets includedtherein and the results of operations of Borrower, Holdings or Sponsor for therespective periods covered by the statements of income included therein.  In the case of the Borrower, except asreflected in such Financial Statements, there are no liabilities or obligationsof any nature whatsoever for the period to which such Financial Statementsrelate (other than under the Transaction Documents) that are required to bedisclosed in accordance with GAAP.

 

**5.27.****                    ****ProjectMilestone Schedule and Project Budget; Operating Forecasts and Base CaseProjections.**

 

(a)           The Project Milestone Schedule, the Project Budget, theOperating Forecast and the Base Case Projections, as amended or supplemented byApproved Project Changes, (i) are complete and based on reasonableassumptions, (ii) are consistent in all material respects with theprovisions of the Project Documents, (iii) have been prepared in goodfaith and with due care, and (iv) fairly represent the Borrower’sexpectation as to the matters covered thereby as of the date of therepresentation.

 

(b)           The Project Milestone Schedule, as amended or supplementedby Approved Project Changes, accurately specifies in summary form the work thatthe Sponsor (pursuant to the EPC Agreement) and the Project ConstructionContractor propose to complete on or before the deadlines specified therein.

 

(c)           The Project Budget, as amended or supplemented by ApprovedProject Changes, represents the Borrower’s good faith estimate of all costs andexpenses anticipated by the Borrower to be incurred to construct the Project inthe manner contemplated by the Transaction Documents.

 

(d)           Borrower’s good faith estimate and belief as of the CommonAgreement Date is that (i) Physical Completion will occur no later thanthe Anticipated Physical Completion Date, (ii) Total Project Costs willnot exceed Base Project Costs except to the extent that the Loan Servicer hasbeen notified to the contrary in accordance with the Loan Documents, and(iii) each of Total Project Costs, Base Project Costs, Eligible BaseProject Costs and Ineligible Base Project Costs will not exceed the respectiveamounts therefor set forth in the Financial Plan.  Nothing has occurred to cause Borrower tobelieve that the Project Milestone Schedule and Base Case Projections, asamended or supplemented by Approved Project Changes, are unreasonable in any materialrespect.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**5.28.****                    ****SufficientFunds**

 

Inaccordance with Section 609.10(d)(8) of the Applicable Loan GuaranteeRequirements, as of the Financial Closing Date, the Total Funding Available tothe Borrower will be sufficient to carry out the Project, including adequate contingencyfunds for identified cost overruns.

 

**5.29.****                    ****Feesand Enforcement.**

 

Otherthan amounts that have been paid in full or are not due and payable or withrespect to which arrangements satisfactory to each Relevant Credit Party havebeen 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 applicablejurisdictions of any Transaction Documents.

 

**5.30.****                    ****Immunity.**

 

Inany proceedings in connection with any Transaction Document to which theBorrower is a party, the Borrower has not been and will not be entitled toclaim for itself or any of its assets immunity from suit, execution, attachmentor other legal processes.

 

**5.31.****                    ****NoOther Powers-of-Attorney, Etc.**

 

TheBorrower has not executed and delivered any powers of attorney or similardocuments, except (i) to its directors and employees in the ordinarycourse of business, and (ii) in connection with Permitted Liens.

 

**5.32.****                    ****NoAdditional Fees.**

 

Otherthan as contemplated in the Base Case Projections and the Project Budget, theBorrower has not paid nor become obligated to pay any fee or commission to anybroker, finder or intermediary for or on account of arranging the financing ofthe transactions contemplated by the Transaction Documents.

 

**5.33.****                    ****OFACand USA PATRIOT Act.**

 

(a)           None of the Borrower, Holdings, the Sponsor or any oftheir respective Affiliates is a Prohibited Person, and the Borrower, Holdings,the Sponsor and all such Affiliates are in compliance with all applicablepublished orders, rules and regulations of OFAC.

 

(b)           None of the Borrower, Holdings, the Sponsor, nor any oftheir directors, officers, or Affiliates: (x) is subject to United Statesor multilateral economic or trade sanctions in which the United Statesparticipates; (y) is owned or controlled by, or act on behalf of, anygovernments, corporations, entities or individuals that are subject to UnitedStates or multilateral economic or trade sanctions in which the United Statesparticipates; or (z) is a Prohibited Person or is 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 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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individuals or entities with whom United Statespersons may not conduct business, including but not limited to lists publishedor maintained by OFAC, lists published or maintained by the U.S. Department ofCommerce, and lists published or maintained by the U.S. Department of State;and none of the Borrower, Holdings or the Sponsor has sold ten percent (10%) ormore of its capital stock (whether in one transaction or a series oftransactions) in a negotiated sale to any Person that, at the time of suchsale, was described in any of clauses (x), (y), or (z) of this Section 5.33(b).

 

(c)           None of the Collateral is traded or used, directly orindirectly by a Prohibited Person or by a Person organized in a ProhibitedJurisdiction.  Neither the making of anyAdvances nor the use by the Borrower, Holdings or the Sponsor of the proceedsthereof will violate any OFAC regulations, or any anti-boycott laws andregulations.

 

(d)           The Borrower, Holdings, and the Sponsor have establishedan anti-money laundering compliance program if and as required by the USAPATRIOT Act.

 

(e)           For purposes of this Section 5.33, “Affiliate”means, with respect to any Person, any other Person which, directly orindirectly, controls, is controlled by, or is under common control with, suchPerson.  Solely for purposes of thisdefinition of “Affiliate,” “control” (together with correlative meanings of “controlledby” and “under common control with”) means possession, directly or indirectly,of the power to direct or cause the direction of the management policies ofsuch Person, whether through the ownership of voting securities, by contract orotherwise.

 

**5.34.****                    ****U.S.Government Requirements.**

 

(a)           Suspension and Debarment.  No event has occurred andno condition exists that is likely to result in the debarment or suspension ofthe Borrower, Holdings, Sponsor or any of their respective Affiliates fromcontracting with the United States Government or any agency or instrumentalitythereof, and none of the Borrower, Holdings, Sponsor or any of their respectiveAffiliates is now or ever has been subject to any such debarment orsuspension.  As of the Common AgreementDate none of the Borrower, Holdings, Sponsor or any of their respectiveAffiliates or any Principal Persons of any of the foregoing are(i) debarred, suspended, proposed for debarment with a final determinationstill pending, declared ineligible or voluntarily excluded (as such terms aredefined in any of the Debarment Regulations) from participating in procurementor nonprocurement transactions with any United States federal governmentdepartment or agency pursuant to any of the Debarment Regulations, or(ii) indicted, convicted or had a Governmental Judgment rendered againstthe Borrower, Holdings, Sponsor or any of their respective Affiliates for anyof the offenses listed in any of the Debarment Regulations, and no event hasoccurred and no condition exists that is likely to result in the debarment orsuspension of the Borrower, Holdings, Sponsor or any of their respectiveAffiliates from contracting with the United States Government or any agency orinstrumentality thereof; and none of the Borrower, Holdings or the Sponsor hassold ten percent (10) or more of its capital stock (whether in onetransaction or a series of transactions) in a negotiated sale to any Person that,at the time of such sale, was described in any of clauses (i) or (ii) ofthis Section 5.34(a).

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(b)           Lobbying.  Inaccordance with 31 U.S.C. §1352, no proceeds of the Advances have been or willbe expended by the Borrower, Holdings or the Sponsor to pay any Person forinfluencing or attempting to influence an officer or employee of any agency, amember of Congress, an officer or employee of Congress, or an employee of amember of Congress.

 

(c)           Affiliate. For purposes of this Section 5.34, “Affiliate” means, withrespect to any Person, any other Person which, directly or including, controls,is controlled by, or is under common control with, such Person.  Solely for purposes of this definition of “Affiliate,”“control” (together with correlative meanings of “controlled by” and “undercommon control with”) means possession, directly or indirectly, of the power todirect or cause the direction of the management policies of such Person,whether through the ownership of voting securities, by contract or otherwise.

 

**5.35.****                    ****InsolvencyProceedings.**

 

TheBorrower is not the subject of any pending, or to the Borrower’s ActualKnowledge, threatened, InsolvencyProceedings.

 

**5.36.****                    ****Useof Proceeds.**

 

TheBorrower has used and shall continue to use the proceeds of all Advances inaccordance with the terms and conditions of all applicable Loan Documents.

 

**5.37.****                    ****NoMaterial Adverse Effect.**

 

Sincethe Financial Closing Date, no Material Adverse Effect has occurred and iscontinuing nor is there any fact or circumstance that could reasonably be expected to result in a Material AdverseEffect.

 

**5.38.****                    ****CertainProgram Requirements.**

 

(a)           Eligibility. In accordance with Section 609.10(d)(1) of the Applicable LoanGuarantee Requirements, the Project qualifies as an “Eligible Project” underTitle XVII and is not a research, development, or demonstration project ora project that employs Commercial Technologies (as defined in the ApplicableLoan Guarantee Requirements) in service in the United States.

 

(b)           U.S. Nexus. In accordance with Section 609.10(d)(2) of the Applicable LoanGuarantee Requirements, the Project will be constructed and operated in theUnited States, the employment of the new or significantly improved technologyin the Project has the potential to be replicated in other commercial projectsin the United States, and this technology is or is likely to be available inthe United States for further commercial application.

 

(c)           Useful Life. In accordance with Section 609.10(d)(6) of the Applicable LoanGuarantee Requirements, the Maturity Date occurs prior to the earlier of(i) 30 years after the 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Financial Closing Date or (ii) the end of 90percent of the projected useful life of the Project’s major physical assets, ascalculated in accordance with GAAP.

 

(d)           No Tax-Exempt Indebtedness.  In accordance with Section 609.10(d)(7) ofthe Applicable Loan Guarantee Requirements, the DOE Credit Facility does notfinance, either directly or indirectly, tax-exempt indebtedness obligations,consistent with the requirements of Section 149(b) of the InternalRevenue Code.

 

**5.39.****                    ****Davis-BaconAct****.**

 

TheBorrower has taken all steps necessary to comply with, and in all material respectsis in compliance with, Section 6.30 and Exhibit A4relating to the Davis-Bacon Act.

 

**5.40.****                    ****BuyAmerican Provisions.**

 

The Project does not involve the construction,alteration, maintenance, or repair of a “public building” or “public work”within the meaning of the Buy American Provisions.

 

**5.41.****                    ****RecoveryAct Reporting.**

 

TheBorrower has taken all necessary steps to be in compliance as of the FinancialClosing Date with its reporting obligations under Section 6.29(a) withrespect to the Recovery Act.

 

**5.42.****                    ****FullDisclosure.**

 

(a)           The statements and information contained in any BorrowerCertificate or DOE Credit Facility Document, taken together with all documents,reports or other written information pertaining to the Project, including theApplication and the Application Supplement, together with all updates of suchinformation from time to time, that have been furnished by or on behalf of theBorrower to any Credit Party or any Independent Consultant, are, taken as awhole, true and correct in all material respects and do not contain anymaterial misstatement of fact or omit to state a material fact or any factnecessary to make the statements contained therein not materially misleading inlight of the circumstances in which they were made.

 

(b)           Other than the Transaction Documents, there are inexistence no documents or agreements to which Sponsor, Holdings or Borrower isa party that have not been describedto the Credit Parties that arematerial in the context of the Transaction Documents or that have the effect of varying any of the Transaction Documentsor the Project.

 

(c)           Each of the Project Milestone Schedule, the ProjectBudget, the Operating Forecast, Operating Plan and the Base Case Projections,as amended and supplemented by Approved Project Changes, has been prepared ingood faith based on assumptions believed to be reasonable by the Borrower atthe time of their preparation or update.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**5.43.****                    ****ForceMajeure**

 

NoEvent of Force Majeure has occurred and is continuing with respect to theBorrower or the Project.

 

**ARTICLE 6AFFIRMATIVE COVENANTS**

 

TheBorrower covenants and agrees that until the date all Secured Obligations(other than inchoate indemnity obligations) are paid in full and the DOE CreditFacility Commitment has terminated, unless the Loan Servicer waives compliancein writing:

 

**6.1.****                           ****InformationCovenants.**

 

Atits own expense the Borrower shall furnish or cause to be furnished to the LoanServicer, in each case (y) in unalterable electronic format with areproduction of the signatures where required and (z) upon request by theLoan Servicer, in soft electronic format, the following items, including thecertificates and information identified in Exhibit O:

 

(a)           Monthly Project Progress Reports.

 

(i)            Within [*****] Business Days after the end of each monthprior to the Physical Completion Date, the Borrower shall deliver to the Lender’sEngineer a Project Progress Report; and

 

(ii)           The Borrower acknowledges that not later than [*****] daysafter the end of each month prior to the Physical Completion Date, the Lender’sEngineer will deliver to the Loan Servicer a separate report on constructionprogress;

 

(b)           Quarterly Financial Statements and Reports.  As part of the Quarterly Reporting Package,not later than forty-five (45) days after the end of each fiscal quarter(excluding the fourth fiscal quarter) of each Fiscal Year, commencing with thefirst fiscal quarter ending on or after the Financial Closing Date:

 

(i)            unaudited Financial Statements of the Borrower as at theend of such quarterly period;

 

(ii)           a certificate of a Financial Officer of the Borrower withrespect to such quarter, setting forth (A) a statement of all materialfinancial transactions (other than any transactions contemplated under theTransaction Documents), and a report of all transactions involving theBorrower, on the one hand, and on the other hand Holdings and the Sponsor or any Affiliate of Holdings or theSponsor (other than any such transaction under the Intercompany ProjectDocuments); (B) for each such quarter that includes all or a portion ofthe Construction Period, calculations showing the amount of EquityContributions and the amount of Advances applied to pay Project Costs; and(C) for each such quarter that includes all or a portion of the OperatingPeriod, calculations showing compliance with the requirements of Section 6.33and 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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certification of such compliance, or if suchcertification cannot be made, an explanation therefor and what correctiveaction the Borrower has taken or proposes to take with respect thereto;

 

(c)           Annual Financial Statements and Reports.  As soon as available, but in any event notlater than ninety (90) days after the end of each Fiscal Year, commencing withthe first Fiscal Year ending on or after the Financial Closing Date:

 

(i)            Financial Statements of the Borrower as at the end ofsuch Fiscal Year, audited by the Borrower’s Accountant and accompanied by anymanagement letter delivered by the Borrower’s Accountant;

 

(ii)           a discussion and analysis by the management of theBorrower of the Borrower’s business and operations at the end of such FiscalYear with respect to the matters set forth in clause (b)(ii) above;

 

(iii)          a report certified by the Borrower addressing the extent towhich the Project Facility Performance Targets have been achieved; and

 

(iv)          a report from the Borrower’sAccountant, including (A) for each such Fiscal Year, certifying that ithas no knowledge that an Event of Default or Potential Default has occurred andis continuing or if, any Event of Default or Potential Default has occurred andis continuing, a statement as to the nature and period of existence thereof;(B) for each such Fiscal Year that includes all or a portion of theConstruction Period, the aggregate amountof Equity Contributions and the aggregate amount of Advances applied to payProject Costs; and (C) for each such Fiscal Year that includes allor a portion of the Operating Period, acomparison between such annual Financial Statements and the projections forsuch Fiscal Year contained in the Operating Forecast, and a certification that it has noknowledge that the Borrower was not, and is not, in compliance with Section 6.33or, if such non-compliance has occurred a statement as to the nature thereof;

 

(d)           Certification by Financial Officer.  Each time Financial Statements of theBorrower are delivered pursuant to Sections 6.1(e)(i) (as part ofthe Quarterly Reporting Package), or 6.1(c)(i) such FinancialStatements shall be certified by a Financial Officer of the Borrower as havingbeen prepared in accordance with GAAP on a consistent basis and as fairlypresenting in all material respects the financial condition of the Borrower asof the date thereof and the results of operations of the Borrower for theperiods presented.  Such certificationshall also include a certification that the Person has made or caused to bemade a review of the transactions and financial condition of the Borrower duringthe relevant fiscal period and (i) that other than as set out in suchFinancial Statements, there are no liabilities or obligations of the Borrower that are required to be presented in suchFinancial Statements in accordance with GAAP, and (ii) that no Event ofDefault or Potential Default exists, or if such certification cannot be made,the nature and period of existence of such Event of Default or PotentialDefault and what corrective action the Borrower has taken or proposes to takewith respect thereto;

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(e)           Quarterly Reporting Package.  Within forty-five (45) days after the end ofeach fiscal quarter (excluding the fourth fiscal quarter) of each Fiscal Year(as part of the Quarterly Reporting Package), each certified by an AuthorizedOfficial of the Borrower:

 

(i)            for each such quarter that includes all or a portion ofthe Construction Period, the most recent monthly Project Progress Reportsdelivered by the Borrower to the Lender’s Engineer pursuant to Section 6.1(a)(i) hereof;

 

(ii)           for each such quarter that includes all or a portion ofthe Operating Period, a summary operating report, which shall include adetailed assessment of the Project’s performance in comparison with theOperating Forecast and Operating Plan then in effect for such period, includingbasic data relating to the operation of the Project, pricing information,unusual maintenance activity, material casualty losses, material disputesbetween the Borrower and any Person, and material non-compliance with anyGovernmental Approvals; and

 

(iii)          all other items indicated in this Section 6.1 asbeing part of the Quarterly Reporting Package, together with a completedQuarterly Reporting Certificate;

 

(f)            Financial Statements of Sponsor.  At any time during which the Sponsor is notsubject to the periodic reporting requirements of the Securities Exchange Act of1934, as amended, promptly after the same become available, and with respect tothe Sponsor in accordance with the time periods applicable to the Borrower setforth in Sections 6.1(b) (as part of the Quarterly ReportingPackage) and 6.1(c), unaudited quarterly and audited annual FinancialStatements of the Sponsor prepared by Sponsor’s Accountant in accordance withGAAP certified by a Financial Officer of the Sponsor as having been prepared inaccordance with GAAP on a consistent basis and as fairly presenting in allmaterial respects the financial condition of the Sponsor as of the date thereofand the results of operations and cash flows of the Sponsor for the periodspresented.

 

(g)           Management Letters. Promptly after the Borrower’s receipt thereof, a copy of any managementletter and all other material communications received by the Borrower from theBorrower’s Accountant in relation to its financial, accounting and othersystems, management or accounts or the Project;

 

(h)           Reporting Obligations.  Promptly, but in any event within [*****]Business Days, after any AuthorizedOfficial of the Borrower or the Operator obtains actual knowledgethereof, notice of:

 

(i)            any event thatconstitutes an Event of Default or Potential Default, specifying the nature thereof,together with a Borrower Certificate indicating any steps the Borrower hastaken or proposes to take to remedy the same;

 

(ii)           any action, litigation, claim, arbitration, dispute orgovernmental proceeding pending or threatened in writing (A) against theBorrower or any of its property, (B) with respect to the Project or anyTransaction Document or any transaction contemplated 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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thereby, or (C) against any other ProjectParticipant; and any material development in any of the foregoing;

 

(iii)          any proceeding or legislation by any Governmental Authorityspecifically affecting (A) the Project, the Borrower, any of its propertyor its equity capital or (B) a Project Participant that, in each case, could reasonably be expected to have aMaterial Adverse Effect, including any developments with respect to any of theforegoing that would reasonably be expected to have a Material Adverse Effect;

 

(iv)          any change in the Authorized Officials of the Borrower,including certified specimen signatures of any new Person so appointed andsatisfactory evidence of the authority of such Person, or any change in theBorrower’s Accountant and the reason therefor;

 

(v)           any actual or proposed termination, rescission, discharge(otherwise than by performance), amendment, supplement, modification, waiver orindulgence or breach in any material respect of any Transaction Document,Governmental Approval or other Required Consent that is not otherwise permittedpursuant to the terms of the Transaction Documents;

 

(vi)          any material notice or correspondence received or initiatedby the Borrower from or to any Governmental Authority relating to the Projector any Transaction Document or any notice or correspondence received orinitiated by the Borrower from or to any Governmental Authority relating to anyGovernmental Approval, but excluding notices or correspondence received orinitiated in the ordinary course of business or otherwise previously deliveredpursuant to any Transaction Document;

 

(vii)         any Lien (other than a Permitted Lien) being granted orestablished or becoming enforceable over any of the Borrower’s assets;

 

(viii)        any proposed material change in thenature or scope of the Project or the business or operations of the Borrower;

 

(ix)           any casualty damage or loss to the Project in excess of[*****];

 

(x)            any notice of a delinquent payment owed by the Borrowerto, or to the Borrower by (A) any Major Project Participant (other thanthe Project Construction Contractor) if such payment is more than [*****], or (B) anyother party under the Project Documents if such payment is more than [*****],in either case, if the amount of any such delinquent payment is in excess of[*****], in each case together with a copy of all correspondence received orsent by the Borrower with respect to such delinquent payment;

 

(xi)           any material correspondence from any ConstructionContractor, the Administrator, or the Operator relating to, (A) anymaterial delay in the completion of the Project, or (B) any event thatcould reasonably be expected to interrupt the operation of the Project for morethan [*****];

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(xii)          any one or more events, conditions or circumstances(including government action) that exist or have occurred or in the judgment ofthe Borrower are expected as imminent that could reasonably be expected to havea Material Adverse Effect;

 

(xiii)         any non-compliance of a Reserve Letterof Credit with the criteria established with respect thereto and any event,condition or circumstance thatrepresents or could reasonably be expected to lead to non-compliance by a bankproviding a Reserve Letter of Credit with the required criteria with respectthereto or the renewal thereof;

 

(xiv)        any Event of Force Majeure affecting, or that either theBorrower or any other Major Project Participant claims would affect, theperformance by such Person of any material obligation under any TransactionDocument, together with copies of all notices, calculations, data and othercorrespondence between such Major Project Participant and the Borrower inrespect of any such event, circumstance or condition;

 

(xv)         any material dispute between (a) the Borrower and anyMajor Project Participant, or (b) among the Borrower, any Major ProjectParticipant and any Governmental Authority, in each case relating to theProject;

 

(xvi)        upon request by any Credit Party, copies of any data relatingto the performance of tests under any Project Document;

 

(xvii)       any event that could reasonably beexpected to cause a reduction in the Operating Revenues of the Borrower for anyFiscal Year by [*****] of the amount estimated therefor in the OperatingForecast;

 

(xviii)      any proposed cancellation or adversechange in any Required Insurance maintained by the Borrower or by any otherPerson for the benefit of the Borrower with respect to the Project, and after Borrower obtains actual knowledge ofany occurrence that has or couldreasonably be expected to result in any premium increase in [*****] overBorrower’s insurance costs, taken as a whole, or any cancellation ornon-renewal of, any policy of Required Insurance or any Required Insurancecoverage required to be maintained hereby or by any other Transaction Document,notice (including a summary description) of such event, and [*****] [*****]after the Borrower obtains actual knowledge thereof, a report describing suchevent and the potential insurance-related impact thereof;

 

(xix)         notice and a copy of any other material report filed orrequired to be filed by any Major Project Participant with any GovernmentalAuthority relating to the Project;

 

(xx)          (a) an ERISA Event, (b) the adoption of any newPension Plan by the Borrower or any ERISA Affiliate, (iii) the adoption ofany amendment to a Pension Plan, if such amendment will result in a materialincrease in benefits or unfunded benefit liabilities (as defined in Section 4001(a)(18)of ERISA) (c) the commencement of contributions by the Borrower or anyERISA Affiliate to any Plan that is subject to Title IV of ERISA or Section 412of the Internal Revenue Code, or (d) the receipt by the Borrower or anyERISA Affiliate of a notice from a Multiemployer Plan sponsor concerning anERISA Event; and

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(xxi)         any material notice or correspondence received or initiatedby the Borrower with respect to any of the Principal Project Documents.

 

(i)            Governmental and Environmental Indemnity Claims andReports.  As soon as available, butin any event:

 

(i)            within [*****] after any such report is submitted, a copyof any report required to be filed by the Borrower (or on behalf of theBorrower) with any Governmental Authority other than in the ordinary course ofbusiness;

 

(ii)           within [*****] after the Borrower obtains Actual Knowledgeof any accident related to the Project having a material and adverse impact onthe environment or on human health (including any accident resulting in theloss of life), notice thereof, and [*****] a report describing such accident,the impact of such accident and the remedial efforts required and (as and whentaken) implemented with respect thereto;

 

(iii)          within [*****] after the close of each Fiscal Year, areport, satisfactory to the Loan Servicer in its reasonable discretion,summarizing any violations of Environmental Laws in connection with the Projectover the preceding year, with sufficient information to allow the CreditParties (including DOE) to monitor the Project’s performance with respect tothe environment and its compliance with Environmental Laws and including anarrative summary of (A) the results of environmental monitoring or samplingactivity, (B) any violations of Environmental Laws identified by anyenvironmental Governmental Authority and any remedial action taken with respectthereto, and

 

(iv)          within [*****] after an Authorized Official of the Borrowerobtains actual knowledge thereof, any Environmental Claim by any GovernmentalAuthority or any assertion of an Environmental Claim or claims involving anamount in [*****] by any other Person or Persons together with a copy of anycorrespondence relating thereto and a description of any steps the Borrower istaking and proposes to take with respect thereto;

 

(j)            Updates to Project Milestone Schedule, Project Plans,Project Budget, Operating Plan, Operating Forecast, Financial Plan and BaseCase Projections.  As part of theQuarterly Reporting Package, in each case certified by an Authorized Officialof the Borrower:

 

(i)            for each fiscal quarter that includes all or a portion ofthe Construction Period, an updated Project Milestone Schedule, updated ProjectPlans and an updated Project Budget, reflecting any Approved Project Changes;and projections regarding Borrower’s bidding strategies;

 

(ii)           for each fiscal quarter that includes all or a portion ofthe Operating Period, an updated Operating Plan for the next four fiscal quarters,an updated Operating Forecast for the next four fiscal quarters and for theremainder of the Operating Period, an updated Financial Plan; and, if requestedby the Loan Servicer, updated Base Case Projections in form and detailreasonably satisfactory to each Relevant Credit Party; and

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(iii)          Upon the request of any Credit Party, an AuthorizedOfficial of the Borrower shall schedule a date to discuss any updated OperatingPlan, updated Operating Forecast, updated Financial Plan, updated Base CaseProjections, and such other matters relating to the Project as any Credit Partymay reasonably request;

 

(k)           Filings with, or Material Notices from, FERC.  (i) Within [*****] sending any suchnotice, report or other document to FERC, a copy of any notice, report or otherdocument filed or required to be filed by the Sponsor or the Borrower with FERCin connection with the Project and (ii) promptly, and in any event within[*****] Business Days after receipt, a copy of any notice or other documentreceived by the Sponsor or the Borrower from FERC in connection with anynotice, report or other document submitted by the Sponsor or the Borrower, orrequired to be submitted by the Sponsor or the Borrower, to FERC underclause (i) of this Section 6.1(k).  The copy of any notice required to be givenby Sponsor to FERC of a change in control under Section 203(a) of theFederal Power Act shall be accompanied by a cover note stating that the noticeis a change in control notice required under Section 203(a) of theFederal Power Act;

 

(l)            Annual Safety Audit.  Within [*****] after its completion, a copy ofthe report regarding the required annual safety audit pursuant to Section 6.18;

 

(m)          Annual Operating Budget.  [*****] the beginning of each Fiscal Yearcommencing with the first Fiscal Year in which Borrower reasonably expects torealize Operating Revenues, the operating budget of Borrower for the firstthree (3) months of such Fiscal Year and [*****] of each Fiscal Yearcommencing with the first Fiscal Year in which Borrower reasonably expects torealize Operating Revenues, the operating budget of Borrower for the last nine (9) monthsof such Fiscal Year, certified, in each case, by an Authorized Official of theBorrower (collectively, the “Initial Operating Budget”), which(i) shall include, on an aggregate and month-by-month basis, reasonableestimates of all Operating Revenues expected to be received and all OperatingCosts (by category) expected to be incurred during such Fiscal Year and duringeach month in such Fiscal Year, (ii) shall include such other informationas may be reasonably requested by the Loan Servicer and (iii) shall beprepared on a basis consistent from year to year and month to month insufficient detail to permit meaningful comparisons, and shall include astatement of the assumptions on which it is based.  Borrower may amend the Initial OperatingBudget, as the same may have been previously amended, for any Fiscal Year byfurnishing the Loan Servicer an amended operating budget of Borrower for suchFiscal Year, certified by an Authorized Official of the Borrower (the “AmendedOperating Budget”), which shall include the same information as iscontained in the Initial Operating Budget, together with an explanation of anychanges from the Initial Operating Budget, as the same may have been previouslyamended.  The Initial Operating Budget,as the same may be amended by any Amended Operating Budget, is hereinafterreferred to as the “Operating Budget”.

 

(n)           Additional Project Documents and Governmental Approvals.  As soon as available, but in no event laterthan [*****] after the receipt thereof by the Borrower, copies of allAdditional Project Documents, any Governmental Approvals and other RequiredConsents obtained or entered into by the Borrower after the Financial ClosingDate;

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(o)           Additional Audit Reports.  As soon as available, but in any event[*****] after the receipt thereof by the Borrower, copies of all other materialannual or interim reports submitted to the Borrower by the Borrower’sAccountant;

 

(p)           Other Reports and Filings.  Promptly upon transmission thereof, copies ofall financial information, statutory audits, proxy materials and otherinformation and reports, if any, which the Borrower has delivered to theSecurities and Exchange Commission or any successor regulatory authority;

 

(q)           Insurance Certificate.  Certificates with respect to RequiredInsurance conforming to the insurance requirements of Schedule 6.3(b) atthe times required by such Schedule;

 

(r)            Information Pertaining to Banks Providing ReserveLetters of Credit.  As soon asavailable, but in any event, [*****] after any downgrade in the credit ratingof any bank providing a Reserve Letter of Credit;

 

(s)           Reporting of Major Corporate Events.  If not prohibited by any applicableGovernmental Rule and the same would not require disclosure under federalsecurities laws, on or before the earlier of (y) [*****] prior thereto and(z) if Sponsor is required to give notice thereof to FERC pursuant toSection 203(a) of the Federal Power Act, the date Sponsor givesnotice thereof to FERC, notice of:

 

(i)            (a) any sale, transfer, assignment, lease or otherdisposition (whether in one transaction or a series of transactions) of all, orsubstantially all, of the assets of Sponsor; (b) any merger orconsolidation of Sponsor with any other Person; or (c) any negotiated saleby Sponsor of any of the capital stock of Sponsor; and

 

(ii)           (a) any sale by Sponsor of any of the EquityInterests in Holdings; (b) the formation of a Parent Holdco; or (c) ifSponsor shall hold its Equity Interests in Holdings through a Parent Holdco,any sale by Sponsor of any of the Equity Interests in Parent Holdco;

 

(t)            Other Information. Promptly upon request, such other information or documents relating tothe Borrower, the Sponsor or the Project as any Credit Party or any IndependentConsultant may reasonably request; and

 

(u)           Information Made Available.

 

(i)            In accordance with Section 609.10(d)(19) of theApplicable Loan Guarantee Requirements, (A) the information that will bemade available to DOE is as set forth in the Loan Documents, and (B) anyinformation will be made publicly available as required by applicable federallaw.

 

(ii)           Without limiting the generality of clause (i) ofthis subsection, all correspondence, books, documents, papers and recordsrelating to the structuring, negotiation and execution of this Common Agreementand the transactions contemplated herein, including this Common Agreement, theLoan Documents, the pre-application, the Application, the term 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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sheet and all supporting documentation, FinancialStatements, audit reports of independent accounting firms, permits andregulatory approvals furnished or otherwise made available to DOE, will behandled in accordance with all applicable federal laws, rules, or regulations,including the Trade Secrets Act, 18 U.S.C. §1905, and the Freedom ofInformation Act (FOIA), 5 U.S.C. §552, and DOE’s implementing regulations at 10C.F.R. 1004.

 

**6.2.****                           ****Books,Records and Inspections; Accounting and Auditing Matters.**

 

(a)           The Borrower shall keep proper records and books ofaccount, maintain adequate management information and cost control systems, andmake arrangements reasonably satisfactory to the Loan Servicer for overseeingthe financial operations of the Borrower, including its cash management,accounting and financial reporting, for overseeing the Borrower’s relationshipwith the Credit Parties and the Borrower’s Accountant and, in accordance with Section 609.10(f)(1) ofthe Applicable Loan Guarantee Requirements, for facilitating the effective andaccurate audit and performance evaluation of the Project pursuant to the Applicable Loan Guarantee Requirements andProgram Requirements;

 

(b)           Each set of Financial Statements the Borrower deliversshall be prepared in accordance with GAAP consistently applied except to theextent that there have been any changes to such accounting principles or theapplication thereof noted in such Financial Statements and all financialrecords of the Borrower shall be maintained at the principal executive officeof the Borrower located at 65 Middlesex Road, Tyngsboro, MA 01879;

 

(c)           The Borrower (i) shall consult with, and respond toquestions from, the Credit Parties regarding the Project upon their request,(ii) in accordance with Section 609.10(d)(18) of the Applicable LoanGuarantee Requirements, shall permit officers and designated representatives ofDOE to visit and inspect the Project Facility and any other facilities andproperties of the Borrower, (iii) in accordance with Section 609.10(f)(2) ofthe Applicable Loan Guarantee Requirements, shall provide to officers anddesignated representatives of DOE and the Comptroller General access to anypertinent books, documents, papers and records of the Borrower for the purposeof audit, examination, inspection and monitoring upon reasonable notice and atreasonable times during normal business hours, to examine and discuss theaffairs, finances and accounts of the Borrower with the representatives of theBorrower, (iv)  shall afford proper facilities for such inspection, shallmake copies (at Borrower’s expense) of any records that are subject to suchinspection, shall make available all information related to the Project,including all patents, technology and proprietary rights owned or controlled bythe Borrower and utilized in the construction, startup or operation of theProject, as may be reasonably necessary in order to determine the technicalprogress, soundness of financial condition, management stability, compliancewith environmental requirements, adequacy of health and safety conditions, andall other matters with respect to the Project, and (v) shall require eachMajor Project Participant to make available to the Credit Parties, theComptroller General and the Independent Consultants the same rights ofinspection and access to its books and records that such Major ProjectParticipant makes available to Borrower or to the Operator.

 

(d)           The Borrower shall upon the request of any Credit Partyauthorize the Borrower’s Accountant to communicate directly with the CreditParties, the Comptroller General and the 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Independent Consultants and their representatives atany time regarding the Borrower’s accounts and operations;

 

(e)            In the event that the Borrower’s Accountant should ceaseto be the accountants of the Borrower for any reason, the Borrower shallappoint and maintain as the Borrower’s Accountant another firm of independentpublic accountants, which firm shall be nationally recognized, and shall beapproved by the Loan Servicer; provided, however, that any of Deloitte &Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopersLLP, if appointed by the Borrower as the Borrower’s Accountant, shall notrequire the approval of the Loan Servicer; and

 

(f)            The Borrower shall retain all records relating toexpenditures with respect to which Advances were made for five years after theAdvance was made with respect to such expenditure.

 

**6.3.****                           ****Maintenanceof Property and Insurance.**

 

(a)           The Borrower shall (i) keep all its property andassets in good working order and condition to the extent necessary to ensurethat its business can be conducted properly at all times, (ii) operate,maintain and repair the Project or cause the Project to be operated, maintainedand repaired in accordance with the standards set forth in the O&MAgreement, manufacturer’s recommendations and insurance requirements,(iii) possess or have access to all equipment necessary for the operationof the Project and maintain such spare parts and inventory or renew and replacesuch equipment, in each case as consistent with the Transaction Documents andthe “reasonable and prudent operator” standard, and (iv) maintain at theProject Site a complete set of plans and specifications for the Project.

 

(b)           The Borrower shall keep its present and future propertiesand business insured as required by and in accordance with the terms andprovisions described on Schedule 6.3(b).  Such terms and provisions may be modified (i) atthe reasonable request of the Loan Servicer upon prior written notice to theBorrower or (ii) at the reasonable request of the Borrower upon priorwritten notice to the Loan Servicer and subject to the reasonable consent ofthe Loan Servicer.

 

(c)           The Borrower shall use commercially reasonable efforts tocause each Construction Contractor to obtain and maintain the insurancerequired under its respective Construction Contract; provided that workshall not proceed under any particular Construction Contract if all suchrequired insurance is not in place.

 

**6.4.****                           ****Maintenanceof Existence; Conduct of Business.**

 

TheBorrower shall (i) maintain and preserve its existence as a limitedliability company organized and existing under the laws of the State ofDelaware and acquire, maintain, and renew all rights, licenses, contracts,powers, privileges, Leases, lands, sanctions, and franchises necessary in thenormal conduct of its business and in the performance of the Borrower’sobligations hereunder and under the other Transaction Documents,(ii) observe all corporate formalities and (iii) engage only in thebusiness contemplated by the Transaction Documents.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**6.5.****                           ****Compliancewith Governmental Rules; Environmental Laws; Governmental Approvals.**

 

(a)           The Borrower shall, and cause the Operator to,(i) comply with, and shall conduct its business, operations, assets,equipment, property, leaseholds, and other facilities in compliance with allapplicable Environmental Laws and in compliance with all other applicableGovernmental Rules the noncompliance with which would reasonably beexpected to have a Material Adverse Effect, and (ii) procure, maintain andcomply with all Governmental Approvals required for the ownership,construction, financing, maintenance or operation of the Project or any partthereof as contemplated by the Transaction Documents at or prior to such timeas such Governmental Approval is required or necessary, except where thefailure to do so could not reasonably be expected to have a Material AdverseEffect.

 

(b)           Each of the following transactions, if, and to the extent,otherwise permitted pursuant to the terms of the Transaction Documents, shallbe in compliance with all applicable Governmental Rules including, withoutlimitation, applicable Governmental Rules of FERC: (i) the sale,transfer, assignment, lease or other disposition (whether in one transaction ora series of transactions) of all, or substantially all, of the assets ofSponsor; (ii) the merger or consolidation of Sponsor with any otherPerson; and (iii) any negotiated sale by Sponsor of any of the capitalstock of Sponsor.

 

**6.6.****                           ****Compliancewith Debarment Regulations.**

 

TheBorrower shall provide immediate written notice (including a brief description)to the Loan Servicer if at any time it learns that the representations madewith respect to Debarment Regulations were erroneous when made or have becomeerroneous by reason of changed circumstances.

 

**6.7.****                           ****Tax,Duties, Proper Legal Form.**

 

TheBorrower shall pay or arrange for the payment before they become overdue of allpresent and future (i) material taxes (including stamp taxes), duties,fees, Periodic Expenses, or other charges payable on or in connection with theexecution, issue, delivery, registration, or notarization, or for the legality,validity, or enforceability, of this Common Agreement, any other TransactionDocuments and any other documents related to this Common Agreement (other thanthose tax that it is contesting in good faith and by appropriate proceedingsfor which reserves have been established to the extent required by GAAP) and (ii) claims,levies, or liabilities (including claims for labor, services, materials andsupplies), for sums that have becomedue and payable and that have or, ifunpaid, could reasonably be expected to become a Lien (other than a PermittedLien) upon the property of the Borrower (or any part thereof).  The Borrower shall take all action to ensurethat each of the Transaction Documents is in proper legal form under therespective governing laws selected in such Transaction Document, without anyfurther action required with respect to such legal form for the enforcement of suchTransaction Documents.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**6.8.****                           ****ApprovedProject Changes.**

 

(a)           The Borrower shall (i) apply the proceeds of theAdvances and Equity Advances exclusively to Eligible Base Project Costs; and (ii) use its reasonablecommercial efforts to cause Physical Completion to be achieved on or prior tothe Anticipated Physical Completion Date and within the Project Budget, all inaccordance with the Program Requirements.

 

(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 “Project Change”) of any of theprovisions of the Project Milestone Schedule or the Project Budget, except forthe following approved Project changes (“Approved Project Changes”):

 

(i)            any Project Change that (x) has been submitted inwriting by the Borrower to the Loan Servicer (including an explanation inreasonable detail of the reasons for such Project Change) and (y) hasreceived a written approval from the Loan Servicer in consultation with theLender’s Engineer;

 

(ii)           any increase of any of the line items in the ProjectBudget if such increase, when aggregated with all other changes to the ProjectBudget in accordance with this Section 6.8(b)(ii) since theCommon Agreement Date, would not result in a cumulative net decrease, since thedate of this Common Agreement, of Overrun Contingencies of more than [*****](excluding any Approved Project Change pursuant to Section 6.8(b)(iii));or

 

(iii)          the use or allocation of any contingency approved orpreapproved for use, as set forth in the Project Budget.

 

(c)           All Approved Project Changes shall be reflected in arevised Project Milestone Schedule or Project Budget, as the case may be,delivered as part of the next Quarterly Reporting Package.

 

**6.9.****                           ****OperatingForecasts.**

 

Fromand after the Project Completion Date, the Borrower shall or shall cause theProject to operate in all material respects pursuant to the Operating Plan thenin effect.

 

**6.10.****                    ****DiligentConstruction and Installation of Project and Operations.**

 

TheBorrower shall cause the Project to be designed, engineered, constructed,equipped, installed and tested diligently in accordance with the ProjectDocuments and the other Transaction Documents, Governmental Approvals, and theProject Milestone Schedule and the Project Budget, subject to Events of ForceMajeure.  Notwithstanding any delay inthe design, engineering, construction, installation, equipping or testing ofthe Project caused in whole or in part by Events of Force Majeure, such design,engineering, construction, installation, equipping and testing shall in allevents be completed on or before the Anticipated Physical Completion Date.  The Borrower shall conduct, and shall causethe Operator to conduct, the operations of the 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Projecton the basis of customary commercial practice and arm’s-length arrangements, oras otherwise set forth in the Project Documents, with due diligence andefficiency and under the supervision of qualified and experienced management.

 

**6.11.****                    ****Ineligibleand Overrun Project Costs.**

 

TheBorrower shall be obligated to comply with the Overrun Equity Commitment andshall fund 100% of (i) Ineligible Project Costs and (ii) OverrunProject Costs by depositing monies in the Overrun Equity Account in the amountsand at the times required by Section A.4 of Appendix A.

 

**6.12.****                    ****CostOverruns and Contingencies.**

 

Tothe extent that the Construction Contracts allow for a Cost Overrun to befunded from Overrun Contingencies, such Cost Overrun shall be funded as aProject Cost and charged against the available Overrun Contingency amount.  Any Cost Overrun that cannot be funded fromOverrun Contingencies shall be funded from Overrun Equity in accordance with Section 2.4.2.

 

**6.13.****                    ****Useof Proceeds; Repayment of Indebtedness.**

 

(a)           Proceeds. The Borrower shall use the proceeds of all Equity Contributions and allAdvances in accordance with the terms and conditions of all applicable LoanDocuments.

 

(b)           Repayment of Indebtedness.  The Borrower shall repay in accordance withits terms all Indebtedness due under the Loan Documents.

 

**6.14.****                    ****Performanceof Obligations.**

 

TheBorrower shall maintain in full force and effect each of the DOE CreditFacility Documents and each of the other Loan Documents to which it is a partyin accordance with the respective terms thereof, except for those LoanDocuments that shall by their termsterminate.  The Borrower shall comply withthe provisions of and perform all of its obligations under each Loan Documentin accordance with the terms thereof. The Borrower shall maintain in full force and effect each of the ProjectAccounts in accordance with the provisions of Appendix A attachedhereto.

 

**6.15.****                    ****ProjectDocuments.**

 

TheBorrower shall (i) maintain all the Project Documents to which it is aparty in full force and effect, (ii) comply with the material provisionsof and perform all of its material obligations under such Project Documents,and (iii) diligently pursue all of its rights and remedies under suchProject Documents.

 

**6.16.****                    ****CashDeposits.**

 

TheBorrower shall instruct each Person remitting cash to or for the account of theBorrower to deposit such cash in accordance with the terms of thisAgreement.  The Borrower 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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shallremit any amounts received by it or received by third parties on its behalf tothe Administrative Agent in its capacity as the Collateral Agent for depositwith the Depository Bank in accordance with this Agreement.

 

**6.17.****                    ****DebtService Reserve.**

 

TheBorrower shall establish and maintain a reserve for Debt Service (the “DebtService Reserve”) in accordance with Appendix A attached hereto.  The Debt Service Reserve shall consist of anycombination of cash and Reserve Letters of Credit.  In the event of any withdrawal of monies ondeposit in the Debt Service Reserve Account in accordance withSection A.10(a) of Appendix A or otherwise, the Borrower shallrestore the amount on deposit in the Debt Service Reserve Account to the DebtService Reserve Requirement within ninety (90) days after the date of suchwithdrawal.

 

**6.18.****                    ****SafetyAudit.**

 

Notless frequently than once each calendar year, the Borrower shall conduct, orcause the Operator to conduct, a safety audit of the Project in a mannerreasonably satisfactory to the Loan Servicer (in consultation with the Lender’sEngineer), each in its sole discretion, including an analysis of whether theProject is in compliance with all Governmental Rules and EnvironmentalLaws and each such safety audit shall result in the prompt preparation of a writtenreport with respect thereto which shall be delivered to the Loan Servicer, DOEand the Lender’s Engineer for review and approval by the Loan Servicer, inconsultation with the Lender’s Engineer. The Borrower shall provide for the prompt correction of any deficienciesidentified in such safety audit and for the operation and maintenance of theProject in accordance with any recommendations set forth therein.

 

**6.19.****                    ****Replacementof Certain Project Participants.**

 

TheBorrower shall, at the request of the Loan Servicer (after consultation withthe Borrower) exercise its right (if any) to terminate (a) the Operator inaccordance with and as permitted by the O&M Agreement if the Operator isnot operating the Project in accordance with the O&M Agreement or (b) anyparty to a Project Document to which the Borrower is a party (other than aCredit Party and NYISO) in accordance with and as permitted by such ProjectDocument if such party is not in compliance with such Project Document.  Promptly after any termination, the Borrowershall enter into a replacement agreement with a new operator or other Person,as the case may be, on terms and conditions satisfactory to the Loan Servicer.

 

**6.20.****                    ****SecurityInterest in Newly Acquired Property; Additional Project Documents.**

 

Ifthe Borrower shall at any time acquire any interest in property not covered bythe Security Documents or enter into any Additional Project Document, theBorrower shall promptly (i) notify the Loan Servicer of said interest orAdditional Project Document, (ii) upon request of the Loan Servicer,execute, deliver and record a supplement to the Security Documents,satisfactory in form and substance to the Loan Servicer, (iii) ensure thatthe security interest shall be valid and effective and (iv) upon requestof the Loan Servicer, deliver to the Administrative 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Agentin its capacity as the Collateral Agent, a consent to assignment for each suchAdditional Project Document in an agreed form.

 

**6.21.****                    ****Title;Rights to Land.**

 

TheBorrower shall preserve and maintain good and valid title to the Project andsuch rights to use the Project Site as are necessary to construct, operate andmaintain the Project in accordance with the requirements of the TransactionDocuments.

 

**6.22.****                    ****IndependentConsultants.**

 

TheBorrower (i) shall cooperate in all respects with each IndependentConsultant and (ii) shall ensure that each Independent Consultant isprovided with all information reasonably requested by such IndependentConsultant in fulfilling its duties to the Credit Parties.

 

**6.23.****                    ****AdditionalDocuments; Filings and Recordings.**

 

(a)           The Borrower shall execute and deliver, from time to timeas reasonably requested by the Loan Servicer, DOE or the Administrative Agentin its capacity as the Collateral Agent at the Borrower’s expense, such otherdocuments as shall be necessary or advisable or that the Loan Servicer, DOE andthe Administrative Agent in its capacity as the Collateral Agent may reasonablyrequest in connection with the rights and remedies of the Credit Parties andthe Administrative Agent in its capacity as the Collateral Agent granted orprovided for by the Transaction Documents, and to consummate the transactionscontemplated therein.

 

(b)           (i)            TheBorrower shall, at its own expense, take all actions that have been or shall berequested by the Loan Servicer, DOE, the Administrative Agent in its capacityas 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 bythe Security Documents and shall furnish timely notice of the necessity of anysuch action, together with such instruments, in execution form, and such otherinformation as may be required or reasonably requested to enable anyappropriate Secured Party to effect any such action.  Without limiting the generality of theforegoing, the Borrower shall, at its own expense, (A) execute or cause tobe executed and shall file or cause to be filed or register or cause to beregistered such financing statements, continuation statements, fixture filingsand mortgages or deeds of trust in all places necessary or advisable (in theopinion of counsel for the Loan Servicer, DOE or the Administrative Agent inits capacity as the Collateral Agent) to establish, maintain and perfect suchsecurity interests and in all other places that the Loan Servicer, DOE or theAdministrative Agent in its capacity as the Collateral Agent shall reasonablyrequest, (B) discharge all other Liens (other than Permitted Liens) orother claims adversely affecting the rights of the Secured Parties in theCollateral Security and (C) deliver or publish all notices to thirdparties that may be required to establish or maintain the validity, perfectionor priority of any Lien created pursuant to the Security Documents.

 

(ii)           The Borrower shall do everything necessary in the judgmentof the Loan Servicer or the Administrative Agent in its capacity as theCollateral Agent (including filing, 

 

**Confidential materials omitted and filed separately with the Securitiesand Exchange Commission.  Asterisks denote such omission.**

 

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registering and recording all necessary documentsand paying all fees, taxes, levies, imposts and Periodic Expenses in connectiontherewith) 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 forvalue, in bulk, by operation of law, or otherwise, in each case granted, withrespect to future assets in accordance with the requirements of allGovernmental Rules, or the law of any other jurisdiction, as applicable,(B) maintain the security and pledges created by the Security Documents infull force and effect at all times (including, as applicable, the prioritythereof) and (C) preserve and protect the Collateral Security and protectand enforce its rights and title, and the rights and title of the CreditParties, to the security created by the Security Documents.  Furthermore, the Borrower shall cause to bedelivered to the Loan Servicer such opinions of counsel and other relateddocuments as may be reasonably requested by the Loan Servicer, DOE or theAdministrative Agent in its capacity as the Collateral Agent to assurecompliance with this Section 6.23. Additionally, when requested by the Loan Servicer, the Borrower shallcause any party to a Project Document executed subsequent to the FinancialClosing Date to enter into a Direct Agreement with the Administrative Agent inits capacity as the Collateral Agent in form and substance satisfactory to theLoan Servicer and the Administrative Agent in its capacity as the CollateralAgent.

 

**6.24.****                    ****IntercompanyProject Documents.**

 

Unlessotherwise agreed by each Relevant Credit Party, each of the IntercompanyProject Documents will contain the following provisions:

 

(a)           a [*****] after the term of the DOE-Guaranteed Loan(provided that any such agreement may terminate on the date that no amounts areoutstanding under the DOE-Guaranteed Loan and the Loan Documents);

 

(b)           payment terms (and other terms) no less favorable to theBorrower than the Sponsor and/or applicable Sponsor Affiliate would extend (i) toan unaffiliated third party, and (ii) to the Sponsor or another SponsorAffiliate if such terms would be more favorable to the Sponsor or such SponsorAffiliate than the terms extended to an unaffiliated third party;

 

(c)           provisions assuring that the Sponsor and/or SponsorAffiliate will provide (or purchase) the goods or services that are the subjectof such Intercompany Project Documents to the Borrower on a non-discriminatorybasis, subject to customary reconciliation and true-up provisions;

 

(d)           calculation of pricing and allocation of any reimbursablecosts based on actual third-party amounts without any administrative markup oradditional fees, except as indicated in paragraphs (m) and (n) below;

 

(e)           DOE right to receive notices of default and other materialevents and DOE cure rights for Borrower breach;

 

(f)            appropriate force majeure provisions protecting theBorrower;

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(g)           limited termination rights in favor of the Sponsor and/orSponsor Affiliate;

 

(h)           collateral assignment to DOE and DOE step-in rights,consent rights and termination rights following the occurrence of an event ofdefault;

 

(i)            pass-through to the Borrower of warranties;

 

(j)            indemnification by the Sponsor and/or Sponsor Affiliateof the Borrower and DOE;

 

(k)           provisions protecting the Borrower’s interests in anyintellectual property necessary or desirable for the Project;

 

(l)            consents and subordinations to the terms of the LoanDocuments, including, but not limited to, cash flow waterfall provisions whichcould result in the Sponsor or Sponsor Affiliate failing to be paid all or aportion of its compensation for services rendered;

 

(m)          for contracts that are effective during the development orconstruction period, payments shall be limited to actual costs incurred and nopayment shall be made for fees, commissions, profit or mark-up until theProject Completion Date, except to the extent agreed upon by DOE;

 

(n)           for contracts that are effective during the operationalperiod, no payment shall be made for fees, commissions, profit or mark-up,except from the release of funds from the Distribution Suspense Account;provided that certain profit and/or mark-up may be payable pursuant to theO&M Agreement and the Administrative Services Agreement in accordance withthe application of funds on deposit in the Project Revenue Account, as setforth herein;

 

(o)           customary insurance naming the Borrower and DOE as losspayees or additional insureds;

 

(p)           waiver of set-off; and

 

(q)           such other provisions as DOE determines are reasonablynecessary to protect the Borrower’s and DOE’s interests.

 

**6.25.****                    ****Eventof Loss.**

 

Ifany material Event of Loss shall occur with respect to the Project or any partthereof, the Borrower shall (i) diligently pursue all its rights tocompensation involving an amount [*****] per claim against all relevantinsurers, reinsurers and Governmental Instrumentalities, as applicable, inrespect of such event; (ii) not, without the written consent of the LoanServicer compromise or settle any claim with respect to any Event of Lossinvolving [*****] per claim; and (iii) pay or apply all Loss Proceedsstemming from such event in accordance with Section 3.4.3(a)(ii) andSection 6.26.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**6.26.****                    ****Applicationof Loss Proceeds.**

 

(a)           All Loss Proceeds shall be applied as provided in this Section 6.26.  All Loss Proceeds shall be paid by therelevant insurers, reinsurers and Governmental Authorities, as applicable,directly to the Administrative Agent in its capacity as the Collateral Agent asloss payee and, if paid to the Borrower, such Loss Proceeds shall be receivedin trust and for the benefit of the Administrative Agent in its capacity as theCollateral Agent segregated from other funds of the Borrower, and shall beforthwith paid over to the Administrative Agent in its capacity as theCollateral Agent in the same form as received (with any necessaryendorsement).  The Administrative Agentin its capacity as the Collateral Agent as directed by the Loan Servicer shallapply all such Loss Proceeds in accordance with the provisions of this Section 6.26.

 

(b)           Upon the occurrence of a Event of Loss with respect towhich Loss Proceeds are payable in respect of a single loss in [*****], theBorrower shall apply such Loss Proceeds to the payment of the costs of repairor restoration of the portion of the Project lost or damaged, and disbursementof such funds by the Administrative Agent in its capacity as the CollateralAgent shall be made in accordance with this Section 6.26.

 

(c)           Upon the occurrence of any Event of Loss with respect towhich Loss Proceeds are payable in respect of a single loss in [*****],disbursement of funds by the Administrative Agent in its capacity as theCollateral Agent to the Borrower shall be permitted if, and only if, the LoanServicer after consultation with the Lender’s Engineer, if any, shall havedetermined that:

 

(i)            repair or replacement of the relevant portion of theProject is technically and economically feasible; and

 

(ii)           the Borrower is in compliance with such other conditionsand requirements as the Loan Servicer shall consider appropriate in thecircumstances.

 

(d)           Upon the occurrence of an Event of Loss, if the Project isto be restored or repaired in accordance with subsection (b) or (c) hereof,the Borrower shall, on the first Business Day of each month until suchrestoration and repair has been completed and the contractors performing suchrestoration or repair work have been paid in full, deliver to the CollateralAgent and the Loan Servicer the following:

 

(i)            A detailed summary of the work performed in connectionwith any such restoration or repair during the preceding month and the itemizedexpenses that are then due and payable, together with copies of all invoices,conditional (upon payment only) lien waivers from the contractors performingsuch restoration or repair work and other information and documents reasonablyrequested by the Loan Servicer with respect to such work and expenses; and

 

(ii)           Proposed instructions directing the Collateral Agent todisburse to the contractors performing such restoration or repair work amountsconstituting Loss Proceeds on deposit in the Loss Proceeds Account in therespective amounts then due and payable to such contractors.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(e)           Upon the completion of any such restoration and repairwork, or if restoration and repair work is not undertaken pursuant to this Section 6.26,the Collateral Agent shall, upon receipt of written instructions from the LoanServicer, apply any amounts constituting Loss Proceeds on deposit in the LossProceeds Account to the prepayment of the FFB Loans on the second Business Dayfollowing receipt of such instructions, in accordance with Section 3.4.3(a)(ii).

 

**6.27.****                    ****Acceptanceand Startup Testing.**

 

TheBorrower shall consult with and provide reasonable notice to the Loan Servicerand Lender’s Engineer regarding provisions related to startup and testing offacility and equipment pursuant to the Construction Contracts and the O&MAgreement.

 

**6.28.****                    ****Technology.**

 

(a)           The Borrower shall not take any action that would in anyway prevent it from exercising the rights granted to the Borrower under theTechnology License Agreement, or that would otherwise materially conflict withor adversely affect the rights granted to the Borrower under the TechnologyLicense Agreement.

 

(b)           The Borrower shall take all commercially reasonableactions necessary to maintain and protect the Technology and IntellectualProperty Rights licensed under the Technology License Agreement.

 

(c)           If the Borrower becomes aware of any breach or violationof any of the terms or conditions of the Technology License Agreement, theBorrower shall take such actions under the Technology License Agreement toprotect the rights granted to the Borrower, including suing for an injunctionagainst such violation or breach.

 

**6.29.****                    ****ComplianceWith Certain U.S. Government Requirements.**

 

(a)           Recovery Act. The Borrower shall timely comply with the reporting requirements set outin Section 1512(c) of Title XV of Division A of the RecoveryAct.  Such reporting shall be made inaccordance with the procedures set out or otherwise referenced in 2 C.F.R. Section 176.50,the Office of Management and Budget’s Initial Implementing Guidance for theRecovery Act, M-09-10 (February 18, 2009), Updated Implementing Guidancefor the Recovery Act, M-09-15 (April 3, 2009), Updated ImplementingGuidance for the Recovery Act, M-09-21 (June 22, 2009) and, in each case,any amendment, supplement or successor thereto.

 

(b)           Lobbying Requirements.  The Borrower shall comply with allrequirements of 31 U.S.C. §1352, including if any funds have been paid or willbe paid to any Person for influencing or attempting to influence an officer oremployee of any agency, a Member of Congress, an officer or employee ofCongress, or an employee of a Member of Congress in connection with the DOE-GuaranteedLoan, the Borrower shall complete and submit Standard Form-LLL, “Disclosure Form toReport Lobbying,” in accordance with its instructions.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(c)           Use of United States Government Funds.  The Borrower shall comply withSection 609.10(c) of the Applicable Loan Guarantee Requirementsregarding the prohibition on the use of funds obtained from the United StatesGovernment, or from a loan or other instrument guaranteed by the United StatesGovernment, for the payment of Credit Subsidy Costs, administrative fees, orother fees charged by or paid to DOE relating to the Applicable Loan GuaranteeRequirements, except to the extent explicitly authorized by an act of theUnited States Congress.

 

(d)           Program Requirements.  The Borrower shall timely comply with allother Program Requirements including, without limitation, all Applicable LoanGuarantee Requirements set forth in Exhibit A3 attached hereto.

 

**6.30.****                    ****Davis-BaconAct.**

 

(a)           In accordance with Section 1705(c) of TitleXVII, beginning on the date hereof, all laborers and mechanics employed in theperformance of the Project, including those employed by contractors andsubcontractors, shall be paid wages at rates not less than those prevailing onsimilar work in the relevant locality as determined by the Secretary of Laborin accordance with the Davis-Bacon Act. In furtherance of this requirement, the contract clauses set out in 29CFR 5.5(a)(1) through (10) are attached hereto as Exhibit A4 (as modifiedtherein) and are hereby incorporated herein as though set out in their entiretyin this Section 6.30 and as provided therein shall be incorporatedinto all other Davis-Bacon Act Covered Contracts (as defined in Exhibit A4), in each case.

 

(b)           The Borrower, on DOE’s behalf, shall systematically reviewthe certified payroll records that it maintains for its own laborers andmechanics pursuant to subparagraph (b)(3)(i) of Exhibit A4 and those that it receives for the laborersand mechanics of any Contract Party (as defined in Exhibit A4) pursuant to subparagraph (b)(3)(ii)(A) ofExhibit A4.  The Borrower shall promptly notify the DOEcontracting officer in writing when it receives any complaint related tonon-compliance with the Davis-Bacon Act, or discovers in the course of itssystematic review of the certified payroll records an incident that theBorrower reasonably believes to be a case of such non-compliance and which, ineach case, the Borrower cannot resolve on its own and shall forward to the DOEcontracting officer (1) the complaint or a written summary of thenon-compliant incident, (2) a summary of the Borrower’s investigation intosuch complaint or such incident, and (3) the relevant certified payrollrecords.  Certified payroll recordsmaintained by the Borrower shall be preserved for 3 years after completion ofwork.  Notwithstanding anything to thecontrary in subparagraph (b)(3)(ii)(A) of Exhibit A4, the Borrower shall maintain such certifiedpayroll records at a site designated by the Borrower and shall make suchrecords available to DOE and the U.S. Department of Labor when necessary, andupon request, for purposes of an investigation or audit of compliance withprevailing wage requirements.  Certifiedpayroll records maintained by the Borrower shall be considered federalgovernment records for the purposes of the Freedom of Information Act, 42U.S.C. 552.  The Borrower shall providesuch records to DOE within five (5) days of receipt of any written requestfor such records from DOE.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(c)           If and to the extent performance of the Project beganprior to the date hereof, Borrower shall, prior to the Initial Advance Date,retroactively adjust, and cause each Contract Party (as defined in Exhibit A4)to retroactively adjust, the wages of each affected laborer and mechanicemployed in the performance of the Project prior to the date hereof, and pay orcause to be paid to each such laborer or mechanic such additional wages, ifany, as are necessary for such laborers and mechanics to have been paid atrates not less than those prevailing on similar work in the relevant localityduring the period such work was performed, as determined by the Secretary ofLabor in accordance with the Davis-Bacon Act in the wage determination(s) foundin Schedule 6.30(d); provided, however, that this clause (c) shallnot apply if and to the extent the Borrower obtains an exemption pursuant tothe provisions of 29 C.F.R. 1.6(g).

 

(d)           The wage determination of the Secretary of Labor attachedhereto as Schedule 6.30(d) may be amended unilaterally by DOEat any time upon written notice to the Borrower.  In the event of any such unilateralamendment, Schedule 6.30(d) attached hereto shall be automaticallyreplaced by such amended Schedule 6.30(d) without any furtheraction by the Borrower.

 

(e)           Without limiting the Borrower’s obligations hereunder orunder the Davis-Bacon Act, the Borrower shall provide DOE (i) a statementof the work to be performed by any Contract Party (as defined in Exhibit A4)which will perform construction, alteration, or repair of a building or workfinanced in whole or in part by the DOE Credit Facility and (ii) any otherinformation requested by DOE, for the purpose of enabling DOE to ensure that(x) the appropriate wage determination(s) are incorporated into bidsolicitations and Davis Bacon Act Covered Contract specifications and(y) the appropriate wage determination(s) are designated specificallyto the Davis Bacon Act Covered Contract requirements.  Any such description or other informationrequested by DOE for the purpose of this paragraph shall be provided to DOEafter the Financial Closing Date at least [*****] Days prior to the executionof any Davis Bacon Act Covered Contract (or, as soon as practicable prior tothe effective date of an amendment or modification thereto relating to thedescription of the work to be performed or exercise of any option to extend,but in no event on or after such effective date) by Borrower or its Affiliatesfor construction, alteration or repair of a building or work financed in wholeor in part by the DOE Credit Facility. If the Borrower fails to comply with its obligations under this Section 6.30(e),no Potential Default or Event of Default shall be deemed to have occurred.  Such failure shall not relieve the Borroweror any of its Affiliates of any of their respective obligations to comply withthe Davis-Bacon Act, or the other terms of the Transaction Documents, and nodefense to failure to comply with the Transaction Documents shall result fromthe inability of the DOE to provide the wage determination as a result of suchfailure.

 

**6.31.****                    ****ERISACovenants.**

 

(a)           The Borrower shall do, and shall cause each of its ERISAAffiliates to do, each of the following: (i) maintain each EmployeeBenefit Plan in compliance in all material respects with the applicableprovisions of ERISA, the Internal Revenue Code or other Federal or state law; (ii) causeeach Qualified Plan to maintain its qualified status under Section 401(a) ofthe Internal Revenue Code; (iii) timely make all required contributions toany Pension Plan; (iv) ensure that all liabilities under each Plan areeither (A) funded to at least the minimum level 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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required by law or, if higher, to the level requiredby the terms governing such Plan; (B) insured with a reputable insurancecompany; or (C) provided for or recognized in the Financial Statementsmost recently delivered to the Loan Servicer under Section 6.1hereof); and (v) ensure that the contributions or premium payments to orin respect of each Pension Plan is and continues to be promptly paid at no lessthan the rates required under the rules of such Pension Plan and inaccordance with the most recent actuarial advice received in relation to suchPension Plan and applicable law.

 

(b)           The Borrower shall not, nor shall it permit any of ERISAAffiliate to, (i) terminate any Pension Plan so as to result in anymaterial (in the reasonable opinion of the Loan Servicer) liability to theBorrower or any ERISA Affiliate, (ii) permit to exist any ERISA Event, orany other event or condition, which could reasonably be expected to result inthe risk of a material (in the reasonable opinion of the Loan Servicer)liability to any ERISA Affiliate, (iii) make a complete or partialwithdrawal (within the meaning of Section 4201 of ERISA) from any MultiemployerPlan so as to result in any material (in the opinion of the Loan Servicer)liability to the Borrower or any ERISA Affiliate, or (iv) enter into anynew Plan or modify any existing Employee Benefit Plan so as to increase itsobligations thereunder which could result in any material (in the reasonableopinion of the Loan Servicer) liability to the Borrower or any ERISA Affiliate.

 

**6.32.****                    ****[Reserved.]**

 

**6.33.****                    ****FinancialCovenants**

 

(a)           As of the last day of each fiscal quarter of the Borrower,the Borrower shall:

 

(i)            following the Project Completion Date, maintain a CurrentRatio measured for the four preceding fiscal quarters of (a) not less than1.0x during the first four fiscal years following the Project Completion Dateand (b) not less than 1.2x thereafter;

 

(ii)           maintain a Leverage Ratio measured for the four precedingfiscal quarters of not more than 62.5%; and

 

(iii)          commencing with the first fiscal quarter to end after thefirst anniversary of the Project Completion Date, maintain a Debt Service CoverageRatio measured for the four preceding fiscal quarters of not less than 1.3x; provided,however, that any failure to achieve such Debt Service Coverage Ratioshall not be deemed an Event of Default unless the Debt Service Coverage Ratiois less than 1.2x.

 

(b)           Commencing after the Project Completion Date, the Borrowershall at all times maintain in the Debt Service Reserve Account an amount equalto the Debt Service Reserve Requirement unless an alternative form of security,reasonably satisfactory to DOE (such as an acceptable Reserve Account Letter ofCredit from a national bank), has been supplied; provided that, in the event ofany withdrawal from the Debt Service Reserve Account, the Borrower shall not bedeemed to be in breach of this subsection (b) unless the Borrower shallfail to restore the amount on deposit in 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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the Debt Service ReserveAccount to the Debt Service Reserve Requirement within ninety (90) days afterthe date of such withdrawal.

 

(c)           The Borrower shall at all times from and after the firstanniversary of the Project Completion Date maintain in the Maintenance ReserveAccount an amount equal to the MRA Required Amount; provided that, in the eventof any withdrawal from the Maintenance Reserve Account, the Borrower shall notbe deemed to be in breech of this subsection (c) unless the Borrower shallfail to restore the amount on deposit in the Maintenance Reserve Account to theMRA Required Amount within ninety (90) days after the date of such withdrawal.

 

(d)           The Borrower shall at all times from and after the firstanniversary of the Project Completion Date maintain in the Capital Account anamount equal to the Capital Account Requirement; provided that, in the event ofany withdrawal from the Capital Account, the Borrower shall not be deemed to bein breach of this subsection (d) unless the Borrower shall fail to restorethe amount on deposit in the Capital Account to the Capital Account Requirementwithin ninety (90) days after the date of such withdrawal.

 

(e)      It shall not be considered a breach of any of the covenantsunder subsections (a) through (d) above so long as, within thirty(30) days of the delivery of quarterly or annual financial statements showingthe breach of any of such covenants, the Borrower causes Holdings to contributecash to the Borrower in an amount necessary to cure such breach afterrecalculating the applicable covenants above by applying the amount of cash socontributed (i) to increase Current Assets, in the case of subsection (a) (i) above,(ii) to increase Total Capitalization, in the case of subsection (a) (ii) above,(iii) to increase Cash Available for Debt Service, in the case ofsubsection (a) (iii) above, or (d) to increase the cash balanceson deposit in the Debt Service Reserve Account, the Maintenance Reserve Accountor the Capital Account, as the case may be, in the case of subsections (b), (c) and(d) above; provided that in no event shall any action pursuant to thisclause (e) be deemed to satisfy (i) any conditions to PhysicalCompletion or Project Completion, or (ii) any Distribution Preconditions.

 

**6.34.****                    ****Accessto Project Site.**

 

TheBorrower shall permit DOE and its representatives and advisors to enter theProject Site and ancillary facilities at all reasonable times to inspect andmonitor performance of the Project Facility.

 

**6.35.****                    ****KeyEmployees****.**

 

(a)           [*****], or such earlier date as may be reasonablynecessary in connection with the development, construction, installation oroperation of the Project, Borrower shall employ, or cause Operator orAdministrator to employ and make available to the Project Facility, individualshaving substantial experience and expertise in each of the followingsubstantive areas:  [*****](collectively, the “Key Employees”). On or before the Physical Completion 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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Date, Borrower shall notify the Loan Servicer of thename and substantive area of expertise of each of the Key Employees.  If any Key Employee ceases to be employed byBorrower or Operator, or ceases to be available to the Project Facility,Borrower shall promptly notify the Loan Servicer of the name and area ofexpertise of the proposed replacement Key Employee.

 

**6.36.****                    ****CentralContractor Registration.**

 

TheBorrower shall at all times maintain its registration in the CCR database orany successor United States federal government database for the registration ofcontractors with DOE, as required by law or as otherwise applicable.

 

**ARTICLE 7NEGATIVE COVENANTS**

 

TheBorrower covenants and agrees that until the date all Secured Obligations(other than inchoate indemnity obligations) are paid in full and the DOE CreditFacility Commitment has terminated, unless the Loan Servicer waives compliancein writing:

 

**7.1.****                           ****Indebtedness.**

 

TheBorrower shall not, and shall not agree to, incur, create, guarantee, assume,permit to exist or otherwise become liable for any Indebtedness, except for:

 

(a)           Indebtedness incurred under the Loan Documents;

 

(b)           Contingent Obligations under the Project Documents (whichshall, in the case of Intercompany Agreements, be subordinated to the SecuredObligations), but excluding any amounts payable by the Borrower to anyAffiliate otherthan (i) payments under the O&MAgreement and the Administrative Services Agreement, and (ii) payments inthe ordinary course of business under the Project Documents;

 

(c)           Indebtedness in respect of amounts due to trade creditorsand accrued expenses, in each case arising in the ordinary course of business,to the extent such amounts and expenses are not unpaid more than [*****] datetherefor;

 

(d)           Indebtedness (including capital leases) that is notsecured for the acquisition of equipment or personal property (includingrefinancings after the purchase thereof) incurred in connection with theconstruction or operation of the Project in accordance with the Loan Documents;

 

(e)           Indebtedness consisting of reimbursement obligations tothe Sponsor with respect to any amounts drawn under the letter of credit referredto in Section 7.10(a)(iii) or any net costs of providing suchletter of credit; provided, however,that any Indebtedness payable hereunder shall only be paid from amounts disbursed from the Distribution Suspense Accountpursuant to Section A.14(b) of Appendix A hereto.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(f)            Indebtedness under Hedging Agreements entered into inaccordance with Section 7.18;

 

(g)           Permitted Subordinated Loans; and

 

(h)           additional Indebtedness in an aggregate outstandingprincipal amount [*****] at any time.

 

**7.2.****                           ****Liens.**

 

TheBorrower shall not, and shall not agree to, create, assume or otherwise permitto exist any Lien upon any of the Collateral Security or any of its otherproperty, whether now owned or hereafter acquired, or in any proceeds or incometherefrom, other than Permitted Liens. Any Lien to be granted by the Borroweron equipment or personal property to secure Indebtedness (including capitalleases) incurred or assumed by the Borrower for the acquisition of suchequipment or personal property shall be subject to the prior written approvalof DOE.

 

**7.3.****                           ****[Reserved.]**

 

**7.4.****                           ****Loans,Advances and Investments.**

 

TheBorrower shall not make or permit to remain outstanding any loans, extensionsof 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 theTransaction Documents as in effect on the Financial Closing Date.

 

**7.5.****                           ****CapitalExpenditures.**

 

TheBorrower shall not make any Capital Expenditure in any year except for(a) expenditures contemplated by the Project Budget and the OperatingPlan, (b) expenditures made from the proceeds of insurance to the extentpermitted by the Loan Documents, and (c) in amounts that are available andcould have been paid as Restricted Payments to the Sponsor under Section 7.10,and (d) other Capital Expenditures in an aggregate in any Fiscal Year notin excess of [*****].

 

**7.6.****                           ****Subsidiaries;Partnerships.**

 

TheBorrower shall not:  (a) form orhave any Subsidiaries; (b) enter into any partnership or a joint venture;(c) acquire any ownership interest in or make any capital contribution toany other Person; (d) enter into any partnership, profit-sharing orroyalty agreement or other similar arrangement whereby the Borrower’s income orprofits are, or might be, shared with any other Person; or (e) enter intoany management contract or similar arrangement whereby its business oroperations are managed by any other Person, other than the O&M Agreementand the Administrative Services Agreement or as otherwise contemplated underthe Transaction Documents.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**7.7.****                           ****OrdinaryCourse of Conduct; No Other Business.**

 

TheBorrower shall not:  (a) engage inany business other than the acquisition, ownership, design, development,construction, financing, implementation, completion, operation and maintenanceof the Project in accordance with and as contemplated by the TransactionDocuments; (b) undertake any action thatcould reasonably be expected to lead to a material alteration of the nature ofits business or the nature or scope of the Project; (c) change its name ortake any other action that might adversely affect the Liens created by theSecurity Documents; or (d) fail to maintain its corporate existence andits right to carry on its business.

 

**7.8.****                           ****Merger,Bankruptcy, Dissolution or Transfer of Assets.**

 

TheBorrower shall not, and shall not agree to: (a) enter into any transaction of merger or consolidation orconvey, sell, lease or otherwise transfer any of its property or assets, except(i) transactions permitted under the Transaction Documents,(ii) sales or other dispositions in the ordinary course of business, (iii) settlementof accounts receivable in the normal course of its business, (iv) dispositionof Permitted Investments, (v) sales or other dispositions of equipment orother assets that are (x) obsolete, (y) no longer used or useful inthe operation of the Project, or (z) are replaced by or exchanged forother equipment of equal or greater value, and in all cases for which theBorrower shall have received consideration reflecting value that would havebeen obtained in a transaction on an arm’s length basis with an unaffiliatedthird party (unless such assets only have scrap value), each of which, withrespect to clause (v), shall be verified by the Lender’s Engineer if requestedby the Loan Servicer; (b) wind up, liquidate, or dissolve itself, commencean Insolvency Proceeding or file any petition or pass a resolution seeking thesame; or (c) acquire property or assets of any other Person (other thanpurchases or other acquisitions of inventory or materials or spare parts orCapital Expenditures, each in the ordinary course of business in accordancewith the applicable budget).

 

**7.9.****                           ****OrganizationalDocuments of Borrower and Holdings; Fiscal Year; Legal Form; Capital Structure.**

 

(a)           The Borrower shall not (i) amend or modify itsOrganizational Documents, or (ii) amend or modify its legal form, itsFiscal Year or its capital structure.

 

(b)           The Borrower shall not permit Holdings (i) to amendor modify Holdings’ Organizational Documents, or (ii) to amend or modifyHoldings’ legal form, Holdings’ Fiscal Year or Holdings’ capital structure.

 

**7.10.****                    ****RestrictedPayments.**

 

(a)           Except as set forth in Section 7.10(b), theBorrower shall not reduce its capital or declare or make or authorize anydividend or any other payment or distribution of cash or property to its EquityOwners on account of any equity interest (each of the foregoing a “RestrictedPayment”) unless the Borrower satisfies each of the following conditions:

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(i)            Physical Completion shall have occurred;

 

(ii)           no Potential Default or Event of Default then exists orwould exist after giving effect to any such Restricted Payment;

 

(iii)          the cash balance in (and the Reserve Letters of Creditavailable to be drawn into) the Debt Service Reserve Account shall equal orexceed the then required Debt Service Reserve Requirement, both before andafter the Restricted Payment is made;

 

(iv)          the Distribution Preconditions have been satisfied;

 

(v)           no other Restricted Payment has been made during thecurrent Fiscal quarter; and

 

(vi)          such Restricted Payment is permitted by Governmental Rules.

 

(b)      Notwithstanding the restrictions set forth above, the Borrowermay make payments to the Sponsor in accordance herewith and in accordance withand subject to Appendix A attached hereto to reimburse costs thatare incurred by the Sponsor or any Sponsor Affiliate in performing anIntercompany Project Document.

 

**7.11.****                    ****Redemptionor Issuance of Stock; Changes to Capital Structure.**

 

TheBorrower shall not (a) redeem, retire, purchase or otherwise acquire,directly or indirectly, any of its Equity Interests now or hereafteroutstanding (or any options or warrants issued by the Borrower with respect toits Equity Interests) or set aside any funds for any of the foregoing or issueany Equity Interests to any other Person or (b) make any changes to itscapital structure (including the issuance of any options, warrants or otherrights with respect thereto).

 

**7.12.****                    ****OtherTransactions.**

 

Exceptfor the Transaction Documents as in effect on the Financial Closing Date or asset out on Schedule 5.14 to the Disclosure Letter, the Borrowershall not, directly or indirectly:  (a) enterinto any transaction or series of related transactions with any Person (includingany Affiliate) other than in the ordinary course of business and on an arm’s-lengthbasis, or (b) establish any sole and exclusive purchasing or sales agency,or enter into any transaction whereby the Borrower might pay more than the fairmarket value for products of others.

 

**7.13.****                    ****Accounts.**

 

TheBorrower shall not establish any bank accounts other than the Project Accounts.

 

**7.14.****                    ****Disbursementof Funds.**

 

TheBorrower shall not disburse any funds in a manner not permitted in theTransaction Documents.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**7.15.****                    ****Commissions.**

 

TheBorrower shall not pay:

 

(a)           any commission or fee to the Sponsor or any Affiliate ofthe Sponsor for furnishing guarantees, counter-guarantees or similar creditsupport for any obligations undertaken in connection with the Project (otherthan as set forth in paragraph (b) below), or

 

(b)           any fee to the Sponsor or any Affiliate of the Sponsorwith respect to or in connection with the development, construction, financingor operation of the Project, including salaries, bonuses, commissions,management fees, consulting fees, and technical assistance fees, other thanBase Fees and fees payable under the Technology License Agreement and theStart-up Agreement.

 

**7.16.****                    ****Amendmentof and Notices Under Transaction Documents.**

 

TheBorrower shall not (other than to correct minor or technical errors that do notmaterially change any Person’s rights or obligations), except with the priorwritten consent of the Loan Servicer acting in consultation with the Lender’sEngineer:

 

(a)           directly or indirectly agree to or permit any amendment,modification, termination, supplement, assignment, or waiver or waive any rightto consent to any amendment, modification, termination, supplement, assignmentor waiver of any right with respect to, or assign any of the respective dutiesor obligations under:

 

(i)            any Project Document or the Project Plans, except foramendments to any Project Document that (A) do not increase the ProjectBudget, except for Approved Project Changes; (B) would not reasonably beexpected to delay the occurrence of Physical Completion by [*****]; and (C) wouldnot reasonably be expected to have a Material Adverse Effect; provided,that the Borrower shall give the Loan Servicer and the Lender’s Engineer promptwritten notice of all such amendments;

 

(ii)           any Governmental Approval or other Required Consent, theeffect of which would reasonably be expected to have a Material Adverse Effect;or

 

(iii)          any Loan Document.

 

(b)           certify, consent to or otherwise permit through a ChangeOrder or otherwise “Final Completion” to occur under any Project ConstructionContract; or

 

(c)           enter into any agreement other than any Loan Documentrestricting its ability to amend or otherwise modify any of the TransactionDocuments.

 

**7.17.****                    ****OtherAgreements.**

 

TheBorrower shall not enter into or become a party to any agreement, contract orloan commitment outside the ordinary course of business.  The Borrower shall not enter into or 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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becomea party to any Additional Project Document without the approval of DOE in itsreasonable discretion.  The Borrowershall not enter into or become a party to any agreement, contract or loancommitment other than (a) the Transaction Documents, (b) agreements,contracts or loan commitments expressly contemplated or permitted by theTransaction Documents, (c) agreements or contracts in the ordinary courseof business that are not otherwise prohibited by the Transaction Documents or(d) as contemplated by the Project Budget, Project Milestone Schedule, theOperating Plan or the Operating Forecast.

 

**7.18.****                    ****HedgingAgreements.**

 

TheBorrower shall not enter into any Hedging Agreement without the prior writtenconsent of the Loan Servicer and the Collateral Agent.

 

**7.19.****                    ****Compromiseor Settlement of Disputes.**

 

TheBorrower shall not agree or otherwise consent to settle or compromise anylitigation, arbitration or other dispute [*****] in any single claim or seriesof related claims or [*****], in each case, without the prior written consentof the Loan Servicer.

 

**7.20.****                    ****Abandonmentof Project.**

 

TheBorrower shall not (a) abandon, agree to abandon or make any publicstatements regarding its intention to abandon the development, construction oroperation of the Project, or take any action that could be deemed an “abandonment”, or transfer the Project toany Person, or (b) notify any Major Project Participant of its intent toterminate any Principal Project Document or the construction or operation ofthe Project.

 

**7.21.****                    ****ImproperUse.**

 

TheBorrower shall not use, operate or occupy, or allow the use, maintenance,operation or occupancy of, any portion of the Project Site or Project in anymanner or for any purpose:  (a) that would be illegal or dangerous (unlesssafeguarded as required by Governmental Rules), (b) that could reasonably be expected to havea Material Adverse Effect, (c) thatmay make void, voidable or cancelable, or materially increase the premium of,any insurance 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.**

 

Otherthan the assignment of the Project Documents and Governmental Approvals to theAdministrative Agent in its capacity as the Collateral Agent as security forthe benefit of the Secured Parties, the Borrower shall not assign or otherwisetransfer its rights under any of the Transaction Documents or Governmental Approvalsto any Person.  In addition, to theextent that the Borrower has the right to prohibit any such assignment, theBorrower shall not permit any party to any Transaction Document to assign suchTransaction Document to a third party without the prior written consent of theLoan Servicer.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**7.23.****                    ****MarginRegulations.**

 

TheBorrower shall not directly or indirectly apply any part of the proceeds of anyAdvance or other revenues to the purchasing or carrying of any margin stockwithin the meaning of Regulation T, U or X of the Board of Governors of theFederal Reserve of the United States, or any regulations, interpretations orrulings thereunder.

 

**7.24.****                    ****EnvironmentalLaws.**

 

TheBorrower shall not undertake any action or Release any Hazardous Substances inviolation of any applicable Environmental Law and shall ensure that the Projectshall be operated in compliance with all applicable Environmental Laws and thatthe Project shall not be operated in any manner that would pose a hazard topublic health or safety or to the environment, in each case unless such actioncould not reasonably be expected to have a Material Adverse Effect.

 

**7.25.****                    ****ERISA.**

 

Neitherthe Borrower nor any ERISA Affiliate shall adopt, establish, participate in, orincur any obligation to contribute to, any Employee Benefit Plan, in each case,unless such action could not reasonably be expected to have a Material AdverseEffect.

 

**7.26.****                    ****InvestmentCompany Act.**

 

TheBorrower shall not take any action thatwould result in the Borrower being required to register as an “investmentcompany” under the Investment Company Act.

 

**7.27.****                    ****PublicUtility Holding Company Act.**

 

TheBorrower shall not take, nor permit any Affiliate to take any action that could result in the Borrower beingsubject to regulation under the PublicUtility Holding Company Act.

 

**7.28.****                    ****Powersof Attorney.**

 

TheBorrower shall not grant any power of attorney or similar power to any Person,except (i) to its directors and employees in the ordinary course ofbusiness, or (ii) in connection with Permitted Liens.

 

**7.29.****                    ****DebarmentRegulations.**

 

(a)           Unless authorized by DOE, none of the Borrower, Holdings,the Sponsor or any of the their respect Affiliates shall knowingly enter intoany transactions with any Person who is debarred, suspended, declaredineligible or voluntarily excluded from participation in procurement ornonprocurement transactions with any United States federal governmentdepartment or agency pursuant to any of the Debarment Regulations.

 

(b)           For purposes of this Section 7.29, “Affiliate”means, with respect to any Person, any other Person which, directly orindirectly, controls, is controlled by, or is under common 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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control with, such Person.  Solely for purposes of this definition of “Affiliate,”“control” (together with correlative meanings of “controlled by” and “undercommon control with”) means possession, directly or indirectly, of the power todirect or cause the direction of the management policies of such Person,whether through the ownership of voting securities, by contract or otherwise.

 

**7.30.****                    ****CorruptPractices and Foreign Asset Control Regulations**

 

Noneof the Borrower, Holdings or the Sponsor shall engage in any practices that areprohibited by Governmental Rules, including, without limitation, the CorruptPractices Laws, the Foreign Asset Control Regulations, the Patriot Act and anyanti-boycott laws and regulations.

 

**7.31.****                    ****OFACand USA PATRIOT Act.**

 

(a)           None of the Borrower, Holdings, the Sponsor or any oftheir respective Affiliates shall be a Prohibited Person, and none of theBorrower, Holdings, the Sponsor or any of such Affiliates shall violate anyapplicable published orders, rules and regulations of OFAC.

 

(b)           None of the Borrower, Holdings, the Sponsor, nor any oftheir directors, officers, or Affiliates: (x) shall be subject to UnitedStates or multilateral economic or trade sanctions in which the United Statesparticipates; (y) be owned or controlled by, or act on behalf of, anygovernments, corporations, entities or individuals that are subject to UnitedStates or multilateral economic or trade sanctions in which the United Statesparticipates; or (z) be a Prohibited Person or be otherwise named, identifiedor described on any blocked persons list, designated nationals list, deniedpersons list, entity list, debarred party list, unverified list, sanctions listor other list of individuals or entities with whom United States persons maynot conduct business, including but not limited to lists published ormaintained by OFAC, lists published or maintained by the U.S. Department ofCommerce, and lists published or maintained by the U.S. Department of State;and none of the Borrower, Holdings or the Sponsor shall sell ten percent (10%)or more of its capital stock (whether in one transaction or a series oftransactions) in a negotiated sale to any Person that, at the time of suchsale, is described in any of clauses (x), (y) or (z) of this Section 7.31(b).

 

(c)           None of the Collateral shall be traded or used, directlyor indirectly by a Prohibited Person or by a Person organized in a ProhibitedJurisdiction.  Neither the making of anyAdvances nor the use by the Borrower, Holdings or the Sponsor of the proceedsthereof shall violate any OFAC regulations, or any anti-boycott laws andregulations.

 

(d)           None of the Borrower, Holdings, and the Sponsor shall failto establish and maintain an anti-money laundering compliance program if and asrequired by the USA PATRIOT Act.

 

(e)           For purposes of this Section 7.31, “Affiliate”means, with respect to any Person, any other Person which, directly orindirectly, controls, is controlled by, or is under common control with, suchPerson.  Solely for purposes of thisdefinition of “Affiliate,” “control” (together with correlative meanings of “controlledby” and “under common control with”) means 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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possession, directly or indirectly, of the power todirect or cause the direction of the management policies of such Person,whether through the ownership of voting securities, by contract or otherwise.

 

**7.32.****                    ****U.S.Government Requirements.**

 

(a)           Suspension and Debarment.  None of the Borrower,Holdings, the Sponsor or any of their respective Affiliates, or any PrincipalPerson of any of the foregoing, shall be (i) debarred, suspended, declaredineligible or voluntarily excluded (as such terms are defined in any of theDebarment Regulations) from participating in procurement or nonprocurementtransactions with any United States federal government department or agencypursuant to any of the Debarment Regulations, or (ii) indicted, convictedor have a Governmental Judgment rendered against the Borrower, Holdings, theSponsor or any of their respective Affiliates, or any Principal Person of anyof the foregoing, for any of the offenses listed in any of the DebarmentRegulations; and none of the Borrower, Holdings or the Sponsor shall sell tenpercent (10%) or more of its capital stock (whether in one transaction or aseries of transactions) in a negotiated sale to any Person that, at the time ofsuch sale, is described in any of clauses (i) or (ii) of this Section 7.32(a).

 

(b)           Lobbying.  Inaccordance with 31 U.S.C. §1352, no proceeds of the DOE-Guaranteed Loans shallbe expended by the Borrower, Holdings or the Sponsor to pay any Person forinfluencing or attempting to influence an officer or employee of any agency, aMember of Congress, an officer or employee of Congress, or an employee of aMember of Congress.

 

(c)      Affiliate.  Forpurposes of this Section 7.32, “Affiliate” means, with respect toany Person, any other Person which, directly or indirectly, controls, iscontrolled by, or is under common control with, such Person.  Solely for purposes of this definition of “Affiliate,”“control” (together with correlative meanings of “controlled by” and “undercommon control with”) means possession, directly or indirectly, of the power todirect or cause the direction of the management policies of such Person,whether through the ownership of voting securities, by contract or otherwise.

 

**7.33.****                    ****FederalIndebtedness.**

 

(a)           None of the Borrower, Holdings, the Sponsor or any oftheir respective Affiliates shall have any delinquent federal debt, includingtax liabilities, unless the delinquency has been resolved with the appropriateGovernmental Authority in accordance with the standards of the Debt CollectionImprovement Act.

 

(b)           For purposes of this Section 7.33, “Affiliate”means, with respect to any Person, any other Person which, directly orindirectly, controls, is controlled by, or is under common control with, suchPerson.  Solely for purposes of thisdefinition of “Affiliate,” “control” (together with correlative meanings of “controlledby” and “under common control with”) means 

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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possession, directly or indirectly, of the power todirect or cause the direction of the management policies of such Person,whether through the ownership of voting securities, by contract or otherwise.

 

**ARTICLE 8EVENTS OF DEFAULT; REMEDIES**

 

**8.1.****                           ****Eventsof Default.**

 

Theoccurrence of any of the following events shall constitute an Event of Defaulthereunder:

 

(a)           Failure to Make Payment Under Loan Documents.  The Borrower shall fail to pay, in accordancewith the terms of the DOE Credit Facility Documents or any other Loan Documents(whether by scheduled maturity, required prepayment, by acceleration orotherwise), (i) any principal of or interest on any DOE-Guaranteed Loan onor before the date such amount is due, or (ii) any scheduled fee, chargeor other amount due under any Loan Document on or before the thirtieth dayfollowing the date such amount is due, in each case, unless such failure iscaused by the failure of the Collateral Agent to apply funds in accordance withAppendix A attached hereto.

 

(b)           Misstatements; Omissions.  Any representation or warranty confirmed ormade in any Loan Document by the Borrower, Holdings, or the Sponsor or in anycertificate, Financial Statement or other document provided by or on behalf ofany such Person to any Credit Party or Independent Consultant in connectionwith the transactions contemplated by the Transaction Documents shall be foundto have been incorrect, false or misleading in any material respect when madeor deemed to have been made.

 

(c)             Covenants and Other Agreements with Cure Period.  The Borrower or any Major Project Participantshall fail to perform or observe any term, covenant or agreement (other thanthose set forth in (i) Sections 8.1(a), (b) and (d) and(ii) Section 6.30(e)) contained in any Loan Document to whichit is a party within the applicable grace period specified therein or, if nograce period is specified, but such failure is curable, within thirty (30) daysafter notice of such failure is given to such party (or, if such failure iscurable but is not reasonably curable within such 30 day period, suchadditional period, not to exceed 90 days, during which time the Borrower orsuch Major Project Participant shall be taking diligent action to effect suchcure).

 

(d)           Covenant Breaches Without Cure Period.  The Borrower shall fail to perform or observeany of its obligations under (i) any term, covenant or agreement set forthin Section 6.1(h) (i) (Reporting Obligations), Sections 6.3(b) and(c), (Maintenance of Property and Insurance), Section 6.17(Debt Service Reserve), Section 6.33 (Financial Covenants) or Article 7(Negative Covenants) or (ii) any other negative covenant contained in anyLoan Document to which it is a party, where such default has not been remediedwithin the cure period, if any, specified in such Loan Document.

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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(e)           Environmental Matters.  Any Governmental Judgment is issued relatingto any Environmental Claim, Environmental Law or any Governmental Approvalissued under any Environmental Law thathas had or could reasonably be expected to have a Material Adverse Effect.

 

(f)            Breach or Default Under Project Documents.  Any Project Participant shall breach ordefault in any material respect under any of its material agreements,conditions, terms or covenants contained in any Project Document to which it isa party and such breach or default shall continue unremedied beyond anyapplicable cure period set forth therein, and such breach or default wouldreasonably be expected to result in a Material Adverse Effect.

 

(g)           Breach or Default Under Completion Guaranty orCorporate Guaranty.  The Sponsorshall fail to perform or observe any term, covenant or agreement contained inthe Completion Guaranty or the Corporate Guaranty in accordance with the termsthereof.

 

(h)           Acceleration of Other Sponsor Indebtedness.  An acceleration of the maturity of anyIndebtedness for Borrowed Money of the Sponsor having a principal amountoutstanding in excess of $500,000 prior to the Project Completion Date or$5,000,000 after the Project Completion Date.

 

(i)            Unenforceability, Termination, Repudiation or Transferof Any Transaction Document.  ThisCommon Agreement or any of the other Transaction Documents or any materialprovision hereof or thereof at any time for any reason (i) is or becomesinvalid, illegal, void or unenforceable against Borrower, Holdings, Sponsor orOperator, or Borrower, Holdings, Sponsor or Operator shall have repudiated ordisavowed or taken any action to challenge the validity or enforceability ofsuch agreement, (ii) is or becomes invalid, illegal, void or unenforceableagainst any other party thereto (other than any of the Credit Parties), or anyother party thereto (other than any of the Credit Parties) shall haverepudiated or disavowed or taken any action to challenge the validity orenforceability of such agreement if, in each case, such invalidity, illegality,voidness, unenforceability, repudiation, disavowal or action could reasonablybe expected to have a Material Adverse Effect, and, in the case of a ProjectDocument, such Project Document is not replaced by a replacement ProjectDocument satisfactory to DOE in its sole discretion within thirty (30) daysafter (A) the replaced Project Document became invalid, illegal, void orunenforceable or (B) any party thereto (other than any of the CreditParties) repudiated, disavowed or took any action to challenge the validity orenforceability of such replaced Project Document, (iii) except asotherwise permitted hereunder, ceases to be in full force and effect inaccordance with the terms thereof, except at the stated termination datethereof, or shall be assigned or otherwise transferred or prematurelyterminated by Borrower, Holdings, Sponsor or Operator (or by any other partythereto, other than any of Credit Parties, if, in each case, such assignment,transfer or premature termination could reasonably be expected to have aMaterial Adverse Effect) prior to the repayment in full of all SecuredObligations (other than with the prior written consent of the Loan Servicer),or (iv) shall cease to give the Administrative Agent in its capacity asthe Collateral Agent or any Credit Party in any material respect the Liens,rights, powers and privileges purported to be created thereby or hereby;provided that any of the events set forth in this clause (iv) shall notconstitute an Event of Default if the same is caused by any act or failure toact by any of the Credit Parties.

 

**Confidentialmaterials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote such omission.**

 

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(j)            Security Interests.  Any of the Security Documents shall fail inany 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 failto have the priority contemplated therefor in such Security Documents, or anysuch Security Document or Lien shall cease to be in full force and effect, orthe validity thereof or the applicability thereof to the Advances, or any otherobligations purported to be secured or guaranteed thereby or any part thereof,shall be disaffirmed by or on behalf of the Borrower or any other partythereto; provided that any of the events set forth in this clause shall notconstitute an Event of Default if the same is caused by any act or failure toact by any of the Credit Parties.

 

(k)           Ownership.

 

(i)            Holdings ceases to be the sole Equity Owner of theBorrower or ceases to own and control all Equity Interests in the Borrower; or

 

(ii)           a Change of Control occurs.

 

(l)            Default under Other Indebtedness.

 

(i)            (x) The Borrower shall default in the payment of anyprincipal, interest or other amount due under any agreement or instrumentevidencing, or under which the Borrower has outstanding at any time, anyIndebtedness for Borrowed Money (other than the DOE-Guaranteed Loans) in anamount in excess of $50,000 for a period beyond any applicable grace period or (y) anyother default occurs under any such agreement or instrument, if the effect ofsuch default is to accelerate, or to permit the acceleration of, the maturityof such Indebtedness for Borrowed Money of the Borrower (other than the DOE-GuaranteedLoans) in an amount in excess of $50,000; or

 

(ii)           (x) Holdings or the Sponsor shall default in thepayment of any principal, interest or other amount due under any agreement orinstrument evidencing, or under which Holdings or the Sponsor, as the case maybe, has outstanding at any time, any Indebtedness for Borrowed Money (otherthan the DOE-Guaranteed Loans) in an amount in excess of $500,000 on or priorto the Project Completion Date or $5,000,000 after the Project Completion Date,in each case for a period beyond any applicable grace period or (y) anyother default occurs under any such agreement or instrument, if the effect ofsuch default is to accelerate, or to permit the acceleration of, the maturityof such Indebtedness for Borrowed Money of Holdings or the Sponsor in an amountin excess of $500,000 on or prior to the Project Completion Date or $5,000,000after the Project Completion Date (other than the Advances).

 

(m)          Judgments.

 

(i)            One or more Governmental Judgments shall be entered againstthe Borrower or Holdings and such Governmental Judgments shall not be vacated,discharged or stayed or bonded pending appeal for any period of thirty (30)consecutive days, and the aggregate amount of all such Governmental Judgmentsoutstanding at any time (except to the 

 

**Confidentialmaterials omitted and filed separately with the Securities and ExchangeCommission.  Asterisks denote such omission.**

 

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extent any applicable insurer(s) shall have acknowledgedliability therefor or shall be defending the related claim under a reservationof rights) exceeds $200,000.

 

(ii)           One or more Governmental Judgments shall be enteredagainst any of the Major Project Participants other than the Borrower and suchGovernmental Judgments shall not be vacated, discharged or stayed or bondedpending appeal for any period of thirty (30) consecutive days, and suchGovernmental Judgments, either singly or in the aggregate, can reasonably beexpected to have a Material Adverse Effect.

 

(n)           Bankruptcy; Insolvency.

 

(i)            Involuntary Bankruptcy, Etc.  An Insolvency Proceeding shall have beencommenced against any Major Project Participant, such proceeding continuesundismissed for 60 days.

 

(ii)           Voluntary Bankruptcy, Etc.  The institution by the Borrower, Holdings orthe Sponsor of any Insolvency Proceeding; or the admission by it in writing ofits inability to pay its Indebtedness generally as it becomes due or itsgeneral failure to pay its Indebtedness as it becomes due; or any other eventshall have occurred that under any Governmental Rule would have an effectanalogous to any of those events listed above in this Section 8.1(n)(ii) withrespect to any such Person; or any action is taken by any such Person for thepurpose of effecting any of the foregoing.

 

(o)           Governmental Approvals and Required Consents.  Any Major Project Participant shall fail toobtain, renew, maintain or comply with any Governmental Approval or otherRequired Consent relating to the Project or the DOE Credit Facility, or anysuch Governmental Approval or Required Consent shall be rescinded, terminated,suspended, modified, withdrawn or withheld or shall be determined to be invalidor shall cease to be in full force and effect; or any proceedings shall be commencedby or before any Governmental Authority for the purpose of rescinding,terminating, suspending, modifying, withdrawing or withholding any suchGovernmental Approval, if such failure, termination, suspension, modification,withdrawal, withholding, revocation, proceeding or other event (i) has hador would reasonably be expected to have a Material Adverse Effect and (ii) isnot cured to the satisfaction of the Loan Servicer within 30 days (or, if suchevent is not reasonably curable within such 30 day period, such longer period,not to exceed 90 days, during which time the Borrower shall be taking diligentaction to effect such cure).

 

(p)            Use of Project Site.  Pursuant to a final, non-appealabledetermination by a Governmental Authority having jurisdiction over the matter,the Borrower shall cease to have the right to (i) possess and use theProject Facility for the purpose of, and in a manner allowing its, owning,constructing, maintaining and operating the Project in the manner contemplatedby the Transaction Documents, for a period of thirty (30) consecutive days, or(ii) sell or otherwise dispose of any of its interest in the Project Siteor the Project other than as permitted by the Loan Documents.

 

**Confidentialmaterials omitted and filed separately with the Securities and ExchangeCommission.  Asterisks denote such omission.**

 

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(q)            Event of Loss. Any portion of the Project is destroyed or becomes permanentlyinoperative, or the Project suffers an actual or constructive loss or damagenot covered by insurance, which in such case would reasonably be expected tohave a Material Adverse Effect and, in any such case, such damaged, destroyedor inoperative portion of the Project is not fully repaired or restored within [*****]days after such portion of the Project was damaged, destroyed or becameinoperative.

 

(r)             Suspension of Construction.  Prior to the Project Completion Date,construction of the Project shall be suspended, whether as a result of theoccurrence of an Event of Force Majeure or otherwise for a period of [*****] ormore consecutive days.

 

(s)           Suspension of Operation.  From and after the Project Completion Date,the Project ceases to operate at a level of at least 17 megawatts for anyreason for a period of sixty (60) or more consecutive days.

 

(t)            Failure of Physical Completion to Occur; InsufficientFunding.

 

(i)            Physical Completion shall not have occurred within six (6) monthsafter the Anticipated Physical Completion Date.

 

(ii)           At any time prior to the Physical Completion Date, in thereasonable opinion of the Loan Servicer, in consultation with the Lender’sEngineer as appropriate the remaining Project Costs necessary to achieve thePhysical Completion Date exceed the funds available to the Borrower and theBorrower fails within sixty (60) days after receiving notice thereof from theLoan Servicer to arrange for the provision of the requisite funds (throughadditional equity contributions or Permitted Subordinated Loans) on terms andconditions and from parties reasonably acceptable to the Loan Servicer.

 

(u)           Notice of Termination under Certain Project Agreements.  The giving of a notice of termination (exceptat the stated termination date thereof) under any Project Document or theoccurrence of any event or circumstance entitling any Major Project Participantto give such a notice.

 

(v)           ERISA Events. There occurs one or more ERISA Events that individually or in theaggregate results in or could reasonably be expected to result in liability ofthe Borrower in [*****] during the term of this Common Agreement.

 

(w)          Suspension and Debarment.  The occurrence of any event or condition thathas resulted or is likely to result in the debarment or suspension of theBorrower from contracting with the United States Government or any agency orinstrumentality thereof.

 

(x)             Deficiencies in Debt Service Reserve Account.  The Borrower shall fail to restore the amounton deposit in the Debt Service Reserve Account to the Debt Service ReserveRequirement within ninety (90) days after the date of any withdrawal from theDebt Service Reserve Account.

 

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(y)           Deficiencies in Maintenance Reserve Account.  The Borrower shall fail to restore the amounton deposit in the Maintenance Reserve Account to the MRA Required Amount withinthree (3) months after the date of any withdrawal from the MaintenanceReserve Account.

 

(z)            Force Majeure. An Event of Force Majeure materially and adversely affecting the Projectshall occur and continue for a period of one hundred eighty (180) consecutivedays.

 

(aa)         Conditions to Initial Advance.  The Borrower shall fail to satisfy all of theconditions to the Initial Advance specified in Section 4.2.1 hereof on orbefore October 15, 2010.

 

(bb)         Material Adverse Effect.  The occurrence of any other event orcondition that has had or could reasonably be expected to have a MaterialAdverse Effect.

 

Forthe avoidance of doubt, each clause of this Section 8.1 shalloperate independently, and the occurrence of any such event shall constitute anEvent of Default.

 

**8.2.****                           ****Remediesfor Events of Default.**

 

Uponthe occurrence and during the continuance of an Event of Default, the CreditParties may, without further notice of default, presentment or demand forpayment, protest or notice of non-payment or dishonor, or other notices ordemands of any kind, all such notices and demands being waived (to the extentpermitted by Governmental Rules), exercise any or all rights and remedies atlaw or in equity (in any combination or order that the Credit Parties, mayelect), including, without limitation or prejudice to the Credit Parties’ otherrights and remedies, the following:

 

(i)            (A) refuse, and the Administrative Agent in itscapacity as the Collateral Agent or any Credit Party shall not be obligated, tomake or guarantee any further Advances or any payments from any Project Accountor any Account Proceeds or other funds held by the Administrative Agent in itscapacity as the Collateral Agent 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 theLiens of the Security Documents;

 

(iii)          declare and make all sums of outstanding principal andaccrued but unpaid interest remaining under this Common Agreement and the otherLoan Documents together with all unpaid fees, Periodic Expenses and charges duehereunder or under any other Loan Document, payable on demand or immediatelydue and payable, whereupon such amounts shall immediately mature and become dueand payable;

 

(iv)          enter into possession of the Project (or any portionthereof) and perform any and all work and labor necessary to complete theProject (or any portion thereof) or to operate and maintain the Project (or anyportion thereof), or otherwise foreclose upon or take possession of anyCollateral Security and all sums expended by any such Person in so doing,together with interest on such amount at the Late Charge Rate, shall be repaidby the Borrower to 

 

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such Person upon demand and shall be secured by theSecurity Documents, notwithstanding that such expenditures may, together withthe aggregate amount of Advances under the DOE Credit Facility, exceed theamount of the total DOE Credit Facility Commitment;

 

(v)           set off and apply such amounts to the satisfaction of theSecured Obligations under all of the Loan Documents, including (A) allmonies on deposit in any Project Account, (B) any Account Proceeds,(C) any Equity Contributions including any Reserve Letters of Credit, or(D) any other moneys of the Borrower on deposit with the AdministrativeAgent in its capacity as the Collateral Agent or any Credit Party;

 

(vi)          prior to the Project Completion Date, require the Sponsorto make an Equity Contribution in an amount equal to the Overrun EquityCommitment or exercise any remedies pursuant to the Completion Guaranty;

 

(vii)         take any other action, as determined by any of the CreditParties in its sole discretion, to cure such Event of Default, if and to theextent that such Event of Default is susceptible of cure by any of the CreditParties, and all sums expended by any such Person in so doing, together withinterest on such amount at the Late Charge Rate, shall be repaid by theBorrower to such Person upon demand and shall be secured by the SecurityDocuments, notwithstanding that such expenditures may, together with theaggregate amount of Advances under the DOE Credit Facility, exceed the amountof the total DOE Credit Facility Commitment;

 

(viii)        take any other action, as determined byany of the Credit Parties in its sole discretion, necessary to protect andpreserve the Collateral, and all sums expended by any such Person in so doing,together with interest on such amount at the Late Charge Rate, shall be repaidby the Borrower to such Person upon demand and shall be secured by the SecurityDocuments, notwithstanding that such expenditures may, together with theaggregate amount of Advances under the DOE Credit Facility, exceed the amountof the total DOE Credit Facility Commitment;

 

(ix)           proceed to protect and enforce its rights and remedies byappropriate proceedings, whether for damages or the specific performance of anyprovision of this Common Agreement or any other Transaction Document, or in aidof the exercise of any power granted in this Common Agreement or any otherTransaction Document, or by law, or proceed to enforce the payment of anyamount due and payable; and

 

(x)            exercise any and all rights and remedies available to itunder any of the Transaction Documents with respect to the Project, theBorrower, the Sponsor, Holdings and any other Project Participant and under theCollateral Security or otherwise under Governmental Rules; and

 

(xi)           in accordance with Section 609.10(e)(4) of theApplicable Loan Guarantee Requirements, take such other actions as DOE mayreasonably require to provide for the care, preservation, protection, andmaintenance of all Collateral so as to enable the United States to achievemaximum recovery upon default by Borrower on the DOE-Guaranteed Loans.

 

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**8.3.****                           ****AutomaticAcceleration.**

 

Uponthe occurrence of an Event of Default referred to in Section 8.1(n) (Bankruptcy;Insolvency), (a) the DOE Credit Facility Commitment shall automatically beterminated, and (b) the DOE-Guaranteed Loans, together with interestaccrued thereon and all other amounts due under the DOE-Guaranteed Loans andthe other Loan Documents, shall immediately mature and become due and payable,without any other presentment, demand, diligence, protest, notice ofacceleration, or other notice of any kind, all of which the Borrower herebyexpressly waives.

 

**8.4.****                           ****Eventof Default Notice.**

 

(a)           Delivery of Notice. The Loan Servicer may deliver an Event of Default Notice to theCollateral Agent at any time when an Event of Default has occurred and iscontinuing.

 

(b)           Copy to the Borrower.  Concurrently with the delivery of any Eventof Default Notice to the Collateral Agent, the Loan Servicer shall deliver acopy thereof to the Borrower, but the effectiveness of any such Event ofDefault Notice shall not depend on the delivery of a copy thereof to theBorrower.

 

(c)           Effect of Notice. Upon delivery to the Collateral Agent of an Event of Default Notice andwhile such Event of Default Notice remains effective, except to the extentotherwise set forth in such Event of Default Notice, the Collateral Agentshall, notwithstanding anything in this Common Agreement to the contrary, (a) ceaseto honor any instruction or request from the Borrower to distribute, transferor withdraw any funds or other assets from the Project Accounts or directingthe manner in which any such funds or other assets shall be held or invested, (b) holdfunds on deposit in any Project Account only in such Permitted Investments asthe Loan Servicer may from time to time direct in writing (or, failing suchdirection, the Overnight Investment), (c) disburse, transfer and withdrawamounts on deposit in the Project Accounts only as the Loan Servicer may directin writing from time to time, and (d) draw upon any or all Reserve Lettersof Credit for the full undrawn face amount in accordance with the terms of suchReserve Letters of Credit and disburse the aggregate amount of such drawings inthe Project Accounts as the Loan Servicer may direct from time to time. Each ofthe parties hereto confirms that the Collateral Agent shall comply with itsobligations set forth in this paragraph, notwithstanding any protest or orderto the contrary by the Borrower at any time.

 

(d)           Revocation. Upon request of the Borrower to the Loan Servicer at any time when anyand all Events of Default that gave rise to an Event of Default Notice havebeen waived by all Credit Parties, the Loan Servicer shall deliver a writtennotice to the Collateral Agent (with a copy to the Borrower and each CreditParty) revoking the effectiveness of any previously delivered Event of Default Notice.

 

**8.5.****                           ****RemediesInstructions.**

 

(a)           Delivery of Remedies Instructions.  At any time when an Event of Default exists,the Loan Servicer shall be entitled, by delivery of Remedies Instructions tothe Collateral Agent, to:

 

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(i)            direct the Collateral Agent to exercise, or to refrainfrom exercising, any right, remedy, power or privilege available to orconferred upon it with respect to the Collateral or otherwise under thisAgreement, the Security Documents or any other Loan Document to which it is aparty; and

 

(ii)           direct the time, place and manner in which the CollateralAgent is to exercise any such right, remedy, power or privilege.

 

(b)           Exercise of Remedies.  If the Collateral Agent has received RemediesInstructions, it shall exercise the rights, remedies, powers and privilegesspecified in the Remedies Instructions unless and until such RemediesInstructions are modified or revoked by the Loan Servicer.

 

(c)           Revocation. Upon request of the Borrower to the Loan Servicer after any and allEvents of Default that gave rise to a Remedies Instruction have been waived orcured, the Loan Servicer shall deliver a written notice to the Collateral Agent(with a copy to the Borrower and each Credit Party) revoking the effectivenessof any Remedies Instructions, and the Collateral Agent shall be required togive effect to such revocation not later than the first Business Day after thedate upon which it receives such revocation; provided, however, that to theextent that the revocation of any Remedies Instructions would requireaffirmative actions to be taken on the part of the Collateral Agent, theCollateral Agent shall be granted a reasonable amount of time to undertake suchactions.

 

(d)           Notwithstanding anything to the contrary contained herein,the Collateral Agent shall not be required to take, or refrain from taking, anyaction which the Collateral Agent determines in its reasonable judgment to becontrary to any provision of the Loan Documents or applicable law, regulations,codes, ordinances, court orders or restrictive covenants with respect to thematters hereunder.

 

**8.6.****                           ****Appointmentof a Receiver.**

 

Notwithstandingany appointment of a receiver, subject to mandatory provisions of GovernmentalRule, the Collateral Agent shall be entitled to retain possession and controlof all cash, investments and Reserve Letters of Credit held by, or depositedwith, it or its agents or nominees pursuant to any provision of this CommonAgreement, the Account Control Agreement or any other Loan Document.

 

**8.7.****                           ****DOE.**

 

DOE,or any other agency or instrumentality of the United States of America that isa successor or assignee of DOE under this Common Agreement, may itself exerciseany right given to the Loan Servicer in this Article 8.

 

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**ARTICLE 9AGENTS AND ADVISORS**

 

**9.1.****                           ****Appointmentof Agents.**

 

Inconnection with the Project, each Credit Party hereby appoints the LoanServicer and the Administrative Agent, and by its signature below, each suchAgent accepts such appointment:

 

(a)           the Loan Servicer to act as Loan Servicer and authorizesit to exercise such rights, powers, authorities and discretions as arespecifically delegated to the Loan Servicer by the terms of this CommonAgreement and the other Loan Documents, together with all such rights, powers,authorities and discretions as are reasonably incidental thereto;

 

(b)           the Administrative Agent or its designee to act asCollateral Agent and authorizes it to exercise such rights, powers, authoritiesand discretions as are specifically delegated to the Administrative Agent inits capacity as the Collateral Agent by the terms of this Common Agreement andthe other Loan Documents, including, without limitation:

 

(i)            promptly notifying DOE of any material changes in thevalue of the Collateral of which it becomes aware;

 

(ii)           monitoring the Borrower’s compliance with covenants andagreements relating to the Collateral;

 

(iii)          monitoring all regulatory and Uniform Commercial Codefilings related to the Collateral to ensure that continuation statements,extensions or renewals, as applicable, are timely filed;

 

(iv)          during the continuance of an Event of Default or of anyother breach or default under this Common Agreement or any other Loan Document,assisting and advising DOE in connection with the liquidation of the Collateralor any part thereof, including selecting specialists to assist in appraisal andliquidation of the Collateral, recommending liquidation strategies, identifyingpotential buyers of the assets and analyzing bids;

 

(v)           asking for, demanding, collecting, suing for, recovering,receiving and giving acquittance and receipts for moneys due and to become dueunder or in respect of the Collateral;

 

(vi)          receiving, endorsing and collecting any drafts or otherinstruments, documents and chattel paper in connection with the precedingclauses;

 

(vii)         occupying any premises where the Collateral or any partthereof is assembled or located;

 

(viii)        enforcing any agreements to which it isa party;

 

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(ix)           creating, preserving and protecting its Liens on, andsecurity interest in, the Collateral;

 

(x)            filing any claims or taking any action or instituting anyproceedings that it may deem necessary or desirable for the collection of anyof the Collateral or otherwise to accomplish the purposes of the SecurityDocuments or enforce its rights with respect to any of the Collateral;

 

(xi)           exercising in respect of the Collateral, in addition toany other rights or remedies available to it and to the extent not in violationof any applicable law, all the rights and remedies of a secured party under theUniform Commercial Code;

 

(xii)          ensuring that all Security Documents are revised or renewedas necessary; and

 

(xiii)         ensuring that the Collateral isproperly maintained for the benefit of DOE, FFB and any other third partylenders or guarantors, together with all such rights, powers, authorities anddiscretions as are reasonably incidental thereto;

 

(c)           the Administrative Agent to act as Administrative Agentand authorizes it to exercise such rights, powers, authorities and discretionsas are specifically delegated to the Administrative Agent by the terms of thisCommon Agreement and the other Loan Documents, including, without limitation,to give notices or provide instructions on behalf of DOE to any Person under theLoan Documents in accordance with the terms and conditions thereof, maintainand provide to DOE a quality assurance plan, provide all deliverables inelectronic formats compatible with DOE’s software applications, and take suchother actions as may be reasonably requested in writing by DOE or as shall berequired in respect of the Loan Documents, together with all such rights,powers, authorities and discretions as are reasonably incidental thereto.

 

**9.2.****                           ****Dutiesand Responsibilities.**

 

(a)           No Agent shall have any duties or responsibilities exceptthose expressly set out in this Common Agreement or in the other LoanDocuments.  Notwithstanding anything tothe contrary contained herein or in any Loan Document, no Agent shall berequired to take any action that iscontrary to any Governmental Rule.

 

(b)           DOE, and any subsequent Person acting as Loan Servicerunder the Loan Documents, shall comply with all requirements of the ApplicableLoan Guarantee Requirements with respect to servicing the DOE-Guaranteed Loans,including:

 

(i)            In accordance with Section 609.10(d)(16) and Section 609.10(e)(3) ofthe Applicable Loan Guarantee Requirements, the Loan Servicer, with theassistance of the Administrative Agentin its capacity as the Collateral Agent, has taken and shallcontinue to take those actions necessary to perfect and maintain liens onassets which are pledged as collateral pursuant to the terms of the SecurityDocuments;

 

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(ii)           In accordance with Section 609.10(f)(1) of theApplicable Loan Guarantee Requirements, the Loan Servicer shall keep suchrecords concerning the project as are necessary for facilitating the effectiveand accurate audit and performance evaluation of the Project pursuant to the Applicable Loan Guarantee Requirements andProgram Requirements;

 

(iii)          In accordance with Section 609.10(g)(1) of theApplicable Loan Guarantee Requirements, any assignment or transfer of theservicing, monitoring, tracking, and reporting functions performed by the LoanServicer must be approved by DOE in writing in advance of such assignment; and

 

(iv)          In accordance with Section 609.10(g)(2) of theApplicable Loan Guarantee Requirements, for the purpose of identifying holderswith the right to receive payment under the DOE Guarantee, the Loan Servicershall develop a procedure for tracking and identifying holders ofDOE-Guaranteed Loans.

 

(c)           In accordance with Section 609.10(e)(4) of theApplicable Loan Guarantee Requirements, the Administrative Agent in its capacity as the Collateral Agent shall takesuch other actions as DOE may reasonably require to provide for the care,preservation, protection, and maintenance of all Collateral so as to enable theUnited States to achieve maximum recovery upon default by Borrower on theDOE-Guaranteed Loans.

 

**9.3.****                           ****Rightsand Obligations.**

 

(a)           Each Agent may:

 

(i)            assume, absent actual knowledge or written notice to thecontrary, that (A) any representation made by any Project Participant inconnection with any Transaction Document is true; (B) no Event of Defaultor Potential Default exists; (C) no Project Participant is in breach of orin default under its obligations under any Transaction Document; and(D) any right, power, authority or discretion vested herein upon any otherAgent or Independent Consultant has not been exercised;

 

(ii)           assume, absent actual knowledge or written notice to thecontrary, that any notice or certificate given by any Project Participant orIndependent Consultant has been validly given by a Person authorized to do soand act upon such notice or certificate unless the same is revoked orsuperseded by a further such notice or certificate;

 

(iii)          assume, absent actual knowledge or written notice to thecontrary, that the address, telecopy and telephone numbers for the giving ofany written notice to any Person hereunder is that identified in Schedule 11.1until it has received from such Person a written notice designating some otheroffice of such Person to replace any such address, or telecopy or telephonenumber, and act upon any such notice until the same is superseded by a furthersuch 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 mayreasonably 

 

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determine are necessary, expedient or desirable, maypay reasonable fees and expenses for the advice or service of any such Personand may rely upon any advice so obtained; provided, that no Agent shallbe under any obligation to act upon such advice if it does not deem such actionto be appropriate;

 

(v)           rely on any matters of fact that might reasonably be expected to be within the Knowledge ofany Project Participant or any Independent Consultant upon a certificate signedby or on behalf of such party;

 

(vi)          rely upon any communication or document reasonably believedby it to be genuine;

 

(vii)         refrain from acting or continuing to act in accordance withany instructions of the Required Credit Parties to begin any legal action orproceeding arising out of or in connection with any Transaction Document untilit shall have received such indemnity or security from the Borrower or suchother Person (other than DOE and FFB) as it may reasonably require (whether bypayment 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 incomplying or continuing to comply with such instructions; and

 

(viii)        seek instructions from the RequiredCredit Parties as to the exercise of any of its rights, powers, authorities ordiscretions hereunder, and in the event that it does so, it shall not beconsidered as having acted unreasonably when acting in accordance with suchinstructions or, in the absence of any (or any clear) instructions, whenrefraining from taking any action or exercising any right, power or discretionhereunder.

 

(b)           Each Agent shall:

 

(i)            except where the Loan Servicer has supplied such noticeor document to such Agent, promptly inform the Loan Servicer of the contents ofany notice or document that in itscapacity as Agent it received from or delivers to:  (A) the Borrower; (B) any ProjectParticipant; (C) the Administrative Agent in its capacity as theCollateral Agent; (D) any Independent Consultant; or (E) anyGovernmental Authority;

 

(ii)           promptly notify the Loan Servicer of the occurrence of anyEvent of Default or Potential Default of which such Agent has written noticefrom any Person;

 

(iii)          except as otherwise expressly provided herein or in anyother Loan Document, perform its duties in accordance with any instructionsgiven to it by the Required Credit Parties, which instructions shall be bindingon all Credit Parties; and

 

(iv)          except as otherwise expressly provided herein, if soinstructed by the Required Credit Parties, refrain from exercising any right,power, authority or discretion vested in it as an Agent hereunder or under theother Loan Documents (other than rights arising under this Article 9or Section 13.17).

 

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**9.4.****                           ****NoResponsibility for Certain Conduct.**

 

(a)           In connection with the Loan Documents, notwithstandinganything to the contrary expressed or implied herein or in the other LoanDocuments, no Agent shall:

 

(i)            be bound to inquire as to (A) whether or not anyrepresentation made by any other Person in connection with any TransactionDocument is true; (B) the occurrence or otherwise of any Event of Defaultor Potential Default; (C) the performance by any other Person of itsobligations under any of the Transaction Documents; or (D) any breach ofor default by any other Person of its obligations under any of the TransactionDocuments;

 

(ii)           be bound to account to any Person for any sum or theprofit element of any sum received by it for its own account except asexpressly provided under the Loan Documents;

 

(iii)          be bound to disclose to any Person any information relatingto the Project or to any Person if such disclosure would, or might in itsopinion, constitute a breach of any Governmental Rule or be otherwiseactionable at the suit of any Person; or

 

(iv)          be under any fiduciary duties or obligation other thanthose for which express provision is made in this Common Agreement or in anyother Loan Document to which such Person is a party.

 

(b)           No Agent shall have any responsibility for the accuracy orcompleteness 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 referredto herein or provided for herein or therein or for any recitals, statements,representations or warranties made by the Borrower or any other Personcontained in this Common Agreement or any other Transaction Document or in anycertificate or other document referred to or provided for in, or received bysuch Agent, hereunder or thereunder.  NoAgent shall be liable as a result of any failure by the Borrower or itsAffiliates or any Person party hereto or to any other Transaction Document(except such Agent) to perform their respective obligations hereunder or underany other Transaction Document or any document referred to or provided forherein or therein or as a result of taking or omitting to take any actionhereunder or in relation to any Transaction Document, except to the extent ofsuch Agent’s gross negligence or willful misconduct.

 

(c)           Any Agent and its Affiliates may accept deposits from,lend money to and generally engage in any kind of banking or other businesswith any Person, without any duty to account therefor to the Credit Parties.

 

(d)           It is understood and agreed by each Relevant Credit Party(for itself and any Person claiming through it) that it has itself been, andwill continue to be, solely responsible for making its own independent appraisalof, and investigations into, the financial condition, creditworthiness,condition, affairs, status and nature of each Project Participant and, 

 

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accordingly, each such Relevant Credit Partywarrants to each Agent that it has not relied on and will not hereafter rely onsuch Agent:

 

(i)            to check or inquire on its behalf into the adequacy,accuracy or completeness or any information provided by any Project Participantor Independent Consultant in connection with any of the Transaction Documentsor the transactions therein contemplated (whether or not such information hasbeen or is hereafter circulated to such Project Participant or IndependentConsultant by an Agent); or

 

(ii)           to assess or keep under review on its behalf the financialcondition, creditworthiness, condition, affairs, status or nature of anyProject Participant or Independent Consultant.

 

**9.5.****                           ****Defaults.**

 

NoAgent shall be deemed to have knowledge or notice of the occurrence of anyEvent of Default or Potential Default unless such Agent has Knowledge of suchEvent of Default or Potential Default or has received a notice from a ProjectParticipant, referring to this Common Agreement, describing such Event ofDefault or Potential Default and stating that such notice is a “notice ofdefault.”  If any Agent has Knowledge ofan 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 LoanServicer shall give prompt notice thereof to each Credit Party and eachIndependent Consultant.  Each Agent shalltake such action with respect to such Event of Default or Potential Default asis provided in Article 8 of this Common Agreement; provided,however, that unless and until such Agent shall have received such directions,it may (but shall not be obligated to) take such action, or refrain from takingsuch action, with respect to such Event of Default or Potential Default as itshall deem advisable and in the best interest of the Credit Parties.

 

**9.6.****                           ****NoLiability.**

 

NoAgent, nor any of its officers, directors, employees or agents shall be liableto any Project Participant or Independent Consultant for any action taken oromitted under this Common Agreement or under the other Loan Documents, or inconnection therewith, except to the extent caused by the gross negligence orwillful misconduct of such Agent, as determined by a court of competentjurisdiction in a final non-appealable Governmental Judgment.  The Relevant Credit Parties each (for itselfand any Person claiming through it) hereby releases, waives, discharges andexculpates each Agent for any action taken or omitted by such Agent under thisCommon Agreement or under the other Loan Documents, or in connection therewith,except to the extent caused by the gross negligence or willful misconduct ofsuch Agent as determined by a court of competent jurisdiction in a finalnon-appealable Governmental Judgment.

 

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**9.7.****                           ****Feesand Expenses of Agents.**

 

(a)           Generally. The Borrower shall be responsible for paying the fees and expenses ofeach Agent in connection with the Project under all circumstances, pursuant toa separate written agreement with each Agent, without recourse to DOE by suchAgent, the Sponsor, the Borrower or any other Person.

 

(b)           Administrative Agent Fee Agreement.  The Borrower shall (i) from time to timeon demand by each Agent, indemnify such Agent against any and all reasonablecosts, claims, losses, expenses (including reasonable legal fees and expenses)and liabilities, that such Agent mayincur in acting in its capacity as an Agent hereunder, other than by reason ofits own gross negligence or willful misconduct; and (ii) withoutlimitation of the foregoing, reimburse such Agent promptly upon demand for anyreasonable out-of-pocket expenses (including reasonable legal fees andexpenses) incurred by such Agent in connection with the preparation, execution,administration or enforcement of, or services provided in respect of rights orresponsibilities under, the Transaction Documents.

 

(c)           Payments. All payments or reimbursements under Section 9.7(b) shallbe due and payable (i) [*****] after the Borrower’s receipt of the Agent’srequest therefor from time to time, and (ii) whether or not this CommonAgreement is terminated or any Advance of the DOE-Guaranteed Loan is made.

 

(d)           Acknowledgements. The Borrower and each Agent expressly acknowledge and agrees that:

 

(i)            DOE shall not be financially liable to any Agent for anyservices rendered or expenses incurred in connection with the Project under anycircumstances whatsoever, including whether any Advance occurs or undercircumstances in which the Borrower fails to pay such fees and expenses;

 

(ii)           The Borrower shall acknowledge and pay all fees andexpenses represented by periodic invoices for services rendered by such Agentto DOE with respect to the Project upon their periodic presentation thereof bysuch Agent, including prior to or on the Financial Closing Date;

 

(iii)          While the services provided by such Agent shall be renderedfor the benefit of DOE and the other Credit Parties in connection with theProject, the invoices of such Agent shall be the sole responsibility of theBorrower, notwithstanding that such Agent is an agent of DOE and the otherCredit Parties; and

 

(iv)          The Borrower specifically disclaims any implication ofconfidential, fiduciary or other client relationship (including anattorney-client relationship) between the Borrower or the Sponsor and suchAgent as a result of this Section 9.7 and shall not interfere withthe relationship (including any attorney-client relationship and the ability toterminate the agency relationship) between such Agent and DOE and the otherCredit Parties.

 

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(e)           The provisions of this Section 9.7 shallsurvive the termination of this Common Agreement and the other Loan Documents.

 

**9.8.****                           ****Resignationand Removal.**

 

(a)           Subject to Section 9.9, any Agent may resignits appointment hereunder at any time without providing any reason therefor bygiving prior written notice to that effect to each of the other parties hereto.

 

(b)           Subject to Section 9.9, the Required CreditParties may remove any Agent from its appointment hereunder with or withoutcause by giving prior written notice to that effect to the Loan Servicer andthe Borrower.

 

**9.9.****                           ****SuccessorAgents.**

 

(a)           No resignation or removal pursuant to Section 9.8shall be effective until:

 

(i)            a successor for such Agent is appointed in accordancewith (and subject to) the provisions of this Section 9.9;

 

(ii)           the resigning or removed Agent has transferred to itssuccessor all of its rights and obligations in its capacity as an Agent underthis Common Agreement and the other Loan Documents; and

 

(iii)          the successor Agent has executed and delivered an agreementto be bound by the terms of this Common Agreement and the other Loan Documentsand to perform all duties required of such Agent hereunder and under the otherLoan Documents.

 

(b)           If an Agent has given notice of its resignation pursuantto Section 9.8(a) or if the Loan Servicer gives each otherAgent notice of removal of any Agent pursuant to Section 9.8(b), orif the Required Credit Parties give the Loan Servicer notice of removal of theLoan Servicer pursuant to Section 9.8(b), then a successor to suchAgent may be appointed by the Required Credit Parties (and, unless an Event ofDefault or Potential Default has occurred and is continuing, with the writtenconsent of the Borrower, which consent shall not unreasonably be withheld ordelayed) during the 90 day period beginning on the date of such notice inaccordance with the terms of this Common Agreement but, if no such successor isso appointed within 90 days after the above notice, the resigning Agent, or theLoan Servicer, in the case of a removed Agent, may appoint such a successor.  If a resigning Agent or the Loan Servicerappoints a successor, such successor shall be acceptable to the Required CreditParties (and, unless an Event of Default or Potential Default has occurred andis continuing, the Borrower, approval by which shall not unreasonably bewithheld or delayed); provided, that if the Required Credit Parties andthe Borrower, if applicable, do not confirm such acceptance in writing within60 days following selection of such successor by the resigning or removed LoanServicer or otherwise appoint a successor within such 60 day period, then theRequired Credit Parties and the Borrower, as the case may be, shall be deemedto have given such acceptance and such successor shall be deemed appointed asthe successor to such resigning or removed Loan Servicer hereunder.  If no 

 

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successor Agent shall have been so accepted ordeemed accepted by the Required Credit Parties within sixty (60) days after theappointment of a successor Agent, then the resigning or removed Agent may applyto a court of competent jurisdiction for the appointment of a successor Agent.

 

(c)           If a successor to an Agent is appointed under theprovisions of this Section 9.9, then:

 

(i)            the predecessor Agent shall be discharged from anyfurther obligation hereunder (but without prejudice to any accruedliabilities);

 

(ii)           the resignation pursuant to Section 9.8(a) orremoval pursuant to Section 9.8(b) of the predecessor Agentnotwithstanding, the provisions of this Common Agreement shall inure to thepredecessor Agent’s benefit as to any actions taken or omitted to be taken byit under this Common Agreement and the other Loan Documents while it was anAgent; and

 

(iii)          the successor Agent and each of the other parties heretoshall have the same rights and obligations amongst themselves as they wouldhave had if such successor Agent had been a party hereto beginning on the dateof this Common Agreement.

 

**9.10.****                    ****DueAuthorization, Execution and Delivery.**

 

EachAgent is hereby authorized by the Credit Parties to execute, deliver andperform each of the Loan Documents to which such Agent is or is intended to bea party.  All action on the part of eachAgent that is required for the authorization, execution, delivery andperformance by such Agent of the Loan Documents to which it is a party has beenduly and effectively taken.  Theobligations of each Agent under the Loan Documents to which it is a party arethe legal, valid and binding obligations of such Agent enforceable inaccordance with their respective terms, except as enforceability may be limitedby applicable bankruptcy, insolvency, reorganization, moratorium or similarlaws affecting the rights of creditors generally and by general principles ofequity (regardless of whether enforcement is sought in proceedings at law or inequity).

 

**9.11.****                    ****Appointmentof Independent Consultants.**

 

9.11.1                  Appointment of InsuranceAdvisor.

 

Inconnection with the Project, each Credit Party hereby appoints the InsuranceAdvisor to serve under the Loan Documents and authorizes the Insurance Advisorto exercise such rights, powers, authorities and discretions as arespecifically delegated to the Insurance Advisor by the terms of this CommonAgreement and the other Loan Documents, which shall include, withoutlimitation:

 

(a)           advising DOE on the type and appropriate level of propertyand casualty, business interruption and other insurance necessary to providerisk mitigation with respect to the Project,

 

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(b)           advising DOE regarding the Borrower’s representations asto the availability of appropriate levels and types of insurance coverage forthe Project,

 

(c)           reviewing the type, level, cost and provider of RequiredInsurance to ensure that DOE is receiving satisfactory coverage from qualifiedinsurance carriers, and

 

(d)           reviewing and commenting on requests from the Borrower forchanges or reductions in insurance coverage during the life of the DOEGuarantee, together with all such rights, powers, authorities and discretionsas are reasonably incidental thereto.

 

9.11.2                  Appointment of Lender’sEngineer.

 

Inconnection with the Project, each Credit Party hereby appoints the Lender’sEngineer to serve under the Loan Documents and authorizes the Lender’s Engineerto exercise such rights, powers, authorities and discretions as arespecifically delegated to it pursuant to the Lender’s Engineer AdvisoryAgreement.

 

Byits execution of the Lender’s Engineer Advisory Agreement, the Lender’s Engineeraccepts its appointment and delegation.

 

**9.12.****                    ****Actions.**

 

Exceptas otherwise provided in this Article 9, and subject to the otherprovisions of this Common Agreement, each Agent shall take any action requestedin writing by the Loan Servicer with respect to the Collateral, this CommonAgreement or any other Loan Document to which it is a party, as applicable.

 

**9.13.****                    ****Delegationof Duties.**

 

Subjectto the provisions of Section 9.1 hereof, each Agent may execute anyof the rights, remedies, powers, privileges, duties or obligations under thisCommon Agreement and the other Loan Documents to which it is a party eitherdirectly or by or through nominees or agents, and shall not be liable for anymisconduct or negligence of any such nominee or agent appointed with due careby it hereunder, except to the extent constituting gross negligence or willfulmisconduct.

 

**9.14.****                    ****CertainRights of the Agents.**

 

(a)           Each Agent may conclusively rely and shall be protected inacting 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 documentbelieved by it to be genuine and to have been signed or presented by the properparty or parties.

 

(b)           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 ofsuch counsel or any opinion of counsel shall be full and complete authorizationand protection in respect of any action taken, suffered or omitted by ithereunder in good faith and in reliance thereon.

 

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**9.15.****                    ****Authorityof the Agents.**

 

TheBorrower acknowledges that the rights and responsibilities of each Agent underthis Common Agreement with respect to any action taken by such Agent or theexercise or non-exercise by such Agent of any power, right or remedy providedfor or resulting or arising out of this Common Agreement shall, as between suchAgent and the Credit Parties, be governed by this Common Agreement and by suchother agreements with respect thereto as may exist from time to time amongthem, but, as between each Agent and the Borrower, such Agent shall beconclusively presumed to be acting as the Agent for the Credit Parties withfull and valid authority so to act or refrain from acting, and the Borrowershall not be under any obligation or entitlement to make any inquiry respectingsuch authority.

 

**9.16.****                    ****ForceMajeure.**

 

Inno event shall any Agent be responsible or liable for any failure or delay inthe performance of its obligations hereunder arising out of or caused by,directly or indirectly, forces beyond its control, including, withoutlimitation, strikes, work stoppages, accidents, acts of war or terrorism, civilor military disturbances, nuclear or natural catastrophes or acts of God, andinterruptions, loss or malfunctions of utilities, communications or computer(software and hardware) services; it being understood that each Agent shall usereasonable efforts that are consistent with accepted practices in the bankingindustry to resume performance as soon as practicable under the circumstances.

 

**9.17.****                    ****Agentsand Independent Consultants Not Prohibited Persons**

 

Noneof the Agents or the Independent Consultants shall at any time be a ProhibitedPerson.  In the event that any of theAgents or the Independent Consultants shall at any time be or become aProhibited Person, such Agent or Independent Consultant shall immediately andwithout further action be removed from its appointment hereunder, subject tothe appointment of a successor Agent or Independent Consultant in accordancewith the terms of this Common Agreement.

 

**9.18.****                    ****Survival.**

 

Theprovisions of this Article 9 shall survive the termination of thisCommon Agreement.

 

**ARTICLE 10REGARDING THE COLLATERAL AGENT**

 

**10.1.****                    ****Administrationof the Collateral.**

 

TheCollateral Agent shall hold the Collateral and any Lien thereon for the benefitof the Secured Parties pursuant to the terms of this Common Agreement and theother Security Documents to which the Collateral Agent is a party. TheCollateral Agent shall administer the Collateral in the manner contemplated bythe Security Documents and the other Loan Documents to which it is a party. TheCollateral Agent shall exercise such rights and remedies 

 

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withrespect to the Collateral as are granted to it under the Security Documents,the other Loan Documents and Governmental Rule and, except as otherwiseexpressly provided herein, in the Security Documents or the other LoanDocuments, as shall be directed in writing by the Loan Servicer.

 

**10.2.****                    ****OwnFunds.**

 

TheCollateral Agent shall not be under any obligation to take any action otherthan as expressly set forth in this Common Agreement or the other LoanDocuments to which it is a party that involves any expense or liability, thepayment of which, within a reasonable time, is not, in the reasonable opinionof the Collateral Agent, assured to it. Nothing in this Common Agreement shallbe interpreted to require the Collateral Agent to advance or expend its ownfunds to make any payments hereunder. The Collateral Agent shall not berequired to invest, or be under any liability for interest, on any monies atany time received by it pursuant to any of the provisions of this CommonAgreement, except as otherwise expressly provided herein or in any other LoanDocument to which it is a party.

 

**10.3.****                    ****Waiverof Setoff by Collateral Agent.**

 

TheCollateral 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 byagreement, under law or otherwise against any of the Collateral in respect ofamounts owing to the Collateral Agent by any Person.

 

**10.4.****                    ****PatriotAct.**

 

Theparties hereto acknowledge that in accordance with Section 326 of thePatriot Act and in order to help fight the funding of terrorism and moneylaundering, the Collateral Agent, like all financial institutions, is requiredto obtain, verify, and record information that identifies each person or legalentity that establishes a relationship or opens an account with the CollateralAgent. The parties to this Common Agreement agree that they will provide theCollateral Agent with such information as it may request in order for theCollateral Agent to satisfy the requirements of the Patriot Act.

 

**10.5.****                    ****Survival.**

 

Theprovisions of this Article 10 shall survive the termination of thisCommon Agreement.

 

**ARTICLE 11REPRESENTATIONS AND WARRANTIES OF THE AGENTS**

 

EachAgent makes all of the following representations and warranties, solely withrespect to itself, to and in favor of the other Credit Parties as of the datehereof.

 

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**11.1.****                    ****Organization,Power and Status.**

 

EachAgent is duly organized and existing under the laws of the jurisdiction of itsformation.

 

**11.2.****                    ****Powerand Authority.**

 

EachAgent has the requisite power and authority to (a) execute, deliver andperform each of the Loan Documents to which it is a party and (b) carry onits business as now being conducted.

 

**11.3.****                    ****NoConsents.**

 

Neitherthe execution, delivery or performance by each Agent of any Loan Document towhich it is a party, nor the performance by each Agent of the terms andconditions thereof requires the approval, consent or authorization of anyPerson other than (a) such approvals, consents and authorizations as havebeen obtained or (b) as may be required from time to time in connectionwith the exercise of remedies provided for herein and in the other LoanDocuments (as to which the Agents makes no representation or warranty).

 

**11.4.****                    ****Proceedings.**

 

Thereare no actions, suits or proceedings, claims or investigations pending or, tothe actual knowledge of any officers of each Agent responsible for theadministration of this Common Agreement, threatened against it that challengethe validity or enforceability of any Loan Document to which it is a party orthat, individually or in the aggregate, if adversely determined wouldmaterially and adversely affect the ability of such Agent to perform itsobligations under any Loan Document to which it is a party.

 

**11.5.****                    ****NoAgents’ Liens.**

 

Thereare no Liens on or against the Collateral that result from (i) claimsagainst such Agent unrelated to the transactions contemplated by this CommonAgreement or the other Loan Documents or (ii) affirmative acts by suchAgent creating a Lien other than as contemplated or permitted by this CommonAgreement or the other Loan Documents.

 

**ARTICLE 12REIMBURSEMENT AGREEMENT**

 

**12.1.****                    ****ReimbursementObligation.**

 

If the Borrower defaults in any payment due to FFB underthe DOE-Guaranteed Loan or otherwise under any FFB Funding Document, and as aresult of such payment default by the Borrower, DOE becomes obligated to make anypayments 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 

 

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(i) allDOE Guarantee Payments paid by DOE to FFB, and (ii) all costs or expensesincurred by DOE in connection therewith, whether by payment to FFB orotherwise.

 

**12.2.****                    ****Paymentsand Computations.**

 

12.2.1                  Interest.

 

TheBorrower 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 DOEGuarantee Payment was paid or incurred by DOE under the DOE Guarantee untilpayment in full by the Borrower to DOE of the DOE Guarantee Payment Amount, ata rate of interest equal to the rate of interest in effect under the FFB NotePurchase Agreement with respect to Overdue Amounts at the time of the paymentdefault by the Borrower.

 

12.2.2                  Method of Payment.

 

TheBorrower shall make each payment with respect to Borrower ReimbursementObligations hereunder (a “Borrower Reimbursement Payment”), irrespectiveof any right of counterclaim or set-off, in Dollars and in immediatelyavailable funds on or before the fifth Business Day following a written demandby DOE to the Borrower indicating the DOE Guarantee Payment Amount and the dateit was paid or incurred by DOE, by wire transfer to the following account, orto such other account as may be specified by DOE from time to time:

 

**U.S. Treasury Department**

**ABA No. 0210-3000-4 TREASNYC/CTR/BNF=D89000001**

**OBI=LGPO Loan No. 1002– Guarantee Reimbursement**

 

12.2.3                  Taxes.

 

AllBorrower Reimbursement Payments by the Borrower hereunder shall be made inaccordance with Section 3.1.2.

 

12.2.4                  Calculations.

 

Allcomputations of interest or fees under this Common Agreement shall be made bythe Loan Servicer, on the same basis as payments under the FFB Note PurchaseAgreement.

 

12.2.5                  Determinations.

 

Eachdetermination of an amount of interest or fees payable hereunder by the LoanServicer shall be conclusive and binding for all purposes, absent manifesterror.

 

**12.3.****                    ****ObligationsAbsolute.**

 

Tothe fullest extent permitted by law, the Borrower Reimbursement Obligations areabsolute, irrevocable and unconditional, and shall be paid strictly inaccordance with the terms of 

 

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thisCommon Agreement under all circumstances whatsoever, including withoutlimitation the following circumstances, whether or not with notice to or theconsent of the Borrower:

 

(i)            the occurrence, or the failure by DOE or any otherSecured Party or any other Person to give notice to the Borrower of theoccurrence, of any Event of Default or Potential Default under this CommonAgreement or any default under any of the other Loan Documents;

 

(ii)           the extension of the time for performance of anyobligations, covenants or agreements of any Person under or arising out of anyof the Loan Documents;

 

(iii)          the existence of any claim set-off, counterclaim, defenseor other rights of any kind or nature which (A) the Borrower, DOE or anyother 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 contemplatedtherein or any unrelated transactions;

 

(iv)          any failure, omission or delay on the part of (A) DOEto assert a defense to a DOE Guarantee Payment Amount under the DOE Guaranteeor to otherwise contest the DOE Guarantee, or (B) DOE or any other SecuredParty or the Borrower to enforce, assert or exercise any other right, power orremedy conferred by this Common Agreement or any of the Loan Documents;

 

(v)           the taking or the omission on the part of DOE or any otherSecured Party or the Borrower of any other actions referred to in any of theLoan Documents;

 

(vi)          the compromise, settlement, release, modification,amendment (whether material or otherwise) or termination of any or all of theobligations, conditions, covenants or agreements of any Person in respect ofany of the Loan Documents;

 

(vii)         any amendment or waiver of the payment, performance orobservance of any of the obligations, conditions, covenants or agreements ofany Person contained in any of the Loan Documents;

 

(viii)        the exchange, surrender, substitution ormodification of any security for any of the Loan Documents;

 

(ix)           any disability, incapacity or lack of powers, authority orlegal personality of or dissolution or change in the status of the Borrower orany other Person;

 

(x)            any release, irregularity, invalidity, illegality, lackof genuineness, unenforceability or modification affecting this CommonAgreement, the DOE Guarantee, the DOE Credit Facility, or the other LoanDocuments, or the transactions contemplated hereby or thereby;

 

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(xi)           the voluntary or involuntary liquidation, dissolution,sale or other disposition of all or substantially all the assets of, themarshaling of assets and liabilities, receivership, insolvency, bankruptcy,assignment for the benefit of creditors, reorganization, arrangement,composition with creditors or readjustment of, or other similar proceedingswhich affect the Borrower or any other Person party to any of the LoanDocuments;

 

(xii)          the release or discharge by operation of law of theBorrower from the performance or observance or any obligation, covenant oragreement contained in any of the Loan Documents;

 

(xiii)         any statement or any other documentpresented under the DOE Guarantee proving to be forged, fraudulent, invalid orinsufficient in any respect or any statement therein being untrue or inaccuratein any respect whatsoever;

 

(xiv)        any determination by a court or arbitrator, or any settlementof a disputed claim by any party hereto or other Person, relating to thisCommon Agreement, the DOE Guarantee, or the other Loan Documents, or thetransactions contemplated hereby or thereby; or

 

(xv)         any other circumstance or happening whatsoever, whether ornot similar to any of the foregoing.

 

**12.4.****                    ****Security.**

 

12.4.1                  Borrower ReimbursementObligations Secured

 

Theparties expressly acknowledge that the Collateral Security pledged under theSecurity Documents is pledged to secure payment by the Borrower of the BorrowerReimbursement Obligations.

 

12.4.2                  Actions.

 

TheBorrower expressly acknowledges that DOE is free to litigate, settle or otherwisesatisfy or discharge its obligation with respect to any DOE Guarantee PaymentAmount, and take any action under the Security Documents or otherwise withrespect to the Collateral Security, as it may from time to time deemappropriate, and any failure by DOE to advise, notify, or consult with theBorrower shall not be a defense to, or in any way diminish, discharge orderogate from the Borrower Reimbursement Obligations hereunder.

 

**12.5.****                    ****DOERights.**

 

12.5.1                  Rights Cumulative.

 

DOE’sright to reimbursement provided for in this Article 12 shall be inaddition to, and not in limitation of, any other claims, rights or remedies ofsubrogation, reimbursement, contribution, exoneration or indemnification orsimilar claims, rights or remedies, whether arising under contract, by statute,or otherwise that DOE may have from time to time.

 

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12.5.2                  Subrogation.

 

Withoutlimiting the generality of Section 12.5.1, in accordance with Section 609.10(e)(2) ofthe Applicable Loan Guarantee Requirements, upon any DOE Guarantee Payment DOEshall be subrogated to the rights of FFB or any subsequent holder of the FFBLoans, including all related Liens and Collateral.

 

**12.6.****                    ****FurtherAssurances.**

 

TheBorrower shall cooperate with DOE in connection with the exercise of any of itsrights under this Article 12 and agrees, promptly upon request byDOE or the Loan Servicer, to execute, acknowledge and deliver all furtherinstruments and documents, and take all such further acts as DOE or the LoanServicer may reasonably request from time to time in order to carry out thepurposes of this Article 12 or to enable DOE to exercise andenforce its rights and remedies hereunder.

 

**ARTICLE 13MISCELLANEOUS**

 

**13.1.****                    ****Addresses.**

 

Anycommunications, including any notices, between or among the parties to the LoanDocuments shall be given to the addresses listed in Schedule 13.1.  All notices or other communications requiredor permitted to be given under the Loan Documents shall be in writing and shallbe considered as properly given (a) if delivered in Person, (b) ifsent by overnight delivery service for inland delivery or international courierfor international delivery, (c) in the event overnight delivery service orinternational courier service is not readily available, if mailed by firstclass mail (or airmail for international delivery), postage prepaid, registeredor certified with return receipt requested, (d) if sent by telecopy withtransmission verified or (e) if transmitted by electronic mail (with suchtransmission verified).  Notice so givenshall be effective upon delivery to the addressee, except that communication ornotice so transmitted by telecopy or other direct written electronic meansshall be deemed to have been validly and effectively given on the day (if aBusiness Day and, if not, on the next following Business Day) on which it isvalidly transmitted if transmitted (with such transmission verified) before2:00 p.m., recipient’s time, and if transmitted after that time, on thenext following Business Day; provided, however, that if any notice is tendered to anaddressee and the delivery thereof is refused by such addressee, such noticeshall be effective upon such tender.  Anyparty shall have the right to change its address for notice under any of theLoan Documents to any other location by giving prior written notice to theother parties in the manner set forth hereinabove.

 

**13.2.****                    ****FurtherAssurances.**

 

TheBorrower shall fully cooperate with all Persons as may be necessary to ensurethat each Credit Party receives any notices due to such Credit Party pursuantto the Transaction Documents.  Each ofthe parties agrees that money damages would not be a sufficient remedy for anybreach of this Section 13.2 and Section 6.23(b) andagrees that in addition to all other 

 

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remedies,any court or arbitrator may award specific performance or other equitablerelief as a remedy for any such breach.

 

**13.3.****                    ****Delayand Waiver.**

 

Nodelay or omission in exercising any right, power, privilege or remedy underthis Common Agreement or any other Loan Document, including any rights andremedies in connection with the occurrence of an Event of Default or PotentialDefault shall impair any such right, power, privilege or remedy of the CreditParties, 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, orin any similar breach or default thereafter occurring, nor shall any waiver ofany single right, power, privilege or remedy, or of any breach or default bedeemed a waiver of any other right, power, privilege or remedy or of any otherbreach or default therefore or thereafter occurring.  Any waiver, permit, consent or approval ofany 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 withthe occurrence of an Event of Default or Potential Default or of any otherbreach or default under this Common Agreement or any other Loan Document, orany waiver on the part of any of the Credit Parties of any provision orcondition of this Common Agreement or any other Transaction Document, must bein writing and shall be effective only to the extent in such writingspecifically set forth.  All rights,powers, privileges and remedies, either under this Common Agreement or anyother Loan Document or by law or otherwise afforded to any of the CreditParties, shall be cumulative and not alternative and not exclusive of any otherrights, powers, privileges and remedies thatsuch Credit Parties may otherwise have.

 

**13.4.****                    ****Rightof Set-Off.**

 

Inaddition to any rights now or hereafter granted under Governmental Rules orotherwise, and not by way of limitation of any such rights, upon the occurrenceand during the continuance of an Event of Default, each Credit Party is herebyauthorized 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, anysuch notice being hereby expressly waived, to set off and to appropriate andapply any and all deposits (general or special, time or demand, provisional orfinal) and any other Indebtedness at any time held or owing by such CreditParty (including by any branches and agencies of such Credit Party whereverlocated) to or for the credit or the account of the Borrower against and onaccount of the Secured Obligations and liabilities of the Borrower to suchCredit Party under this Common Agreement or any other Loan Document.

 

**13.5.****                    ****Amendmentor Waiver.**

 

Exceptas otherwise provided herein, neither this Common Agreement nor any of theterms hereof may be changed, waived, discharged or terminated unless suchchange, waiver, discharge or termination is in writing and signed by theBorrower, DOE, the Administrative Agent and the Loan Servicer.  Any amendment to or waiver of this CommonAgreement or any of the terms hereof that constitutes a ‘modification’ withinthe meaning set forth in Section 502(9) of the Federal Credit ReformAct of 1990 and OMB Circular A-11 may be subject to (a) the availabilityto DOE of funds appropriated by the United States Congress to meet an 

 

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increase,if any, in the Credit Subsidy Cost or (b) if such funds are notappropriated or are unavailable, to the payment by the Borrower of any suchincrease.

 

**13.6.****                    ****EntireAgreement.**

 

ThisCommon Agreement, including any agreement, document or instrument attachedhereto or referred to herein, integrates all the terms and conditions mentionedherein or incidental hereto and supersedes all oral negotiations and prioragreements and understandings of the parties hereto in respect to the subjectmatter hereof.

 

**13.7.****                    ****GoverningLaw.**

 

ThisCommon Agreement and the rights and obligations of the parties hereunder shallbe governed by, and construed and interpreted in accordance with, the Federallaw of the United States.  To the extentthat Federal law does not specify a rule of decision for a particularmatter at issue, it is the intention and agreement of the parties hereto thatthe substantive law of the State of New York shall be adopted as the governingFederal rule of decision.

 

**13.8.****                    ****Severability.**

 

Incase any one or more of the provisions contained in any Loan Document should beinvalid, illegal or unenforceable in any respect, the validity, legality andenforceability of the remaining provisions shall not in any way be affected orimpaired thereby, and the parties thereto shall enter into good faithnegotiations to replace the invalid, illegal or unenforceable provision.

 

**13.9.****                    ****Calculations.**

 

Allfinancial data submitted pursuant to this Common Agreement and the other LoanDocuments shall be prepared in accordance with GAAP, and all financial ratiotests applicable to the Borrower shall be based on definitions consistent withGAAP.

 

**13.10.****             ****Limitationon Liability.**

 

Noclaim shall be made by the Borrower or any of its Affiliates against any CreditParty or any of their Affiliates, directors, employees, attorneys or agents forany special, indirect, consequential or punitive damages (whether or not theclaim therefor is based on contract, tort or duty imposed by law), inconnection with, arising out of or in any way related to the transactionscontemplated by this Common Agreement or the other Transaction Documents or anyact or omission or event occurring in connection therewith; and the Borrowerhereby waives, releases and agrees not to sue upon any such claim for any suchdamages, whether or not accrued and whether or not known or suspected to existin its favor; except that the foregoing limitation shall not apply to theextent that any such claim results from the gross negligence or willfulmisconduct of any Credit Party.

 

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**13.11.****             ****Waiverof Jury Trial.**

 

EACHOF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVESANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATIONBASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS COMMONAGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OFDEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THEBORROWER.  THIS PROVISION IS A MATERIALINDUCEMENT FOR EACH CREDIT PARTY TO ENTER INTO THIS COMMON AGREEMENT AND THEOTHER LOAN DOCUMENTS.

 

**13.12.****             ****Consentto Jurisdiction.**

 

Byexecution and delivery of this Common Agreement, the Borrower irrevocably andunconditionally:

 

(a)           submits for itself and its property in any legal action orproceeding against it arising out of or in connection with this CommonAgreement or any other Loan Document, or for recognition and enforcement of anyjudgment in respect thereof, to the non-exclusive general jurisdiction of (i) thecourts of the United States of America for the District of Columbia, (ii) thecourts of the United States of America for the Southern District of New York,(iii) any other federal court of competent jurisdiction in any otherjurisdiction where it or any of its property may be found, and(iv) appellate courts from any of the foregoing;

 

(b)           consents that any such action or proceeding may be broughtin or removed to such courts, and waives any objection, or right to stay ordismiss any action or proceeding, that it may now or hereafter have to thevenue of any such action or proceeding in any such court or that such action orproceeding was brought in an inconvenient court and agrees not to plead orclaim the same;

 

(c)           agrees that service of process in any such action orproceeding may be effected by mailing a copy thereof by registered or certifiedmail (or any substantially similar form of mail), postage prepaid, to theBorrower at its address set forth in Schedule 13.1 or at such otheraddress of which DOE shall have been notified pursuant thereto;

 

(d)           agrees that nothing herein shall (i) affect the rightof any Credit Party to effect service of process in any other manner permittedby law or (ii) limit the right of any Credit Party to commence proceedingsagainst or otherwise sue the Borrower or any other Person in any other court ofcompetent jurisdiction nor shall the commencement of proceedings in any one ormore jurisdictions preclude the commencement of proceedings in any otherjurisdiction (whether concurrently or not) if, and to the extent, permitted bythe Governmental Rules; and

 

(e)           agrees that judgment against it in any such action orproceeding shall be conclusive and may be enforced in any other jurisdictionwithin or without the U.S. by suit on the judgment or otherwise as provided bylaw, a certified or exemplified copy of which judgment shall be conclusiveevidence of the fact and amount of the Borrower’s obligation.

 

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**13.13.****             ****Successorsand Assigns.**

 

(a)           The provisions of this Common Agreement shall be bindingupon and inure to the benefit of the parties hereto and their respectivesuccessors and permitted assigns.

 

(b)           The Borrower may not assign or otherwise transfer any ofits rights or obligations under this Common Agreement or under any TransactionDocument without the prior written consent of the Loan Servicer and DOE.

 

(c)           FFB may assign any or all of its rights, benefits andobligations under the Loan Documents and with respect to the CollateralSecurity to any financial institution in accordance with the provisions of theDOE Credit Facility Documents.

 

(d)           The Borrower or its agent shall maintain a register forthe recordation of the names and addresses of the Lenders and the principalamounts of the Advances owing to each Lender pursuant to the terms hereof fromtime to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, anyAgent and the Lenders may treat each Person whose name is recorded in theRegister as a Lender for all purposes of this Common Agreement, notwithstandingnotice to the contrary.  The Register shallbe available for inspection by the Borrower and any Lender, at any reasonabletime and from time to time upon reasonable prior notice.

 

**13.14.****             ****Participations.**

 

FFBmay from time to time sell or otherwise grant participations in any or all ofits rights and obligations under the Loan Documents and with respect to theCollateral Security without the consent of the Borrower or any Agent.  In such case, Borrower and any Agent shallcontinue to deal exclusively with FFB and the provisions of this Agreementshall apply as if no such participation had been sold or granted.

 

**13.15.****             ****Reinstatement.**

 

ThisCommon Agreement shall continue to be effective or be reinstated, as the casemay be, if at any time payment and performance of the Borrower’s obligationshereunder, or any part thereof, is, pursuant to Governmental Rules, rescindedor reduced in amount, or must otherwise be restored or returned by any CreditParty.  In the event that any payment orany part thereof is so rescinded, reduced, restored or returned, suchobligations shall be reinstated and deemed reduced only by such amount paid andnot so rescinded, reduced, restored or returned.

 

**13.16.****             ****NoPartnership; Etc.**

 

TheCredit Parties and the Borrower intend that the relationship between them shallbe solely that of creditor and debtor. Nothing contained in this Common Agreement or in any other Loan Documentshall be deemed or construed to create a partnership, tenancy-in-common, jointtenancy, joint venture or co-ownership by, between or among the Credit Partiesand the Borrower or any other Person. The Credit Parties shall not be in any way responsible or liable 

 

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forthe indebtedness, losses, obligations or duties of the Borrower or any otherPerson with respect to the Project or otherwise.  All obligations to pay real property or othertaxes, assessments, insurance premiums, and all other fees and PeriodicExpenses arising from the ownership, operation or occupancy of the Project andto perform all obligations under the agreements and contracts relating to theProject shall be the sole responsibility of the Borrower.

 

**13.17.****             ****Paymentof Costs and Expenses.**

 

(a)           (i)            TheBorrower shall, whether or not the transactions herein contemplated areconsummated, pay or reimburse:  allreasonable and invoiced out-of-pocket costs and expenses of each Credit Party(including all commissions, charges, costs and expenses for the conversion ofcurrencies and all other costs, charges and expenses, including all fees andPeriodic Expenses of the legal counsel, consultants and advisors for any of theforegoing) made, paid, suffered or incurred in connection with (A) thetranslation, negotiation, preparation, execution and delivery and, whereappropriate, authentication, registration and recordation of this CommonAgreement, the other Transaction Documents and any other documents andinstruments related hereto or thereto (including legal opinions), and(B) the authentication, registration, translation and recordation (whereappropriate) of any of the Transaction Documents and the delivery of theevidences of Indebtedness relating to the Advances and the disbursementsthereof.

 

(ii)           The Borrower shall also pay or reimburse all out-of-pocketcosts 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 legalcounsel, consultants and advisors for any of the foregoing) made, paid,suffered or incurred in connection with (A) any amendment or modificationto, or the protection or preservation of any right or claim under, or consentor waiver in connection with, this Common Agreement or any other TransactionDocument, any such other document or instrument related hereto or thereto orany Collateral Security, and (B) the administration, preservation in fullforce and effect and enforcement (including with respect to a work out) of thisCommon Agreement, the other Transaction Documents and any other documents andinstruments referred to herein or therein (including the fees and disbursementsof counsel for each Credit Party and travel costs), and (C) the fees andexpenses of the Lender’s Engineer and other Independent Consultants from timeto time retained pursuant to the Loan Documents.

 

(b)           The Borrower shall, whether or not the transactions hereincontemplated are consummated, (i) indemnify each of the Credit Parties(each an “Indemnified Person” and, collectively, the “IndemnifiedParties”) and each of its respective officers, directors, employees,representatives, attorneys and agents from and hold each of them harmlessagainst any and all liabilities, obligations, losses, damages, penalties,claims, actions, judgments, suits, costs, expenses and disbursements incurredby any of them as a result of, or arising out of, or in any way related to, orby reason of, any investigation, litigation or other proceeding or inquiry(whether or not such Indemnified Person is a party thereto) related to theentering into and performance of any Transaction Document or the disbursementof, or use of the proceeds of, any DOE-Guaranteed Loans or the consummation ofany transactions contemplated herein or in any Transaction Document, includingthe fees and Periodic Expenses of counsel selected by such 

 

**Confidentialmaterials omitted and filed separately with the Securities and ExchangeCommission.  Asterisks denote such omission.**

 

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Indemnified Person incurred in connection with anysuch investigation, litigation or other proceeding or in connection withenforcing the provisions of this Section 13.17 (but excluding anysuch liabilities, obligations, losses, damages, penalties, claims, actions,judgments, suits, costs, expenses and disbursements to the extent incurred byreason of the gross negligence or willful misconduct of the Indemnified Personor its officers, directors, employees, representatives, attorneys or agents, asthe case may be, as determined pursuant to a final, non-appealable judgment bya court of competent jurisdiction) (collectively, “Indemnity Claims”).

 

(c)           Without limitation to the provisions of Section 13.17(b) above,the Borrower agrees to defend, indemnify and hold harmless each IndemnifiedPerson and each of its respective directors, officers, shareholders, agents,employees, participants, successors and assigns, from and against any and allClaims.

 

(d)           All sums paid and costs incurred by any Indemnified Personwith respect to any matter indemnified hereunder shall bear interest at theLate Charge Rate applicable to their respective Advances from the date theBorrower receives notice thereof from such Indemnified Person, until reimbursedby the Borrower, and all such sums and costs shall be added to the SecuredObligations and be secured by the Security Documents and shall be immediatelydue and payable on demand.  Each suchIndemnified Person shall promptly notify the Borrower in a timely manner of anysuch amounts payable by the Borrower hereunder, provided that any failure toprovide such notice shall not affect the Borrower’s obligations under this Section 13.17.,

 

(i)            Each Indemnified Person within ten (10) days afterthe receipt by it of notice of the commencement of any action for whichindemnity may be sought by it, or by any Person controlling it, from theBorrower on account of the agreements contained in this Section 13.17,shall notify the Borrower in writing of the commencement thereof, but thefailure of such Indemnified Person to so notify the Borrower of any such actionshall not release the Borrower from any liability that it may have to such Indemnified Person, except to the extentthat the Borrower is actually prejudiced by such delay.

 

(ii)           To the extent that the undertaking in the precedingclauses of this Section 13.17 may be unenforceable because it isviolative of any law or public policy, the Borrower shall contribute themaximum portion that it is permitted to pay and satisfy under Governmental Rules tothe payment and satisfaction of such undertakings.

 

(iii)          The provisions of this Section 13.17 shallsurvive foreclosure under the Security Documents and satisfaction or dischargeof the Secured Obligations, and shall be in addition to any other rights andremedies of any Indemnified Person.

 

(iv)          Any amounts payable by the Borrower pursuant to this Section 13.17shall be payable within the later to occur of (i) [*****] after theBorrower receives an invoice for such amounts from any applicable IndemnifiedPerson, and (ii) [*****] to the date on which such Indemnified Personexpects to pay such costs on account of which the Borrower’s indemnityhereunder is payable, and if not paid by such applicable date shall bearinterest at the Late Charge Rate from and after such applicable date until paidin full.

 

**Confidentialmaterials omitted and filed separately with the Securities and ExchangeCommission.  Asterisks denote such omission.**

 

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(v)           The Borrower shall be entitled, at its expense, toparticipate in the defense thereof provided that such Indemnified Person shallhave the right to retain its own counsel, at the Borrower’s expense, and suchparticipation by the Borrower in the defense thereof shall not release theBorrower of any liability that it may have to such Indemnified Person.  Any Indemnified Person against whom any Claimis made shall be entitled, after consultation with the Borrower and uponconsultation with legal counsel wherein such Indemnified Person is advised thatsuch Claim is meritorious, to compromise or settle any such Claim.  Any such compromise or settlement shall bebinding upon the Borrower for purposes of this Section 13.17.

 

(vi)          Upon payment of any Claim by the Borrower pursuant to this Section 13.17,the Borrower, without any further action, shall be subrogated to any and allclaims that such Indemnified Person may have relating thereto, and suchIndemnified Person shall at the request and expense of the Borrower cooperatewith the Borrower and give at the request and expense of the Borrower suchfurther assurances as are necessary or advisable to enable the Borrowervigorously 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) participationin the defense of, (iii) consent rights with respect to any compromise orsettlement, or (iv) subrogation rights, in each case except as otherwiseprovided for pursuant to this Section with respect to any action, suit orproceeding against the Borrower, Holdings or the Sponsor.

 

**13.18.****             ****Counterparts.**

 

ThisCommon Agreement may be executed in one or more duplicate counterparts and whensigned by all of the parties shall constitute a single binding agreement.

 

***[Remainder of page intentionally left blank;signatures follow.]***

 

**Confidentialmaterials omitted and filed separately with the Securities and ExchangeCommission.  Asterisks denote such omission.**

 

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INWITNESS WHEREOF, the parties hereto have caused this Common Agreement to beexecuted and delivered by their respective officers or representatives hereuntoduly authorized as of the date first written above.

 
| **STEPHENTOWN REGULATION SERVICES  LLC**                               |
|------------------------------------------------------------------------|
|                                                                   |
|                                                                   |
| By:                                                                    | /s/  James M. Spiezio |   |
|                                                                   |   |   |
| Its:                                                                   | Treasurer  and Secretary |   |
|                                                                   |   |
|                                                                   |   |
| **U.S.  DEPARTMENT OF ENERGY**,                                        |   |
|  as  Credit Party                                                 |   |
|                                                                   |   |
|                                                                   |   |
| By:                                                                    | /s/  David G. Frantz |   |
|                                                                   |   |   |
| Its:                                                                   | Director |   |
|                                                                   |   |
|                                                                   |   |
| **U.S.  DEPARTMENT OF ENERGY,**                                        |   |
|  as  Loan Servicer                                                |   |
|                                                                   |   |
|                                                                   |   |
| By:                                                                    | /s/  David G. Frantz |   |
|                                                                   |   |   |
| Its:                                                                   | Director |   |
|                                                                   |   |
|                                                                   |   |
| **MIDLAND LOAN  SERVICES, INC.**,                                 |
|  as Administrative Agent in its capacity as  the Collateral Agent |
|                                                                   |   |
|                                                                   |   |
| By:                                                                    | /s/  Bradley J. Hauger |   |
|                                                                   |   |   |
| Its:                                                                   | Senior  Vice President |   |
|                                                                   | Servicing Officer |   |

 

**Confidentialmaterials omitted and filed separately with the Securities and ExchangeCommission.  Asterisks denote such omission.**

 

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**APPENDIX A**

 

**ACCOUNTS; REVENUESAND APPLICATION THEREOF**

 

Section A.1           Project Accounts

 

(a)           The Borrower shall establishand maintain (I) the Collateral Account with PNC Bank, NationalAssociation, or another bank or financial institution satisfactory to DOE (the “DepositoryBank”) for the receipt and management of Project-related funds and securityand (II) the following subaccounts within the Collateral Accountestablished and maintained with the Depository Bank for the management ofProject-related funds and security (the Collateral Account and suchsubaccounts, collectively, the “Project Accounts”):

 

(i)            Base Equity Account;

 

(ii)           Overrun Equity Account;

 

(iii)          Loss Proceeds Account;

 

(iv)          Project Revenue Account;

 

(v)           Operating DisbursementAccount;

 

(vi)          Debt Service PaymentAccount;

 

(vii)         Debt Service ReserveAccount;

 

(viii)        Maintenance Reserve Account;

 

(ix)           Capital Account;

 

(x)            Post Reserve Account; and

 

(xi)           Distribution SuspenseAccount.

 

(b)           All monies at any timedeposited in any account required hereby shall be disbursed, allocated andapplied solely for the uses and purposes provided herein.

 

Section A.2           Control by Collateral Agent; Fees

 

(a)           The Collateral Agent shallhave sole dominion and control over, and the exclusive right of withdrawal from,all Project Accounts, other than the Operating Disbursement Account and theMaintenance Reserve Account, in accordance with the terms of this CommonAgreement and the Account Control Agreements. The Borrower shall have the right to direct the disposition of funds inthe Operating Disbursement Account by check or wire transfer unless an Event ofDefault Notice has been issued and remains effective.

 

**Confidentialmaterials omitted and filed separately with the Securities and ExchangeCommission.  Asterisks denote such omission.**

 

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(b)           The Borrower shall pay allfees and expenses of the Secured Parties, the Depository Bank and theCollateral Agent as may be required by DOE in its sole discretion in connectionwith the establishment and maintenance of the Project Accounts.

 

Section A.3           Base Equity Account

 

(a)           On the Financial ClosingDate, the Borrower shall deposit in the Collateral Account, and the CollateralAgent shall transfer from the Collateral Account to the Base Equity Account,all Base Equity that has not previously been invested in the Project andapproved and valued by DOE.

 

(b)           Prior to the PhysicalCompletion Date, all monies on deposit in the Base Equity Account shall beapplied to Equity Advances in accordance with, and in the amounts determinedunder, Sections 2.1(b) and 2.4.2 of the Common Agreement.

 

(c)           From and after the PhysicalCompletion Date, at the request of the Borrower, provided that no PotentialDefault or Event of Default shall then exist, the Collateral Agent shall causeany monies on deposit in the Base Equity Account to be disbursed to theBorrower for distribution to the Equity Owners of the Borrower without regardto the limitations set forth in Section 7.10 of the CommonAgreement (except for Section 7.10(a)(ii) thereof).  The Collateral Agent shall cause such amountsto be deposited in the account specified by the Borrower in the notice referredto in the preceding sentence within two (2) Business Days after receipt ofsuch notice.

 

Section A.4           Overrun Equity Account

 

(a)           If at any time the Borroweror DOE shall determine that the sum of (A) the unadvanced proceeds of theDOE Credit Facility and (B) the amount remaining on deposit in the BaseEquity Account shall be insufficient to pay all remaining Total Project Costs,then the Borrower shall [*****] of (y) such determination by the Borroweror (z) notice of such determination by DOE to the Borrower, deposit theamount of such deficiency in the Collateral Account, and the Collateral Agentshall immediately transfer the entire amount so deposited by the Borrowerpursuant to this Section A.4(a) from the Collateral Account tothe Overrun Equity Account.

 

(b)           Prior to the PhysicalCompletion Date, all monies on deposit in the Overrun Equity Account shall beapplied to Equity Advances in accordance with, and in the amounts determinedunder, Sections 2.1(b) and 2.4.2 of the Common Agreement.

 

(c)           From and after the PhysicalCompletion Date, at the request of the Borrower, provided that no PotentialDefault or Event of Default shall then exist, the Collateral Agent shall causeany monies on deposit in the Overrun Equity Account to be disbursed to theBorrower or as the Borrower may direct for distribution to the Equity Owners ofthe Borrower without regard to the limitations set forth in Section 7.10of the Common Agreement (except for Section 7.10(a)(ii) thereof).  The Collateral Agent shall cause such amountsto be deposited in the account specified by the Borrower in the notice referredto in the preceding sentence within two (2) Business Days after receipt ofsuch notice.

 

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Section A.5           Loss Proceeds Account

 

AllLoss Proceeds shall be deposited in the Collateral Account immediately uponreceipt, shall be immediately transferred by the Collateral Agent from theCollateral Account to the Loss Proceeds Account and shall be applied asprovided in Section 3.4.3(a)(ii) and Section 6.26of the Common Agreement.

 

Section A.6           Deposit of Operating Revenues

 

TheBorrower shall use commercially reasonable efforts to cause all OperatingRevenues to be deposited directly into the Collateral Account immediately uponreceipt and, following the transfer of such Operating Revenues by theCollateral Agent from the Collateral Account to the Project Revenue Account,thereafter applied as provided in Section A.7 hereof.  The Collateral Agent shall immediatelytransfer any amounts deposited in the Collateral Account pursuant to this Section A.6from the Collateral Account to the Project Revenue Account.

 

Section A.7           Application of Operating Revenues

 

(a)           Prior to the PhysicalCompletion Date, the Collateral Agent shall cause all monies on deposit in theProject Revenue Account to be applied for the following purposes in thefollowing order of priority, the requirements of each numbered item to be fullysatisfied for any fiscal period before application of any monies to anysucceeding numbered item for such fiscal period:

 

(i)         First:  On the first Business Day of each calendarmonth, to the Operating Disbursement Account, (A) such amount, if any,that, when added to the amount then on deposit in the Operating DisbursementAccount, shall equal the amount of Operating Costs for such calendar month inaccordance with the Operating Budget, and (B) with the consent of DOE inits sole discretion, an additional amount equal to all or a portion of theamount of Operating Costs anticipated by Borrower to be paid or incurred duringsuch calendar month in excess of the amount of Operating Costs for suchcalendar month as set forth in the Operating Budget;

 

(ii)        Second:  On the first Business Day of each calendarmonth, to the Maintenance Reserve Account, such amount, if any, that, whenadded to the amount then on deposit in the Maintenance Reserve Account, shallequal the MRA Required Amount; and

 

(iii)       Third:  Any monies on deposit in the Project RevenueAccount that are not applied as provided in clauses (i) and (ii) ofthis Section A.7(a) shall be retained in the Project RevenueAccount.

 

(b)           From and after the PhysicalCompletion Date, the Collateral Agent shall cause all monies on deposit in theProject Revenue Account to be applied for the following purposes in thefollowing order of priority, the requirements of each numbered item to be fullysatisfied for any 

 

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fiscal period before application of any monies toany succeeding numbered item for such fiscal period:

 

(i)         First:  On the first Business Day of each calendarmonth, to the Operating Disbursement Account, (A) such amount, if any,that, when added to the amount then on deposit in the Operating DisbursementAccount, shall equal the amount of Operating Costs for such calendar month inaccordance with the Operating Budget, and (B) with the consent of DOE inits sole discretion, an additional amount equal to all or a portion of theamount of Operating Costs anticipated by Borrower to be paid or incurred duringsuch calendar month in excess of the amount of Operating Costs for suchcalendar month as set forth in the Operating Budget;

 

(ii)        Second:  On the first Business Day of each calendarmonth, to the Debt Service Payment Account, such amount, if any, that, whenadded to the amount then on deposit in the Debt Service Payment Account, shallequal the amount of interest and principal on the DOE-Guaranteed Loan and allother costs, fees and expenses arising under the Loan Documents that are dueand payable to FFB or DOE on or before the next succeeding Payment Date;

 

(iii)       Third:  On the first Business Day of each calendarmonth, to the Debt Service Reserve Account, such amount, if any, that, whenadded to the amount then on deposit in the Debt Service Reserve Account, shallequal the Debt Service Reserve Requirement;

 

(iv)       Fourth:  On the first Business Day of each calendarmonth, to the Maintenance Reserve Account, such amount, if any, that, whenadded to the amounts then on deposit in the Maintenance Reserve Account, shallequal the MRA Required Amount;

 

(v)        Fifth:  On the first Business Day of each calendarmonth, to the Capital Account, such amount, if any, that, when added to theamounts on deposit in the Capital Account, shall equal the Capital AccountRequirement;

 

(vi)       Sixth:  On the first Business Day of each calendarmonth, to the Post Reserve Account, such amount, if any, that, when added tothe amounts then on deposit in the Post Reserve Account, shall equal theaggregate amount of Base Fees payable on or before the next succeeding PaymentDate to the Operator under the O&M Agreement and to the Administrator underthe Administrative Services Agreement; and

 

(vii)      Seventh:  On the first Business Day of each January,April, July and October, commencing on or after the Project CompletionDate, to the Distribution Suspense Account, all remaining monies then on depositin the Project Revenue Account.

 

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Section A.8           Operating Disbursement Account

 

TheBorrower shall from time to time, or cause the Operator or the Administratorto, apply monies on deposit in the Operating Disbursement Account to pay(a) Operating Costs in accordance with the most recent Operating Budgetand (b) with the consent of DOE in its sole discretion, Operating Costs inexcess of the amount of Operating Costs as set forth in the most recent OperatingBudget.

 

Section A.9           Debt Service Payment Account

 

TheCollateral Agent shall cause monies on deposit in the Debt Service PaymentAccount to be applied to pay all amounts payable by Borrower to FFB and DOEunder the Loan Documents including, without limitation, interest and principalon the DOE-Guaranteed Loan and all other costs, fees and expenses arising underthe Loan Documents, as and when all such amounts are due and payable.

 

Section A.10         Debt Service Reserve Account

 

(a)           If at any time the monies ondeposit in the Debt Service Payment Account shall not be sufficient to pay allamounts payable to FFB and DOE under the Loan Documents, including, withoutlimitation, interest and principal on the DOE-Guaranteed Loan and all othercosts, fees and expenses arising under the Loan Documents, as and when all suchamounts are due and payable, then, after application of all monies on depositin the Debt Service Payment Account for such purposes, the Collateral Agentshall cause monies on deposit in the Debt Service Reserve Account to be appliedto pay such deficiency.

 

(b)           On the second Business Dayprior to the date on which any amount is payable by Borrower to FFB or DOEunder the Loan Documents, the Collateral Agent shall give notice to the Sponsorif the monies on deposit in the Debt Service Payment Account plus the monies ondeposit in the Debt Service Reserve Account are insufficient to cause suchamount to be paid to FFB or DOE under the Loan Documents, which notice shallspecify the amount of such insufficiency.

 

(c)           Within five (5) daysafter the date on which any monies are withdrawn from the Debt Service ReserveAccount, the Collateral Agent shall give notice to the Sponsor if the moniesthen on deposit in the Debt Service Reserve Account are less than the DebtService Reserve Requirement, which notice shall specify the amount of suchdeficiency.

 

(d)           If at any time the monies ondeposit in the Debt Service Reserve Account shall exceed the Debt ServiceReserve Requirement, the Collateral Agent shall transfer the amount of suchexcess to the Project Revenue Account.

 

Section A.11         Maintenance Reserve Account

 

(a)           If at any time the monies ondeposit in the Operating Disbursement Account shall not be sufficient to payOperating Costs, then, after application of all monies on deposit in theOperating Disbursement Account for such purpose, the Borrower shall transfermonies on 

 

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deposit in the Maintenance Reserve Account in theamount of such deficiency to the Operating Disbursement Account to be appliedto pay such deficiency.

 

(b)           If at any time, and to theextent that (i) the monies on deposit in the Debt Service Payment Accountshall not be sufficient to pay all amounts payable to FFB and DOE under the LoanDocuments as and when such amounts are due and payable and (ii) the monieson deposit in the Debt Service Reserve Account are insufficient to cover suchdeficiency in the Debt Service Payment Account, then the Borrower shalltransfer monies on deposit in the Maintenance Reserve Account in the amount ofsuch deficiency to the Debt Service Payment Account.

 

(c)           If at any time the monies ondeposit in the Maintenance Reserve Account shall exceed the MRA RequiredAmount, the Borrower shall transfer the amount of such excess to the ProjectRevenue Account.

 

Section A.12         Capital Account

 

(a)           The Collateral Agent shallhold monies on deposit in the Capital Account as a reserve fund and shall notdisburse such monies without the consent of the Loan Servicer.

 

(b)           If at any time, and to theextent that (i) the monies on deposit in the Debt Service Payment Accountshall not be sufficient to pay all amounts payable to FFB and DOE under theLoan Documents as and when such amounts are due and payable and (ii) themonies on deposit in the Debt Service Reserve Account and the MaintenanceReserve Account are insufficient to cover such deficiency in the Debt ServicePayment Account, then the Collateral Agent shall transfer monies on deposit inthe Capital Account in the amount of such deficiency to the Debt ServicePayment Account.

 

Section A.13         Post Reserve Account

 

TheCollateral Agent shall cause monies on deposit in the Post Reserve Account tobe applied as follows:

 

(a)           to pay Base Fees as and whenall such amounts are due and payable, on a pro rata basis in proportion to theaggregate amounts that are due and payable pursuant to the terms of the O&MAgreement and the Administrative Services Agreement, respectively; providedthat, to the extent that any shortfall exists in the Operating DisbursementAccount, the Debt Service Payment Account, the Debt Service Reserve Account orthe Maintenance Reserve Account, such monies shall be transferred to each suchaccount in such order prior to being used to pay Base Fees; and

 

(b)           after the payment of allBase Fees then due and payable, any monies remaining on deposit in the PostReserve Account shall be transferred to the Project Revenue Account.

 

Section A.14         Distribution Suspense Account

 

TheCollateral Agent shall cause all monies on deposit in the Distribution SuspenseAccount to be applied for the following purposes in the following order ofpriority, the 

 

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requirementsof each numbered item to be fully satisfied for any fiscal period beforeapplication of any monies to any succeeding numbered item for such fiscalperiod:

 

(a)           On the 15th day of eachFebruary, May, August and November (each, a “Distribution Date”),in the event that all of the conditions precedent set forth in Section 7.10(a) ofthe Common Agreement are not satisfied, to the Project Revenue Account, allmonies then on deposit in the Distribution Suspense Account.

 

(b)           On each Distribution Date,provided that all of the conditions precedent set forth in Section 7.10(a) ofthe Common Agreement are satisfied, at the direction of the Borrower, theCollateral Agent shall cause a portion of the monies then on deposit in theDistribution Suspense Account to be disbursed to the Borrower or as theBorrower may direct to make any Restricted Payment; provided, however, that atthe same time as the Collateral Agent shall cause any monies on deposit in theDistribution Suspense Account to be disbursed to make any Restricted Payment,the Collateral Agent shall cause monies on deposit in the Distribution SuspenseAccount in an amount equal to the Prepayment Amount to be applied to thevoluntary prepayment of the DOE-Guaranteed Loan in accordance with clause (v) ofthe definition of “Distribution Preconditions” and pursuant to Section 3.4.3(a)(v) ofthis Common Agreement.

 

(c)           For purposes of applyingparagraph (a) or paragraph (b) of this Section A.14,satisfaction or nonsatisfaction of all of the conditions precedent set forth inSection 7.10(a) of the Common Agreement shall be determined asof both (i) the first day of the then current calendar quarter and(ii) the applicable Distribution Date, except that satisfaction ornonsatisfaction of the condition precedent set forth in clause (iv) ofthe definition of “Distribution Preconditions” shall be determined onlyas of the last day of the preceding calendar quarter.  Unless all of the conditions precedent setforth in Section 7.10(a) of the Common Agreement are satisfiedon all such applicable dates, all monies then on deposit in the DistributionSuspense Account shall be transferred to the Project Revenue Account on theapplicable Distribution Date.

 

Section A.15         Closing of Project Accounts

 

Ifa Project Account is no longer intended to be utilized pursuant to this CommonAgreement, the Borrower may deliver a written request to the Collateral Agentto close such Project Account and transfer any funds on deposit therein to theProject Revenue Account.  If the LoanServicer acknowledges to the Collateral Agent in writing that such ProjectAccount will no longer be utilized pursuant to this Common Agreement, theCollateral Agent shall close such Project Account, transfer any funds ondeposit therein to the Project Revenue Account and deliver notice of suchactions to the Borrower and the Loan Servicer.

 

Section A.16         Reserve Letters of Credit

 

(a)           Reductions in Amount

 

Atany time when one or more Reserve Letters of Credit are outstanding in relationto the Debt Service Reserve Account and the balance of the Debt Service ReserveAccount exceeds the Debt Service Reserve Requirement (the amount of the excessbeing the “Reduction Amount”) as the result of (a) funds beingdeposited into the Debt Service Reserve Account in accordance with 

 

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thisCommon Agreement or (b) a reduction in the Debt Service ReserveRequirement, then the aggregate undrawn amount of the Reserve Letters of Creditshall, upon the written request of the Borrower be reduced.  Such reduction shall be confirmed by the LoanServicer to the Collateral Agent in writing. The Collateral Agent shall effect any such reduction by promptlydelivering to the issuer of each affected Reserve Letter of Credit acertificate in the form attached to such Reserve Letter of Credit requestingthat the available amount of such Reserve Letter of Credit be reduced asprovided in this Section A.16(a).

 

(b)           Drawings of Full Amount

 

TheCollateral Agent shall draw the full amount of a Reserve Letter of Credit onthe first Business Day to occur after the earlier of (a) the date that isthirty (30) days prior to the scheduled expiration date of such Reserve Letterof Credit if the Collateral Agent may otherwise do so in compliance with thedefinition of Reserve Letter of Credit and (b) as instructed in writing bythe Loan Servicer if the issuer of such Reserve Letter of Credit ceases tosatisfy the requirements established by the DOE or such Reserve Letter ofCredit is otherwise eligible to be drawn in accordance with its terms.  Any amounts so drawn by the Collateral Agentunder a Reserve Letter of Credit shall be deposited by the Collateral Agent inthe Debt Service Reserve Account.

 

(c)           Partial Drawings

 

(i)     If pursuant to this CommonAgreement the Collateral Agent is directed to disburse, transfer or withdraw anamount (a “Required Amount”) from the Debt Service Reserve Account, theCollateral Agent shall transfer cash and/or draw on any Reserve Letter ofCredit as follows:

 

(A)           if no Reserve Letter ofCredit has been provided, or if and to the extent the Borrower so specifies bywritten notice to the Collateral Agent, the Collateral Agent shall transfercash from the Debt Service Reserve Account;

 

(B)           if the balance on the DebtService Reserve Account comprises one or more Reserve Letters of Credit, and anycash to be transferred in accordance with paragraph (A) is lessthan the Required Amount, the Collateral Agent shall draw on a Reserve Letterof Credit in an aggregate amount equal to such shortfall.

 

(ii)    Any draws upon any ReserveLetter of Credit will be made at least two (2) Business Days prior to thedate on which the relevant disbursement, transfer or withdrawal is to be made.

 

Section A.17         Permitted Investments

 

(a)           All amounts deposited in theProject Accounts and not disbursed on the same day deposited shall be invested,on the same day as deposited or, with respect to amounts deposited with theCollateral Agent after 11:00 a.m. (New York time), the Collateral Agentshall use 

 

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commercially reasonable efforts to invest on thesame day as deposited, or otherwise on the next Business Day, in PermittedInvestments specified in writing by the Borrower.  The Borrower shall use commerciallyreasonable efforts to assure that the final maturity of any such investmentdoes not extend beyond the time when the amounts used to acquire suchinvestments would be required for any other application under this CommonAgreement.  If the Borrower does notspecify in writing to the Collateral Agent in which Permitted Investmentsamounts deposited shall be invested, the Collateral Agent shall deposit suchamounts in the Overnight Investment, until such written specification isreceived.  Interest or any other incomearising out of the investment of monies on deposit in any of the ProjectAccounts shall be deposited when paid in the Project Revenue Account.

 

(b)           Liquidation to MakeDisbursements.  If and whencash is required for any disbursement, transfer or withdrawal from a ProjectAccount in accordance with this Common Agreement, the Collateral Agent shallcause Permitted Investments to be sold or otherwise liquidated into cash(without regard to maturity) in order to make such disbursement, transfer orwithdrawal.

 

(c)           Liability of CollateralAgent and DOE.  All investmentsin Permitted Investments shall be made at the sole risk of the Borrower.  Neither the Collateral Agent nor DOE shall beliable for any loss, fee, tax or other charge resulting from any investment orreinvestment in any Permitted Investment or the sale, disposition, redemptionor liquidation of such investment or by reason of the fact that the proceedsrealized in respect of such sale, disposition, redemption or liquidation wereless than that which might otherwise have been obtained.

 

Section A.18         Disbursements by Collateral Agent

 

TheCollateral Agent shall make disbursements, transfers and withdrawals from theProject Accounts (except for the Operating Disbursement Account and theMaintenance Reserve Account) pursuant to and in accordance with writteninstructions from the Loan Servicer to disburse, transfer or withdraw funds inaccordance with the terms of this Common Agreement.  The Collateral Agent shall have no obligation(express, implied or otherwise) to investigate whether any such written instructionsfrom the Loan Servicer comply with this Appendix A or any otherprovision of this Common Agreement.

 

Section A.19         Collateral Agent’s Notice

 

Atleast two (2) Business Days prior to the date of any requesteddisbursement, transfer or withdrawal from the Project Revenue Account pursuantto Section A.7 hereof (each, a “Disbursement Date”), theCollateral Agent shall transmit to the Borrower and the Loan Servicer a notice(each, a “Disbursement Notice”) specifying:

 

(a)           Any Agent fees, costs andexpenses to be paid in accordance with Section 9.7 of this CommonAgreement on the immediately succeeding Disbursement Date;

 

(b)           The balances in each of theProject Accounts and the undrawn amount of any Reserve Letter of Credit as ofthe opening of business in New York on the date of such Disbursement Notice;and

 

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(c)           The amount and source offunds received in accordance with this Common Agreement and the disbursements,transfers and withdrawals of funds from each Project Account for the period oftime that transpired since the date of immediately preceding DisbursementNotice (all as set forth in the records and accounts maintained by theCollateral Agent).

 

Section A.20         Loan Servicer Notices.

 

Onor before the twentieth (20th) day of each month, the Loan Servicer shall deliver to the CollateralAgent and the Borrower a notice specifying the following amounts:

 

(a)           The amount of all fees,expenses and unscheduled payments to be paid to each Credit Party under theLoan Documents during the next succeeding month, broken down, for each suchPerson, on an item-by-item basis;

 

(b)           The amount of Debt Servicedue to each Credit Party in respect of the Credit Facilities and all otheramounts due to each Credit Party under the Loan Documents on or before theimmediately succeeding Quarterly Payment Date, broken down for each CreditParty on an item-by-item basis; and

 

(c)           The amount of the DebtService Reserve Requirement.

 

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**Exhibits to Common Agreement**

 
| **A**  |   | Definitions                                                           |
|--------|--------|-----------------------------------------------------------------------|
| **A1** |   | Financial Plan                                                        |
| **A2** |   | Definition of Physical Completion and  Project Completion             |
| **A3** |   | Definition of DOE Requirements                                        |
| **A4** |   | Davis-Bacon  Provisions for Davis-Bacon Act Covered Contracts         |
| **A5** |   | Disclosure  Letter                                                    |
| **B**  |   | Rules of  Interpretation                                         |
| **C1** |   | Form of  Borrower Certificate (Initial Closing)                  |
| **C2** |   | Form of  Borrower Certificate (Periodic Closing)                 |
| **D1** |   | Form of  Lender’s Engineer Certificate (Initial Closing)    |
| **D2** |   | Form of  Lender’s Engineer Certificate (Periodic Closing)   |
| **E1** |   | Form of  Sponsor’s Certificate (Initial Closing)            |
| **E2** |   | [Intentionally  Omitted]                                              |
| **E3** |   | Form of  Certificate of Holdings (Initial Closing)               |
| **F1** |   | Form of  Insurance Consultant Certificate (Initial Closing)      |
| **F2** |   | Form of  Insurance Consultant Certificate (Periodic Closing)     |
| **G**  |   | Form of  Collateral Agent Certificate  (Initial Closing)         |
| **H**  |   | Form of  Major Project Participant Certificate (Initial Closing) |
| **I**  |   | Form of  Financial Officer Certificate (Initial Closing)         |
| **J**  |   | [Intentionally  Omitted]                                              |
| **K**  |   | [Intentionally  Omitted]                                              |
| **L**  |   | [Intentionally  Omitted]                                              |
| **M**  |   | Form of  Master Advance Notice                                   |
| **N**  |   | Form of  Drawstop Notice                                         |
| **O**  |   | Form of  Quarterly Reporting Certificate                         |
| **P**  |   | Form of  Physical Completion Certificate                         |
| **Q**  |   | Form of  Project Completion Certificate                          |

 

**Confidential materials omitted and filed separately with theSecurities and Exchange Commission.  Asterisks denote such omission.**

 

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**Exhibit A**to Common Agreement

 

**DEFINITIONS**

 

“Account Control Agreement” Any and all agreements pursuant to which a Secured Party obtains controlof a deposit account or a securities account within the meaning of Section 9-104or Section 8-106, respectively, of the Uniform Commercial Code of anyapplicable jurisdiction, to secure the Secured Obligations, including withoutlimitation that certain Account Control Agreement by and among the DepositoryBank, as that bank at which the deposit account is maintained, theAdministrative Agent in its capacity as the Collateral Agent, as Secured Party,and Borrower.

 

“Actual Knowledge”  Withrespect to any Person, the actual knowledge of the Principal Persons of suchPerson.

 

“AdditionalProject Construction Purchase Order” A purchase order from Sponsor or Borrower to Project ConstructionContractor, in form and substance satisfactory to the Loan Servicer andapproved by the Lender’s Engineer, in addition to Purchase Order Number 1550,dated November 20, 2009, constituting a part of the Project ConstructionContract.

 

“AdditionalProject Documents”  All of thecontracts necessary for and material to the construction or operation of theProject entered into by the Borrower subsequent to the Common Agreement Date.

 

“AdministrativeAgent”  Midland Loan Services, Inc.,a Delaware corporation.

 

“AdministrativeAgent Fee Agreement”  The fee letteragreement between the Administrative Agent and the Borrower, in form andsubstance acceptable to DOE.

 

“AdministrativeServices Agreement” The Agreement obligating the Administrator to provideongoing administrative and management support to the Borrower with respect tothe Project.

 

“Administrator”  The Sponsor, or any replacement administratorof the Project Facility, as permitted under the Administrative ServicesAgreement and approved by the Loan Servicer.

 

“Advance”  An advance or a borrowing under the DOECredit Facility made pursuant to the Common Agreement, the Building LoanAgreement and the DOE Credit Facility Documents.

 

“AdvanceConditions Precedent”  As defined in Section 4.2(a) ofthe Common Agreement.

 

“AdvanceDate”  A Business Day on which FFBmakes an Advance in accordance with Article 2 of the CommonAgreement.

 

“AdvanceNotice Date” As defined in Section 4.2(a) of the CommonAgreement.

 

**Confidentialmaterials omitted and filed separately with the Securities and ExchangeCommission.  Asterisks denote such omission.**

 

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“AdvanceSchedule”  A schedule detailing theexpected dates and amounts of proposed Advances and Equity Advances to fundProject Costs, prepared by the Borrower and certified by the Lender’s Engineer,as amended from time to time in accordance with Section 6.8(c) ofthe Common Agreement.

 

“Affiliate”  As to anyPerson, any other Person that directly or indirectly controls, or is undercommon control with, or is controlled by, such Person.  As used in this definition, “control”(including, with its correlative meanings, “controlled by” and “under commoncontrol with”) as used with respect to any Person means possession, directly orindirectly, of the power to direct or cause the direction of management orpolicies of such Person (whether through ownership of voting securities orpartnership or other ownership interests, by contract or otherwise); provided,however, that, in any event and for all purposes of the Loan Documents:(i) the Sponsor or any Affiliate of the Sponsor shall be deemed an “Affiliate”of the Borrower; and (ii) any Person that owns directly or indirectly 10%or more of the securities having ordinary voting powers for the election ofdirectors or other applicable governing body of another Person (but excludinglimited partnership interests) shall be deemed to control such other Person.

 

“Agents”  Collectively, the Loan Servicer and theAdministrative Agent in all of its capacities (other than the AdministrativeAgent (or its designee) in its capacity as the Insurance Advisor), including,without limitation, any subcontractors of the Loan Servicer or theAdministrative Agent.

 

“ALTASurvey” The ALTA survey prepared by [*****], with respect to the ProjectSite.

 

“AnticipatedPhysical Completion Date”  The dateeighteen (18) months after the Financial Closing Date.

 

“AnticipatedProject Completion Date”  The datesix (6) months after the Anticipated Physical Completion Date.

 

“ApplicableLoan Guarantee Requirements”  Theprovisions with respect to Title XVII, at 10 CFR Part 609, as amendedfrom time to time, and any Applicable Loan Guarantee Requirements from time totime promulgated to implement Section 1705 of Title XVII.

 

“Applicable Margin”  Asdefined in the DOE Credit Facility Documents.

 

“Application”  The Loan Guarantee Application of the Sponsorfor a DOE Guarantee under Title XVII.

 

“ApplicationSupplement”  The supplement to theApplication required under Section 4.1.46 of the Common Agreement, whichshall include all items required to be submitted under (i) Section 1705of Title XVII and (ii) all applicable requirements under the Recovery Act,including, without limitation, the items numbered (1) through (4) asset forth on pages A3-5 and A3-6 of Exhibit A3 to the CommonAgreement.

 

“ApprovedAdvance Schedule”  With respect toAdvances under the DOE Credit Facility, an updated Advance Schedule submittedby the Borrower from time to time and deemed approved upon satisfaction of allcorresponding Advance Conditions Precedent.

 

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“Approved Pre-Closing Equity Credit”  The sum of (i) the appraised value ofthe Project Site land, as indicated in the appraisal delivered pursuant to Section 4.1.33,and (ii) an amount designated in the Development Costs Statement ascontributed to the Borrower and approved by the Loan Servicer for applicationto the Base Equity Commitment in accordance with Section 2.4.2 ofthe Common Agreement.

 

“ApprovedPre-Closing Equity Credit Balance” As of any date, the amount of the Approved Pre-Closing Equity Credit lessthe aggregate amount of Equity Contributions allocated from the ApprovedPre-Closing Equity Credit.

 

“ApprovedProject Changes”  As defined in Section 6.8(b) ofthe Common Agreement.

 

“AssetPledge Documents”  As defined in Section 4.1.1of the Common Agreement.

 

“AuthorizedOfficial”  With respect to anyPerson, (i) the President, the Vice President, the Assistant VicePresident, the Treasurer, the Assistant Treasurer, or any other FinancialOfficer of such Person, and (ii) with respect to the Borrower, and the Sponsor,only those individuals holding any of the foregoing positions whose nameappears on a certificate of incumbency delivered concurrently with theexecution of the Common Agreement, as such certificate of incumbency may beamended or supplemented from time to time to identify names of the individualsthen holding such offices and the capacity in which they are acting.

 

“Availability Period”  Theperiod from the date of the FFB Promissory Note to the “Last Day for an Advance”specified in the FFB Promissory Note.

 

“Bankruptcy Law”  Anyinsolvency, reorganization, moratorium or similar law for the general relief ofdebtors in any relevant jurisdiction.

 

“Base Case Projections”  Aprojection of operating results for the Project over a period ending no soonerthan twelve fiscal months after the Maturity Date, showing on a basisconsistent with the Operating Plan, the Operating Forecast, and the TransactionDocuments at a minimum the Borrower’s good faith projections based onassumptions that were believed by the Borrower to be reasonable as of the datemade, as of the Initial Advance Date or such later date as of which such BaseCase Projections have been revised, of revenues, expenses, cash flow, DebtService Coverage Ratios and sources and uses of revenues over the forecastperiod, as updated from time to time in accordance with Section 6.1(j)(ii) ofthe Common Agreement.

 

“Base Equity”  The baseequity to be contributed by the Sponsor to the Borrower and applied to BaseProject Costs, as shown on the Financial Plan.

 

“Base Equity Account”  TheProject Account created under clause (i) of Section A.1(a) ofAppendix A to the Common Agreement.

 

“Base Equity Commitment” The obligation of the Borrower and the Sponsor to fund (i) 37.5% ofall Eligible Base Project Costs, and (ii) 100% of all Ineligible BaseProject Costs.

 

“Base Fees”  The Base Feespayable to Operator pursuant to the O&M Agreement and the Base Fees payableto Administrator pursuant to the Administrative Services Agreement.

 

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“BaseProject Costs”  The Borrower’s estimate as of the Common Agreement Date of TotalProject Costs, in the aggregate amount of $69,019,230 (which, for avoidance ofdoubt, includes [*****] of budgeted Overrun Contingencies).

 

“Borrower”  StephentownRegulation Services LLC, a limited liability company organized and existingunder the laws of the State of Delaware.

 

“BorrowerCertificate”  A certificate executedby an Authorized Official of the Borrower that is (i) with respect to anycertificate delivered pursuant to Section 4.1 of the CommonAgreement, dated as of the Financial Closing Date and substantially in the formattached as Exhibit C to the Common Agreement, (ii) a MasterAdvance Notice delivered pursuant to Section 4.2 of the CommonAgreement, substantially in the form attached as Exhibit M to theCommon Agreement, (iii) delivered as a condition precedent to PhysicalCompletion or Project Completion, or (iv) with respect to any othercertification to be made by the Borrower pursuant to any Loan Document,addressing such matters as are specified in such Loan Document.

 

“BorrowerReimbursement Obligations”  Asdefined in Section 12.2.1 of the Common Agreement.

 

“BorrowerReimbursement Payment”  As defined inSection 12.2.2of the Common Agreement.

 

“Borrower’sAccountant”  Miller Wachman LLP orsuch other firm of independent public accountants of recognized standing as maybe appointed by the Borrower as Borrower’s Accountant from time to time withthe approval of the Loan Servicer; provided, however, that any of Deliotte &Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopersLLP, if appointed by the Borrower as Borrower’s Accountant, shall not requirethe approval of the Loan Servicer.

 

“BuildingLoan” The portion of the DOE Credit Facility to be advanced pursuant to theterms of the Building Loan Agreement.

 

“BuildingLoan Agreement” The Building Loan Agreement among the Borrower, DOE and theCollateral Agent providing the terms and conditions of Advances of the BuildingLoan.

 

“BuildingLoan Mortgage”  The Building LoanMortgage and Security Agreement made by the Borrower, as mortgagor, in favor ofthe Administrative Agent in its capacity as the Collateral Agent, as mortgagee,to secure the principal amount of $5,760,620 pursuant to which the Borrowergrants for the benefit of DOE a mortgage encumbering all of its rights to theProject Site and the Improvements.

 

“Business Day”  Any dayother than a Saturday, Sunday or any other day on which either FFB or the FederalReserve Bank of New York are not open for business.

 

“BuyAmerican Provisions” means Section 1605 of Title XVI of Division A ofthe Recovery Act, 2 C.F.R. Sections 176.140 and 176.160, Office of Managementand Budget’s Initial Implementing Guidance for the Recovery Act, M-09-10 (February 18,2009) and Updated Implementing Guidance for the Recovery Act, M-09-15 (April 3,2009) and, in each case, any 

 

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amendment,supplement or successor thereto, including any relevant regulation or guidancewhich may be issued by DOE.

 

“CapitalAccount”  The Project Account createdunder clause (ix) of Section A.1(a) of Appendix Ato the Common Agreement.

 

“CapitalAccount Requirement”  An amount equalto $1,000,000.

 

“CapitalExpenditures”  All expenditures thatshould be capitalized in accordance with GAAP.

 

“Capital Lease”  Any leaseof (or other agreement conveying the right to use) property, real or personal,which would be required, in accordance with GAAP, to be capitalized andaccounted for as a capital lease on a balance sheet of the lessee.

 

“CashAvailable for Debt Service”  means,for any period, Net Income *plus*depreciation and amortization and other non-cash charges *plus/minus*changes in Working Capital *plus* interestand fees paid, *minus* capital expenditures;except that (a) in calculating the rolling 12-month Debt Service CoverageRatio for purposes of clause (iv) of the definition of “DistributionPreconditions”, “Cash Available for Debt Service” means, for any12-month period, (A) the revenues, receipts and earnings of the Borrowerfrom the sources described in clauses (i) and (ii) of the definitionof “Operating Revenues” for such twelve-month period plus (B) therevenues and receipts of the Borrower from the source described in clause (iii) ofthe definition of “Operating Revenues” for a period of no more thanthree (3) months during such 12-month period, minus (C) the OperatingCosts of the Borrower for such twelve-month period, and (b) for purposesof Section 2(b)(ii) of Exhibit A2 to the CommonAgreement, “Cash Available for Debt Service” means, for any period, therevenues, receipts and earnings of the Borrower from the sources described inclauses (i) and (ii) of the definition of “Operating Revenues”for such period minus the Operating Costs of the Borrower for such period.

 

“CCR”  As defined in Section 4.1.49 ofthe Common Agreement.

 

“Changeof Control”  At any time, either:

 

(a) theSponsor ceases to hold a majority of the voting power of the issued andoutstanding Voting Stock of Holdings (or, if the Sponsor shall hold its EquityInterests in Holdings through a Parent Holdco, a majority of the voting powerof the outstanding Voting Stock of such Parent Holdco), provided that ifthe members of the board of managers or equivalent body of Holdings areselected in a manner other than by vote of Voting Stock, a Change of Controlshall occur if, and only if, the Sponsor ceases to have the power, by contractor otherwise, to appoint a majority of the members of the board of managers orequivalent body of Holdings or such Parent Holdco, as applicable; or

 

(b) ifthe Sponsor holds its Equity Interests in Holdings through a Parent Holdco,such Parent Holdco shall cease to hold [*****] of the issued and outstandingEquity Interests in Holdings.

 

“Change of Law”  Anychange in any Governmental Rule or the application or requirementsthereof, or compliance by any Person with any request or directive (whether ornot

 

A-5

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having the force of law but if not having the force of law, being of atype with which they customarily comply) of any Governmental Authority issuedafter the Common Agreement Date.

 

“Change Orders”  Withrespect to any Construction Contract, as defined in such Construction Contract.

 

“Claims”  As defined inthe Environmental Indemnity Agreement.

 

“Collateral”  The Collateral Security granted to theAdministrative Agent in its capacity as the Collateral Agent under the SecurityDocuments.

 

“CollateralAccount”  The Project Account createdunder clause (I) of Section A.1(a) of Appendix A to the CommonAgreement.

 

“CollateralAgent”  The Administrative Agent inits capacity as collateral agent, as appointed in the Common Agreement.

 

“CollateralAssignment”  The CollateralAssignment of Permits and Contracts by and between the Borrower and theCollateral Agent.

 

“CollateralSecurity”  All real or personalproperty, assets, revenues, and equity interests, whether now existing orhereinafter acquired, that are subject to or are intended to be or becomesubject to the security interest or lien granted by any of the SecurityDocuments.

 

“Commencementof Construction”  The occurrence ofthe following: (i) the Borrower has completed all pre-constructionengineering and design, has received all necessary licenses, permits and localand national environmental clearances, has engaged all contractors and orderedall essential equipment and supplies as, in each case, can reasonably beconsidered necessary so that physical construction of the Project may begin[*****].

 

“CommonAgreement”  The Common Agreement,dated as of August 6, 2010, among the Borrower, DOE and the AdministrativeAgent in its capacity as the Collateral Agent, to which this Exhibit Ais appended.  The Common Agreement,together with the DOE Guarantee, constitutes the “Loan Guarantee Agreement”referred to in the Applicable Loan Guarantee Requirements.

 

“CommonAgreement Date”  The date of theCommon Agreement.

 

“CompletionGuaranty” The Completion Guaranty from the Sponsor to DOE guaranteeing allobligations of the Borrower through the Project Completion Date, includingcausing the Project Completion Date to occur on the date specified in the LoanDocuments and all obligations to correct any deficiencies in the Project thatarise through the warranty period.

 

“ComptrollerGeneral”  The Comptroller General ofthe United States.

 

“Construction Contractor” Each of (i) the Sponsor, (ii) the Project ConstructionContractor and (iii) any material subcontractor under any ConstructionContract.

 

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“Construction Contracts” Each of (i) the EPC Agreement, (ii) the Project ConstructionContract and (iii) any material subcontract of any tier under the EPCAgreement or the Project Construction Contract.

 

“Construction Period”  Theperiod prior to the Physical Completion Date.

 

“ConstructionWork”  All work pursuant to each ofthe Construction Contracts.

 

“ContingentObligation”  As to any Person, anyobligation of such Person with respect to any Indebtedness (“primaryobligations”) of any other Person (the “primary obligor”) in any manner,whether directly or indirectly, including without limitation any obligation ofsuch 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 obligationsor any property constituting direct or indirect security therefor, includingthe obligation to make take-or-pay or similar payments; (iii) to advanceor supply funds; (iv) to maintain working capital or equity capital of theprimary obligor or otherwise to maintain the net worth or solvency or anybalance sheet item, level of income or financial condition of the primaryobligor; (v) to purchase property, securities or services primarily forthe purpose of assuring the holder of any such primary obligation of theability of the primary obligor to make payment of such primary obligation;(vi) otherwise to assure or hold harmless the holder of such primaryobligation against loss in respect thereof, including without limitation withrespect to letter of credit obligations, swap agreements, foreign exchangecontracts and other similar agreements (including agreements relating toderivative instruments); provided, however, that the term “ContingentObligation” shall not include endorsements of instruments for deposit orcollection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amountequal to the stated or determinable amount of the primary obligation in respectof which such Contingent Obligation is made or, if not stated or determinable,the maximum anticipated liability in respect thereof (assuming such Person isrequired to perform thereunder) as determined by such Person in good faith.

 

“Control”  The ability todirect or cause the direction (whether through the ownership of votingsecurities, by contract, or otherwise) of the management and policies of aPerson or to control (whether affirmatively or negatively and whether throughthe ownership of voting securities, by contract, or otherwise) the decision ofsuch Person to engage in the particular conduct at issue.  A Person shall be rebuttably presumed toControl another Person if such Person owns, directly or indirectly through oneor more intermediaries, (a) sufficient shares of stock or other equityinterests to allow the Person, under ordinary circumstances, to elect or directthe election of a majority of the members of the board of directors or othergoverning body of another Person, or (b) shares of stock or other equityinterests of such other Person representing, in the aggregate, more than 50% ofthe aggregate outstanding economic interests of such Person.  The term “Controlled” has a meaningcorrelative to that of Control.

 

“Corporate Guaranty” The Guaranty from the Sponsor to DOE in theamount of $2,397,000 to be used only to replenish the amount in the DebtService Reserve Account to the Debt Service Reserve Requirement.

 

“CorruptPractices Laws”  (i) the ForeignCorrupt Practices Act of 1977 (Pub. L. No. 95-213, §§101-104),as amended, and (ii) any equivalent U.S. or foreign Governmental Rule.

 

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“CostOverrun” Any Project Cost in excess of the Base Project Cost (excluding theOverrun Contingencies) amount budgeted therefor in the relevant line item ofthe Project Budget as in effect on the Common Agreement Date (after taking intoaccount any reallocations (other than from Overrun Contingencies) among lineitems permitted pursuant to Section 6.8(b) of the CommonAgreement.)

 

“CoveredTaxes”  As defined in Section 3.1.2of the Common Agreement.

 

“CreditParties”  DOE, the AdministrativeAgent in its capacity as the Collateral Agent, and the Loan Servicer.

 

“CreditSubsidy Cost”  As defined in §609.2of the Applicable Loan Guarantee Requirements.

 

“CurrentAssets” means assets treated as current assets under GAAP.

 

“CurrentLiabilities” means all Indebtedness and liabilities due on demand or tobecome due within one year, and other liabilities treated as currentliabilities under GAAP.

 

“CurrentRatio” With respect to any computation period, the ratio of(i) Current Assets for such period, to (ii) Current Liabilities forsuch period.

 

“Davis-BaconAct”  Subchapter IV of Chapter 31 of Part Aof Subtitle II of Title 40 of the United States Code, including and asimplemented by the regulations set forth in Parts 1, 3 and 5 of title 29 of theCode of Federal Regulations.

 

“DebarmentRegulations”  (i) TheGovernment-wide Debarment and Suspension (Non-procurement) regulations (CommonRule), 53 Fed. Reg. 19204 (May 26, 1988), (ii) Subpart 9.4(Debarment, Suspension, and Ineligibility) of the Federal AcquisitionRegulations, 48 C.F.R. 9.400 - 9.409, and (iii) the revisedGovernment-wide Debarment and Suspension (Non-procurement) regulations (CommonRule), 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”  Withrespect to any computation period, all principal, interest and fees which camedue under all Indebtedness for such period.

 

“DebtService Coverage Ratio”  With respectto any computation period, the ratio of (i) Cash Available for DebtService for such period, to (ii) Debt Service for such period.

 

“Debt Service Payment Account” The Project Account created underclause (vi) of Section A.1(a) of Appendix A to theCommon Agreement.

 

“DebtService Reserve”  As defined in Section 6.17of the Common Agreement.

 

“Debt Service Reserve Account” The Project Account created under clause (vii) of Section A.1(a) ofAppendix A to the Common Agreement.

 

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“DebtService Reserve Requirement”  Anamount equal to the amount of Debt Service due on the immediately succeedingtwo Quarterly Payment Dates; provided, however, that if at any time aDSRA Deficiency exists, then such DSRA Deficiency will be funded (A) bytransfer immediately to the Debt Service Reserve Account from the DistributionSuspense Account of all amounts therein, up to the amount of such DSRADeficiency, and (B) by deposit within 30 days thereafter into the DebtService Reserve Account of additional amounts necessary to fund any remainingDSRA Deficiency.

 

“DepositoryBank”  As defined in Section A.1(a) ofAppendix A to the Common Agreement.

 

“DesignContractor”  [*****], in its capacityas design contractor under the Engineering and Architectural ServicesAgreement, or its successors approved by the Loan Servicer in consultation withthe Lender’s Engineer.

 

“DevelopmentCosts”  All reasonable out-of pocketexpenses related to the Project that have been incurred prior to the datespecified in the Development Costs Statement by the Borrower, the Sponsor orany Affiliate of the Sponsor in the development of the Project, but notincluding technology development costs, general administrative and overheadcosts or other Ineligible Project Costs.

 

“DevelopmentCosts Statement”  The statement, inform and substance satisfactory to DOE, summarizing the amount of DevelopmentCosts incurred prior to the Initial Advance Date that, subject to therequirements of Section 4.1.4(v) of the Common Agreement, andtogether with the appraised value of the Project Site land, will comprise theApproved Pre-Closing Equity Credit.

 

“DirectAgreements”  As defined in Section 4.1.1of the Common Agreement.

 

“Disclosure Letter”  Thedisclosure letter dated as of the Financial Closing Date delivered by theBorrower to the Loan Servicer, containing certain schedules of informationrequired pursuant to the Common Agreement and the Security Agreement andattached as Exhibit A5 to the Common Agreement.

 

“DistributionPreconditions”

 

Eachof the following conditions is satisfied:

 

(i)            the date six (6) monthsafter the Project Completion Date has occurred;

 

(ii)           no Event of Defaultor Potential Default then exists or would exist after giving effect to anyRestricted Payment;

 

(iii)          the Debt ServiceReserve Account is funded to the Debt Service Reserve Requirement and theMaintenance Reserve Account is funded to the MRA Required Amount;

 

(iv)          the rolling 12-monthDebt Service Coverage Ratio is at least 1.40 to 1 (as evidenced by acertificate of the Borrower, reviewed and approved by Borrower’s Accountant andLender’s Engineer);

 

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(v)           the Borrower atsubstantially the same time as the related Restricted Payment applies the PrepaymentAmount to the voluntary prepayment of the DOE-Guaranteed Loan, with suchPrepayment Amount allocated to the prepayment of principal in the maximumpossible amount when taken together with any associated make-whole premiums ordiscounts (it being understood that (x) if there is an associated premium,the principal amount prepaid would be less than the Prepayment Amount, and (y) ifthere is an associated discount, the principal amount prepaid would be greaterthan the Prepayment Amount); and

 

(vi)          an appropriaterequisition and supporting documentation is provided to DOE at least 10Business Days in advance of any request for a Restricted Payment.

 

“DistributionSuspense Account”  The ProjectAccount created under clause (xi) of Section A.1(a) of AppendixA to the Common Agreement.

 

“DOE”  The U.S. Department of Energy, an agency ofthe United States of America.

 

“DOECredit Facility”  The loan facilityavailable to the Borrower under the DOE Credit Facility Documents in theprincipal amount of up to the lesser of (i) $43,137,019 and(ii) 62.5% of Eligible Base Project Costs.

 

“DOECredit Facility Agent”  The LoanServicer, acting in its capacity as agent for FFB, as lender under the DOECredit Facility Documents.

 

“DOE Credit Facility Commitment” The commitment of FFB to make Advances to the Borrower pursuant to theterms of the FFB Note Purchase Agreement in an aggregate principal amount notto exceed the “Maximum Principal Amount” specified in the FFB Promissory Note,which must be an amount not greater than the “Loan Commitment Amount” set forthin the FFB Note Purchase Agreement, that is the aggregate principal amount ofall Advances that may be made by FFB under the DOE Credit Facility.

 

“DOECredit Facility Commitment Termination Date”  In accordance with the DOE Credit FacilityDocuments the earliest of (i) the first date on which the aggregate amountof the DOE-Guaranteed Loans disbursed thereunder equals the amount of the DOECredit Facility Commitment, (ii) the Final Advance Date, and (iii) thedate of termination in whole of DOE Credit Facility Commitment.

 

“DOECredit Facility Documents”  Asdefined in Section 4.1.1 of the Common Agreement.

 

“DOE Credit Facility Fees” All facility fees payable to DOE, the DOE Maintenance Fee, and any DOEModification Fee, as specified in the DOE Credit Facility Documents and relatedside letters.

 

“DOEGuarantee”  The guarantee provided byDOE for the benefit of FFB pursuant to the DOE Credit Facility Documents.

 

“DOE Guarantee Payment”  Asdefined in Section 12.1 of the Common Agreement.

 

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“DOEGuarantee Payment Amount”  As definedin Section 12.1 of the Common Agreement.

 

“DOE-GuaranteedLoans”  The Advances made by FFBpursuant to the DOE Credit Facility Documents.

 

“DOE Maintenance Fee”  Amaintenance fee payable to DOE in the amount of $25,000 per year over the termof the DOE-Guaranteed Loan.

 

[*****]

 

“DOE Requirements”  The requirements and conditions of theApplicable Loan Guarantee Requirements set forth on Exhibit A3 tothe Common Agreement.

 

“Dollars”or “ $”  The lawful currency ofthe United States of America.

 

“DrawstopNotice” as defined in Section 2.4.3(a) of the CommonAgreement.

 

“DSRA Deficiency” (i) prior to the date on which the Debt Service Reserve Account isfirst required to be fully funded up to the amount of the Debt Service ReserveRequirement, zero, and (ii) thereafter, the excess of the then-applicableDebt Service Reserve Requirement over the amount then funded in Debt ServiceReserve Account.

 

“Eligible Base Project Costs” The portion of Base Project Costs that are Eligible Project Costs,estimated as of the Common Agreement Date to be in the aggregate amount of$69,019,230 (which for avoidance of doubt, includes [*****] of budgeted OverrunContingencies).

 

“EligibleProject Costs”  Those portions ofProject Costs that are eligible for funding as “Project Costs” as defined inthe Applicable Loan Guarantee Requirements.

 

“Employee Benefit Plan”  (i) All“employee benefit plans” (as defined in Section 3(3) of ERISA) otherthan any Multiemployer Plans which are or at any time have been maintained orsponsored by the Borrower or any ERISA Affiliate or to which the Borrower orany ERISA Affiliate has ever made, or been obligated to make, contributions orwith respect to which the Borrower or any ERISA Affiliate has incurred anymaterial liability or obligation, (ii) all Pension Plans, and (iii) allQualified Plans.

 

“Engineeringand Architectural Services Agreement” The Architectural/Engineering Services Agreement between Sponsor andDesign Contractor, dated November 15, 2007, including any subcontractsthereunder.

 

“EnvironmentalClaim”  Any and all obligations,liabilities, losses, administrative, regulatory or judicial actions, suits,demands, decrees, claims, liens, judgments, notices of noncompliance orviolation, investigations (excluding routine inspections), proceedings,clean-up, removal or remedial actions or orders, or damages (foreseeable andunforeseeable, 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 ofany Governmental Approval issued under any such 

 

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EnvironmentalLaw including (a) any and all Indemnity Claims by any GovernmentalAuthority for enforcement, cleanup, removal, response, remedial or otheractions 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 reliefresulting from Hazardous Substances, the violation or alleged violation of anyEnvironmental Law or Governmental Approval issued thereunder, or arising fromalleged injury or threat of injury to health, safety or the environment.

 

“EnvironmentalIndemnity Agreement”  TheEnvironmental Indemnity Agreement to be made by the Borrower and the Sponsor infavor of the Administrative Agent in its capacity as the Collateral Agent andother Indemnified Parties (as defined therein).

 

“EnvironmentalLaws”  Any Governmental Rule ineffect as of the Common Agreement Date or thereafter, including, withoutlimitation, the National Environmental Policy Act of 1969, and in each case asamended, regulating, relating to or imposing obligations, liability orstandards of conduct concerning (A) the use of the Project Site or thecondition thereof; or (B) pollution, protection of human or animal healthor the environment or Releases or threatened Releases of pollutants,contaminants, chemicals, radiation or industrial, toxic or hazardous substancesor wastes, including without limitation Hazardous Substances, or otherwiserelating to the generation, manufacture, processing, distribution, use, treatment,storage, recycling, disposal, transport, or handling of pollutants,contaminants, chemicals, or industrial, toxic or hazardous substances orwastes, including without limitation Hazardous Substances.

 

“EPCAgreement”  The Engineering,Procurement and Construction Agreement between the Borrower and the Sponsor.

 

“Equipment”  The equipment constituting a part of theProject to be installed on the Project Site in accordance with the terms of theProject Documents.

 

“EquityAdvance”  Any disbursement of BaseEquity or Overrun Equity from the Base Equity Account or the Overrun EquityAccount pursuant to the terms of the Common Agreement.

 

“EquityCommitments”  The Base EquityCommitment and the Overrun Equity Commitment.

 

“EquityContributions”  The aggregate equitycontributed as Base Equity and Overrun Equity.

 

“EquityContributor”  The Sponsor.

 

“Equity Interests”  Anyand all shares, interests, rights to purchase, warrants, options,participations or other equivalents of or interests in (however designated) thecommon or preferred equity or equity or preference share capital of a Person,including, without limitation, partnership interests and limited liabilitycompany interests.

 

“EquityOwner”  With respect to any Person,another Person holding Equity Interests in such first Person.

 

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“Equity Pledge Agreement” The Equity Pledge Agreement to be entered into by Holdings and theAdministrative Agent in its capacity as the Collateral Agent by which Holdingspledges all of the Equity Interests in the Borrower.

 

“ERISA”  The Employee Retirement Income Security Actof 1974 of the United States, as amended from time to time, and the regulationspromulgated, and any publicly available rulings issued, thereunder.

 

“ERISA Affiliate” As applied to any person (as defined in Section 3(9) ofERISA), means (i) any corporation that is a member of a controlled groupof corporations within the meaning of Section 414(b) of the InternalRevenue 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 businessunder common control within the meaning of Section 414(c) of theInternal Revenue Code or Section 4001(b) of ERISA of which thatperson is a member, (iii) any member of an affiliated service group withinthe meaning of Section 414(m) and (o) of the Internal RevenueCode of which that person, any corporation described in clause (i) aboveor any trade or business described in clause (ii) above is a member.

 

“ERISAEvent” means (a) a reportable event as defined in Section 4043 ofERISA and the regulations issued under such Section with respect to aPension Plan, excluding, however, such events as to which the PBGC byregulation has waived the requirement of Section 4043(a) of ERISAthat it be notified within 30 days of the occurrence of such event; (b) theapplicability of the requirements of Section 4043(b) of ERISA withrespect 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 occurwith respect to such plan within the following 30 days; (c) a withdrawalby the Borrower or an ERISA Affiliate from a Pension Plan or the termination ofany Pension Plan resulting in liability under Sections 4063 or 4064 ofERISA; (d) the withdrawal of the Borrower or an ERISA Affiliate in acomplete or partial withdrawal (within the meaning of Sections 4203 and4205 of ERISA) from any Multiemployer Plan if there is any potential liabilitytherefore, or the receipt by the Borrower or an ERISA Affiliate of notice fromany Multiemployer Plan that it is in reorganization or insolvency pursuant toSections 4241 or 4245 of ERISA, (e) the filing of a notice of intentto terminate, the treatment of a plan amendment as a termination underSections 4041 or 4041A of ERISA, or the commencement of proceedings by thePBGC to terminate a Pension Plan or Multiemployer Plan; (f) the impositionof liability on the Borrower or an ERISA Affiliate pursuant to Sections 4062(e) or4069 of ERISA or by reason of the application of Section 4212(c) ofERISA; (g) the failure by the Borrower or an ERISA Affiliate to make anyrequired contribution to a Pension Plan, or the failure to meet the minimumfunding standard of Section 412 of the Internal Revenue Code with respectto any Pension Plan (whether or not waived in accordance with Section 412(d) ofthe Internal Revenue Code) or the failure to make by its due date a requiredinstallment under Section 412(m) of the Internal Revenue Code withrespect to any Pension Plan or the failure to make any required contribution toa Multiemployer Plan; (h) an event or condition which might reasonably beexpected to constitute grounds under Section 4042 of ERISA for thetermination of, or the appointment of a trustee to administer, any Pension Planor Multiemployer Plan; (i) the imposition of any material liability underTitle I or Title IV of ERISA, other than PBGC premiums due but notdelinquent under Section 4007 of ERISA, upon the Borrower or an ERISAAffiliate; (j) an application for a funding waiver under Section 303of ERISA or an extension of any amortization period pursuant 

 

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toSection 412 of the Internal Revenue Code with respect to any PensionPlan;  (k) the imposition of anylien on any of the rights, properties or assets of the Borrower or an ERISAAffiliate, in either case pursuant to Title I or IV of ERISA or toSections 401(a)(29) or 412 of the Internal Revenue Code; (l) themaking of any amendment to any Pension Plan that could directly result in theimposition of a lien or the posting of a bond or other security; (m) theoccurrence of a nonexempt prohibited transaction (within the meaning of Section 4975of the IRC or Section 406 of ERISA) involving the assets of a PensionPlan; or (n) the final determination that a Qualified Plan’s qualificationor tax exempt status should be revoked.

 

“Eventof Default”  Any of the eventsdescribed in Section 8.1 of the CommonAgreement.

 

“Eventof Default Notice”  A written noticeto the Collateral Agent from the Loan Servicer stating that an Event of Defaulthas occurred.

 

“Eventof Force Majeure”  Any event,circumstance or condition in the nature of force majeure that would entitle any Project Participantto any abatement, postponement, or other relief from any of its contractualobligations under any Project Document to which such Person is party, includingwith respect to FFB an “Uncontrollable Cause” as defined in the FFB NotePurchase Agreement.

 

“Event of Loss”  Any eventthat causes any portion of the Project or any other property of the Borrower tobe damaged, destroyed or rendered unfit for normal use for any reasonwhatsoever, including without limitation through a failure of title or any lossof such property.

 

“FERC”  The Federal EnergyRegulatory Commission.

 

“FFB” The Federal Financing Bank, a body corporate andinstrumentality of the United States of America.

 

“FFBAdvance Request”  A request for anAdvance delivered to FFB pursuant to the FFB Note Purchase Agreement.

 

“FFBAdvance Request Approval Notice”  An “AdvanceRequest Approval Notice” as defined in the FFB Note Purchase Agreement, signedby DOE.

 

“FFBFunding Documents”  The FFB ProgramFinancing Agreement, the FFB Note Purchase Agreement, the FFB Promissory Note,the DOE Guarantee, and all other documents, certificates and instrumentsrequired to be delivered in connection with any of the foregoing documents.

 

“FFBLoans”  The loans made by FFBpursuant to the FFB Funding Documents.

 

“FFBLoan Transfer”  Any transfer pursuantto the FFB Note Purchase Agreement of all or any part of the promissory noteevidencing the FFB Loans.

 

“FFBNote Purchase Agreement”  The NotePurchase Agreement dated as of the Common Agreement Date, among the Borrower,FFB, and DOE.

 

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“FFBProgram Financing Agreement”  TheProgram Financing Agreement, dated as of September 2, 2009, between FFBand DOE.

 

“FFBPromissory Note”  The Promissory Noteto be entered into by the Borrower in favor of FFB and guaranteed by DOE.

 

“FinalAdvance Date”  The “Last Day for anAdvance” as set forth in the DOE Credit Facility Documents.

 

“FinancialClosing Date”  August 6, 2010.

 

“FinancialOfficer”  With respect to any Person,General Manager, any director, the chief financial officer, the Controller, theTreasurer or any Assistant Treasurer, any Vice President-Finance or anyAssistant Vice President-Finance or any other Vice President or Assistant VicePresident with significant responsibility for the financial affairs of suchPerson.

 

“FinancialOfficer Certificate”  A certificateexecuted by an Financial Officer of the Borrower or the Sponsor, as the case may be, that is(i) with respect to any certificate delivered pursuant to Section 4.1of the Common Agreement, dated as of the Financial Closing Date andsubstantially in the form attached as Exhibit I to the Common Agreement,(ii) delivered as a condition precedent to Project Completion, or(iii) with respect to any other certification to be made by a FinancialOfficer pursuant to any Loan Document, addressing such matters as are specifiedin such Loan Document.

 

“FinancialPlan”  The Financial Plan attached asExhibit A1 to the Common Agreement, as amended from time to timewith the written consent of the Loan Servicer, setting forth all sources offunds needed to pay Total Project Costs, including DOE-Guaranteed Loans, BaseEquity and Overrun Equity, contingent liabilities and letters of credit.

 

“FinancialStatements”  With respect to anyPerson, such Person’s quarterly or annual balance sheet and statements ofincome, retained earnings, and sources and application of funds for such fiscalperiod, together with all notes thereto and with comparable figures for thecorresponding period of its previous fiscal period, each prepared in Dollarsand in accordance with GAAP (except for the absence of footnotes and normal year-endadjustments in the case of unaudited financial statements), it being agreedthat for purposes of the Loan Documents (i) the Financial Statements ofthe Sponsor shall be prepared on a consolidated basis (including the Borrowerand Holdings), (ii) separate Financial Statements of the Borrower shall beprepared and delivered, and (iii) separate Financial Statements ofHoldings shall not be prepared.

 

“FirstPrincipal Payment Date”  September 15,2012.

 

“FiscalYear”  The accounting year of theBorrower beginning on and including the Sunday nearest December 31 andending on and including the Saturday nearest to the following December 31.

 

“FlywheelRepair Agreement”  The Agreement forRepair and/or Replacement of Flywheel Installation Assemblies dated as of theCommon Agreement Date between the Sponsor and the Borrower.

 

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“ForeignAsset Control Regulations”  TheUnited States Trading with the Enemy Act, as amended, or any of the foreignassets control regulations of the United States Treasury Department (31 C.F.R.Subtitle B, Chapter V, as amended), or any ruling issued thereunder or anyenabling legislation or Presidential Executive Order granting authoritytherefore.

 

“GAAP”  Generally accepted accounting principles inthe United States of America in effect from time to time including, whereappropriate, generally accepted auditing standards, including withoutlimitation the pronouncements and interpretations of appropriate accountancyadministrative bodies (including without limitation the Financial AccountingStandards Board and any predecessor and successor thereto), applied on aconsistent basis both as to classification of item and amounts, it beingunderstood that unaudited financial statements will not include footnotes andwill be subject to normal year-end adjustments.

 

“GovernmentalApproval”  Any approval, consent,authorization, license, permit, order, certificate, qualification, waiver,exemption, or variance, or any other action of a similar nature, of or by aGovernmental Authority, including without limitation any of the foregoing thatare or may be deemed given or withheld by failure to act within a specifiedtime period.

 

“GovernmentalAuthority”  Any federal, state,county, municipal, or regional authority, or any other entity of a similarnature, including, without limitation, NYISO, exercising any executive,legislative, judicial, regulatory, or administrative function of government.

 

“GovernmentalJudgment”  With respect to anyPerson, any judgment, order, decision, or decree, or any action of a similarnature, of or by a Governmental Authority having jurisdiction over such Personor any of its properties.

 

“GovernmentalRegistration”  Any registration,filing, declaration or notice, or any other action of a similar nature, with orto a Governmental Authority having jurisdiction over the Borrower or any of itsproperties.

 

“GovernmentalRule”  With respect to any Person,any statute, law, rule, regulation, code, or ordinance of a GovernmentalAuthority having jurisdiction over such Person or any of its properties,including any requirement related to any Governmental Registration.

 

“HazardousSubstance”  Any hazardous or toxicsubstances, chemicals, materials, pollutants or wastes defined, listed,classified or regulated as such in or under any Environmental Laws, includingwithout limitation (i) any petroleum or petroleum products (includingwithout limitation gasoline, crude oil or any fraction thereof), flammableexplosives, radioactive materials, asbestos in any form that is or could becomefriable, urea formaldehyde foam insulation and polychlorinated biphenyls;(ii) any chemicals, materials or substances defined as or included in thedefinition of “hazardous substances,” “hazardous wastes,” “extremely hazardouswastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,”“contaminants” or “pollutants,” or words of similar import, under anyapplicable Environmental Law; and (iii) any other chemical, material orsubstance, import, storage, transport, use or disposal of, or exposure to orRelease of which is prohibited, limited or otherwise regulated under anyEnvironmental Law.

 

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“HedgingAgreement”  Any agreement or instrument(including without limitation a cap, swap, collar, option, forward purchaseagreement or other similar derivative instrument) relating to the hedging ofany interest under any Indebtedness.

 

“Holdings”  Stephentown Holding LLC, a Delaware limited liabilitycompany.

 

“Improvements”  The buildings, fixtures and otherimprovements to be situated on the Project Site.

 

“Indebtedness”  At any date, all or any liabilities,obligations and reserves, contingent or otherwise, which, in accordance withGAAP, would be reflected as a liability on a balance sheet, including withoutlimitation:

 

(i)                                     any obligationof the Borrower for borrowed money or arising out of any credit facility;

 

(ii)                                  any obligationof the Borrower evidenced by bonds, debentures, notes or other similarinstruments;

 

(iii)                               any obligationof the Borrower to pay the deferred purchase price of property or services(other than amounts due to trade creditors and accrued expenses, in each casearising in the ordinary course of business and on terms reasonable andcustomary for the industry, unless such amounts and expense are accrued andunpaid for more than ninety days);

 

(iv)                              any obligationof the Borrower under conditional sales or other title retention agreements;

 

(v)                                 the netaggregate rentals under any lease by the Borrower as lessee that under GAAPwould be capitalized on the books of the lessee or is the substantialequivalent of the financing of the property so leased;

 

(vi)                              any obligationof the Borrower to purchase securities or other property which arises out of orin connection with the sale of the same or substantially similar securities orproperty;

 

(vii)                           any obligationof the Borrower secured by any lien upon property of the Borrower;

 

(viii)                        anyIndebtedness of others secured by a lien on any assets of the Borrower; and

 

(ix)                                anyIndebtedness of others guaranteed, directly or indirectly by the Borrower.

 

“Indebtednessfor Borrowed Money”  As to anyPerson, without duplication, (i) all indebtedness (including principal,interest, fees, and charges) of such Person for borrowed money or for thedeferred purchase price of property or services (other than any deferral(x) in connection with the provision of credit in the ordinary course ofbusiness by any trade creditor or utility or (y) of any amounts payableunder the Project Documents) or (ii) the aggregate amount required to becapitalized under any Capital Lease under which such Person is the lessee.

 

“IndemnifiedPerson”  As defined in Section 13.17of the Common Agreement.

 

“Indemnity Claims”  Asdefined in Section 13.17 of the Common Agreement.

 

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“IndependentConsultants”  Collectively the Lender’sEngineer, Nixon Peabody LLP as legal counsel to DOE, the Insurance Advisor andany other advisor or consultant retained by the Credit Parties with the consentof the Borrower, not to be unreasonably withheld.

 

“IneligibleBase Project Costs”  The portion ofBase Project Costs that are Ineligible Project Costs, estimated as of theCommon Agreement Date to be zero.

 

“IneligibleProject Costs”  Those portions ofProject Costs that are not Eligible Project Costs, including Ineligible BaseProject Costs and Overrun Project Costs.

 

“InitialAdvance” means the initial Advance under the DOE Credit Facility.

 

“InitialAdvance Date”  The date on which theInitial Advance is made following confirmation by each applicable Credit Partythat the conditions precedent to the initial Advance under the Common Agreementhave been satisfied.

 

“InitialConditions Precedent”  As defined in Section 4.1of the Common Agreement.

 

“InsolvencyProceedings”  Any bankruptcy,insolvency, liquidation, company reorganization, restructuring, controlledmanagement, suspension of payments, scheme of arrangement, appointment ofprovisional liquidator, receiver or administrative receiver, notification,resolution, or petition for winding up or similar proceeding, under anyapplicable law, in any jurisdiction and whether voluntary or involuntary.

 

“InsuranceAdvisor”  Marsh USA Inc., acting asinsurance advisor for the Loan Servicer, or any successor insurance advisor orexpert appointed by the Loan Servicer.

 

“InsuranceAdvisor Certificate”  A certificateexecuted by an Authorized Official of the Insurance Advisor that is(i) with respect to any certificate delivered pursuant to Section 4.1of the Common Agreement, dated as of the Financial Closing Date, or(ii) delivered as a condition precedent to Physical Completion or ProjectCompletion, or (iii) with respect to any other certification to be made bythe Insurance Advisor pursuant to any Loan Document, addressing such matters asare specified in such Loan Document.

 

“InsuranceConsultant”  Risk Solutions, Inc.,acting as insurance consultant for the Borrower, or any successor insuranceconsultant or expert appointed by the Borrower with the consent of the LoanServicer.

 

“InsuranceConsultant Certificate”  Acertificate executed by an Authorized Official of the Insurance Consultant thatis (i) with respect to any certificate delivered pursuant to Section 4.1of the Common Agreement, dated as of the Financial Closing Date andsubstantially in the form attached as Exhibit F1 to the CommonAgreement, (ii) with respect to any certificate delivered pursuant to Section 4.2of the Common Agreement, dated as of the Advance Notice Date and substantiallyin the form attached as Exhibit F2 to the Common Agreement, or(iii) delivered as a condition precedent to Physical Completion or ProjectCompletion, or (iv) with respect to any other certification to be made bythe Insurance Consultant pursuant to any Loan Document, addressing such mattersas are specified in such Loan Document.

 

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“Intellectual Property Rights” Any and all rights in, arising out of, or associated with the following,whether now or hereafter existing, created, acquired or held: (i) allU.S., international and foreign patents and patent applications and allreissues, divisions, renewals, extensions, provisionals, continuations andcontinuations-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 copyrightregistration, renewals and extensions thereof, and all other rightscorresponding thereto throughout the world; (iv) all mask work rights,mask work registrations and applications therefor, and any equivalent orsimilar rights in semiconductor masks, layouts, architectures or topology; (v) allrights in industrial designs and any registrations and applications thereforthroughout the world; (vi) all rights to trade names, logos, trademarksand service marks, including registered trademarks and service marks and allapplications to register trademarks and service marks throughout the world;(vii) all rights to any databases and data collections throughout theworld; (viii) all moral and economic rights of authors and inventors,however denominated, throughout the world; and (ix) any similar orequivalent rights to any of the foregoing anywhere in the world.

 

“Intended Prepayment Date” The date specified in a Prepayment Election Notice on which the Borrowerintends to prepay all or part of a DOE-Guaranteed Loan in accordance with theterms of the Common Agreement and the DOE Credit Facility Documents.

 

“IntercompanyProject Documents”  Each agreementbetween the Borrower and the Sponsor or any Sponsor Affiliate, includingwithout limitation the EPC Agreement, the Technology License Agreement, theTechnology Escrow Agreement, the O&M Agreement, the Administrative ServicesAgreement, the Permitting and Engineering Management Agreement and the FlywheelRepair Agreement.

 

“InterconnectionAgreement” The Agreement providing for interconnection of the Project tothe electric transmission system.

 

“InterestDuring Construction”  Interestaccruing under the DOE Credit Facility, for the period from the Initial AdvanceDate to the end of the final Availability Period under the DOE Credit FacilityDocuments.

 

“InternalRevenue Code”  The United StatesInternal Revenue Code of 1986, as amended from time to time, and theregulations promulgated and rulings issued thereunder.  Section references to the InternalRevenue Code are to the Internal Revenue Code as in effect at the CommonAgreement Date and any subsequent provisions of the Internal Revenue Code,amendatory thereof, supplemental thereto or substituted therefor.

 

“Investment”  For any Person: (i) the acquisition(whether for cash, property, services or securities or otherwise) or holding ofEquity Interests, bonds, notes, debentures, partnership or other ownershipinterests or other securities of or in any other Person; (ii) the makingof any deposit with, or advance, loan or other extension of credit to, anyother Person or any guarantee of, or other Contingent Obligation with respectto, any Indebtedness or other liability of any other Person and (withoutduplication) any amount committed to be advanced, lent or extended to any otherPerson; and (iii) the acquisition of any similar property, right orinterest of or in any other Person.

 

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“InvestmentCompany Act”  The United StatesInvestment Company Act of 1940, as amended from time to time.

 

“Know”or “Known”  To have or havingKnowledge.

 

“Knowledge”  With respect to any Person, the actualknowledge of the Principal Persons or any knowledge which should have beenobtained by any of the Principal Persons upon reasonable investigation andinquiry.

 

“Land Documents”  Asdefined in Section 4.1.2(a) of the Common Agreement.

 

“LateCharge”  Interest on any OverdueAmount calculated at the Late Charge Rate in accordance with the DOE CreditFacility Documents.

 

“LateCharge Rate”  As defined in the FFBPromissory Note.

 

“Lease”  Any agreement that would be characterizedunder GAAP as an operating lease.

 

“Lender’sEngineer”  [*****], or any replacementengineering advisor designated by DOE.

 

“Lender’sEngineer Advisory Agreement”  Thematching order between DOE and Lender’s Engineer.

 

“Lender’sEngineer Certificate”  A certificateexecuted by an Authorized Official of the Lender’s Engineer that is(i) with respect to any certificate delivered pursuant to Section 4.1of the Common Agreement, dated as of the Financial Closing Date andsubstantially in the form attached as Exhibit D1 to the CommonAgreement, (ii) with respect to any certificate delivered pursuant to Section 4.2of the Common Agreement, dated as of the Advance Notice Date and substantiallyin the form attached as Exhibit D2 to the Common Agreement,(iii) delivered as a condition precedent to Project Completion, or(iv) with respect to any other certification to be made by the Lender’sEngineer pursuant to any Loan Document, addressing such matters as arespecified in such Loan Document.

 

“Lender’sEngineer Report”  A report or reportsof the Lender’s Engineer delivered (i) on or before the Initial AdvanceDate, as to matters set forth in Section 4.1.14 of the Common Agreement, and(ii) on or before the Project Completion Date as to matters set forth inthe definition of Project Completion.

 

“LeverageRatio” means total Indebtedness divided by Total Capitalization.

 

“Lien”  Any lien (statutory or other), pledge,mortgage, charge, security interest, deed of trust, assignment, hypothecation,title retention, fiduciary transfer, deposit arrangement, easement, encumbranceor preference, priority or other security agreement or preferential arrangementof 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 asthe interest of a vendor or lessor under any conditional sale agreement,Capital Lease or other title retention agreement relating to such asset,(including without limitation any conditional sale or other title retentionagreement, any Capital Lease having substantially the same economic effect asany of 

 

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theforegoing, or any preferential arrangement having the practical effect ofconstituting a security interest with respect to the payment of any obligationwith, or from the proceeds of, any asset or revenue of any kind).

 

“LoanDocuments”  The Common Agreement, theDOE Credit Facility Documents, the Sponsor Loan Documents, the SecurityDocuments, and any documents and agreements delivered in connection therewith that are agreed in writing by the LoanServicer and the Borrower to be Loan Documents, but in all cases excluding anyProject Documents.

 

“Loan Servicer”  DOE,acting through its Loan Guarantee Program Office as Loan Servicer in accordancewith the terms of the Common Agreement.

 

“Loss Proceeds”  Allproceeds (other than any proceeds of business interruption insurance, advanceloss of profit insurance, and proceeds covering liability of the Borrower tothird parties) resulting from a Event of Loss, as remain after payment of all costsand expenses (including reasonable attorneys’ fees) incurred in collecting suchproceeds.

 

“Loss Proceeds Account” The Project Account created under clause (iii) of Section A.1(a) ofAppendix A to the Common Agreement.

 

“Maintenance Reserve Account”  The Project Account created under clause (viii) ofSection A.1(a) of Appendix A to the Common Agreement.

 

“MajorProject Participant”  The Borrower,the Sponsor and the Operator.

 

“MajorProject Participant Certificate”  Acertificate executed by an Authorized Official of the applicable Major ProjectParticipant that is (i) with respect to any certificate delivered pursuantto Section 4.1 of the Common Agreement, dated as of the FinancialClosing Date and substantially in the form attached as Exhibit H tothe Common Agreement, or (ii) delivered as a condition precedent toPhysical Completion or Project Completion, or (iii) with respect to anyother certification to be made by a Major Project Participant pursuant to anyLoan Document, addressing such matters as are specified in such Loan Document.

 

“MasterAdvance Notice”  A request for anAdvance and/or an Equity Advance delivered by the Borrower pursuant to Section 2.3.1 of the Common Agreement, substantially in the form attached as Exhibit Mto the Common Agreement.

 

“MaterialAdverse Effect”  As of any date ofdetermination, a material and adverse effect on (i) the Project,(ii) the ability of the Borrower or any other Major Project Participant,to observe and perform its material obligations in a timely manner under anyTransaction Documents to which it is a party; (iii) the business,financial condition or results of operations of the Borrower or any other MajorProject Participant; (iv) the validity or enforceability of any materialprovision of any Transaction Document; (v) any material right or remedy ofDOE under the Transaction Documents; or (vi) except to the extent causedby any act or omission of any Credit Party, the security or Lien of the SecuredParties on any of the Collateral Security under any Security Document.

 

“MaturityDate”  June 15, 2030.

 

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“Mortgage”The Building Loan Mortgage and the Project Loan Mortgage, collectively.

 

“Moody’s”  Moody’s Investors Service, Inc., so longas it is a Rating Agency.

 

“MRARequired Amount” An amount projected to be equal to six months of plantmaintenance and fixed operating costs, to be verified by DOE in consultationwith the Lender’s Engineer.  The initialMRA Required Amount is currently anticipated to be $559,362 for the initialyear of Project operation and shall be recalculated by the Borrower (subject toverification by DOE in consultation with the Lender’s Engineer) prior to thebeginning of each Fiscal Year.

 

“MultiemployerPlan” means a “multiemployer plan” (within the meaning ofSection 3(37) of ERISA) which the Borrower or any ERISA Affiliatecontributes to or participates in, or with respect to which the Borrower or anyERISA Affiliate has any material liability or other obligation (whether accrued,absolute, contingent orotherwise).

 

“NetIncome” means for any period, the net income (or loss) of the Borrower forsuch period, as determined in accordance with GAAP, provided, that there shallbe excluded in such determination.

 

(i)                                     any aggregatenet gain or net loss during such period arising from the sale, conversion,exchange, or other disposition of capital assets;

 

(ii)                                  any gain orlosses resulting from the write-up of any assets;

 

(iii)                               any net gain ornet loss arising from the extinguishment, under GAAP, of any Indebtedness ofthe Borrower; and

 

(iv)                              any net income,gain or loss during such period resulting from (A) any extraordinaryitems, or (B) any discontinued operations or the disposition thereof.

 

“NYISO”means The New York Independent System Operator.

 

“NYISOMembership Agreement” The agreement between the Borrower and NYISO formembership of the Borrower in NYISO.

 

“O&MAgreement”  The Operations andMaintenance Agreement dated as of the Common Agreement Date between theOperator and the Borrower.

 

“OFAC”  means the Office of Foreign Assets Control ofthe United States Department of the Treasury.

 

“OMB”  The Office of Management and Budget of theExecutive Office of the President of the U.S.

 

“OperatingBudget”  As defined in Section 6.1(m) ofthe Common Agreement.

 

“Operating Costs”  For anyperiod with respect to which such Operating Costs are being calculated, allamounts paid (or projected to be paid) for the administration, management, andoperation and maintenance of the Project, including without limitation:  (i) amounts payable under 

 

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theO&M Agreement and the Administrative Services Agreement (excluding BaseFees); (ii) premiums and other costs related to the maintenance ofRequired Insurance; and (iii) taxes. Operating Costs shall be limited to actual third party costs incurredand shall not include any payments to Borrower, Sponsor or any Affiliatethereof, other than to reimburse such entities for costs paid to third partiespursuant to the terms of any of the Project Documents.

 

“Operating Disbursement Account” The Project Account created under clause (v) of Section A.1(a) ofAppendix A to the Common Agreement.

 

“OperatingDocuments”  As defined in Section 4.1.2(c) ofthe Common Agreement.

 

“Operating Forecast”  Theperiodic forecast prepared by the Borrower (on an aggregate and month-by-monthbasis) in connection with the operation of the Project, and delivered from timeto time pursuant to Section 6.1(j)(ii) of the CommonAgreement, which (i) shall be the Borrower’s good faith projections atsuch time taking into account all facts and circumstances then existing andassumptions believed by the Borrower to be reasonable on the date made,reasonable estimates of all Operating Revenues reasonably expected to bereceived and all Operating Costs (by category) and Capital Expendituresreasonably expected to be incurred, (ii) shall reflect Debt Service dueduring each period, and pro forma Cash Available for Debt Service projectionsfor each period, (iii) shall include such other information as may bereasonably requested by the Loan Servicer or the Lender’s Engineer, and(iv) shall be prepared on a basis consistent from period to period, andconsistent with the Operating Plan, in sufficient detail to permit meaningfulcomparisons, and shall include a statement of the assumptions on which it isbased.

 

“OperatingPeriod”  The period from the PhysicalCompletion Date to the date on which the Secured Obligations are repaid in full.

 

“OperatingPlan”  The periodic operating planfor the Project prepared by the Borrower in connection with the operation ofthe Project, and delivered from time to time pursuant to Section 6.1(j)(ii) ofthe Common Agreement which (i) shall describe the Project’s operating planfor the relevant period, (ii) shall summarize changes in the Project’smaintenance plan in accordance with the Reference Database and the O&MAgreement, including the Project’s program for spare parts, inventorymanagement, supply management, (iii) shall include such other informationas may be reasonably requested by the Loan Servicer or the Lender’s Engineer,and (iv) shall be prepared on a basis consistent from period to period,and consistent with the Operating Forecast, in sufficient detail to permitmeaningful comparisons, and include a statement of the assumptions on which itis based.

 

“OperatingRevenues”  All revenues, receipts andearnings of the Borrower from all sources, including, without limitation,revenues from:  (i) sales of anygoods or services provided at or by the Project or from other locations,including payments for energy, capacity and frequency regulation services;(ii) renewable energy credits; (iii)  proceeds from businessinterruption insurance policies; (iv) proceeds from delay in start-upinsurance policies; and (v) delay liquidated damages payable under anyConstruction Contract; provided, however, that Operating Revenues shallnot include proceeds (x) from casualty and event of loss insurance;(y) that are subject to a mandatory prepayment pursuant to Section 3.4.3of the Common Agreement; and (z) from any Permitted Subordinated Loans.

 

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“Operator”The Sponsor, or any replacement operator of the Project Facility as permittedunder the O&M Agreement and approved by the Loan Servicer and the Lender’sEngineer.

 

“OrganizationalDocuments”  With respect to anyPerson, its charter, articles of incorporation and by-laws, memorandum andarticles of association, statute, partnership agreement, limited liabilitycompany agreement or similar instruments that are required to be registered orlodged in the place of organization of such Person and that establish the legal personality of such Person.

 

“OverdueAmount”  Any amount owing under theFFB Promissory Note that is not paid when and as due.

 

“OvernightInvestment”  A U.S. bank money marketdeposit account.

 

“Overrun Contingencies” The line item for “Overrun Contingency” included in the Financial Plan,in the amount of [*****].

 

“Overrun Equity”  Theequity required to be contributed by the Sponsor to the Borrower in excess ofthe Base Equity and applied to Total Project Costs.

 

“OverrunEquity Account”  The Project Accountcreated under clause (ii) of Section A.1(a) of AppendixA to the Common Agreement.

 

“OverrunEquity Commitment”  The obligation ofthe Borrower and the Sponsor to fund all Overrun Project Costs and costs ofdesign, engineering, startup, commissioning and shakedown, until the ProjectCompletion Date, funded as set forth in the Common Agreement.

 

“Overrun Project Costs” All Total Project Costs in excess of Base Project Costs , whether Eligible Project Costs or IneligibleProject Costs, and including (i) costs associated with the design,engineering, financing, construction, startup, commissioning and shakedown ofthe Project, (ii) shortfalls from anticipated revenues, increases fromanticipated costs, changes in intercompany payment amounts, and other workingcapital needs of the Borrower prior to Project Completion, (iii) amountsarising from timing differences in disbursement of cash to pay expenses andreceipt of cash associated with revenues prior to Project Completion, and(iv) any other amounts required to achieve Project Completion or otherwiseincurred prior to the Project Completion Date, to be funded(x) first, from Overrun Contingencies, and (y) thereafter, withrespect to all Cost Overruns in excess of the amount of Overrun Contingencies,from Overrun Equity.

 

“Parent Holdco”  A holdingcompany owned by the Sponsor and one or more Equity Owners and owning 100% ofthe issued and outstanding Equity Interests of Holdings.

 

“Patriot Act”  The Unitingand Strengthening America by Providing Appropriate Tools Required to Interceptand Obstruct Terrorism Act of 2001 (Pub. L. 107-56), as amended, and allregulations promulgated thereunder.

 

“PaymentDate”  Each Principal Payment Dateand each Quarterly Payment Date.

 

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“PBGC”means the Pension Benefit Guaranty Corporation or any entity succeeding to anyor all of its functions under ERISA.

 

“PensionPlan” means an employee benefit plan (as defined in Section 3(3) ofERISA) other than a Multiemployer Plan (i) that is or was at any timemaintained or sponsored by the Borrower or any ERISA Affiliate or to which theBorrower or any ERISA Affiliate has ever made, or was obligated to make,contributions, and (ii) that is or was subject to Section 412 of theInternal Revenue Code, Section 302 of ERISA or Title IV of ERISA

 

“PeriodicExpenses”  All of the followingamounts from time to time due under or in connection with the LoanDocuments:  (i) all recordation andother costs, fees and charges payable to third parties in connection with theexecution, delivery, filing, registration, or performance of the TransactionDocuments or the perfection of the security interests in the CollateralSecurity, (ii) all fees charges, and expenses of any IndependentConsultants, legal counsel, accountants, and other advisors to the CreditParties, (iii) all fees, charges and expenses of the Administrative Agentin all of its capacities, and (iv) all other fees, charges, expenses andother amounts from time to time due under or in connection with the LoanDocuments.

 

“PermittedInvestments”  (i) Directobligations of the United States of America (including obligations issued orheld in book-entry form on the books of the Department of the Treasury of theUnited States of America) or obligations, the timely payment of principal andinterest of which is fully guaranteed by the United States of America maturingnot more than 180 days from the date of the creation thereof;(ii) obligations, debentures, notes or other evidence of Indebtednessissued or guaranteed by any agency or instrumentality of the United Statesmaturing not more then 180 days from the date of the creation thereof;(iii) interest-bearing demand or time deposits (including certificates ofdeposit) that are held in banks witha general obligation rating of not less than BBB- by S&P or the equivalentrating by Moody’s, or if not so rated, secured at all times, in the manner andto the extent provided by law, by collateral security described in clauses (i) or(ii) of this definition, of a market value of no less than the amount ofmoneys so invested maturing not more than 180 days from the date of thecreation thereof; (iv) commercial paper rated (on the date of acquisitionthereof) at least A-1 or P-1 or equivalent by S&P or Moody’s, respectively(or an equivalent rating by another nationally recognized credit rating agencyof similar standing if neither of such corporations is then in the business ofrating commercial paper), maturing not more than 90 days from the date ofcreation thereof; (v) money market funds, so long as such funds are ratedAaa by Moody’s and AAA by S&P, and (vi) any advances, loans orextensions of credit or any stock, bonds, notes, debentures or other securitiesas the Loan Servicer, acting pursuant to the Common Agreement, may from time totime approve.

 

“PermittedLiens”  (i) The rights andinterests of the Secured Parties as provided in the Transaction Documents;(ii) Liens for any tax, assessment or other governmental charge not yetdue, or being diligently contested in good faith and by appropriate proceedingstimely instituted, so long as (A) such proceedings shall not involve anydanger of the sale, forfeiture or loss of the Project, or any easements, as thecase may be, title thereto or any interest therein and shall not interfere withthe use or disposition of the Project or any easements; (B) such tax,assessment or other governmental charge is not more than 60 days delinquent;and (C) a bond, adequate reserves or other security acceptable to the LoanServicer has been posted or provided in such manner and amount as to assure DOEthat any taxes, assessments or other charges determined to

 

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bedue will promptly be paid in full when such contest is determined;(iii) Liens in favor of materialmen, workers or repairmen, or other likeLiens arising in the ordinary course of business or in connection with theconstruction of the Project, either for amounts not yet due or for amountsbeing diligently contested in good faith and by appropriate proceedings timelyinstituted so long as (x) such proceedings shall not involve any danger ofthe sale, forfeiture or loss of any part of the Project, or any easements, asthe case may be, title thereto or any interest therein and shall not interferewith the use or disposition of the Project, or any easements, and (y) abond or other security acceptable to the Loan Servicer has been posted orprovided in such manner and amount as to assure DOE that any amounts determinedto be due will promptly be paid in full when such contest is determined;(iv) Liens identified in the ALTA Survey; (v) zoning, entitlement,building and other land use regulations imposed by Governmental Authoritieshaving jurisdiction over the Project Site which do not and will not materiallyimpair the use, development or operation by Borrower of the Project Site forits intended purpose; (vi) covenants, conditions, restrictions, easementsand other similar matters of record as of the Financial Closing Date affectingtitle to the Project Site, which do not and would not reasonably be expected tomaterially impair the use, development or operation by the Borrower of theProject Site for its intended purpose; (vii) any other Lien affecting theProject Site the existence of which does not and would not reasonably beexpected to materially impair the use, development or operation by the Borrowerof the Project Site for its intended purpose; (viii) Liens (not securingIndebtedness) of depository institutions and securities intermediaries (includingrights of set-off or similar rights) with respect to deposit accounts orsecurities accounts; (ix) Liens securing judgments for the payment ofmoney not constituting an Event of Default under Section 8.1(l) orsecuring appeal or other surety bonds related to such judgments;(x) deposits to secure the performance of bids, trade contracts and leases(other than Indebtedness), statutory obligations, surety bonds (other thanbonds related to judgments or litigation), performance bonds and other obligationsof a like nature incurred in the ordinary course of business; and, (xi) onlyif approved in writing by DOE in accordance with Section 7.2, Lienson equipment or personal property to secure Indebtedness (including capitalleases) incurred or assumed by the Borrower for the acquisition of suchequipment or personal property; provided, however, that,notwithstanding the foregoing, Permitted Liens shall not include any Lien onany Pledged Equity Interests.

 

“PermittedSubordinated Loans”  Any subordinatedloans made by the Equity Contributors to the Borrower, on terms and conditionssatisfactory to the Loan Servicer in its sole discretion.

 

“Permittingand Engineering Management Agreement” The Permitting and Engineering Management Agreement between the Borrowerand the Sponsor.

 

“Person”  Any individual,firm, corporation, company, voluntary association, partnership, limitedliability company, joint venture, trust, unincorporated organization,Governmental Authority, committee, department, authority or any other body,incorporated or unincorporated, whether having distinct legal personality ornot.

 

“Physical Completion”  Asset forth in Section 1 of Exhibit A2 to the CommonAgreement.

 

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“Physical Completion Certificate”** **A Borrower Certificate deliveredas a condition precedent to Physical Completion, as required pursuant to Section 1(d) ofExhibit A2 to the Common Agreement.

 

“Physical Completion Date” The date on which all the conditions for Physical Completion have beenmet.

 

“Pledged Equity Interests” The Equity Interests of the Borrower, which are subject to the securityinterests created by the Equity Pledge Agreement.

 

“Post Reserve Account” The Project Account created under clause (x) of Section A.1(a) ofAppendix A to the Common Agreement.

 

“Potential Default”  Anevent that, with the giving ofnotice or passage of time or both, would become an Event of Default.

 

“PrepaymentElection Notice”  Writtennotification delivered by the Borrower of any intended prepayment of all orpart of the DOE-Guaranteed Loans, as specified in the FFB Promissory Note.

 

“PrepaymentAmount” An amount equal to [*****] of any Restricted Payment.

 

“PrepaymentPrice”  With respect to any Advance,the price paid by the Borrower to the Holder for the prepayment of such Advanceas specified in the FFB Promissory Note.

 

“PrincipalPayment Date”  The First PrincipalPayment Date and each Quarterly Payment Date occurring after the FirstPrincipal Payment Date, or in each case if not a Business Day, the nextBusiness Day.

 

“PrincipalPersons”  Any officer, director,owner, key employee or other Person, in each case, with management orsupervisory responsibilities with respect to the Borrower or the Operator, orany other Person (whether or not an employee), who, in each case, has criticalinfluence on or substantive control over the Project.

 

“PrincipalProject Documents”  The LandDocuments, the Construction Contracts, and the Operating Documents.

 

“ProgramRequirements”  (i) the provisionsof Title XVII and the Applicable LoanGuarantee Requirements, and(ii) all DOE and FFB legal and financial requirements, policies,and procedures applicable to the Title XVII program from time to time.

 

“Prohibited Jurisdiction”  Any county or jurisdiction, from time totime, that is subject to sanctions or similar restrictions promulgated oradministered by any Federal Governmental Authority of the United States.

 

“ProhibitedPerson” means any Person:

 

(i) thatis named, or is owned or controlled by, or, where applicable, acting for or onbehalf of, any person or entity that is named on, the most current list of “SpeciallyDesignated 

 

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Nationalsand Blocked Persons” (Appendix A to 31CFR chapter V) as published by OFAC atits official website, http://www.treas.gov/offices/enforcement/ofac/sdn/, or atany replacement website or other replacement official publication of such list(the “SDN List”); or

 

(ii) whois an Affiliate of or affiliated with a Person listed above. Solely for thepurposes of the definition of “Prohibited Person,” “Affiliate” means, withrespect 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 “controlledby” and “under common control with”) means possession, directly or indirectly,of the power to direct or cause the direction of the management or policies ofsuch Person, whether through the ownership of voting securities, by contract,or otherwise.

 

“Project”  The development, design, construction,ownership and operation of a twenty (20) megawatt (MW) flywheel-based frequencyregulation plant designed to enhance grid stabilization and optimization, to belocated in Stephentown, New York.

 

“ProjectAccounts”  As defined in Section A.1(a) ofAppendix A to the Common Agreement.

 

“ProjectBudget”  The Project Budget deliveredby the Borrower to each Credit Party pursuant to Section 4.1.4(iv) ofthe Common Agreement, as amended from time to time in accordance with Section 6.8of the Common Agreement, setting forth Total Project Costs and a detailedbudget (each by category on an aggregate basis) to design, develop, construct,equip and start up the Project through the Project Completion Date (inclusiveof the cost of all Punch List Items) under the Project Documents.

 

“ProjectChange”  As defined in Section 6.8of the Common Agreement.

 

“ProjectCompletion”  As set forth in Section 2of Exhibit A2 to the Common Agreement.

 

“ProjectCompletion Certificate”  A BorrowerCertificate delivered as a condition precedent to Project Completion, asrequired pursuant to Section 2(d) of Exhibit A2 tothe Common Agreement.

 

“ProjectCompletion Date”  The date on whichall the conditions for Project Completion have been met, as certified by DOE inwriting.

 

“ProjectConstruction Contract”  The Statementof Work  20MW Beacon Power Smart EnergyMatrix Stephentown Construction, bearing initial release date ofNovember 16, 2009, together with (a) Purchase Order Number 15500,dated November 20, 2009, from Sponsor to Project Construction Contractorand (b) a certain Standard Form of Agreement between Owner and Contractorfor a Project of Limited Scope to be entered into between Sponsor and ProjectConstruction Contractor as a condition to the Initial Advance.

 

“Project Construction Contractor” [*****], or its successorsapproved by the Loan Servicer in consultation with the Lender’s Engineer.

 

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“ProjectCosts”  All costs incurred by theBorrower to acquire title or use rights to the Project Site and to develop,design, finance, construct, install and equip the Project, including withoutlimitation, (i) amounts payable under the Project Documents;(ii) interest, fees and expenses payable under the DOE Credit Facilityprior to the end of the relevant Availability Period; (iii) principalpayments on the DOE Credit Facility occurring prior to the Project CompletionDate; (iv) costs to acquire title or use rights to the Project Site,necessary easements and other real property interests; (v) costs andexpenses of legal, engineering, accounting, construction management and otheradvisors or Independent Consultants incurred in connection with the Project;(vi) fees, commissions and expenses payable to the Credit Parties at orprior to the Initial Advance Date; (vii) Development Costs to the extentpermitted to be paid under the Loan Documents; (viii)  insurance premiumsfor coverage obtained prior to the Project Completion Date; (ix) theBorrower’s labor costs and general and administration costs; (x) costsincurred under the O&M Agreement and mobilization costs included in theBase Case Projections; and (xi) such other costs or expenses approved bythe Credit Parties after consultation with the Lender’s Engineer and such otherIndependent Consultants as they may deem necessary.

 

“ProjectDocuments”  The Principal ProjectDocuments and the Additional Project Documents.

 

“ProjectFacility”  The Project Site, theImprovements and the Equipment.

 

“Project Facility Performance Targets”  Those Project attributes that are(a) the ability to absorb and discharge at least 20MW of power; and(b) the ability to absorb and discharge at least 5,000 kWh of energy.

 

“ProjectLoan Mortgage” The Project Loan Mortgage and Security Agreement made by theBorrower, as mortgagor, in favor of the Administrative Agent in its capacity asthe Collateral Agent, as mortgagee, to secure the principal amount of$3,239,380 pursuant to which the Borrower grants for the benefit of DOE amortgage encumbering all of its rights to the Project Site and theImprovements.

 

“ProjectMilestone Schedule”  The schedule ofsignificant development and construction milestones delivered in accordancewith Section 4.1.4(iii), as amended from time to time by ApprovedProject Changes.

 

“ProjectParticipant”  Any party to a ProjectDocument and any party to a Loan Document other than the Credit Parties.

 

“Project Plans” Detailed project plans in form and substancesatisfactory to each Relevant Credit Party, consisting of the Project Budgetand the Project Milestone Schedule, as well as the Construction Printsreferenced in Part 5 of Exhibit A of the Technology Escrow Agreementand the Sponsor Technology Escrow Agreement, including, without limitation,updates and supplements to information submitted by the Sponsor or the Borrowerin accordance with Section 4.1.13 of the Common Agreement; provided thatthe review of any portion of the Project Plans, or updates or supplementsthereto, that are held in escrow pursuant to the Technology Escrow Agreement orthe Sponsor Technology Escrow Agreement (the “Escrow Agreements”) 

 

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shall be limited to review by the Consultant (asdefined in the Escrow Agreements) or as otherwise permitted by the EscrowAgreements.

 

“ProjectProgress Report”  A progress reportregarding the construction and installation of the Project prepared monthly bythe Borrower, in form reasonably satisfactory to the Loan Servicer, addressingthe progress of construction and installation of the Project to date and theexpected progress of construction and installation, including OverrunContingencies incurred or reasonably expected to be incurred, any events thathave occurred or are reasonably expected to occur that would materially andadversely affect the Project schedule, along with an explanation of materialdelays from the then existing Project schedule.

 

“ProjectRevenue Account”  The Project Accountcreated under clause (iv) of Section A.1(a) of AppendixA to the Common Agreement.

 

“ProjectSite”  The real property owned by theBorrower located in Stephentown, New York and any other land necessary for theProject Facility.

 

“ProjectedDebt Service Coverage Ratio”  As ofany date of determination for any period, the quotient of: (i) CashAvailable for Debt Service for such period; divided by (ii) the aggregateamount of Debt Service scheduled for such period, in each case based on amountsprojected in the Base Case Projections.

 

“PrudentUtility Practice” shall mean, as to the Project, those practices, methods,equipment, specifications and standards of safety and performance, as the samemay change from time to time, as are commonly used by electric utilityfacilities in the United States of America of a type and size similar to theProject, including similar electrical and mechanical equipment, as good, safeand prudent engineering practices in connection with commissioning, startup,testing, operation, maintenance, repair, improvement and use of electrical andother equipment, facilities and improvements of such electric utilityfacilities, with commensurate standards of safety, performance, dependability,efficiency and economy.  Prudent UtilityPractices does not necessarily mean one particular practice, method, equipmentspecification or standard in all cases, but is instead intended to encompass abroad range of acceptable practices, methods, equipment specifications andstandards.

 

“PublicUtility Holding Company Act” or “PUHCA”  The United States Public Utility HoldingCompany Act of 2005, as amended from time to time.

 

“PunchList Items”  Items listed on theconstruction punchlist that are approved by the Lender’s Engineer.

 

“QualifiedPlan” means an employee benefit plan (as defined in Section 3(3) ofERISA) other than a Multiemployer Plan (i) that is or was at any timemaintained or sponsored by the Borrower or any ERISA Affiliate or to which theBorrower or any ERISA Affiliate has ever made, or was ever obligated to make,contributions, and (ii) that is intended to be tax-qualified underSection 401(a) of the Internal Revenue Code.

 

“QuarterlyPayment Date”  Each March 15, June 15, September 15 and December 15, or if not a Business Day, the nextBusiness Day.

 

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“QuarterlyReporting Certificate”  A certificateexecuted by an Authorized Official of the Borrower delivered pursuant to Section 6.1(b) ofthe Common Agreement, substantially in the form attached as Exhibit Oto the Common Agreement.

 

“QuarterlyReporting Package”  The itemsspecified in Section 6.1(b) of the Common Agreement as beingdelivered quarterly under cover of a Quarterly Reporting Certificate.

 

“RatingAgency”  Moody’s or Standard &Poor’s.

 

“RecoveryAct”  The American Recovery andReinvestment Act of 2009, P.L. No. 111-5.

 

“ReferenceDatabase”  As defined in theTechnology License Agreement.

 

“Register”  As defined in Section 13.13of the Common 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, orotherwise entering into the environment.

 

“RelevantCredit Party”  As defined in Section 4.1 of the CommonAgreement.

 

“RemediesInstructions”  Written instructionsto the Collateral Agent from the Loan Servicer directing the Collateral Agentto exercise or refrain from exercising any rights, remedies, powers or privilegeswith respect to the Collateral or otherwise under this Common Agreement or anyother Loan Document to which it is a party.

 

“RequestedAdvance Date”  As defined in the FFBNote Purchase Agreement.

 

“RequiredConsents”  As defined in Section 5.10 of the Common Agreement.

 

“RequiredInsurance”  Insurance coverage forthe Project satisfying the requirements set forth in Schedule 6.3(b) ofthe Common Agreement.

 

“RequiredCredit Parties”  DOE, acting alone.

 

“ReserveLetter of Credit”  An unconditional,irrevocable, direct-pay, letter of credit that is denominated in Dollars, thatis issued in favor of the Administrative Agent in its capacity as theCollateral Agent by a bank or other financial institution acceptable to DOE(any bank or financial institution the long-term senior unsecured indebtednessof which is rated at least “A” or its equivalent by any nationally recognizedstatistical rating organization being deemed acceptable to DOE), and that meetseach of the following requirements and is otherwise in form and substancereasonably satisfactory to each Credit Party:

 

(i)            the initial expiration date thereofshall be at least 12 months beyond the date of issuance, and shallautomatically renew upon its expiration (which renewal period shall be for atleast 12 months) unless, at least 45 days prior to any such expiration,the issuer shall provide the Administrative Agent in its capacity as theCollateral Agent with a notice of non-renewal of such letter of credit;

 

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(ii)           upon any failure to renew suchReserve Letter of Credit at least 30 days prior to such expiration date, or ifthe issuer of such Reserve Letter of Credit shall fail to meet the requirementswith respect thereto the entire face amount thereof shall be drawable by theAdministrative Agent in its capacity as the Collateral Agent (unless theAdministrative Agent in its capacity as the Collateral Agent shall havereceived a replacement letter of credit meeting the conditions herein imposedor amounts shall have been deposited in the applicable Project Account suchthat the amount on deposit therein, when aggregated with the face amountavailable to be drawn under any applicable Reserve Letter of Credit thenoutstanding (other than such Reserve Letter of Credit that is not to be renewedor that no longer meets thecriteria) is equal to the amount required to be on deposit in such ProjectAccount);

 

(iii)          such Reserve Letter of Credit shalladditionally be drawable in all cases in which the Common Agreement providesfor a transfer of funds from the applicable Project Account and there shall beno conditions to any drawing thereunder other than the submission of a drawingrequest substantially in the form attached to such Reserve Letter of Credit;and

 

(iv)          no agreement, instrument or documentexecuted in connection with such Reserve Letter of Credit shall provide theissuer thereof or any other Person with any claim against the Borrower, theAdministrative Agent in its capacity as the Collateral Agent, the Loan Serviceror any other Secured Party, or against any Collateral Security, whether forcosts of maintenance, reimbursement of amounts drawn under such letter ofcredit or otherwise.

 

“RestrictedPayments”  As defined in Section 7.10 of the Common Agreement.

 

“SecuredObligations”  All amounts owing tothe Secured Parties under the Loan Documents, including (i) All loans,advances, debts, liabilities, and obligations, howsoever arising, owed by theBorrower under the DOE Credit Facility or otherwise to the Credit Parties(whether or not evidenced by any note or instrument and whether or not for thepayment of money), direct or indirect, absolute or contingent, due or to becomedue, now existing or hereafter arising, pursuant to any of the TransactionDocuments, including without limitation all interest, fees and PeriodicExpenses chargeable to the Borrower and payable by the Borrower hereunder orthereunder; (ii) any and all sums advanced by any Agent or any otherSecured Party in order to preserve the Collateral Security or preserve theSecured Parties’ security interest in the Collateral Security; and(iii) in the event of any proceeding for the collection or enforcement ofthe obligations after an Event of Default shall have occurred and be continuing,the expenses of retaking, holding, preparing for sale or lease, selling orotherwise disposing of or realizing on the Collateral Security, or of anyexercise by any Credit Party of its rights under the Security Documents,together with any Periodic Expenses, including reasonable attorney’s fees andcourt costs.

 

“SecuredParties”  DOE and the AdministrativeAgent in its capacity as the Collateral Agent, as their respective interestsmay appear.

 

“SecurityAgreement”  The Security Agreementdated as of the Common Agreement Date, between the Borrower and theAdministrative Agent in its capacity as the Collateral Agent.

 

“SecurityDocuments”  As defined in Section 4.1.1(e) ofthe Common Agreement.

 

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“Sponsor”Beacon Power Corporation, a corporation organized and existing under the lawsof the State of Delaware.

 

“SponsorCertificate”  A certificate executedby an Authorized Official of the Sponsor that is (i) with respect to anycertificate delivered pursuant to Section 4.1 of the CommonAgreement, dated as of the Financial Closing Date and substantially in the formattached as Exhibit E1 to the Common Agreement, (ii) withrespect to any certificate delivered pursuant to Section 4.2 of theCommon Agreement, dated as of the Advance Notice Date and substantially in theform attached as Exhibit E2 to the Common Agreement,(iii) delivered as a condition precedent to Physical Completion or ProjectCompletion, or (iv) with respect to any other certification to be made bythe Sponsor pursuant to any Loan Document, addressing such matters as arespecified in such Loan Document.

 

“SponsorIPO”  The closing of the initialpublic offering of the common stock of the Sponsor.

 

“SponsorLoan Documents”  As defined in Section 4.1.1(d) ofthe Common Agreement.

 

“SponsorSublicense”  The sublicense, to beentered into pursuant to the [*****] and Section 4.2.1 of the CommonAgreement, between the Sponsor and the Collateral Agent with respect to theSponsor’s rights to the [*****] under the [*****].

 

“SponsorTechnology Escrow Agreement”  TheSponsor Technology Escrow Agreement dated as of the Common Agreement Date amongthe Sponsor, the Collateral Agent and Escrow Associates, Inc.

 

“SponsorTechnology License Agreement”  TheSponsor Technology License Agreement dated as of the Common Agreement Datebetween the Sponsor, as licensor, and the Collateral Agent, as licensee.

 

“Sponsor’sAccountant”  The firm of independentpublic accountants acting as Borrower’s Accountant, in its capacity asaccountant to the Sponsor.

 

“Standard &Poor’s” or “S&P”  Standard &Poor’s Ratings’ Group, a division of McGraw-Hill Inc., a New York corporation,so long as it is a Rating Agency.

 

“Stockholders’Equity” as defined under GAAP.

 

“SubordinationAgreement”  One or more subordination agreements, ifany, pursuant to which all Indebtedness and certain other payment obligationsfrom the Borrower to the Sponsor are subordinated to the Secured Obligations,and in form and substance satisfactory to each Credit Party.

 

“System ImpactStudy”  The system impact studyevaluating the impact of the proposed interconnection of the Project to theelectric transmission system on the reliability of the electric transmissionsystem.

 

“Technology”  Regardless of form, any invention (whether ornot patentable or reduced to practice), discovery, information, work ofauthorship, articles of manufacture, machines, 

 

A-33

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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 sourcecode, object code, firmware, development tools and application programminginterfaces (APIs), tools, materials, marketing and development plans, and otherforms of technology and all media on which any of the foregoing is recorded.

 

“TechnologyEscrow Agreement”  The TechnologyEscrow Agreement dated as of the Common Agreement Date among the Sponsor,Escrow Associates, Inc. and the Borrower.

 

“TechnologyLicense Agreement”  The TechnologyLicense Agreement dated as of the Common Agreement Date between the Sponsor, aslicensor, and the Borrower, as licensee.

 

“TitleCompany”  [*****]

 

“TitleXVII”  Title XVII of the EnergyPolicy Act of 2005, Pub. L. 109-58, as amended by Section 406 of Div A ofTitle IV of Pub. L. 111-5, as may be amended from time to time.

 

[*****]

 

[*****]

 

[*****]

 

[*****]

 

[*****]

 

“TotalCapitalization” Indebtedness plus Stockholders’ Equity.

 

“TotalFunding Available”  The aggregate ofall funds that are (i) undrawn but committed, or reasonably expected to beavailable, under the DOE Credit Facility and the Base Equity Commitments,(ii) received or receivable delay payments and Loss Proceeds,(iii) amounts standing to the credit of the Project Revenue Account, and(iv) all unused Overrun Equity Commitments and any other unused equityfunding that is committed or reasonably expected to be available.

 

“TotalProject Costs”  The total amount ofProject Costs required for completion of the Project.

 

“TransactionDocuments”  The Project Documents andthe Loan Documents.

 

“UniformCommercial Code”  The UniformCommercial Code of the jurisdiction, the law of which governs the document inwhich such term is used.

 

“U.S.”  The United States of America.

 

“USAPATRIOT Act”  means the Patriot Act.

 

A-34

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“VotingStock” means capital stock issued by a corporation, or equivalent interestsin any other Person, the holders of which are ordinarily, in the absence ofcontingencies, entitled to vote for the election of directors (or personsperforming similar functions) of such Person, even if the right so to vote hasbeen suspended by the happening of such a contingency.

 

“WorkingCapital”  Current Assets minusCurrent Liabilities.

 

A-35

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**Exhibit A1**to Common Agreement

 

**FINANCIAL PLAN**

 
| **Sources**                | ** ** | **Amount** | ** **     |
|----------------------------|------------|------------|----------------|
| DOE Guaranteed Loan (Debt) |       | $          | 43,137,019     |   |
| Base Equity                |       | $          | 25,882,211     |   |
| Overrun Equity             |       | $          | 0              |   |
| **TOTAL SOURCES**          | ** ** | **$**      | **69,019,230** | ** ** |

 
| **Uses**                            | ** ** | **Cost** | ** **     |
|-------------------------------------|------------|----------|----------------|
| Cost of Land                        |       | $        | 192,487        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| [*****]                             |       |     | [*****]        |   |
| **TOTAL USES (Base Project Costs)** | ** ** | **$**    | **69,019,230** | ** ** |

 

A1-1

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**Exhibit A2**to Common Agreement

 

**DEFINITION OF PHYSICAL COMPLETIONAND PROJECT COMPLETION**

 

1.             “**Physical Completion**” Thesatisfaction of the following conditions, as evidenced by the writtennotification from DOE to the Borrower in accordance with clause (d)(iii)of this definition:

 

(a)           Physical Completion Tests:

 

(i)            General. The Project Facility andall other buildings, equipment, facilities, and infrastructure necessary tooperate the Project in accordance with the Operating Plan (including, withoutlimitation, the [*****] for the Project to be used as replacements forflywheels which become defective or inoperable, such spare flywheels to bedelivered either (x) to the Project Site or (y)  to a site inTyngsboro, Massachusetts that is leased or licensed by Sponsor to Borrower)(A) have been completely constructed, completed, and installed inaccordance with the terms of the applicable Project Documents, (B) allessential elements thereof have been tested and commissioned in accordance withPrudent Utility Practice; (C) are operating in accordance with applicablemanufacturers’ specifications, the terms of the Project Documents, and allenvironmental permits and licenses, Environmental Laws, and other applicableguidelines; (D) have been accepted and paid for (except for amounts notyet due and payable), as evidenced by the Borrower having issued finalacceptance certificates relating to each of the material Project Documents; and(E) have been and are being properly operated and maintained in allrespects.

 

(ii)           Construction Work. All Construction Work under the Construction Contracts shall have beencompleted, including without limitation all Punch List Items, except forwarranty issues that do not affect performance of the Project Facility and do not have a material impact on environmentalor occupational health and safety matters.

 

(iii)          [*****]

 

(iv)          O&MActivities.  TheOperator shall have performed all obligations then required to be performed byit in accordance with the O&M Agreement.

 

(b)           Operational Completion Tests:

 

(i)            Performance Testing.  The Project Facility shall have successfully completed all testsdemonstrating satisfaction of allrequired performance standards under the applicable Project Documents, including without limitation verification thatthe Project Facility Performance Targets have been met.

 

A2-1

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(ii)           Construction Contracts.  (A) Final completion undereach of the Construction Contracts shall have occurred, and(B) no further payments shall be due and owing from Borrower to anyConstruction Contractor.

 

(iii)          Insurance Programfor Operating Period.  The Loan Servicer shall have received,in form and substance satisfactory to DOE, (x) an Insurance Advisor’sCertificate, and (y) an Insurance Consultant’s Certificate (A) describingin reasonable detail the Borrower’s insurance program with respect to theOperating Period (including without limitation with respect to any newinsurance since the date of the final Advance, copies of certificates orpolicies with respect thereto, designating the Administrative Agent in its capacity as the Collateral Agent as loss payee,as appropriate, all certified by the Borrower as being true and complete), and(B) certifying that it has reviewed and analyzed such insurance programand that in its opinion such insurance program satisfies all the requirementsof Schedule 6.3(b).

 

(c)           Legal Conditions:

 

(i)            Title to Assets. The Borrower shall have good and marketable fee title to, or validleasehold interests in, free and clear of all Liens and encumbrances (exceptfor Permitted Liens), the ProjectFacility and all of the land and all buildings, equipment, andfacilities referred to above, and to all other facilities known to be requiredfor the Project.

 

(ii)           Liens Under Security Documents.  The Borrower shall have granted Liens infavor of the Administrative Agent in its capacity as the Collateral Agent forthe benefit of the Secured Parties with respect to all of the assets requiredto be subject to the Security Documents.

 

(iii)          Representations and Warranties.  All representations and warranties in theLoan Documents shall be true and correct in all material respects as of thePhysical Completion Date (except to the extent relating to an earlier date).

 

(iv)          Approvals,Permits and Licenses.  AllGovernmental Approvals required to have been obtained as of the PhysicalCompletion Date (including any Governmental Approvals disclosed in writing bythe Borrower and required to have been obtained as of that date) shall havebeen obtained and shall be in full force and effect and shall not then be underappeal or subject to other proceedings or unsatisfied conditions that couldreasonably be expected to result in a material modification or cancellation asof such date.  The Borrower shall be incompliance with all such Governmental Approvals, the non-compliance with whichcould reasonably be expected to have a Material Adverse Effect.

 

(v)           No Event of Default or Default.  No Event of Default or Potential Defaultshall exist.

 

(d)           Physical Completion Certificate Delivery:

 

(i)            Delivery of Physical Completion Certificate.  The Borrower shall have furnished DOE with aPhysical Completion Certificate certifying that each of the requirements setforth in clauses (a) through (c) above has been satisfied as of the date of thePhysical Completion Certificate.

 

A2-2

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(ii)           Lender’s Engineer Report.  DOE shall have received a Lender’s EngineerReport addressing such matters as DOE shall reasonably request, includingwithout limitation the satisfaction of the requirements set forth in clauses(a) and (b), as appropriate.

 

(iii)          Notice of Physical Completion.  Following receipt of the Physical CompletionCertificate and the Lender’s Engineer’s Report, DOE shall have determined thateach of the requirements set forth in clauses (a) through (c) above has beensatisfied and shall have so notified the Borrower in writing; provided,however, that:

 

(A)          DOE may require confirmation, at theBorrower’s expense, of any of the requirements set forth in clause (c) above,including by requesting delivery to DOE of an independent consultant’s reportor an opinion of counsel satisfactory to DOE; and

 

(B)           DOE shall have the right to makerequests for additional information or documents from the Borrower tosubstantiate the accuracy or completeness of the Physical CompletionCertificate with respect to any of the requirements set forth in clause (c)above.

 

(C)           DOE shall notify the Borrower withinthirty (30) days following receipt of the Physical Completion Certificateeither (i) that Physical Completion has been achieved, in which case thePhysical Completion Date shall be deemed to be the date of such notice, or(ii) that DOE objects to the Physical Completion Certificate or suchCertificate is inaccurate or incomplete, which notice shall set forth the basisfor such objection or determination, as the case may be.  The failure of DOE to notify the Borrowerwithin such thirty (30) day period either that DOE objects to the PhysicalCompletion Certificate, or that such Certificate is inaccurate or incompleteshall be deemed to constitute notice that Physical Completion has beenachieved.

 

2.             **“ProjectCompletion” **Thesatisfaction of the following conditions, as evidenced by the writtennotification from DOE to the Borrower in accordance with clause (d)(iii) ofthis definition:

 

(a)           Physical Completion:

 

Physical Completion shall have occurred.

 

(b)           Financial Completion:

 

(i)            Two Principal and Interest Payments.  The Borrower shall have paid in full twoconsecutive scheduled principal and interest payments due under the DOE CreditFacility on, or at any time before, the date such payments were due.

 

(ii)           Cash Available For Debt Service.  The Borrower shall have generated CashAvailable for Debt Service for each of the preceding two consecutive fiscalquarters in an amount sufficient to pay in full the scheduled principal andinterest payments next becoming due under the DOE Credit Facility.

 

(iii)          Debt Service Reserve.  The Debt Service Reserve Account shall havebeen fully funded (or Reserve Letters of Credit shall have been posted in lieuthereof).

 

A2-3

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(c)           Legal Conditions:

 

(i)            Representation and Warranties.  All representations and warranties in theLoan Documents shall be true and correct in all material respects as of theProject Completion Date (except to the extent relating to an earlier date).

 

(ii)           Approvals, Permits and Licenses.  All Governmental Approvals required to havebeen obtained as of the Project Completion Date (including any GovernmentalApprovals disclosed in writing by the Borrower and required to have beenobtained as of that date) shall have been obtained and shall be in full forceand effect and shall not then be under appeal or subject to other proceedingsor unsatisfied conditions that could reasonably be expected to result in amaterial modification or cancellation as of such date.  The Borrower shall be in compliance with allsuch Governmental Approvals, the non-compliance with which could reasonably beexpected to have a Material Adverse Effect.

 

(iii)          No Event of Default or Default.  No Event of Default or Potential Defaultshall exist.

 

(d)           Project Completion Certificate Delivery:

 

(i)            Delivery of Project Completion Certificate.  The Borrower shall have furnished DOE with aProject Completion Certificate certifying that each of the requirements setforth in clauses (a) through (c) above has been satisfied as of the date of theProject Completion Certificate.

 

(ii)           Notice of Project Completion.  Following receipt of the Project CompletionCertificate, DOE shall have determined that each of the requirements set forthin clauses (b) and (c) above has been satisfied and shall have so notified theBorrower in writing; provided, however, that:

 

(A)          DOE may require confirmation, at theBorrower’s expense, of any of the requirements set forth in clauses (b) and (c)above, including by requesting delivery to DOE of an independent consultant’sreport or an opinion of counsel satisfactory to DOE; and

 

(B)           DOE shall have the right to makerequests for additional information or documents from the Borrower tosubstantiate the accuracy or completeness of the Project Completion Certificatewith respect to any of the requirements set forth in clauses (b) and (c) above.

 

(C)           DOE shall notify the Borrower withinthirty (30) days following receipt of the Project Completion Certificate either(i) that Project Completion has been achieved, in which case the ProjectCompletion Date shall be deemed to be the date of such notice, or (ii) that DOEobjects to the Project Completion Certificate or such Certificate is inaccurateor incomplete, which notice shall set forth the basis for such objection ordetermination, as the case may be.  Thefailure of DOE to notify the Borrower within such thirty (30) day period eitherthat DOE objects to the Project Completion Certificate or that such Certificateis inaccurate or incomplete shall be deemed to constitute notice that ProjectCompletion has been achieved.

 

A2-4

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**Exhibit A3**to Common Agreement

 

**DEFINITION OF DOE REQUIREMENTS**

 

**(from Applicable Loan Guarantee Requirements)**

 

**[Capitalized terms in this Exhibit A3 have the meanings given to such terms in the Applicable Loan Guarantee Requirements]**

 

Thefollowing requirements and conditions are hereby incorporated into the CommonAgreement:

 

(a)  Pursuant to Section 6.09.10(d) of theApplicable Loan Guarantee Requirements, prior to the execution by DOE of a LoanGuarantee Agreement, DOE must ensure that the following requirements andconditions, which must be specified in the Loan Guarantee Agreement, aresatisfied:

 

(1)The Project qualifies as an “Eligible Project” under the Act and is not aresearch, development, or demonstration project or a project that employsCommercial Technologies in service in the United States;

 

(2)The Project will be constructed and operated in the United States, theemployment of the new or significantly improved technology in the Project hasthe potential to be replicated in other commercial projects in the UnitedStates, and this technology is or is likely to be available in the UnitedStates for further commercial application;

 

(3)The face value of the debt guaranteed by DOE is limited to no more than 80percent of total Project Costs;

 

(4)(i) Where DOE guarantees 100 percent of the Guaranteed Obligation, theDOE-Guaranteed Loan shall be funded by FFB;

 

(ii)  Where DOE guarantees more than 90 percent ofthe Guaranteed Obligation, the guaranteed portion cannot be separated from or “stripped”from the non-guaranteed portion of the Guaranteed Obligation if the loan isparticipated, syndicated or otherwise resold in the secondary market;

 

(iii)  Where DOE guarantees 90 percent or less ofthe Guaranteed Obligation, the guaranteed portion may be separated from or “stripped”from the non-guaranteed portion of the Guaranteed Obligation, if theDOE-Guaranteed Loan is participated, syndicated or otherwise resold in thesecondary debt market;

 

(5)  The Borrower and other principals involved inthe Project have made or will make a significant equity investment in theProject;

 

(6)  The Borrower is obligated to make fullrepayment of the principal and interest on the Guaranteed Obligations and otherProject debt over a period of up to the lesser of 30 years or 90 percent of theprojected useful life of the Project’s major physical assets, as calculated in 

 

A3-1

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accordancewith generally accepted accounting principles and practices. The non-guaranteedportion of any Guaranteed Obligation must be repaid on a pro-rata basis, andmay not be repaid on a shorter amortization schedule than the guaranteedportion;

 

(7) The loan guarantee does not finance, either directly or indirectly,tax-exempt debt obligations, consistent with the requirements of section 149(b)of the Internal Revenue Code;

 

(8)  The amount of the DOE Guarantee, whencombined with other funds committed to the Project, will be sufficient to carryout the Project, including adequate contingency funds;

 

(9)  There is a reasonable prospect of repaymentby Borrower of the principal of and interest on the Guaranteed Obligations andother Project debt;

 

(10)  The Borrower has pledged Project assets andother collateral or surety, including non project-related assets, determined byDOE to be necessary to secure the repayment of the Guaranteed Obligations;

 

(11)  The DOE Loan Guarantee Agreement and relateddocuments include detailed terms and conditions necessary and appropriate toprotect the interest of the United States in the case of default, includingensuring availability of all the intellectual property rights, technical dataincluding software, and physical assets necessary for any person or entity,including DOE, to complete, operate, convey, and dispose of the defaultedproject;

 

(12)  The interest rate on any GuaranteedObligation is determined by DOE, after consultation with the TreasuryDepartment, to be reasonable, taking into account the range of interest ratesprevailing in the private sector for similar obligations of comparable riskguaranteed by the Federal government;

 

(13)  Any Guaranteed Obligation is not subordinateto any loan or other debt obligation and is in a first lien position on allassets of the Project and all additional collateral pledged as security for theGuaranteed Obligations and other Project debt;

 

(14)  There is satisfactory evidence that Borrowerand FFB or other Holders are willing, competent, and capable of performing theterms and conditions of the Guaranteed Obligations and other debt obligationand the DOE Loan Guarantee Agreement, and will diligently pursue the Project;

 

(15)  The Borrower has made the initial (or total)payment of fees for the Administrative Cost of Issuing a Loan Guarantee withrespect to the DOE Guarantee for the construction and operational phases of theProject (Third Fee);

 

(16)  FFB, other Holder or servicer has taken andis obligated to continue to take those actions necessary to perfect andmaintain liens on assets which are pledged as collateral for the GuaranteedObligation;

 

(17)  If Borrower is to make payment in full forthe Credit Subsidy Cost of the loan guarantee pursuant to Section 1702(b)(2) ofthe Act, such payment must be received by DOE prior to, or at the time of,closing;

 

A3-2

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(18)  DOE or its representatives have access to theProject site at all reasonable times in order to monitor the performance of theProject;

 

(19)  DOE, FFB, or other Holder and Borrower havereached an agreement as to the information that will be made available to DOEand the information that will be made publicly available;

 

(20)  The prospective Borrower has filedapplications for or obtained any required regulatory approvals for the Projectand is in compliance, or promptly will be in compliance, where appropriate,with all Federal, state, and local regulatory requirements;

 

(21)  Borrower has no delinquent Federal debt,including tax liabilities, unless the delinquency has been resolved with theappropriate Federal agency in accordance with the standards of the DebtCollection Improvement Act of 1996;

 

(22)  The DOE Loan Guarantee Agreement containssuch other terms and conditions as DOE deems reasonable and necessary toprotect the interest of the United States; and

 

(23)(i)FFB is an “Eligible Lender”, as defined in §609.2 of the Applicable LoanGuarantee Requirements, and meets DOE’s lender eligibility and performancerequirement contained in §§609.11 (a) and (b) of the Applicable Loan GuaranteeRequirements; and

 

(ii)The servicer meets the servicing performance requirements of §609.11(c) of theApplicable Loan Guarantee Requirements.

 

(b)  Pursuant to Section 6.09.10(e) of theApplicable Loan Guarantee Requirements, the DOE Loan Guarantee Agreement mustprovide that, in the event of a default by the Borrower:

 

(1)  Interest accrues on the GuaranteedObligations at the rate stated in the DOE Loan Guarantee Agreement or LoanAgreement, until DOE makes full payment of the defaulted Guaranteed Obligationsand, except when debt is funded through the Federal Financing Bank, DOE is notrequired to pay any premium, default penalties, or prepayment penalties;

 

(2)  Upon payment of the Guaranteed Obligations byDOE, DOE is subrogated to the rights of the Holders of the debt, including allrelated liens, security, and collateral rights and has superior rights in andto the property acquired from the recipient of the payment as provided in§609.15 of the Applicable Loan Guarantee Requirements;

 

(3)  FFB or any other servicer acting on DOE’sbehalf is obligated to take those actions necessary to perfect and maintainliens on assets which are pledged as collateral for the Guaranteed Obligations;and

 

(4)  The holder of pledged collateral is obligatedto take such actions as DOE may reasonably require to provide for the care,preservation, protection, and maintenance of such collateral so as to enablethe United States to achieve maximum recovery upon default by Borrower on theGuaranteed Obligations.

 

(c)  Pursuant to Section 6.09.10(f) of theApplicable Loan Guarantee Requirements, the DOE Loan Guarantee Agreement mustcontain audit provisions which provide, in substance, as follows:

 

A3-3

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(1)  FFB or any other Holder or other partyservicing the Guaranteed Obligations, as applicable, and the Borrower, mustkeep such records concerning the project as are necessary to facilitate aneffective and accurate audit and performance evaluation of the project asrequired in §609.17 of the Applicable Loan Guarantee Requirements; and

 

(2)  DOE and the Comptroller General, or theirduly authorized representatives, must have access, for the purpose of audit andexamination, to any pertinent books, documents, papers, and records of theBorrower, FFB or other Holder, or other party servicing the GuaranteedObligations, as applicable.  Examinationof records may be made during the regular business hours of the Borrower, FFBor other Holder, or other party servicing the Guaranteed Obligations, or at anyother time mutually convenient as required in §609.17 of the Applicable LoanGuarantee Requirements.

 

(d)  Pursuant to Section 6.09.10(g) of theApplicable Loan Guarantee Requirements, the DOE Loan Guarantee Agreement must containprovisions providing that:

 

(1)FFB or other Holder may sell, assign or transfer a Guaranteed Obligation toanother Eligible Lender that meets the requirements of §609.11 of theApplicable Loan Guarantee Requirements. Such Eligible Lender to which aGuaranteed Obligation is assigned or transferred, is required to fulfill allservicing, monitoring, and reporting requirements contained in the DOE LoanGuarantee Agreement and these regulations if the transferring Eligible Lenderwas performing these functions and transfer such functions to the new EligibleLender. Any assignment or transfer, however, of the servicing, monitoring, andreporting functions must be approved by DOE in writing in advance of suchassignment; and

 

(2)The Secretary of Energy, or the Secretary’s designee or contractual agent, forthe purpose of identifying Holders with the right to receive payment under theguarantees shall include in the DOE Loan Guarantee Agreement or relateddocuments a procedure for tracking and identifying Holders of GuaranteeObligations. These duties usually will be performed by the servicer. Anycontractual agent approved by the Secretary to perform this function cannottransfer or assign this responsibility without the prior written consent of theSecretary.

 

The Credit Subsidy Cost for the Projectmay be covered by funds made available under the American Recovery andReinvestment Act of 2009, Pub. L. No. 111-5, to pay for the Credit Subsidy Costof guarantees made under Section 1705 of Title XVII of the Energy Policy Act of2005, as amended, if the Project satisfies all of the applicable requirementsof Title XVII, including Section 1705, and of the Recovery Act, including, butnot limited to the following below, and the provisions set forth in the Term Sheetand this Exhibit A3 and subject to the availability of funds.  The Sponsor and Borrower each agrees tosubject the Project to all Program Requirements and Applicable Loan GuaranteeRequirements implementing Title XVII (including Section 1705), as amended fromtime to time.

 

(e) As soon as practicable, but in noevent later than 30 days after the effective date of the ConditionalCommitment, the Sponsor and/or Borrower shall supplement its applicationsubmitted in response to the August 8, 2006 solicitation with the following:

 

(1) A statement from the Sponsor that itbelieves that there is “reasonable prospect” that the DOE-Guaranteed Loan willbe fully paid from Project revenue;

 

A3-4

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(2) A brief description of the types ofjobs expected to be created or retained in the United States.  The term “jobs expected to be created” meansthose new positions reasonably expected to be created and filled, or previouslyexisting unfilled positions that are reasonably expected to be filled, as aresult of Recovery Act funding, and “jobs or positions expected to be retained”means those previously existing filled positions that are reasonably expectedto be retained as a result of Recovery Act funding.  Such descriptions may rely on job titles,broader labor categories, or the borrowers’ existing practice for describingjobs as long as the terms used are widely understood and explain the generalnature of the work. Note that a job cannot be reported as both created and retained;

 

(3) An estimate of the number of jobsexpected to be created and retained in the United States.  At a minimum, this estimate shall include anynew positions reasonably expected to be created and any existing filled positionsthat are reasonably expected to be retained to support or carry out RecoveryAct projects or activities managed directly by the borrower, and if known, bysub-recipients. The number shall be expressed as “full-time equivalent” (FTE),calculated cumulatively as all hours worked divided by the total number ofhours in a full-time schedule, as defined by the borrower. For instance, twofull-time employees and one part-time employee working half days would bereported as 2.5 FTE in each calendar quarter. Because FTE is calculated basedon aggregate hours worked, temporary or part-time labor is not overstated.Applicants are encouraged to include information in their narrative used tocalculate the FTE figure;

 

(4) A description of the viability of theProject without guarantees, whether from DOE or otherwise;

 

(5) A list of other Federal andnon-Federal governmental (including State) incentives or other assistance onwhich the Project relies, including grants, tax credits, or other loanguarantees to support the financing, construction and operation of the Project;

 

(6) A description evidencing theimportance of the Project in meeting reliability needs of the national or localelectric grid;

 

(7) A description substantiating theeffect of the Project in meeting the environment (including climate change) andenergy goals of the State or region of the United States in which the Projectis involved or located or of the two or more States of the United States thatthe Project exists between or connects;

 

(8) A statement from the Sponsor substantiatingthat commercial financing suitable to fully meet the needs of the Project, orto allow commercial completion of the Project, is not available from theprivate financial markets on commercially reasonable terms.

 

(f) The Project must commence constructionnot later than September 30, 2011.

 

The term “Commencement of Construction” isdefined in Exhibit A to the Common Agreement.

 

(g) As soon as practicable, but in noevent later than 30 days after the effective date of the ConditionalCommitment, the Sponsor and/or Borrower shall submit to DOE an updatedfinancial model, financial projections or any other application item for theProject that, in each case, takes into account the cost of complying with (i)the Buy American Provisions, to the 

 

A3-5

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extent applicable, (ii) theDavis-Bacon Act and all applicable Davis-Bacon Act regulations as suchcompliance is required by Section 1705(c) of Title XVII and (iii) allapplicable provisions of the Recovery Act.

 

(h)The Borrower must consult their own legal counsel to determine whether the BuyAmerican requirements of Section 1605(a) of the Recovery Act apply to theirproposed projects. If the Borrower believes that its proposed project is notsubject to such Buy American requirements, it must set forth in its Part Isubmission an explanation justifying such rationale. As required by Section1605(d) of the Recovery Act, Section 1605 is to be applied in a mannerconsistent with U.S. obligations under international agreements. If theBorrower determines that the Buy American requirements of Section 1605 are notapplicable to its project by virtue of U.S. obligations under internationalagreements, the Borrower must set forth in its Part I submission an explanationjustifying its position. If the Borrower determines that its project would besubject to the Buy American requirements, but that its project may be eligiblefor a waiver under Section 1605(b) of the Recovery Act, the Borrower must setforth in its Part I submission an explanation justifying the basis for itsrequest for a waiver.

 

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**Exhibit A4**to Common Agreement

 

**DAVIS-BACON PROVISIONS FOR DAVIS-BACON ACT COVERED CONTRACTS**

 

**(a)                Definitions.**  For purposes of this Exhibit A4, andas required by subparagraph (b)(8) below of this Exhibit, the definitions setforth in Section 5.2 of title 29 of the Code of Federal Regulations (CFR) areincorporated by reference herein, some of which are set forth below, except tothe extent modified below, in addition to certain newly defined terms set forthbelow for purposes of Davis-Bacon Act compliance under Section 1705 of TitleXVII:

 

(1)                                             “Davis-BaconAct Covered Contract” means any contract, agreement or other arrangementfor the “construction, prosecution, completion or repair” (as such term isdefined below) of the Project (including the Common Agreement) in connectionwith Section 1705(c), as enacted by the American Recovery and Reinvestment Actof 2009.

 

(2)                                             “ContractParty” means any contractor, subcontractor (including any lower tiersubcontractor) or other entity (other than the Borrower but including, ifapplicable, the project sponsor or affiliate) that is party to a Davis-BaconAct Covered Contract; it being understood that the foregoing exclusion ofBorrower from the definition of Contract Party in no way affects the Borrower’sDavis Bacon Act obligations as set forth in this Exhibit.

 

(3)                                             “Construction,prosecution, completion, or repair” or “performance of the Project”means the following:

 

(1) All types of work done on a particular building or work at the sitethereof, including work at a facility which is deemed a part of the site of thework within the meaning of (paragraph (l) of 29 CFR 5.2) by laborers andmechanics employed by a construction contractor or construction subcontractor,including without limitation—

 

(i)                 Altering,remodeling, installation (where appropriate) on the site of the work of itemsfabricated off-site;

 

(ii)                Painting anddecorating;

 

(iii)               Manufacturingor furnishing of materials, articles, supplies or equipment on the site of thebuilding or work (or, under the United States Housing Act of 1937; the HousingAct of 1949; and the Native American Housing Assistance and Self-DeterminationAct of 1996 in the construction or development of the project);

 

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(iv)(A) Transportation between the site of the work within the meaningof paragraph (l)(1) of 29 CFR 5.2 and a facility which is dedicated to theconstruction of the building or work and deemed a part of the site of the workwithin the meaning of paragraph (l)(2) of 29 CFR 5.2; and

 

(B) Transportation of portion(s) of the building or work between a sitewhere a significant portion of such building or work is constructed, which is apart of the site of the work within the meaning of paragraph (l)(1) of 29 CFR5.2, and the physical place or places where the building or work will remain.

 

(2) Except as provided in paragraph (j)(1)(iv)(A) of 29 CFR 5.2, thetransportation of materials or supplies to or from the site of the work byemployees of the construction contractor or a construction subcontractor is not``construction, prosecution, completion, or repair’’.

 

(4)                                             “Contractingofficer” means the individual, a duly appointed successor, or authorizedrepresentative who is designated and authorized to enter into contracts onbehalf of the Federal agency or any representative designated by DOE to theBorrower from time to time for purposes of Davis-Bacon Act compliance.

 

(5)                                             “Laborer ormechanic” includes at least those workers whose duties are manual orphysical in nature (including those workers who use tools or who are performingthe work of a trade), as distinguished from mental or managerial. The termlaborer or mechanic includes apprentices, trainees, and helpers. The term doesnot apply to workers whose duties are primarily administrative, executive, orclerical, rather than manual. Persons employed in a bona fide executive,administrative, or professional capacity as defined in part 541 of title 29 ofthe 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 workweekto mechanic or laborer duties, and who do not meet the criteria of part 541,are laborers and mechanics for the time so spent.

 

(6)                                             “Site of thework” is defined as follows:

 

(i)  The site of the work is thephysical place or places where the building or work called for in theDavis-Bacon Act Covered Contract will remain; and any other site where asignificant portion of the building or work is constructed, provided that suchsite is established specifically for the performance of such contract orproject;

 

(ii) Except as provided in subparagraph (a)(6)(iii) of this Exhibit,job headquarters, tool yards, batch plants, borrow pits, etc., are part of the 

 

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site of the work, provided they are dedicated exclusively, or nearlyso, to performance of the Davis Bacon Act Covered Contract or project, andprovided they are adjacent or virtually adjacent to the site of the work asdefined in subparagraph (a)(6)(i) of this Exhibit;

 

(iii) Not included in the site of the work are permanent home offices,branch plant establishments, fabrication plants, tool yards, etc., of theBorrower or a Contract Party whose location and continuance in operation aredetermined wholly without regard to a particular Federal or federally assistedcontract, such as the Common Agreement, or project. In addition, fabricationplants, batch plants, borrow pits, job headquarters, tool yards, etc., of a commercialor material supplier, which are established by a supplier of materials for theproject before opening of bids and not on the site of the work as stated insubparagraph (a)(6)(i) of this Exhibit, are not included in the site of thework. Such permanent, previously established facilities are not part of thesite of the work, even where the operations for a period of time may bededicated exclusively, or nearly so, to the performance of a Davis-Bacon ActCovered Contract.

 

(7)                                             “Wagedetermination” includes the original decision and any subsequent decisionsmodifying, superseding, correcting, or otherwise changing the provisions of theoriginal decision. The application of the wage determination shall be inaccordance with the provisions of Sec. 1.6 of title 29 of the Code of FederalRegulations.

 

**(b)(1)****                             ****Minimumwages****.**

 

(i) All laborers and mechanics employed or working on the site of thework, will be paid unconditionally and not less often than once a week, andwithout subsequent deduction or rebate on any account (except such payrolldeductions as are permitted by regulations issued by the Secretary of Laborunder the Copeland Act (29 CFR part 3)), the full amount of wages and bona fidefringe benefits (or cash equivalents thereof) due at time of payment computedat rates not less than those contained in the wage determination of theSecretary of Labor which is attached to the Common Agreement as Schedule6.30(d) and made a part hereof, regardless of any contractual relationshipwhich may be alleged to exist between the Borrower and such laborers andmechanics, or between any Contract Party and such laborers and mechanics.

 

Contributions made or costs reasonably anticipated for bona fide fringebenefits under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers ormechanics are considered wages paid to such laborers or mechanics, subject tothe provisions of subparagraph (b)(1)(iv) of this Exhibit; also, regularcontributions 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 beconstructively made or incurred during such weekly period. Such laborers andmechanics shall be paid the 

 

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appropriate wage rate and fringe benefits on the wage determination forthe classification of work actually performed, without regard to skill, exceptas provided in paragraph (b)(4) below. Laborers or mechanics performing work inmore than one classification may be compensated at the rate specified for eachclassification for the time actually worked therein: Provided, that theemployer’s payroll records accurately set forth the time spent in eachclassification in which work is performed. The wage determination (includingany additional classification and wage rates conformed under subparagraph(b)(1)(ii) of this Exhibit) as attached to the Common Agreement as Schedule6.30(d) and the Davis-Bacon poster (WH-1321) shall be posted at all timesby the Borrower and each Contract Party at the site of the work in a prominentand accessible place where it can be easily seen by the workers.

 

(ii)(A) The contracting officer shall require that any class oflaborers or mechanics, including helpers, which is not listed in the wagedetermination and which is to be employed under the Davis-Bacon Act CoveredContract shall be classified in conformance with the wage determination. Thecontracting officer shall approve an additional classification and wage rate andfringe benefits therefore only when the following criteria have been met:

 

(1) The work to be performed by the classification requested is notperformed by a classification in the wage determination; and

 

(2) The classification is utilized in the area by the constructionindustry; and

 

(3) The proposed wage rate, including any bona fide fringe benefits,bears a reasonable relationship to the wage rates contained in the wagedetermination.

 

(B) If the Borrower or any Contract Party, as the case may be, and therespective laborers and mechanics to be employed in the classification (ifknown), or their representatives, and the contracting officer agree on theclassification and wage rate (including the amount designated for fringebenefits where appropriate), a report of the action taken shall be sent by thecontracting officer to the Administrator of the Wage and Hour Division,Employment Standards Administration, U.S. Department of Labor, Washington, DC20210. The Administrator, or an authorized representative, will approve,modify, or disapprove every additional classification action within 30 days ofreceipt and so advise the contracting officer or will notify the contractingofficer within the 30-day period that additional time is necessary.

 

(C) In the event the Borrower or any Contract Party, as the case maybe, the laborers or mechanics to be employed in the classification or theirrepresentatives, and the contracting officer do not agree on the proposedclassification and wage rate (including the amount designated for fringebenefits, where appropriate), the contracting officer shall refer thequestions, including the views of all interested parties and the recommendationof the contracting officer, to the Administrator for determination. TheAdministrator, or an authorized representative, will issue a determinationwithin 30 days 

 

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of receipt and so advise the contracting officer or will notify thecontracting officer within the 30-day period that additional time is necessary.

 

(D) The wage rate (including fringe benefits where appropriate)determined pursuant to subparagraphs (b)(1)(ii) (B) or (C) of this Exhibit,shall be paid to all workers performing work in the classification under anyDavis-Bacon Act Covered Contract from the first day on which work is performedin the classification.

 

(iii) Whenever the minimum wage rate prescribed in any Davis-Bacon ActCovered Contract for a class of laborers or mechanics includes a fringe benefitwhich is not expressed as an hourly rate, the Borrower or any Contract Partyshall either pay the benefit as stated in the wage determination or shall payanother bona fide fringe benefit or an hourly cash equivalent thereof.

 

(iv) If the Borrower or any Contract Party does not make payments to atrustee or other third person, the Borrower or any Contract Party may consideras part of the wages of any laborer or mechanic the amount of any costsreasonably anticipated in providing bona fide fringe benefits under a plan orprogram; provided, that the Secretary of Labor has found, upon the writtenrequest of the Borrower or any Contract Party, that the applicable standards ofthe Davis-Bacon Act have been met. The Secretary of Labor may require theBorrower or any Contract Party to set aside in a separate account assets forthe meeting of obligations under the plan or program.

 

**(2) Withholding.**  The DOE contracting officer shall upon itsown action or upon written request of an authorized representative of theDepartment of Labor withhold or cause to be withheld from the Borrower or aContract Party, as the case may be, under this Contract or any other Federalcontract with the same Borrower or Contract Party, or any otherfederally-assisted contract subject to Davis-Bacon prevailing wagerequirements, which is held by the same Borrower or Contract Party, so much ofthe accrued payments or advances as may be considered necessary to pay laborersand mechanics, including apprentices, trainees, and helpers, employed orworking on the site of the work the full amount of wages required by theContract. In the event of failure to pay any laborer or mechanic, including anyapprentice, 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, DOEmay, after written notice to the Borrower take such action as may be necessaryto cause the suspension of any further disbursement under the DOE-GuaranteedLoan until such violations have ceased, it being understood that any suchsuspension shall not affect the validity of the DOE Guarantee on the portionsof the DOE-Guaranteed Loan that have been disbursed prior to the date of suchsuspension and remain outstanding as of such date.

 

**(3) Payrolls and basic records.**

 

(i) Payrolls and basic records relating thereto shall be maintained bythe Borrower and each Contract Party during the course of the work andpreserved for a period of three years thereafter for all of their respectivelaborers and mechanics employed or working at the site of the work.  Such records shall contain the name, 

 

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address, and social security number of each such worker, his or hercorrect classification, hourly rates of wages paid (including rates ofcontributions or costs anticipated for bona fide fringe benefits or cashequivalents thereof of the types described in section 1(b)(2)(B) of theDavis-Bacon Act), daily and weekly number of hours worked, deductions made andactual wages paid. Whenever the Secretary of Labor has found under 29 CFR5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount ofany costs reasonably anticipated in providing benefits under a plan or programdescribed in section 1(b)(2)(B) of the Davis-Bacon Act, the Borrower and eachContract Party shall maintain records which show that the commitment to providesuch benefits is enforceable, that the plan or program is financiallyresponsible, and that the plan or program has been communicated in writing tothe laborers or mechanics affected, and records which show the costsanticipated or the actual cost incurred in providing such benefits. TheBorrower and any Contract Party employing apprentices or trainees underapproved programs shall maintain written evidence of the registration ofapprenticeship programs and certification of trainee programs, the registrationof the apprentices and trainees, and the ratios and wage rates prescribed inthe applicable programs.

 

(ii)(A)  The Contract Party shall submit weekly foreach week in which any Davis-Bacon Act Covered Contract work is performed acopy of all payrolls to the Borrower. The highest tier Contract Party is responsible for the submission ofcopies of payrolls by all subcontractors and lower tier subcontractors.  Unless otherwise directed by DOE, theBorrower shall submit weekly for each week in which any Contract work isperformed a copy of all of its payrolls, as well as all payrolls of eachContract Party, to the DOE contracting officer. The payrolls submitted shallset out accurately and completely all of the information required to bemaintained under subparagraph (b)(3)(i) of this Exhibit, except that fullsocial security numbers and home addresses shall not be included on weeklytransmittals. Instead the payrolls shall only need to include an individuallyidentifying number for each employee (e.g., the last four digits of theemployee’s social security number). The required weekly payroll information maybe submitted in any form desired. Optional Form WH-347 is available for thispurpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htmor its successor site. The Borrower is responsible for the submission of copiesof 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 theProject.  Each Contract Party isresponsible for the submission of copies of payrolls by all subcontract orlower-tier Contract Parties.  The Borrowerand each Contract Party shall maintain the full social security number andcurrent address of each of its own covered workers, and shall provide them uponrequest, in the case of the Contract Party, to the Borrower, for transmissionto the DOE or the Wage and Hour Division of the Department of Labor forpurposes of an investigation or audit of compliance with prevailing wagerequirements. It is not a violation of this subparagraph (b)(3)(ii)(A) of thisExhibit for a higher-tiered Contract Party to require a lower-tiered ContractParty to provide addresses and social security numbers to such Contract Partyfor its own records, without weekly submission to the DOE or the Borrower.

 

(B) Each payroll submitted shall be accompanied by a ``Statement ofCompliance,’’ signed by the Borrower or Contract Party or his or her agent whopays or 

 

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supervises the payment of the laborer or mechanic employed under theDavis-Bacon Act Covered Contract and shall certify the following:

 

(1) That the payroll for the payroll period contains the informationrequired to be provided under subparagraph (b)(3)(ii) of this Exhibit, theappropriate information is being maintained under subparagraph (b)(3)(i) ofthis Exhibit, 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 thepayroll period has been paid the full weekly wages earned, without rebate,either directly or indirectly, and that no deductions have been made eitherdirectly or indirectly from the full wages earned, other than permissibledeductions as set forth in Regulations, 29 CFR part 3;

 

(3) That each laborer or mechanic has been paid not less than theapplicable wage rates and fringe benefits or cash equivalents for theclassification of work performed, as specified in the applicable wagedetermination incorporated into the Common Agreement and any other Davis-BaconAct Covered Contract.

 

(C) The weekly submission of a properly executed certification setforth on the reverse side of Optional Form WH-347 shall satisfy the requirementfor submission of the ``Statement of Compliance’’ required by subparagraph(b)(3)(ii)(B) of this Exhibit.

 

(D) The falsification of any of the above certifications may subjectthe Borrower or any Contract Party to civil or criminal prosecution undersection 1001 of title 18 and section 3729 of title 31 of the United StatesCode.

 

(iii) The Borrower and each Contract Party shall make the recordsrequired under subparagraph (b)(3)(i) of this Exhibit available for inspection,copying, or transcription by authorized representatives of the DOE or theDepartment of Labor, and shall permit such representatives to interviewemployees during working hours on the job. If the Borrower or any ContractParty fails to submit the required records or to make them available, the DOEmay, after written notice to the Borrower take such action as may be necessaryto cause the suspension of any further disbursement under the DOE-GuaranteedLoan, it being understood that any such suspension shall not affect thevalidity of the DOE Guarantee on the portions of the DOE-Guaranteed Loan thathave been disbursed prior to the date of such suspension and remain outstandingas of such date.  Furthermore, failure tosubmit the required records upon request or to make such records available maybe grounds for debarment action pursuant to 29 CFR 5.12.

 

**(4) Apprentices and trainees.**

 

(i) Apprentices. Apprentices will be permitted to work at lessthan the predetermined rate for the work they performed when they are employedpursuant to and individually registered in a bona fide apprenticeship programregistered with the U.S. Department of Labor, Employment and TrainingAdministration, Office of Apprenticeship Training, Employer and Labor Services,or with a State Apprenticeship 

 

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Agency recognized by the Office, or if a person is employed in his orher first 90 days of probationary employment as an apprentice in such anapprenticeship program, who is not individually registered in the program, butwho has been certified by the Office of Apprenticeship Training, Employer andLabor Services or a State Apprenticeship Agency (where appropriate) to beeligible for probationary employment as an apprentice. The allowable ratio ofapprentices to journeymen on the job site in any craft classification shall notbe greater than the ratio permitted to the Borrower or Contract Party as to theentire work force under the registered program. Any worker listed on a payrollat an apprentice wage rate, who is not registered or otherwise employed asstated above, shall be paid not less than the applicable wage rate on the wagedetermination for the classification of work actually performed. In addition,any apprentice performing work on the job site in excess of the ratio permittedunder the registered program shall be paid not less than the applicable wage rateon the wage determination for the work actually performed. Where a Borrower orContract Party is performing construction on a project in a locality other thanthat in which its program is registered, the ratios and wage rates (expressedin percentages of the journeyman’s hourly rate) specified in the Borrower orContract Party’s registered program shall be observed. Every apprentice must bepaid at not less than the rate specified in the registered program for theapprentice’s level of progress, expressed as a percentage of the journeymenhourly rate specified in the applicable wage determination. Apprentices shallbe paid fringe benefits in accordance with the provisions of the apprenticeshipprogram. If the apprenticeship program does not specify fringe benefits,apprentices must be paid the full amount of fringe benefits listed on the wagedetermination for the applicable classification. If the Administratordetermines that a different practice prevails for the applicable apprenticeclassification, fringes shall be paid in accordance with that determination. Inthe event the Office of Apprenticeship Training, Employer and Labor Services,or a State Apprenticeship Agency recognized by the Office, withdraws approvalof an apprenticeship program, the Borrower or the Contract Party will no longerbe permitted to utilize apprentices at less than the applicable predeterminedrate for the work performed until an acceptable program is approved.

 

(ii) Trainees. Except as provided in 29 CFR 5.16, trainees willnot be permitted to work at less than the predetermined rate for the workperformed unless they are employed pursuant to and individually registered in aprogram which has received prior approval, evidenced by formal certification bythe U.S. Department of Labor, Employment and Training Administration. The ratioof trainees to journeymen on the job site shall not be greater than permittedunder the plan approved by the Employment and Training Administration. Everytrainee must be paid at not less than the rate specified in the approvedprogram for the trainee’s level of progress, expressed as a percentage of thejourneyman hourly rate specified in the applicable wage determination. Traineesshall be paid fringe benefits in accordance with the provisions of the traineeprogram. If the trainee program does not mention fringe benefits, traineesshall be paid the full amount of fringe benefits listed on the wagedetermination unless the Administrator of the Wage and Hour Division determinesthat there is an apprenticeship program associated with the correspondingjourneyman wage rate on the wage determination which provides for less thanfull fringe benefits for apprentices. Any employee listed on the payroll at atrainee rate who is not registered and participating in a training planapproved by the 

 

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Employment and Training Administration shall be paid not less than theapplicable wage rate on the wage determination for the classification of workactually performed. In addition, any trainee performing work on the job site inexcess of the ratio permitted under the registered program shall be paid notless than the applicable wage rate on the wage determination for the workactually performed. In the event the Employment and Training Administrationwithdraws approval of a training program, the Borrower or the Contract Partywill no longer be permitted to utilize trainees at less than the applicablepredetermined rate for the work performed until an acceptable program isapproved.

 

(iii) Equal employment opportunity. The utilization ofapprentices, trainees and journeymen under this part shall be in conformitywith the equal employment opportunity requirements of Executive Order 11246, asamended, and 29 CFR part 30.

 

**(5) Compliance with Copeland Act requirements.** The Borrowerand any Contract Party shall comply with the requirements of 29 CFR part 3,which are incorporated by reference in this Common Agreement and any otherDavis-Bacon Act Covered Contract.

 

**(6) Subcontracts.** The Borrower and any higheror lower tier Contract Party shall insert in any Davis-Bacon Act CoveredContract the clauses contained in subparagraphs (b)(1) through (10) of thisExhibit and such other clauses as the DOE may by appropriate instructionsrequire, and also a clause requiring the higher tier Contract Party to includethese clauses in any lower tier Davis-Bacon Act Covered Contract. The Borrowershall be responsible for the compliance by any Contract Party with all thecontract clauses in (1) through (10) of this Exhibit.

 

**(7) Contract termination: debarment.**  A breach of any of the contract clauses in(1) through (10) of subparagraph (b) in this Exhibit will constitute an Eventof Default by the Borrower under Article 8 of the Common Agreement and may begrounds for termination of any Davis-Bacon Act Covered Contract, and fordebarment as a contractor, a subcontractor or other entity as provided in 29CFR 5.12; provided, however, that the termination provision inthis subparagraph (b)(7) shall not apply to the Common Agreement but that, inlieu of the application of such termination provision of subparagraph (b)(7),the remedies available to DOE under Section 8.2 of the Common Agreementshall apply upon such an Event of Default.

 

**(8) Compliance with Davis-Bacon and Related Act requirements.**  All rulings and interpretations of theDavis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 (other thanSection 5.5(b) of 29 CFR part 5) are herein incorporated by reference in thisCommon Agreement and any other Davis-Bacon Act Covered Contract.

 

**(9) Disputes concerning labor standards.** Disputesarising out of the labor standards provisions of this Common Agreement or anyother Davis-Bacon Act Covered Contract shall not be subject to the generaldisputes clause of such contract. Such disputes shall be resolved in accordancewith 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 

 

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disputes between the Borrower or any Contract Party and DOE, the U.S.Department of Labor, or the employees or their representatives.

 

**(10) Certification of eligibility.**

 

(i) By entering into this Common Agreement and any other Davis-BaconAct Covered Contract, the Borrower and the Contract Party each certifies thatneither it (nor he or she) nor any person or firm who has an interest in theBorrower or the Contract Party’s firm is a person or firm ineligible to beawarded Government contracts by virtue of section 3(a) of the Davis-Bacon Actor 29 CFR 5.12(a)(1).

 

(ii) No part of this Common Agreement or any other Davis-Bacon ActCovered Contract shall be assigned or subcontracted, as the case may be, to anyperson or firm ineligible for award of a Government contract by virtue ofsection 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.

 

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** **

**Exhibit A5**to Common Agreement

 

**DISCLOSURE LETTER**

 

Seeattached.

 

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**LOAN GUARANTEE OF THE U.S.DEPARTMENT OF ENERGY**

 

**WITH RESPECT TO A LOAN FROM THEFEDERAL FINANCING BANK**

 

**TO**

 

**STEPHENTOWN REGULATION SERVICESLLC**

 

**COMPANY DISCLOSURE LETTER**

 

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**Schedule 1**

 

**Security Agreement**

 

**CommercialTort Claims**

 

None.

 

**IntellectualProperty Collateral**

 

[*****]

 

**Location of Chief Executive Office and Collateral****.**

 

ChiefExecutive Office and Principal Place of Business:  99 Grange Hall Road, Stephentown, NY 12168

 

Collateralis kept: (i) c/o Beacon Power Corporation, 65 Middlesex Road, Tyngsboro, MA01879; (ii) 99 Grange Hall Road, Stephentown, NY 12168; and (iii) with certainsuppliers, prior to delivery at the Site, including without limitation, D&WContractors, D&W Contractors, 95 Park Street, Unit #2, Northfield, NH03276.

 

**Locationsof Books****.**

 

c/oBeacon Power Corporation, 65 Middlesex Road, Tyngsboro, MA 01879

 

Certainbooks maybe kept with the Escrow Agent in connection with the TransactionDocuments.

 

**Jurisdictionof Organization and Names****.**

 

Jurisdictionof Organization:  Delaware

 

**Inventory****.**

 

Ascontemplated by the Waiver and Agreement, certain assets are located (i) c/oBeacon Power Corporation, 65 Middlesex Road, Tyngsboro, MA 01879; (ii) 99Grange Hall Road, Stephentown, NY 12168; and (iii) with certain suppliers,prior to delivery at the Site, including without limitation, [*****]

 

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**Equipment****.**

 

None.

 

**InvestmentProperty; Instruments; and Chattel Paper****.**

 

Accountssubject to the Account Control Agreement.

 

**Letter-of-Credit Rights****.**

 

None.

 

**Locationof Collateral****.**

 

Collateralis kept: (i) c/o Beacon Power Corporation, 65 Middlesex Road, Tyngsboro, MA01879; (ii) 99 Grange Hall Road, Stephentown, NY 12168; and (iii) with certainsuppliers, prior to delivery at the Site, including without limitation, [*****]

 

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**Schedule 5.10**

 

**Permits; Other Required Consents**

 

[*****]

 

Borrowerhas obtained and will be required to obtain permits in the ordinary course aswell.

 

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**Schedule 5.11**

 

**Litigation, Labor Disputes**

 

None.

 

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**Schedule 5.12**

 

**Tax**

 

None.

 

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**Schedule 5.14**

 

**Transactions with Affiliates**

 

TransactionDocuments entered into from time to time in accordance with the CommonAgreement.

 

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**Schedule 5.16**

 

**Environmental Laws**

 

Noother matters, other than any matters that are disclosed in the environmentalreport attached to the Environmental Indemnity Agreement

 

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**Exhibit B**to Common Agreement

 

**RULES OF INTERPRETATION**

 

Forall purposes of this Common Agreement, including Exhibits, Schedules, Annexesand Appendices hereto, unless otherwise indicated or required by the context:

 

1.               Plurals andGender.  Defined terms in the singularshall include the plural and vice versa, and the masculine, feminine or neutergender shall include all genders.

 

2.               Use of Or.  The word “or” is not exclusive.

 

3.               Change of Law.  Each reference to a Governmental Rule orEnvironmental Law includes any amendment, supplement or modification of suchGovernmental Rule or Environmental Law, as the case may be, and allregulations, rulings and other Governmental Rules or Environmental Lawspromulgated thereunder.

 

4.               Successor andAssigns.  A reference to a Personincludes its successors and permitted assigns.

 

5.               Including.  The words “include,” “includes” and “including”are not limiting and mean include, includes and including “without limitation”and “without limitation by specification”.

 

6.               Hereof, Herein,Hereunder.  The words “hereof,”“herein” and “hereunder” and words of similar import when used in any documentshall refer to such document as a whole and not to any particular provision ofsuch document.

 

7.               Articles,Sections, Exhibits.  A referencein a document to an Article, Section, Exhibit, Schedule, Annex or Appendix isto the Article, Section, Exhibit, Schedule, Annex or Appendix of such documentunless otherwise indicated.

 

8.               Attachments, Replacements,Amendments.  Referencesto any document, instrument or agreement (a) shall include all exhibits,schedules, annexes and appendices thereto, and all exhibits, schedules, annexesor appendices to any document shall be deemed incorporated by reference in suchdocument, (b) shall include all documents, instruments or agreementsissued or executed in replacement thereof, and (c) shall mean suchdocument, instrument or agreement, or replacement thereto, as amended, modifiedand supplemented from time to time and in effect at any given time.

 

9.               Periods andTime.  References to “days”, “weeks”,“months” and “years” shall mean calendar days, weeks, months and years,respectively.  References to a time ofday shall mean such time in Washington,D.C.

 

10.         Ambiguities.  The Loan Documents are the result ofnegotiations among, and have been reviewed by each party to the Loan Documentsand their respective counsel. Accordingly, 

 

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theLoan Documents shall be deemed to be the product of all parties thereto, and noambiguity shall be construed in favor of or against any Person.

 

11.         ContinuingDefinitions.  Withrespect to any term that is defined by reference to any document, for purposeshereof, such term shall continue to have the original definitionnotwithstanding any termination, expiration or modification of such document.

 

12.         Terms DefinedElsewhere.  Terms thatare defined in the preamble, the recitals, or the Sections of this Agreementhave the meanings ascribed to them therein.

 

13.         Headings.  The table of contents and article and sectionheadings and other captions have been inserted as a matter of convenience forthe purpose of reference only and do not limit or affect the meaning of theterms and provisions thereof.

 

14.         Accounting Terms.  All accounting terms not specifically definedshall be construed in accordance with GAAP.

 

15.         Forward-Looking Statements.  With respect to preparation or update by anyPerson of budgets, projections or other forward-looking plans and forecasts,such Person shall be deemed to represent only that such budgets, projectionsand forward-looking plans and forecasts were prepared in good faith based uponassumptions believed by such Person to be reasonable at the time of theirpreparation or update.

 

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**Exhibit C1**to Common Agreement

 

**FORM OF BORROWERCERTIFICATE(For Financial Closing Date)**

 

(Delivered pursuant to Section 4.1.23of the Common Agreement)

 

 

Date of this Certificate: August 6, 2010

 

U.S.Department of Energy

 

Ladies and Gentlemen:

 

This Borrower Certificate is delivered to youpursuant to Sections 4.1.23 of the Common Agreement, datedas of August 6, 2010 (the “Common Agreement”), by and among(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Certificateshall have their respective meanings specified in the Common Agreement.

 

The Borrower HEREBY CERTIFIES for the benefitof each Credit Party that, as of the date hereof:

 

1.             Pursuant to Section 4.1.2 of the CommonAgreement, the following Project Documents were delivered on the Financial ClosingDate and are attached hereto, (a) each of which is (i) a true,correct and complete copy of such document (including all schedules, exhibits,attachments, supplements and amendments thereto and any related protocols orside letters), and (ii) has been duly executed and delivered by theparties thereto and is in full force and effect (A) against the Borrowerand (B) against each other party thereto except, in the case of thisclause (B), for instances that would not, individually or in theaggregate, reasonably be expected to result in a Material Adverse Effect; and(b) to the Borrower’s Actual Knowledge, no party to any such document is,or but for the passage of time or giving of notice or both will be, in breachof any obligation thereunder:

 

a)     the Land Documents;

 

b)    the EPC Agreement;

 

c)     the Engineering and Architectural Services Agreement;

 

d)    the Permitting and Engineering Management Agreement;

 

e)     the NYISO Membership Agreement;

 

f)     the O&M Agreement;

 

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g)    the Technology License Agreement;

 

h)    the Technology Escrow Agreement;

 

i)      the Administrative Services Agreement; and

 

j)      the Flywheel Repair Agreement.

 

2.             Pursuant to Section 4.1.3of the Common Agreement, the Advance Schedule attached hereto is the Borrower’s reasonable estimate in allmaterial respects, based on all facts and circumstances existing and Known tothe Borrower, of the timing and amount of proposed Advances and EquityContributions for the Project (showing the total Advances expected in eachcalendar month);

 

3.             Pursuant to Section 4.1.4(i) of theCommon Agreement, the Financial Plan submitted to the Lender’sEngineer and the Loan Servicer on May 7,2010 and May 11, 2010 respectively, and attached asExhibit A1 to the Common Agreement, accurately reflects the Borrower’sFinancial Plan as of the date hereof and demonstrates that the DOE CreditFacility Commitment, when combined with other funds committed to the Project,including the Base Equity, will be available and sufficient to carry out theProject and based on the Borrower’s reasonable estimates of the informationcontained therein;

 

4.             Pursuant to Section 4.1.4(ii) of theCommon Agreement, the Base Case Projections, including a computer filecontaining the Base Case Projections and the underlying models and assumptionsand explanations thereto, submitted to the Lender’s Engineer and the LoanServicer on May 3, 2010 andattached hereto, represent the Borrower’s reasonable estimates ofthe information contained therein as of the date submitted and as of the datehereof;

 

5.             Pursuant to Section 4.1.4(iii) of theCommon Agreement, the Project Milestone Schedule, submitted to theLender’s Engineer and the Loan Servicer on July 23, 2010 and attached hereto, represents the Borrower’sreasonable estimates of the information contained therein as of the datesubmitted and as of the date hereof;

 

6.             Pursuant to Section 4.1.4(iv) of theCommon Agreement, the Project Budget, submitted to the Lender’sEngineer and the Loan Servicer on May 11,2010 and May 28, 2010 respectively and attached hereto, representsthe Borrower’s reasonable estimates of the information contained therein as ofthe date submitted and as of the date hereof;

 

7.             Pursuant to Section 4.1.4(v) of theCommon Agreement, a detailed description, with supporting documents, ashave been reasonably requested on or prior to the date hereof, of DevelopmentCosts incurred to date and a Development Costs Statement summarizing thosecosts that the Borrower seeks credit as Approved Pre-Closing Equity Credit tobe applied toward Base Equity and that are to be reviewed by the Lender’sEngineer, was submitted to the Lender’s Engineer and the Loan Servicer prior tothe date hereof, is attached hereto and remains now true and complete in allmaterial respects and represents the Borrower’s reasonable estimates of theinformation contained therein;

 

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8.             Pursuant to Section 4.1.8of the Common Agreement, the attached Base Case Projections delivered pursuantto Section 4.1.4 of the Common Agreement include calculationsindicating that throughout the term of the DOE Credit Facility a minimum annualDebt Service Coverage Ratio of 1.30 to 1 for the period after the ProjectCompletion Date is expected to be achieved;

 

9.             Pursuant to Section 4.1.9(ii) of theCommon Agreement, the amounts reflected in the Approved Pre-ClosingEquity Credit (a) are in anamount not greater than $18,882,211, and (b) have been applied in accordancewith the Project Budget only for Eligible Base Project Costs; and no amounts inthe Project Budget have been applied to Ineligible Base Project Costs;

 

10.           Pursuant to Section 4.1.9(iii) ofthe Common Agreement, no charges have been made to the line item for OverrunContingencies in the Project Budget;

 

11.           Pursuant to Section 4.1.10of the Common Agreement, (a) the Borrower has no existing Indebtedness,other than Indebtedness permitted under the Common Agreement and (b) noLiens encumber any Collateral, other than Permitted Liens.

 

12.           Pursuant to Section 4.1.12 of the CommonAgreement, (a) all Governmental Approvals and other RequiredConsents listed on Schedule 5.10 to the Disclosure Letter (except thoseidentified on Schedule 5.10 to the Disclosure Letter as to be obtained at alater date) have been duly obtained and are not subject to any waiting periodor appeal, and (b) a copy of each such Governmental Approval or otherRequired Consent, has been submitted to the Lender’s Engineer and the Loan Serviceron or prior to the date hereof, and each of which is true and complete in allmaterial respects as of the date hereof;

 

13.           Pursuant to Section 4.1.16of the Common Agreement, the Periodic Expenses of any Independent Consultantsincurred and invoiced prior to the Financial Closing Date (other than PeriodicExpenses not then due) have been paid in full;

 

14.           Pursuant to Section 4.1.17 of the CommonAgreement, the price set forth in each Project Document has not been increasedfrom the price as of the Common Agreement Date;

 

15.           Pursuant to Section 4.1.19 of the CommonAgreement, the Project Facility Performance Targets are achievable;

 

16.           Pursuant to Section 4.1.22 of the CommonAgreement, attached hereto are true and complete copies ofthe Borrower’s organizational documents (as amended to date), good standingcertificates and incumbency certificates;

 

17.           Pursuant to Section 4.1.22 of the CommonAgreement, attached hereto are true and complete copies ofthe Borrower’s resolutions duly adopted by the sole Member of the Borrower toauthorize (a) the Borrower’s participation in the Project, (b) thefinancing therefor and the granting of Liens, and (c) the execution,delivery and performance by the Borrower of the Transaction Documents(including a Direct Agreement) to which it is party;

 

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18.           Pursuant to Section 4.1.26 of the CommonAgreement, all required taxes, all Periodic Expenses, and all recordation andother costs, fees and Periodic Expenses invoiced and due in connection with theexecution, delivery, filing, registration, or performance of the TransactionDocuments or the perfection of the security interests in the CollateralSecurity have been paid in full;

 

19.           Pursuant to Section 4.1.27 of the CommonAgreement, (a) insurance coverage for the Project satisfies the requirementsfor Required Insurance as set forth on Schedule 6.3(b) of theCommon Agreement and certificates or policies for such insurance coverage areattached hereto, (b) such insurance coverage is reasonable for theProject, and (c) the applicable insurance policies are in full force and effect;

 

20.           Pursuant to Section 4.1.32of the Common Agreement, pursuant to the Technology License Agreement, theBorrower has received one or more licenses covering all intellectual propertyrights necessary for the design, construction and operation of the Project;

 

21.           Pursuant to Section 4.1.35 of the CommonAgreement, any recommendations for mitigation of earthquake risk set forth inthe Seismic Risk Analysis, dated September 14, 2009, prepared by DenteEngineering, P.C. (the “Earthquake Risk Report”), a copy of which is attachedhereto, have been adequately addressed in the Project Plans;

 

22.           Pursuant to Section 4.1.36 of the CommonAgreement, (i) except for the receipt of a fully executed original of theInterconnection Agreement in accordance with Section 4.2.1 of theCommon Agreement, arrangements reflected in the Project Milestone Schedule andthe Project Budget have been made under the Project Documents or are otherwiseavailable to the extent required in Section 5.25 of the CommonAgreement for the provision of all services, materials and utilities necessaryfor the construction, startup, commissioning and shakedown of the Project, and (ii) arrangementsreflected in the Base Case Projections have been made or can be made under theOperating Documents to the extent then appropriate or are otherwise availableto the extent required in Section 5.25 of the Common Agreement forthe provision of all services, materials and utilities necessary for theoperation and maintenance of the Project as contemplated by the PrincipalProject Documents;

 

23.           Pursuant to Section 4.1.38 of the CommonAgreement, all conditions precedent required to be satisfied by any MajorProject Participant under any Transaction Document as of the Financial ClosingDate have been satisfied;

 

24.           Pursuant to Section 4.1.40of the Common Agreement, all employees of the Borrower have entered into validand binding non-disclosure and assignment of invention agreements;

 

25.           Pursuant to Section 4.1.44 of the CommonAgreement, the Borrower does not have a judgement Lien against any of itsproperty for a debt owed to the United States of America or any other creditor;

 

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26.           Pursuant to Section 4.1.45 of the CommonAgreement, the Borrower is in compliance with, and has taken all necessarysteps to be able to timely comply in all material respects with (a) itsreporting obligations under Section 6.29(a) of the CommonAgreement with respect to Recovery Act and (b) the requirements set forthin Section 6.30 and Exhibit A4 of the Common Agreement;

 

27.           Attached hereto is a copy of the ApplicationSupplement;

 

28.           Pursuant to Section 4.1.47 of the CommonAgreement, Commencement of Construction has occurred on or before the datehereof;

 

29.           Pursuant to Section 4.1.48of the Common Agreement, since June 29, 2009 (a) no event hasoccurred with respect to the Project or any Major Project Participant thatwould reasonably be expected to have a Material Adverse Effect and (b) noevent has occurred that would reasonably be expected to have a Material AdverseEffect;

 

30.           Pursuant to Section 4.1.49of the Common Agreement, the Borrower has registered in the United Statesfederal government Central Contractor Registration database; and

 

31.           Pursuant to Section 4.1.52 of the CommonAgreement, there is no pending or threatened (in writing) action, suit, orproceeding, or investigation by a Governmental Authority, of any kind,including any action or proceeding of or before any Governmental Authority,that (i) relates to the Project or to any transactions contemplated by anyof the Transaction Documents or (ii) to which the Borrower, or, to theBorrower’s Actual Knowledge, the Sponsor or any other Major Project Participantis a party, that, in each case, either singly or in the aggregate, has, orcould reasonably be expected tohave, a Material Adverse Effect.

 

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IN WITNESS WHEREOF, the undersigned hasexecuted this Borrower Certificate as of the date first written above.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

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List of Attachments to Borrower Certificate

 
| 1.     | Advance  Schedule (Paragraph 2)                                                                                   |
|--------|-------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                              |
| 2.     | Base  Case Projections (Paragraph 4)                                                                              |
|   |                                                                                                              |
| 3.     | Project  Milestone Schedule (Paragraph 5)                                                                         |
|   |                                                                                                              |
| 4.     | Project  Budget (Paragraph 6)                                                                                     |
|   |                                                                                                              |
| 5.     | Development  Costs Statement (Paragraph 7)                                                                        |
|   |                                                                                                              |
| 6.     | Borrower’s  Organizational Documents, Good Standing Certificates and Incumbency  Certificates (Paragraph 16) |
|   |                                                                                                              |
| 7.     | Borrower’s  Authorizing Resolutions (Paragraph 17)                                                           |
|   |                                                                                                              |
| 8.     | Certificates  of Insurance (Paragraph 19)                                                                         |
|   |                                                                                                              |
| 9.     | Earthquake  Risk Report (Paragraph 21)                                                                            |
|   |                                                                                                              |
| 10.    | Application  Supplement (Paragraph 27)                                                                            |

 

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**Exhibit C2**to Common Agreement

 

**FORM OF BORROWERCERTIFICATE (For Periodic Closing)**

 

(Delivered pursuant to Section 4.2.11(i) ofthe Common Agreement)

 

Date of this Certificate:            ,20   

 

U.S.Department of Energy

 

Ladies and Gentlemen:

 

This Borrower Certificate is delivered to youpursuant to Section 4.2.11(i) of the Common Agreement, datedas of August 6, 2010 (the “Common Agreement”), by and among(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this BorrowerCertificate shall have their respective meanings specified in the CommonAgreement.

 

The Borrower HEREBY CERTIFIES for the benefitof each Relevant Credit Party that, as of the date hereof:

 

1.             Pursuant to Section 4.2.2(i) ofthe Common Agreement, the updated Advance Schedule attached hereto as Exhibit 4.2.2(i),including the estimates set forth therein, of the timing and amount of Advancesrequired in connection with the construction and financing of the Project isconsistent with the Project Budget, consistent with the achievement of PhysicalCompletion within the time period specified in the Project Milestone Scheduleand consistent with the limitations set forth in Section 2.1(c) ofthe Common Agreement;

 

2.             Pursuant to Section 4.2.2(ii) ofthe Common Agreement, (i) the proceeds of all Advances to be made withrespect to the updated Advance Schedule will be needed for Eligible ProjectCosts that have been incurred or by the Requested Advance Date will beincurred, and (ii) attached hereto as Exhibit 4.2.2 is adescription in reasonable detail of such Eligible Project Costs;

 

3.             Pursuant to Section 4.2.3(a) ofthe Common Agreement, the Project Progress Report delivered on        ,20   , is accurate and complete in all material respects basedupon Borrower’s good faith estimates of the information contained therein,including with respect to the following:

 

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(i)            [Construction andinstallation of the Project are proceeding in accordance with the ProjectMilestone Schedule and the Project Budget] OR [The Project Progress Report (i) describesany variances from the Project Milestone Schedule and Project Budget and (ii) statesthat the variances described in the Project Progress Report would notreasonably be expected to have a Material Adverse Effect];

 

(ii)           Construction andinstallation of the Project are expected to be completed on or before theAnticipated Physical Completion Date;

 

(iii)          Total Funding Available issufficient to pay all remaining Total Project Costs (including Interest DuringConstruction, DOE Credit Facility Fees, Periodic Expenses, and identified CostOverruns); and

 

(iv)          evidence that as of the dateof such Project Progress Report (A) each Construction Contractor and theOperator shall have irrevocably waived and released all Liens, statutory orotherwise, that any of them may have or acquire on the Collateral Security withrespect to the work completed prior to the last submission for payment, exceptfor Liens in favor of any Person in an aggregate amount for such Person not [*****]; and (B) all unpaid balances thatare due or unsettled claims with any Construction Contractor, if any, have beenadequately paid and that those being contested or negotiated in good faith areprovisioned to the reasonable satisfaction of the Loan Servicer;

 

4.             Pursuant to Section 4.2.3(b) ofthe Common Agreement:

 

(i)            there is no reason tobelieve that anything is incorrect or misleading in any material respect in theProject Progress Report delivered on          ,20   ; and

 

(ii)           nothing has occurred sincethe date of such Project Progress Report or the date of the Lender’s Engineer’smost recent site visit, whichever is later, that could reasonably be expectedto prevent construction and installation of the Project within the ProjectMilestone Schedule and the Project Budget;

 

5.             Pursuant to Section 4.2.5of the Common Agreement, (i) all consents and approvals of third Personsas may be required in connection with the proposed Advances and allGovernmental Approvals required as of the Advance Notice Date have been dulyobtained and are in full force and effect and are not under appeal or subjectto other proceedings or unsatisfied conditions that could reasonably beexpected to result in a material modification or cancellation thereof, and(ii) attached hereto as Exhibit 4.2.5 are copies of allmaterial Governmental Approvals not previously delivered, which are true andcomplete in all material respects;

 

6.             Pursuant to Section 4.2.6of the Common Agreement, (i) all Required Insurance is in place, in goodstanding and in full force and all premiums due and payable thereon as of thedate hereof (x) have been paid in full, (y) are to be paid with theproceeds of the requested Advance, or (z) are to be paid by otherarrangements satisfactory to the Borrower, and (ii) attached hereto as Exhibit 4.2.6are true and complete copies of all certificates or policies with respect toany additional renewal or substitute insurance 

 

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obtained by the Borrower since the previous Advance Notice Date,designating (or evidencing the designation of) the Administrative Agent in itscapacity as Collateral Agent as loss payee, where appropriate;

 

7.             Pursuant to Section 4.2.7of the Common Agreement, (i) all corporate and similar proceedingsconcluded since the last Advance Notice Date are in proper form and substance,and (ii) attached hereto as Exhibit 4.2.7 are true andcomplete original counterparts or copies of all Additional Project Documentsentered into since the last Advance Notice Date;

 

8.             Pursuant to Section 4.2.8 of the CommonAgreement, the representations and warranties in the Loan Documents(other than those that speak only asto an earlier date) are true and correct in all material respects and no Eventof Default or Potential Default has occurred and is continuing;

 

9.             Pursuant to Section 4.2.9of the Common Agreement, no changes to the technical requirements of theexisting Governmental Approvals has occurred, that has had or could reasonablybe expected to have a Material Adverse Effect;

 

10.           Pursuant to Section 4.2.10of the Common Agreement, the Borrower has achieved the Project FacilityPerformance Targets applicable to this Advance Notice Date;

 

11.           Pursuant to Section 4.2.12of the Common Agreement, (i) there have been no changes to the ProjectBudget since the previous Advance Notice Date, except for Approved ProjectChanges, (ii) the aggregate amounts expended for each type of Project Costdoes not exceed the aggregate amount budgeted for such cost in the ProjectBudget, including budgeted Overrun Contingencies, except for Approved ProjectChanges, and (iii) the sum of (A) the unadvanced proceeds of the DOECredit Facility and (B) the amount on deposit in the Base Equity Accountand Overrun Equity Account is sufficient to pay all remaining Total ProjectCosts;

 

12.           Pursuant to Section 4.2.14of the Common Agreement, the Advance will not result in a violation of any law,any Transaction Document, any governmental approval, or any other agreement orconsent to which the Borrower is a party or any judgment or approval to whichit is subject;

 

13.           Pursuant to Section 4.2.15of the Common Agreement, since June 29, 2009 no event has occurred withrespect to the Project or any Major Project Participant that would reasonablybe expected to have a Material Adverse Effect;

 

14.           Pursuant to Section 4.2.17of the Common Agreement, since the Common Agreement Date, no change in law orany other event has occurred that would reasonably be expected to have aMaterial Adverse Effect; and

 

15.           Pursuant to Section 4.2.18of the Common Agreement, the Borrower is in compliance with its obligationsunder the Loan Documents, including all affirmative covenants and 

 

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negative covenants, and has furnished all information requested underthe Loan Documents.

 

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IN WITNESS WHEREOF, the undersigned hasexecuted this Borrower Certificate as of the date first written above.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

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**Exhibit D1**to Common Agreement

 

**FORM OF LENDER’S ENGINEER CERTIFICATE********(For Financial Closing Date)**

 

(Delivered pursuant to Section 4.1.15(i) of the CommonAgreement)

 

**[On Letterhead of the Lender’s Engineer]**

 

Date of this Certificate: August 6, 2010

 

U.S.Department of Energy

 

Ladiesand Gentlemen:

 

ThisCertificate of the Lender’s Engineer is delivered to you [*****] as Lender’s Engineer pursuant to theCommon Agreement, dated as of August 6, 2010 (the “Common Agreement”),by and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) theU.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as theCollateral Agent.

 

Allcapitalized terms used in this Certificate of the Lender’s Engineer shall havethe respective meanings specified in the Common Agreement.

 

Wehave reviewed the Borrower’s Certificate (For Financial Closing Date) dated August 6,2010.

 

Tothe extent that this Certificate of the Lender’s Engineer evidences, attests orconfirms compliance with any covenants, conditions, procedures or requirements,we have made such examination or investigation as was, in our opinion,necessary to enable us to express an opinion as to whether such covenants,conditions, procedures or requirements have been complied with.

 

Ourreview and observations were performed in accordance with the Matching OrderDE-MO01-09CF02002 and the Sponsor Payment Letter dated February 23, 2009and with generally accepted engineering practice and in accordance with thestandards of care practiced by independent and consulting engineers performingsimilar tasks on like projects.  ThisCertificate is addressed to DOE in its capacity as Loan Servicer and may not berelied upon by any other party.

 

Theopinions that support our certifications contained herein were developed withthe understanding and assumption, after appropriate due diligence, that we havebeen provided true, correct, and complete information satisfactory in form andscope from the Borrower as to the matters covered by this Certificate of theLender’s Engineer.

 

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Pursuantto Section 4.1.15(i) of the Common Agreement, the undersigned DOESHEREBY CERTIFY that, as of the date hereof:

 

1.             Pursuant to Section 4.1.3of the Common Agreement, the Advance Schedule provided by the Borrower andattached hereto showing the timing and amount of proposed Advances and EquityContributions for the Project (the total Advances expected in each calendarmonth) is consistent with the Financial Plan and Project Budget and consistentwith the achievement of Physical Completion within the time period specified inthe Project Milestone Schedule, based on all facts and circumstances thenexisting and Known to us;

 

2.             Pursuant to Section 4.1.4(i) ofthe Common Agreement, the Financial Plan provided by the Borrower onMay 7, 2010 and attached as Exhibit A1 to the CommonAgreement, demonstrates that the DOE Credit Facility Commitment, when combinedwith other funds committed to the Project, including the Base Equity, will besufficient to carry out the Project, based upon the Borrower’s estimates of theinformation contained therein;

 

3.             Pursuant to Section 4.1.4(ii) ofthe Common Agreement, and based on our independent review of the technicalinputs to and the information presented in the Base Case Projections, includinga computer file containing the Base Case Projections and the underlying modelsand assumptions and explanations thereto, provided by the Borrower onApril 30, 2010 and attached hereto, as documented in our IndependentEngineer’s Report submitted to DOE on May 27, 2010, we are of the opinion [*****];

 

4.             Pursuant to Section 4.1.4(iii) ofthe Common Agreement, the Project Milestone Schedule provided by the Borroweron July 23, 2010 and attached hereto is achievable for the Project;

 

5.             Pursuant to Section 4.1.4(iv) ofthe Common Agreement, the Project Budget provided by the Borrower onMay 11, 2010 and attached hereto is consistent with the Advance Scheduleand Financial Plan for the Project; and, based on our review, as documented inour Independent Engineer’s Report submitted to DOE on May 27, 2010, theestimated total Project construction cost and Overrun Contingency appear to bewithin the range of estimated construction costs and contingency allowances forreasonably similar projects, considering the Project size and complexity andtype of equipment, with which we are familiar;

 

6.             Pursuant to Section 4.1.9(i) ofthe Common Agreement, we have reviewed the Borrower’s description, andsupporting documents, of Development Costs provided by the Borrower in theDevelopment Costs Statement dated July 14, 2010, submitted by the Borroweron July 15, 2010, pursuant to Section 4.1.4(v) of theCommon Agreement and attached hereto; the amount of Development Costs of$18,882,140.72 certified by the Borrower in such description can be included inthe Approved Pre-Closing Equity Credit;

 

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7.             Pursuant to Section 4.1.9(ii) ofthe Common Agreement, (a) the amounts reflected in the ApprovedPre-Closing Equity Credit are in an amount not greater than $18,882,211 andhave been applied in accordance with the Project Budget only for Eligible BaseProject Costs, and (b) the Borrower has not allocated any amounts in theProject Budget to Ineligible Base Project Costs.  For the avoidance of doubt, the Borrower hasindicated that there are no Ineligible Base Project Costs;

 

8.             Pursuant to Section 4.1.9(iii) ofthe Common Agreement, and certified by the Borrower, no changes have been madeto the line item for Overrun Contingencies in the Project Budget;

 

9.             Pursuant to Section 4.1.13of the Common Agreement, and, provided that the Borrower provides the updatesrequired under the provisions of the Technology Escrow Agreement, the ProjectPlans are satisfactory and sufficient for the construction of the Improvementson the Project Site;

 

10.           Pursuant to Section 4.1.17of the Common Agreement, the price set forth in each Project Document andcertified by the Borrower has not been increased from the price as of theCommon Agreement Date;

 

11.           Pursuant to Section 4.1.19 of the CommonAgreement, the Project Facility Performance Targets are achievable;

 

12.           Pursuant to Section 4.1.32of the Common Agreement, pursuant to the Technology License Agreement, theBorrower has received one or more licenses covering all intellectual propertyrights necessary for the design, construction and operation of the Project;

 

13.           Pursuant to Section 4.1.35 of the Common Agreement, anyrecommendations for mitigation of earthquake risk set forth in the Seismic RiskAnalysis, dated September 14, 2009 prepared by Dente Engineering, P.C.(the “Earthquake Risk Report”), a copy of which is attached hereto, have beenadequately addressed in the Project Plans;

 

14.           Pursuant to Section 4.1.36(i) ofthe Common Agreement, except for the receipt of a fully executed original ofthe Interconnection Agreement in accordance with Section 4.2.1 of theCommon Agreement, arrangements reflected in the Project Milestone Schedule andthe Project Budget have been made under the Project Documents or are otherwiseavailable to the extent required in Section 5.25 of the CommonAgreement for the provision of all services, materials and utilities necessaryfor the construction, startup, commissioning and shakedown of the Project;

 

15.           Pursuant to Section 4.1.36(ii) ofthe Common Agreement, and certified by the Borrower, arrangements reflected inthe Base Case Projections have been made or can be made under the OperatingDocuments, or are otherwise available to the extent required in Section 5.25of the Common Agreement, for the provision 

 

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of all services, materials and utilities necessary for the operationand maintenance of the Project as contemplated by the Principal ProjectDocuments.

 

INWITNESS WHEREOF, the undersigned have executed this Certificate of Lender’sEngineer as of the date hereof.

 
|   | [*****]**, AS LENDER’S ENGINEER** |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | By:                                    |   |
|   | Its:                                   |   |
|   |                                   |
|   |                                   |
|   | By:                                    |   |
|   | Its:                                   | Vice President |

 

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List of Attachments to Lender’s Engineer Certificate

 
| 1.     | Advance  Schedule (Paragraph 1)            |
|--------|--------------------------------------------|
|   |                                       |
| 2.     | Base  Case Projections (Paragraph 3)       |
|   |                                       |
| 3.     | Project  Milestone Schedule (Paragraph 4)  |
|   |                                       |
| 4.     | Project  Budget (Paragraph 5)              |
|   |                                       |
| 5.     | Development  Costs Statement (Paragraph 6) |
|   |                                       |
| 6.     | Earthquake  Risk Report (Paragraph 13)     |

 

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**Exhibit D2**to Common Agreement

 

**FORM OF LENDER’S ENGINEER CERTIFICATE****(For Periodic Closing)**

 

(Delivered pursuant to Section 4.2.11(iii) of theCommon Agreement)

 

**[On Letterhead of the Lender’s Engineer]**

 

Date of this Certificate:                 ,20   

 

Requested Advance Date:                 ,20   

 

U.S.Department of Energy

 

Ladiesand Gentlemen:

 

ThisCertificate of the Lender’s Engineer is delivered to you by [*****] as Lender’s Engineer pursuant to theCommon Agreement, dated as of August 6, 2010 (the “Common Agreement”),by and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) theU.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as theCollateral Agent.

 

Allcapitalized terms used in this Certificate of the Lender’s Engineer shall havethe respective meanings specified in the Common Agreement.

 

Wereviewed the Borrower’s Master Advance Notice dated as of               ,2010 and supporting information requesting an [Equity] Advance on                 ,2010, the Borrower Certificate (for Periodic Closing) dated as of             ,2010, and other information identified herein. We have visited the Project on a periodic basis and observed the statusof construction progress [and start-up activities] at the Project.  We last visited the Project on             ,201  .

 

Tothe extent that this Certificate of the Lender’s Engineer evidences, attests orconfirms compliance with any covenants, conditions, procedures or requirements,we have made such examination or investigation as was, in our opinion,necessary to enable us to express an opinion as to whether such covenants,conditions, procedures or requirements have been complied with.

 

Ourreview and observations were performed in accordance with the Matching OrderDE-MO01-09CF02002 and the Sponsor Payment Letter dated February 23, 2009and with generally accepted engineering practice and in accordance with thestandards of care practiced by independent and consulting engineers performingsimilar tasks on like projects.  ThisCertificate is addressed to DOE in its capacity as Loan Servicer and may not berelied upon by any other party.

 

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Theopinions that support our certifications contained herein were developed withthe understanding and assumption, after appropriate due diligence, that we havebeen provided true, correct, and complete information satisfactory in form andscope from the Borrower as to the matters covered by this Certificate of theLender’s Engineer.

 

Pursuantto Section 4.2.11(ii) of the Common Agreement, the undersignedDOES HEREBY CERTIFY that, as of the date hereof:

 

1.             Pursuant to Section 4.2.2(i) ofthe Common Agreement, the updated Advance Schedule provided by the Borrower on           , 20   ,including the estimates set forth therein, of the timing and amount of Advancesrequired in connection with the construction and financing of the Projectis consistent with the Project Budget, consistent with the achievement ofPhysical Completion within the time period specified in the Project MilestoneSchedule and consistent with the limitations set forth in Section 2.1(c) ofthe Common Agreement;

 

2.             Pursuant to Section 4.2.3(a) ofthe Common Agreement, the Project Progress Report delivered on           ,20   , is accurate and complete in all material respects basedupon Borrower’s good faith estimates of the information contained therein,including with respect to the following:

 

(i)            [Construction andinstallation of the Project are proceeding in accordance with the ProjectMilestone Schedule and the Project Budget] OR [The Project Progress Report (i) describesany variances from the Project Milestone Schedule and Project Budget and (ii) thevariances stated in the Project Progress Report would not reasonably beexpected to have a Material Adverse Effect];

 

(ii)           Construction andinstallation of the Project are expected to be completed on or before theAnticipated Physical Completion Date;

 

(iii)          Total Funding Available issufficient to pay all remaining Total Project Costs (including Interest DuringConstruction, DOE Credit Facility Fees, Periodic Expenses, and identified CostOverruns); and

 

(iv)          evidence that as of the dateof such Project Progress Report (A) each Construction Contractor and theOperator shall have irrevocably waived and released all Liens, statutory orotherwise, that any of them may have or acquire on the Collateral Security withrespect to the work completed prior to the last submission for payment, exceptfor Liens in favor of any Person in an aggregate amount for such Person not [*****]; and (B) all unpaid balances thatare due or unsettled claims with any Construction Contractor, if any, have beenadequately paid and that those being contested or negotiated in good faith areprovisioned to the reasonable satisfaction of the Loan Servicer;

 

3.             [Ifapplicable:]  [Pursuant to Section 4.2.3(b) ofthe Common Agreement:

 

(i)            we have no reason to believethat anything is incorrect or misleading in any material respect in the ProjectProgress Report delivered on              ,20   ; and

 

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(ii)           during the normal course ofour review, nothing has come to our attention that has occurred since the dateof such Project Progress Report or the date of the Lender’s Engineer’s mostrecent site visit, whichever is later, that could reasonably be expected toprevent construction and installation of the Project within the ProjectMilestone Schedule and the Project Budget;]

 

4.             Pursuant to Section 4.2.9of the Common Agreement, no changes to the technical requirements of theexisting Governmental Approvals listed in Schedule 5.10 to the DisclosureLetter has occurred, that has had or could reasonably be expected to have aMaterial Adverse Effect;

 

5.             [Pursuant to Section 4.2.10of the Common Agreement, the Borrower has achieved the Project FacilityPerformance Targets applicable to this Advance Notice Date]; and

 

6.             Pursuant to Section 4.2.12of the Common Agreement, (i) there have been no changes to the ProjectBudget since the previous Advance Notice Date, except for Approved ProjectChanges, (ii) the aggregate amounts expended for each type of Project Costdoes not exceed the aggregate amounts budgeted for such cost in the ProjectBudget, including budgeted Overrun Contingencies, except for Approved ProjectChanges, and (iii) the sum of (A) the unadvanced proceeds of the DOECredit Facility and (B) the amount on deposit in the Base Equity Accountand Overrun Equity Account is sufficient to pay all remaining Total ProjectCosts.

 

D2-3

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INWITNESS WHEREOF, the undersigned have executed this Certificate of Lender’sEngineer as of the date hereof.

 

 
|   | [*****]**, AS LENDER’S ENGINEER** |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | By:                                    |   |
|   | Its:                                   |   |
|   |                                   |
|   |                                   |
|   | By:                                    |   |
|   | Its:                                   | Vice  President |

 

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**Exhibit E1**to Common Agreement

 

**FORM OF SPONSOR’SCERTIFICATE (For Initial Closing)**

 

(Delivered pursuant to Section 4.1.23of the Common Agreement)

 

Date of this Certificate: August 6, 2010

 

U.S.Department of Energy

 

Ladies and Gentlemen:

 

This Sponsor’s Certificate is delivered to youpursuant to Section 4.1.23 of the Common Agreement, datedas of August 6, 2010 (the “Common Agreement”), by and among(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Certificateshall have their respective meanings specified in the Common Agreement.

 

The Sponsor HEREBY CERTIFIES for the benefit ofeach Relevant Credit Party that, as of the date hereof:

 

1.             Pursuant to Section 4.1.3of the Common Agreement, the Advance Schedule attached hereto is the Borrower’s best estimate, based on all factsand circumstances existing and Known to the Borrower, of the timing and amountof proposed Advances and Equity Contributions for the Project (showing thetotal Advances expected in each calendar month);

 

2.             Pursuant to Section 4.1.4(i) of theCommon Agreement, the Financial Plan submitted to the Lender’sEngineer and the Loan Servicer and shown as Exhibit 1 to the CommonAgreement accurately reflects the Borrower’s Financial Plan as of the datehereof and demonstrates that the DOE Credit Facility Commitment, when combinedwith other funds committed to the Project, including the Base Equity, will beavailable and sufficient to carry out the Project based on the Borrower’sreasonable estimates of the information contained therein;

 

3.             Pursuant to Section 4.1.4(ii) of theCommon Agreement, the Base Case Projections, including a computer filecontaining the Base Case Projections and the underlying models and assumptionsand explanations thereto, submitted to the Lender’s Engineer and the LoanServicer on May 3, 2010 and attached hereto, represent the Borrower’s 

 

E1-1

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reasonable estimates of the information contained therein as of thedate submitted and as of the date hereof;

 

4.             Pursuant to Section 4.1.4(iii) of theCommon Agreement, the Project Milestone Schedule, submitted to theLender’s Engineer and the Loan Servicer on June 1, 2010 and June 2,2010 respectively and attached hereto, represents the Borrower’s reasonableestimates of the information contained therein as of the date submitted and asof the date hereof;

 

5.             Pursuant to Section 4.1.4(iv) of theCommon Agreement, the Project Budget, submitted to the Lender’sEngineer and the Loan Servicer on May 11, 2010 and May 28, 2010respectively and attached hereto, represents the Borrower’s reasonableestimates of the information contained therein as of the date submitted and asof the date hereof;

 

6.             Pursuant to Section 4.1.4(v) of theCommon Agreement, a detailed description, with supporting documents, ashave been reasonably requested on or before the date hereof, of DevelopmentCosts incurred to date and a Development Costs Statement summarizing thosecosts that the Borrower seeks credit as Approved Pre-Closing Equity Credit tobe applied toward Base Equity and that are to be reviewed by the Lender’sEngineer, was submitted to the Lender’s Engineer and the Loan Servicer prior tothe date hereof, is attached hereto and remains now true and complete in allmaterial respects and represents the Borrower’s reasonable estimate of theinformation contained therein;

 

7.             Pursuant to Section 4.1.22 of the CommonAgreement, attached hereto are true and complete copies of the Sponsor’sorganizational documents (as amended to date), good standing certificates andincumbency certificates;

 

8.             Pursuant to Section 4.1.22 of the Common Agreement,attached hereto are true and complete copies of the Sponsor’sresolutions duly adopted by its board of directors to authorize (a) theSponsor’s participation in the Project, (b) the financing therefor and thegranting of Liens, and (c) the execution, delivery and performance by theSponsor of the Transaction Documents (including a Direct Agreement) to which itis party;

 

9.             Pursuant to Section 4.1.32of the Common Agreement, pursuant to the Technology License Agreement, theBorrower has received one or more licenses covering all intellectual propertyrights necessary for the design, construction and operation of the Project; and

 

10.           Pursuant to Section 4.1.40of the Common Agreement, all employees of the Borrower have entered into validand binding non-disclosure and assignment of invention agreements.

 

IN WITNESS WHEREOF, the undersigned hasexecuted this Sponsor’s Certificate as of the date first written above.

 

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|   | **BEACON  POWER CORPORATION** |
|--------|-------------------------------|
|   |                          |
|   |                          |
|   | By:                           |   |
|   | Its:                          |   |

 

 

cc:           Stephentown RegulationServices LLC

 

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List of Attachments to Sponsor’s Certificate

 
| 1.     | Advance  Schedule (Paragraph 1)                                                                                 |
|--------|-----------------------------------------------------------------------------------------------------------------|
|   |                                                                                                            |
| 2.     | Base  Case Projections (Paragraph 3)                                                                            |
|   |                                                                                                            |
| 3.     | Project  Milestone Schedule (Paragraph 4)                                                                       |
|   |                                                                                                            |
| 4.     | Project  Budget (Paragraph 5)                                                                                   |
|   |                                                                                                            |
| 5.     | Development  Costs Statement (Paragraph 6)                                                                      |
|   |                                                                                                            |
| 6.     | Sponsor’s  Organizational Documents, Good Standing Certificates and Incumbency  Certificates (Paragraph 7) |
|   |                                                                                                            |
| 7.     | Sponsor’s  Authorizing Resolutions (Paragraph 8)                                                           |

 

E1-4

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**Exhibit E2**to Common Agreement

 

**Intentionally Omitted**

 

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**Exhibit E3**to Common Agreement

 

**FORM OF CERTIFICATE OFHOLDINGS (For Initial Closing)**

 

(Delivered pursuant to Section 4.1.23of the Common Agreement)

 

 

Date of this Certificate: August 6, 2010

 

U.S.Department of Energy

 

Ladies and Gentlemen:

 

This Certificate of Holdings is delivered toyou pursuant to Section 4.1.23 of the Common Agreement, datedas of August 6, 2010 (the “Common Agreement”), by and among(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Certificateshall have their respective meanings specified in the Common Agreement.

 

Holdings HEREBY CERTIFIES for the benefit ofeach Relevant Credit Party that, as of the date hereof:

 

1.             Pursuant to Section 4.1.22 of the CommonAgreement, attached hereto are true and complete copies of Holdings’organizational documents (as amended to date), good standing certificates andincumbency certificates; and

 

2.             Pursuant to Section 4.1.22 of the CommonAgreement, attached hereto are true and complete copies of Holdings’ resolutionsduly adopted by its board of directors to authorize (a) Holdings’ participationin the Project, (b) the financing therefor and the granting of Liens, and(c) the execution, delivery and performance by Holdings of the TransactionDocuments to which it is party.

 

E3-1

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IN WITNESS WHEREOF, the undersigned hasexecuted this Certificate as of the date first written above.

 
|   | **STEPHENTOWN  HOLDING LLC** |
|--------|------------------------------|
|   |                         |
|   |                         |
|   | By:                          |   |
|   | Its:                         |   |

 

 

cc:           Stephentown RegulationServices LLC

 

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List of Attachments to Holdings’ Certificate

 
| 1.     | Holdings’  Organizational Documents, Good Standing Certificates and Incumbency  Certificates (Paragraph 1) |
|--------|-----------------------------------------------------------------------------------------------------------------|
|   |                                                                                                            |
| 2.     | Holdings’  Authorizing Resolutions (Paragraph 2)                                                           |

 

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**Exhibit F1**to Common Agreement

 

**[FORM OF CERTIFICATE OF THE INSURANCE CONSULTANT]****(For Initial Closing)**

 

(Delivered pursuant to Section 4.1.15(ii) of the Common Agreement)

 

U.S.Department of Energy

 

Ladies and Gentlemen:

 

This Insurance Consultant’s Certificate isdelivered to you pursuant to Section 4.1.15(ii) of the CommonAgreement, dated as of August 6, 2010 (the “Common Agreement”), byand among (i) Stephentown Regulation Services LLC, as Borrower,(ii) the U.S. Department of Energy, as Credit Party and Loan Servicer, and(iii) Midland Loan Services, Inc., as Administrative Agent in itscapacity as the Collateral Agent.

 

All capitalized terms used in this Certificateshall have their respective meanings specified in the Common Agreement.

 

ThisCertificate or memorandum of insurance does not affirmatively or negativelyamend, extend, or alter the coverage afforded by the insurance policies.

 

The Insurance Consultant HEREBY CERTIFIES forthe benefit of each Relevant Credit Party that, as of the date hereof:

 

Pursuant to Section 4.1.27 of theCommon Agreement, (i) insurance coverage for the Projectsatisfies the requirementsfor Required Insurance as set forth on Schedule 6.3(b) of theCommon Agreement and certificates or policies for such insurance coverage are attachedhereto, (ii) such insurance coverage is reasonable for the Project, and (iii) theapplicable insurance policies are in full force and effect.

 

F1-1

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IN WITNESS WHEREOF, the undersigned has executedthis Insurance Consultant’s Certificate as of the date first written above.

 
|   | **[INSURANCE  CONSULTANT]** |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         |   |
|   | Its:                        |   |

 

 

cc:           Stephentown RegulationServices LLC

 

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**Exhibit F2**to Common Agreement

 

**[FORM OF INSURANCE CONSULTANT CERTIFICATE]****(For Periodic Closing)**

 

(Delivered pursuant to Section 4.2.11(iv) of the Common Agreement)

 

Dateof this Certificate:                  

 

U.S.Department of Energy

 

Ladies and Gentlemen:

 

This Insurance Consultant’s Certificate isdelivered to you pursuant to Section 4.2.11(iv) of the Common Agreement, dated as ofAugust 6, 2010 (the “Common Agreement”), by and among(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Certificateshall have their respective meanings specified in the Common Agreement.

 

ThisCertificate or memorandum of insurance does not affirmatively or negativelyamend, extend, or alter the coverage afforded by the insurance policies.

 

The Insurance Consultant HEREBY CERTIFIES forthe benefit of each Relevant Credit Party that, as of the date hereof:

 

Pursuantto Section 4.2.6 of the Common Agreement, (i) all RequiredInsurance is in place, in good standing and in full force and all premiums dueand payable thereon as of the date hereof (x) have been paid in full, (y) areto be paid with the proceeds of the requested Advance, or (z) are to bepaid by other satisfactory arrangements, and (ii) attached hereto are trueand complete copies of all certificates or policies with respect to anyadditional renewal or substitute insurance obtained by the Borrower since theprevious Advance Notice Date, designating (or evidencing the designation of)the Administrative Agent in its capacity as Collateral Agent as loss payee,where appropriate.

 

IN WITNESS WHEREOF, the undersigned hasexecuted this Insurance Consultant’s Certificate as of the date first writtenabove.

 
|   | **[INSURANCE  CONSULTANT]** |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         |   |
|   | Its:                        |   |

 

F2-1

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cc:           Stephentown RegulationServices LLC

 

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**Exhibit G**to Common Agreement

 

**FORM OF CERTIFICATE OF COLLATERAL AGENT****(For Initial Closing)**

 

(Delivered pursuant to Section 4.1.21(c) of the CommonAgreement)

 

Date of this Certificate: August 6, 2010

 

U.S.Department of Energy

 

Ladiesand Gentlemen:

 

ThisCertificate of the Administrative Agent in its capacity as the Collateral Agentis delivered to you pursuant to the Common Agreement, dated as ofAugust 6, 2010 (the “Common Agreement”), by and among(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

Allcapitalized terms used in this Certificate of the Administrative Agent in itscapacity as the Collateral Agent shall have their respective meanings specifiedin the Common Agreement.

 

Tothe extent that this Certificate of the Administrative Agent in its capacity asthe Collateral Agent evidences, attests or confirms compliance with anycovenants, conditions, procedures or requirements, we have made suchexamination or investigation as was, in our opinion, necessary to enable us toexpress an opinion as to whether such covenants, conditions, procedures orrequirements have been complied with.

 

Pursuantto Section 4.1.21(c) of the Common Agreement, the undersignedDOES HEREBY CERTIFY that, as of the date hereof, pursuant to Section 4.1.28of the Common Agreement, each of the Project Accounts has been established inaccordance with the provisions of Appendix A of the Common Agreement.

 

TheCollateral Agent does HEREBY FURTHER CERTIFY that it has received $7,000,070.28from the Borrower and deposited such amount in the Base Equity Account.

 

G-1

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|   | Very  truly yours,                                               |
|--------|------------------------------------------------------------------|
|   |                                                             |
|   |                                                             |
|   | **MIDLAND  LOAN SERVICES, INC.**,                           |
|   | as  Administrative Agent in its capacity as the Collateral Agent |
|   |                                                             |
|   |                                                             |
|   | By:                                                              |   |
|   | Its:                                                             |   |

 

 

cc:           Stephentown RegulationServices LLC

 

G-2

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**Exhibit H**to Common Agreement

 

**FORM OF MAJOR PROJECT PARTICIPANT CERTIFICATE**

 

(Delivered pursuant to Section 4.1.24 of the CommonAgreement)

 

Date of this Certificate: August 6, 2010

 

U.S.Department of Energy

 

Ladiesand Gentlemen:

 

BeaconPower Corporation, a corporation duly organized and validly existing under thelaws of Delaware (the “Major Project Participant”), certifies that:

 

A.            Reference ismade to the Common Agreement, dated as of August 6, 2010 (the “CommonAgreement”), by and among (i) Stephentown Regulation Services LLC, asborrower (the “Borrower”), (ii) the U.S. Department of Energy, asCredit Party and Loan Servicer, and (iii) Midland Loan Services, Inc.,as Administrative Agent in its capacity as the Collateral Agent (the “Collateral Agent”).  All capitalized terms used in thisCertificate shall have their respective meanings specified in the CommonAgreement unless otherwise defined in this Certificate.

 

B.            I have read thecovenants, representations, warranties and agreements of Beacon PowerCorporation (the “Major Project Participant”) contained in the followingagreements (collectively, the “Transaction Documents”): (i) theIntercompany Project Documents, (ii) the Sponsor Loan Documents and(iii) the Direct Agreement; and, in each case, the Major ProjectParticipant has been represented by counsel in connection with the TransactionDocuments.

 

C.            I have made orcaused to be made such examination or investigation as is necessary to enableme to express an informed opinion as to the matters set forth below.

 

Pursuantto Section 4.1.24 of the Common Agreement the undersigned DOESHEREBY CERTIFY that:

 

1.             The MajorProject Participant has duly authorized, executed and delivered eachTransaction Document to which it is a party;

 

2.             Each TransactionDocument to which the Major Project Participant is a party is a legal, validand binding obligation of the Major Project Participant enforceable against itin accordance with its terms, subject to all applicable bankruptcy laws andgeneral principles of equity regardless of whether enforcement is considered ina proceeding at law or in equity;

 

H-1

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3.             Therepresentations and warranties relating to the Major Project Participant setforth in each Transaction Document to which the Borrower, Holdings or theSponsor is a party are true and correct in all material respects on the datehereof as if made on the date hereof (or, if stated to have been made solely asof an earlier date, were true and correct as of such earlier date);

 

4.             There is nofact known to the Major Project Participant the existence of which couldreasonably be expected to have a material adverse effect upon (i) theMajor Project Participant’s ability to observe and perform its material obligationsin a timely manner under any of the Transaction Documents, (ii) thebusiness, operations, condition (financial or otherwise) or property of theMajor Project Participant, (iii) the validity or enforceability of anymaterial provision of any Transaction Document or (iv) any material rightor remedy of the U.S. Department of Energy under any Transaction Document(collectively, a “Material Adverse Effect”);

 

5.             (a) Allgovernment approvals and all other consents and approvals that are required asof the date hereof to have been obtained by the Major Project Participant inconnection with the transactions contemplated by the Transaction Documents havebeen obtained and are in full force and effect; and (b) the Major ProjectParticipant is in compliance with all government approvals, the non-compliancewith which could have a Material Adverse Effect;

 

6.             The MajorProject Participant is in compliance with all applicable statutes, laws, rules andregulations, including, environmental laws, the Government-wide Debarment andSuspension (Non-procurement) regulations (Common Rule), 53 Fed. Reg. 19204 (May 26,1988), (ii) Subpart 9.4 (Debarment, Suspension, and Ineligibility) of theFederal Acquisition Regulations, 48 C.F.R. 9.400 - 9.409, and (iii) therevised Government-wide Debarment and Suspension (Non-procurement) regulations(Common Rule), 60 Fed. Reg. 33037 (June 26, 1995)(the “DebarmentRegulations”) and the final regulations with respect to Title XVII, at10 CFR Part 609, and any other applicable regulations from time to timepromulgated to implement Title XVII, the non-compliance with which could have aMaterial Adverse Effect;

 

7.             The MajorProject Participant is not delinquent on any amounts due and owing to the U.S.Government or its agencies or instrumentalities;

 

8.             No event hasoccurred and no condition exists that is likely to result in the debarment orsuspension of the Major Project Participant from contracting with the U.S.Government or any agency or instrumentality thereof, and the Major ProjectParticipant is not now and has not been subject to any such debarment orsuspension.  On the date hereof neitherthe Major Project Participant nor its principals are (a) debarred,suspended, proposed for debarment with a final determination still pending,declared ineligible or voluntarily excluded (as such terms are defined in anyof the Debarment Regulations) from participating in procurement ornonprocurement transactions with any U.S. Government department or agencypursuant to any of the Debarment Regulations, or (b) indicted, convictedor had a civil judgment rendered against the Major Project Participant or anyof its principals for any of the 

 

H-2

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offenseslisted in any of the Debarment Regulations and no event has occurred and nocondition exists that is likely to result in the debarment or suspension of theMajor Project Participant from contracting with the U.S. Government or anyagency or instrumentality thereof.  TheMajor Project Participant will provide immediate notice to the U.S. Departmentof Energy if at any time it learns that the representations made under this Section 8were erroneous when made or have become erroneous by reason of changedcircumstances; and

 

9.             To the MajorProject Participant’s Actual Knowledge, (a) there is no breach of anymaterial obligation under any of the applicable Transaction Documents and nonotices of breach of any of the applicable Transaction Documents have beenissued, entered or received by the Major Project Participant and (b) noEvent of Default has occurred and is continuing.

 

 
|   | **BEACON  POWER CORPORATION** |
|--------|-------------------------------|
|   |                          |
|   |                          |
|   | By:                           |   |
|   | Its:                          |   |

 

 

cc:           Stephentown RegulationServices LLC

 

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**Exhibit I**to Common Agreement

 

**FORM OF FINANCIALOFFICER CERTIFICATE**

 

(Delivered pursuant to Section 4.1.5of the Common Agreement)

 

Date of this Certificate: August 6, 2010

 

U.S.Department of Energy

 

Ladies and Gentlemen:

 

This Certificate is delivered to you pursuantto Section 4.1.5 of the Common Agreement, datedas of August 6, 2010 (the “Common Agreement”), by and among(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this officer’sCertificate shall have their respective meanings specified in the CommonAgreement.

 

The undersigned, a Financial Officer of the[Borrower/Sponsor] HEREBY CERTIFIES for the benefit of each Relevant CreditParty that, as of the date hereof:

 

1.             [attached hereto are the most recent audited andunaudited Financial Statements of the Sponsor, dated       ,20  and      , 20  ,respectively, and the Sponsor has delivered such Financial Statements to theLoan Servicer and each Relevant Credit Party;] [OR]

 

[attached hereto is the [initial balance sheet][unaudited Financial Statements] dated              ,20   of the Borrower, and the Borrower has delivered such [initialbalance sheet] [unaudited Financial Statements] to the Loan Servicer and eachRelevant Credit Party;

 

2.             the information contained in such Financial Statementsfairly present in all material respects the financial condition of the[Borrower/Sponsor] for the periods specified therein; and

 

3.             [*For FinancialOfficer of Borrower Only*] Pursuant to Section 4.1.29 ofthe Common Agreement, the report attached hereto describing theBorrower’s accounting systems, controls, and management information systemsreasonably demonstrates that they are satisfactory for purposes of providinginformation necessary for financial reporting in accordance with GAAP and istrue and complete;

 

I-1

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IN WITNESS WHEREOF, the undersigned hasexecuted this Financial Officer’s Certificate as of the date first writtenabove.

 
|   | [**BEACON POWER CORPORATION**]             |
|--------|--------------------------------------------|
|   | [**STEPHENTOWN REGULATION SERVICES  LLC**] |
|   |                                       |
|   | **By:**                                    |   |
|   | **Name:**                                  |   |
|   | **Title:**                                 |   |

 

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List of Attachments to Financial Officer Certificate

 
| 1.     | Financial  Statements (Paragraph 1)                                 |
|--------|---------------------------------------------------------------------|
|   |                                                                |
| 2.     | Report  Describing Accounting Systems [Borrower only] (Paragraph 3) |

 

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**Exhibit J**to Common Agreement

 

**Intentionally Omitted**

 

J-1

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**Exhibit K**to Common Agreement

 

**Intentionally Omitted**

 

K-1

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**Exhibit L**to Common Agreement

 

**Intentionally Omitted**

 

L-1

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**Exhibit M**to Common Agreement

 

**FORM OF MASTER ADVANCE NOTICE**

 

(Delivered pursuant to Sections 2.3.1(a) and 4.2.23 of the Common Agreement and the DOE Credit Facility Agreement)

 

Dateof this Notice:               ,20   

 

RequestedAdvance Date:                 ,20   

 

U.S.Department of Energy

 

MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral AgentAttn:       Brad Hauger and GeneralCounselRe:          DOE LoanGuarantee, [                                 ]

 

[*****][*****]Re:          DOE LoanGuarantee, [                                 ]

 

Ladiesand Gentlemen:

 

This Master Advance Notice is delivered to you pursuant to the CommonAgreement, dated as of August 6, 2010 (the “Common Agreement”), byand among (i) Stephentown Regulation Services LLC, as Borrower,(ii) the U.S. Department of Energy, as Credit Party and Loan Servicer, and(iii) Midland Loan Services, Inc., as Administrative Agent in itscapacity as the Collateral Agent.

 

All capitalized terms used in this Master Advance Notice shall havetheir respective meanings specified in the Common Agreement.

 

The undersigned has read the provisions of the Common Agreement and theLoan Documents which are relevant to the furnishing of this Master AdvanceNotice.  To the extent that this MasterAdvance Notice evidences, attests or confirms compliance with any covenants orconditions precedent provided for in the Common Agreement or any other LoanDocuments, the Borrower has made such examination or investigation as was, inits opinion, necessary to enable it to express an opinion as to whether suchcovenants or conditions have been complied with.

 

The Borrower HEREBY CERTIFIES for the benefitof each Relevant Credit Party that, as of the date hereof:

 

M-1

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1.         This MasterAdvance Notice constitutes [a request for an Advance of [US$                              ],under the DOE Credit Facility] [and a request for an Equity Advance of [US $                ]].

 

2.         [The RequestedAdvance Date for the Advance is                ,20   .] [The requested date for the Equity Advance is             ,20   .]

 

3.         A draft of theFFB Advance Request with respect to the requested Advance is attached hereto.

 

4.         All statementsmade by the Borrower in the Borrower Certificate delivered on the AdvanceNotice Date remain true and complete in all material respects on the datehereof as if made on the date hereof (other than to the extent suchrepresentations and warranties relate solely to an earlier date).

 

5.         The proceeds ofthe [Advance] [and the Equity Advance] shall be applied only to Eligible BaseProject Costs.

 

6.         Schedule 1 attachedhereto sets forth, with respect to [the requested Advance] [and the requestedEquity Advance], the amount of Base Equity and Overrun Equity to be disbursedfrom the Base Equity Account and the Overrun Equity Account, as applicable, [onthe Requested Advance Date] [or the requested date for the Equity Advance]:

 

7.         Schedule 2A attachedhereto sets forth the aggregate amount, on a prospective basis after givingeffect to [the requested Advance] [and the requested Equity Advance], of

 

·      all Advances outstanding under the DOE CreditFacility;

 

·      the amount of the Approved Pre-Closing EquityCredit; and

 

·      all Base Equity and Overrun Equity (if any)disbursed from the Base Equity Account and the Overrun Equity Account or incash.

 

8.         Schedule 2B attachedhereto sets forth the Project Costs being financed using the proceeds of therequested [Advance] [and/or Equity Advance], which are all Eligible BaseProject Costs.

 

9.         The Borrowercertifies for the benefit of each Relevant Credit Party that as of the date ofthis Master Advance Notice:

 

(A)          The representations andwarranties of the Borrower contained in the Loan Documents to which it is partyare true, correct and complete in all material respects on and as of the datehereof (other than to the extent such representations and warranties relatesolely to an earlier date);

 

(B)           No Event of Default orPotential Default has occurred and is continuing;

 

M-2

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(C)           To the Borrower’s ActualKnowledge, there is no reason to believe that anything is incorrect ormisleading in any material respect in the most recent Project Progress Report;and

 

(D)          To the Borrower’s ActualKnowledge, nothing has occurred since the date of the most recent ProjectProgress Report or the date of the Lender’s Engineer’s most recent site visit,whichever is later, that could reasonably be expected to prevent constructionand installation of the Project within the Project Milestone Schedule and theProject Budget.

 

10.       The Borrower has timely complied in all material respects with (A) itsreporting obligations under Section 6.29(a) of the CommonAgreement with respect to the Recovery Act, and (B) the requirements setforth in Section 6.30 of the Common Agreement and Schedule 6.30(d) tothe Common Agreement with respect to the Davis-Bacon Act.

 

11.       All applicable conditionsprecedent described in Section 4.2 of the Common Agreement havebeen satisfied or waived by DOE in accordance with the terms of the CommonAgreement.

 

12.       The Borrower has paid (orhas made arrangements to pay) all DOE Credit Facility Fees and PeriodicExpenses on or before the Requested Advance Date, except to the extent thatsuch amounts are to be paid with proceeds of the requested Advance.

 

13.       All proceeds of allAdvances, and all Equity Contributions made prior to the date hereof which havebeen expended as of the date hereof, have been applied to Project Costs inaccordance with the applicable Transaction Documents.  Each payment of Project Costs to be made fromthe requested Advance has not been the subject of any previous FFB AdvanceRequest.

 

14.       The Borrower has deliveredto the Loan Servicer, the Collateral Agent, and DOE the most recent ProjectProgress Report, if any, required to be provided pursuant to Section 6.1(a) ofthe Common Agreement.

 

15.       The Borrower has otherwisecomplied with the procedures, conditions and requirements specified in theCommon Agreement and the other Loan Documents in connection with the Advancerequested hereunder.

 

INWITNESS WHEREOF, the undersigned has executed this Master Advance Notice as ofthe date hereof.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

M-3

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Attachments

 
| 1.     | Schedule 1               |
|--------|-------------------------------|
|   |                          |
| 2.     | Schedule 2A              |
|   |                          |
| 3.     | Schedule 2B              |
|   |                          |
| 4.     | Draft  of FFB Advance Request |

 

M-4

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** **

**Exhibit N**to Common Agreement

 

**FORM OF DRAWSTOPNOTICE**

 

(Delivered pursuant to Section 2.4.3of the Common Agreement)

 

Date of this Notice:                 ,20   

 

RequestedAdvance Date:                  ,20   

 

StephentownRegulation Services LLCAttn:       General CounselRe:          DOE LoanGuarantee

 

MidlandLoan Services, Inc., as Administrative Agent in its capacity as the Collateral AgentAttn:       Brad Hauger and GeneralCounselRe:          DOE LoanGuarantee, [                           ]

 

Ladies and Gentlemen:

 

The undersigned refers to Section 2.4.3of the Common Agreement, dated as of August 6, 2010 (the “CommonAgreement”), by and among (i) Stephentown Regulation Services LLC, asBorrower, (ii) the U.S. Department of Energy, as Credit Party and LoanServicer, and (iii) Midland Loan Services, Inc., as AdministrativeAgent in its capacity as the Collateral Agent.

 

All capitalized terms used in this DrawstopNotice shall have their respective meanings specified in the Common Agreement.

 

The undersigned hereby confirms that it willnot [guarantee the requested Advance] [approve the requested Equity Advance] onthe [Requested Advance Date] [requested date for the Equity Advance], despitethe issuance of the Advance Request Approval Notice dated                 ,20    by DOE, because, as of the date hereof, for purposes ofsuch Section 2.4.3, the following conditions to the requested[Advance] [Equity Advance] required by [the Credit Party or DOE, as applicable]as set forth in the Common Agreement and/or the DOE Credit Facility Agreementto which [the Credit Party or DOE, as applicable] is a party are not met, orhaving been met, are no longer met:

 

*[Specify the unmetcondition, the relevant provision of the Common Agreement and/or the DOE CreditFacility Agreement, as applicable, and the reasons therefor.]*

 

N-1

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|   | Very  truly yours,                                                                                 |
|--------|----------------------------------------------------------------------------------------------------|
|   |                                                                                               |
|   | **[NAME  OF CREDIT PARTY]**                                                                        |
|   |                                                                                               |
|   |                                                                                               |
|   | By:                                                                                                |   |
|   | Its:                                                                                               |   |
|   |                                                                                               |
| cc:    | *[Include Fax numbers]*                                                                            |   |
|   |                                                                                               |   |
|   | U.S.  Department of Energy                                                                         |   |
|   | Attn:                                                                                              |   |
|   |                                                                                               |   |
|   | Midland  Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent |
|   | Attn: Brad Hauger and General Counsel                                                              |   |
|   | Re:                                                                                                | DOE  Loan Guarantee, [                                ] |
|        |                                                                                                    |  |  |  |

 

N-2

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**Exhibit O**to Common Agreement

 

**[FORM OF QUARTERLY REPORTING CERTIFICATE]**

 

(Delivered pursuant to Section 6.1 of the Common Agreement)

 

Dateof this Certificate:                      ,20   

 

U.S.Department of Energy

 

Ladies and Gentlemen:

 

This Quarterly Reporting Certificate isdelivered to you pursuant to Section 6.1 of the CommonAgreement, dated as of August 6, 2010 (the “Common Agreement”), byand among (i) Stephentown Regulation Services LLC, as Borrower, (ii) theU.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as theCollateral Agent.

 

All capitalized terms used in this Certificateshall have their respective meanings specified in the Common Agreement.

 

The undersigned, an Authorized Official of theBorrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,as of the date hereof:

 

1.             Pursuant to Section 6.1(b)(i) of theCommon Agreement, attached hereto as Exhibit 6.1(b)(i) areunauditedFinancial Statements of the Borrower as of                ,20   .

 

2.             Pursuant to Section 6.1(b)(ii) of theCommon Agreement, attached hereto as Exhibit 6.1(b)(ii) is a certificate of a Financial Officer of theBorrower with respect to the quarter ending               ,20   , setting forth (A) a statement of all materialfinancial transactions (other than any transactions contemplated under theTransaction Documents), and a report of all transactions involving theBorrower, on the one hand, and on the other hand Holdings and the Sponsor or any Affiliate of Holdings or theSponsor (other than any such transaction under the Intercompany ProjectDocuments); (B) *[For each quarter thatincludes all or a portion of the Construction Period]*calculationsshowing the amount of Equity Contributions and the amount of Advances appliedto pay Project Costs; and (C) *[For each quarter thatincludes all or a portion of the Operating Period]*, calculationsshowing compliance with the requirements of Section 6.33 andcertification of such compliance *[or if such certificationcannot be made, an explanation therefor and what corrective action the Borrowerhas taken or proposes to take with respect thereto].*

 

O-1

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3.             Pursuant to Section 6.1(d) of the CommonAgreement, attached hereto as Exhibit 6.1(d) is acertification by a Financial Officer of the Borrower regarding the FinancialStatements attached hereto as Exhibit 6.1(b)(i) and other issues required to be addressed.

 

4.             *[Foreach quarter that includes all or a portion of the Construction Period] *Pursuant to Section 6.1(e)(i) of the Common Agreement,attached hereto as Exhibit 6.1(e)(i) are the monthlyProject Progress Reports for the period ending             , 20   .

 

5.             *[Foreach quarter that includes all or a portion of the Operating Period] *Pursuant to Section 6.1(e)(ii) of the Common Agreement,attached hereto as Exhibit 6.1(e)(ii) is a summaryoperating report for the period ending               ,20   .

 

6.             [*At any time during whichthe Sponsor is not subject to the periodic reporting requirements of theSecurities Exchange Act of 1934, as amended*] Pursuant to Section 6.1(f) ofthe Common Agreement, attached hereto as Exhibit 6.1(f) areunaudited Financial Statements of the Sponsor as of                ,20   , together with a certification by a Financial Officer ofthe Sponsor regarding such unaudited Financial Statements of the Sponsor andother issues required to be addressed.

 

7.             *[Foreach quarter that includes all or a portion of the Construction Period] *Pursuant to Section 6.1(j)(i) of the Common Agreement,attached hereto as Exhibit 6.1(j)(i) are an updatedProject Milestone Schedule, updated Project Plans and an updated ProjectBudget, reflecting any Approved Project Changes, and projections regardingBorrower’s bidding strategies.

 

8.             *[Foreach quarter that includes all or a portion of the Operating Period] *Pursuant to Section 6.1(j)(ii) of the Common Agreement,attached hereto as Exhibit 6.1(j)(ii) are an updatedOperating Plan for the next four fiscal quarters, an updated Operating Forecastfor the next four fiscal quarters and for the remainder of the OperatingPeriod, an updated Financial Plan, and, if requested by the Loan Servicer,updated Base Case Projections.

 

9.             No Event of Default or Potential Default hasoccurred and is continuing [except as follows:].

 

10.           No circumstanceexists, and no change of law or regulation of any Governmental Authority hasoccurred, that has had or could reasonably be expected to have a Material AdverseEffect [except as follows:].

 

O-2

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IN WITNESS WHEREOF, the undersigned hasexecuted this Quarterly Reporting Certificate as of the date first writtenabove.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

O-3

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**Exhibit 6.1(b)(i)**to Quarterly Reporting Certificate

 

**Unaudited Financial Statements of the Borrower as of**            ,20   

 

*[attach Financial Statements]*

 

O-4

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**Exhibit 6.1(b)(ii)**to Quarterly Reporting Certificate

 

**Certification by Financial Officer of Borrower RegardingQuarterly Financial Statements**

 

Dateof this Certificate:                ,20   

 

Pursuant to Section 6.1(b)(ii) of the Common Agreement, the undersigned, a FinancialOfficer of the Borrower, HEREBYCERTIFIES as follows:

 

The following is a summary of all material financialtransactions (other than transactions contemplated under the TransactionDocuments):

 

1.             The followinglists all transactions involving the Borrower, on the one hand, and on theother hand Holdings and the Sponsor orany Affiliate of Holdings or the Sponsor (other than any suchtransaction under the Intercompany Project Documents):

 

*[Describe transactions]*

 

2.*            **[Foreach quarter that includes all or a portion of the Construction Period]*  The undersigned certifies that the followingcalculations show the amount of Equity Contributions and the amount of Advancesapplied to pay Project Costs as of            ,20   :

 

*[Show or attach calculations]*

 

*3. **          **[Foreach such quarter that includes all or a portion of the Operating Period] *The undersigned certifiesthat the following calculations show compliance with the requirements of Section 6.33(Financial Covenants) of the Common Agreement as of              ,20   .

 

*[Show or attach calculations]*

 

*[or if such certification cannot be made, provide explanation thereforand what corrective action the Borrower has taken or proposes to take withrespect thereto]*

 

O-5

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IN WITNESS WHEREOF, the undersigned hasexecuted this certificate as of the date first written above.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

O-6

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**Exhibit 6.1(d)**to Quarterly Reporting Certificate

 

**Certification by Financial Officer of Borrower RegardingQuarterly Financial Statements**

 

Dateof this Certificate:                ,20   

 

Pursuant to Section 6.1(d) ofthe Common Agreement, the undersigned, a Financial Officer of theBorrower, HEREBY CERTIFIES for thebenefit of each Relevant Credit Party that, as of the date hereof:

 

1.            The unaudited Financial Statements of the Borroweras of             ,20   , attached hereto have been prepared in accordance withGAAP (other than the absence of footnotes and any year-end adjustments) on aconsistent basis and as fairly presenting in all material respects thefinancial condition of the Borrower as of the date thereof and the results ofoperations of the Borrower for the periods presented;

 

2.            The undersigned has made or caused to be made areview of the transactions and financial condition of the Borrower during therelevant fiscal period and

 

(i)            other than as set out insuch Financial Statements, there are no liabilities or obligations of theBorrower that are required to bepresented in such Financial Statements in accordance with GAAP and

 

(ii)           no Event of Default orPotential Default exists.

 

*[or if such certification cannotbe made, explain the nature and period of existence of such Event of Default orPotential Default and what corrective action the Borrower has taken or proposesto take with respect thereto]*

 

IN WITNESS WHEREOF, the undersigned hasexecuted this certificate as of the date first written above.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

O-7

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**Exhibit 6.1(e)(i)**to Quarterly Reporting Certificate

 

**[Project Progress Reports]**

 

*[For each quarter that includes all or a portion of the ConstructionPeriod]*

 

Dateof this Certificate:                    ,20   

 

The undersigned, an Authorized Official of theBorrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,as of the date hereof:

 

Pursuant to Section 6.1(e)(i) ofthe Common Agreement, attached are the most recent monthlyProject Progress Reports for the period ending                ,20   , which include the following:

 

(i)            an assessment of the Project’sperformance in comparison with the Project Budget and the Project MilestoneSchedule then in effect for such period,

 

(ii)           basic data relating toconstruction and installation of the Project in comparison with the AnticipatedPhysical Completion Date,

 

(iii)          Total Funding Available issufficient to pay all remaining Total Project Costs (including Interest DuringConstruction, DOE Credit Facility Fees, Periodic Expenses, and identified CostOverruns), and

 

(iv)          evidence that as of the dateof such Project Progress Report (A) each Construction Contractor and theOperator has irrevocably waived and released all Liens, statutory or otherwise,that any of them may have or acquire on the Collateral Security with respect towork completed prior to the last submission for payment, except for Liens infavor of any Person in an aggregate amount for such Person [*****]; and (B) all unpaid balances thatare due or unsettled claims with any Construction Contractor, if any, have beenadequately paid and that those being contested or negotiated in good faith areprovisioned to the reasonable satisfaction of the Loan Servicer.

 

IN WITNESS WHEREOF, the undersigned hasexecuted this certificate as of the date first written above.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

O-8

----

 

**Exhibit 6.1(e)(ii)**to Quarterly Reporting Certificate

 

 

**[Summary Operating Report]**

 

*[For each quarter that includes all or a portion of the OperatingPeriod]*

 

Dateof this Certificate:                  ,20   

 

The undersigned, an Authorized Official of theBorrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,as of the date hereof:

 

Pursuantto Section 6.1(e)(ii) of the Common Agreement, the attached is a summaryoperating report for the period ending                  ,20   , which includes the following;

 

(v)           a detailedassessment of the Project’s performance in comparison with the OperatingForecast and Operating Plan then in effect for such period,

 

(vi)          basic datarelating to operation of the Project,

 

(vii)         pricinginformation,

 

(viii)        a description andexplanation of any unusual maintenance activity,

 

(ix)           a description andexplanation of any material casualty losses,

 

(x)            a description andexplanation of any material disputes between the Borrower and any Person, and

 

(xi)           a description andexplanation of any material non-compliance with any with GovernmentalApprovals.

 

IN WITNESS WHEREOF, the undersigned hasexecuted this certificate as of the date first written above.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

O-9

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**Exhibit 6.1(f)**to Quarterly Reporting Certificate

 

**Certification by Financial Officer of Sponsor RegardingQuarterly Financial Statements**

 

*[attach Financial Statements]*

 

Dateof this Certificate:                 ,20   

 

Pursuant to Section 6.1(f) ofthe Common Agreement, the undersigned, a Financial Officer of theSponsor, HEREBY CERTIFIES that:

 

The unaudited Financial Statements of the Sponsor asof                 ,20   , attached hereto have been prepared in accordance withGAAP (other than the absence of footnotes and any year-end adjustments) on aconsistent basis and as fairly presenting in all material respects thefinancial condition of the Sponsor as of the date thereof and the results ofoperations and cash flows of the Sponsor for the periods presented;

 

IN WITNESS WHEREOF, the undersigned hasexecuted this certificate as of the date first written above.

 
|   | **BEACON  POWER CORPORATION** |
|--------|-------------------------------|
|   |                          |
|   |                          |
|   | By:                           |   |
|   | Its:                          |   |

 

O-10

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**Exhibit 6.1(j)(i) Borrower******to Quarterly Reporting Certificate

 

**Updated Project Milestone Schedule, Project Plans and Project Budget**

 

*[For each quarter that includes all or a portion of the ConstructionPeriod, attach ProjectMilestone Schedule, Project Plans and Project Budget]*

 

Dateof this Certificate:                   ,20   

 

The undersigned, an Authorized Official of theBorrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,as of the date hereof:

 

Pursuant to Section 6.1(j)(i) ofthe Common Agreement, attached hereto are an updated Project MilestoneSchedule, updated Project Plans and an updated Project Budget, reflecting anyApproved Project Changes, and projections regarding Borrower’s bidding strategies.

 

IN WITNESS WHEREOF, the undersigned hasexecuted this certificate as of the date first written above.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

O-11

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**Exhibit 6.1(j)(i)-LE**to Quarterly Reporting Certificate

 

**FORM OF LENDER’S ENGINEER CERTIFICATE**

**(in Connection with Borrower’s Quarterly Reporting Certificate -Construction)**

 

(Delivered pursuant to Section 6.1(j)(i) of the CommonAgreement)

 

*[For each quarter that includes all or a portion of the ConstructionPeriod,regarding Updated Project Milestone Schedule, Project Plans and Project Budget,asapplicable]*

 

**[On Letterhead of the Lender’s Engineer]**

 

Date of this Certificate:                 ,20   

 

U.S.Department of Energy

 

Ladiesand Gentlemen:

 

ThisCertificate of the Lender’s Engineer is delivered to you by [*****] as Lender’s Engineer pursuant to theCommon Agreement, dated as of August 6, 2010 (the “Common Agreement”),by and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) theU.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as theCollateral Agent.

 

Allcapitalized terms used in this Certificate of the Lender’s Engineer shall havethe respective meanings specified in the Common Agreement.

 

Wehave reviewed the Borrower’s Certificate Exhibit 6.1(j)(i), to QuarterlyReporting Certificate dated                     ,201  , and the attached updated [Project Milestone Schedule], [ProjectPlans], [and Project Budget].

 

Tothe extent that this Certificate of the Lender’s Engineer evidences, attests orconfirms compliance with any covenants, conditions, procedures or requirements,we have made such examination or investigation as was, in our opinion,necessary to enable us to express an opinion as to whether such covenants,conditions, procedures or requirements have been complied with.

 

O-12

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Ourreview and observations were performed in accordance with the Matching OrderDE-MO01-09CF02002 and the Sponsor Payment Letter dated February 23, 2009and with generally accepted engineering practice and in accordance with thestandards of care practiced by independent and consulting engineers performingsimilar tasks on like projects. This Certificate is addressed to DOE in itscapacity as Loan Servicer and may not be relied upon by any other party.

 

Theopinions that support our certifications contained herein were developed withthe understanding and assumption, after appropriate due diligence, that we havebeen provided true, correct, and complete information satisfactory in form andscope from the Borrower as to the matters covered by this Certificate of theLender’s Engineer.

 

Pursuantto Section 6.1(j)(i) of the Common Agreement, the undersigned DOESHEREBY CERTIFY as of the date hereof that:

 

1.             We havereviewed the proposed changes included in the updated [Project MilestoneSchedule], [Project Plans], [and Project Budget] provided by the Borrower.  [We have provided a recommendation to DOE,via letter dated ___________, 201_, that the proposed changes to the [ProjectMilestone Schedule], [Project Plans], [and Project Budget] be approved.]

 

2.             The updated[Project Milestone Schedule], [Project Plans], [and Project Budget] reflectonly Approved Project Changes.

 

3.             [Certificationregarding updated review of materials pursuant to Technology Escrow Agreementand Sponsor Technology Escrow Agreement.]

 

INWITNESS WHEREOF, the undersigned has executed this Certificate of Lender’sEngineer as of the date hereof.

 
| ** ** | [*****]**, AS LENDER’S ENGINEER** |
|------------|----------------------------------------|
|       |                                   |
|       |                                   |
|       | By:                                    |   |
|       |                                   |   |
|       | Its:                                   |   |
|       |                                   |   |
|       |                                   |   |
|       | By:                                    |   |
|       |                                   | Its:  Vice President |

 

O-13

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**Exhibit 6.1(j)(ii) Borrower**to Quarterly Reporting Certificate

 

**Updated Operating Plan and Operating Forecast, Financial Plan and BaseCase Projections**

 

*[For each quarter that includes all or a portion of the OperatingPeriod, attach Operating Plan, Operating Forecast, Financial Plan and Base CaseProjections]*

 

Dateof this Certificate:                ,20   

 

The undersigned, an Authorized Official of theBorrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,as of the date hereof:

 

Pursuant to Section 6.1(j)(ii) ofthe Common Agreement, attached hereto are an updated OperatingPlan for the four fiscal quarters ending on              ,20   , an updated Operating Forecast for the four fiscalquarters ending on                ,20    and for the remainder of the Operating Period, an updatedFinancial Plan and, if requested by the Loan Servicer, updated Base CaseProjections.

 

IN WITNESS WHEREOF, the undersigned hasexecuted this certificate as of the date first written above.

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

O-14

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**Exhibit 6.1(j)(ii)-LE**to Quarterly Reporting Certificate

 

**FORM OF LENDER’S ENGINEER CERTIFICATE(in Connection with Borrower’s Quarterly Reporting Certificate - Operations)**

 

(Delivered pursuant to Section 6.1(j)(ii) of the CommonAgreement)

 

*[For each quarter that includes all or a portion of the OperatingPeriod,regarding Updated Operating Plan, Operating Forecast, Financial Plan and BaseCaseProjections, as applicable]*

 

**[On Letterhead of the Lender’s Engineer]**

 

Date of this Certificate:                    ,20   

 

U.S.Department of Energy

 

Ladiesand Gentlemen:

 

ThisCertificate of the Lender’s Engineer is delivered to you by [*****] as Lender’s Engineer pursuant to theCommon Agreement, dated as of August 6, 2010 (the “Common Agreement”),by and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) theU.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as theCollateral Agent.

 

Allcapitalized terms used in this Certificate of the Lender’s Engineer shall havethe respective meanings specified in the Common Agreement.

 

Wehave reviewed the Borrower’s Certificate Exhibit 6.1(j)(ii), to QuarterlyReporting Certificate dated                   ,201  , and the attached updated [Operating Plan], [OperatingForecast], [Financial Plan], [and the Technical Inputs to the Base CaseProjections].

 

Tothe extent that this Certificate of the Lender’s Engineer evidences, attests orconfirms compliance with any covenants, conditions, procedures or requirements,we have made such examination or investigation as was, in our opinion,necessary to enable us to express an opinion as to whether such covenants, conditions,procedures or requirements have been complied with.

 

O-15

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Ourreview and observations were performed in accordance with the Matching OrderDE-MO01-09CF02002 and the Sponsor Payment Letter dated February 23, 2009and with generally accepted engineering practice and in accordance with thestandards of care practiced by independent and consulting engineers performingsimilar tasks on like projects. This Certificate is addressed to DOE in itscapacity as Loan Servicer and may not be relied upon by any other party.

 

Theopinions that support our certifications contained herein were developed withthe understanding and assumption, after appropriate due diligence, that we havebeen provided true, correct, and complete information satisfactory in form andscope from the Borrower as to the matters covered by this Certificate of theLender’s Engineer.

 

Pursuantto Section 6.1(j)(ii) of the Common Agreement, the undersigned DOESHEREBY CERTIFY as of the date hereof that:

 

1.             We havereviewed the proposed changes included in the updated [Operating Plan],[Operating Forecast], [Financial Plan], [and the Base Case Projections]provided by the Borrower.  [We haveprovided a recommendation to DOE, via letter dated [             ,201  ], that the proposed changes to the [Operating Plan], [OperatingForecast], [Financial Plan], [and the Base Case Projections] be approved.]

 

2.             The updated[Operating Plan], [Operating Forecast], [Financial Plan], [and the TechnicalInputs to the Base Case Projections] are [as discussed with the DOE] [reflectonly Approved Project Changes].

 

3.             [Certificationregarding updated review of materials pursuant to Technology Escrow Agreementand Sponsor Technology Escrow Agreement.]

 

INWITNESS WHEREOF, the undersigned has executed this Certificate of Lender’sEngineer as of the date hereof.

 
|   | [*****]**, AS LENDER’S ENGINEER** |
|--------|----------------------------------------|
|   |                                   |
|   |                                   |
|   | By:                                    |   |
|   |                                   |   |
|   | Its:                                   |   |
|   |                                   |   |
|   |                                   |   |
|   | By:                                    |   |
|   |                                   | Its:  Vice President |

 

O-16

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**Exhibit P**to Common Agreement

 

**FORM OF PHYSICAL COMPLETION CERTIFICATE**

 

**[Letterhead of the Borrower]**

 

(Delivered pursuant to the definition of Physical Completionin Exhibit A2 to the Common Agreement)

 

Date of this Certificate:              ,20   

 

U.S.Department of Energy

 

Midland Loan Services, Inc., as Collateral AgentAttn:       Brad Hauger and GeneralCounselRe:          DOE LoanGuarantee, [                      ]

 

Ladiesand Gentlemen:

 

ThisPhysical Completion Certificate is delivered to you pursuant to the CommonAgreement, dated as of August 6, 2010 (the “Common Agreement”), byand among (i) Stephentown Regulation Services LLC, as Borrower, (ii) theU.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as theCollateral Agent.

 

Allcapitalized terms used in this Physical Completion Certificate shall have therespective meanings specified in the Common Agreement.

 

Tothe extent that this Physical Completion Certificate evidences, attests, orconfirms compliance with any covenants, conditions, procedures, orrequirements, we have made such examination or investigation as was, in ouropinion, necessary to enable us to express an opinion as to whether suchcovenants, conditions, procedures, or requirements have been complied with.

 

THEUNDERSIGNED HEREBY CERTIFIES FOR THE BENEFIT OF THE LOAN SERVICER THAT, each ofthe requirements set forth in clauses (a) through (c) below has beensatisfied as of the date hereof:

 

(a)           Physical Completion Tests:

 

(i)            General.  The ProjectFacility and all other buildings, equipment, facilities, and infrastructurenecessary to operate the Project in accordance with the Operating Plan(including, without limitation, the [*****] forthe Project, to be used as replacements for flywheels which become defective orinoperable, such spare flywheels to be delivered (x) to the Project Siteor (y) to a site in Tyngsboro, Massachusetts that is leased or licensed bySponsor to

 

P-1

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theBorrower)(A) have been completely constructed, completed, and installed inaccordance with the terms of the applicable Project Documents, (B) allessential elements thereof have been tested and commissioned in accordance withPrudent Utility Practice; (C) are operating in accordance with applicablemanufacturers’ specifications, the terms of the Project Documents, and allenvironmental permits and licenses, Environmental Laws, and other applicableguidelines; (D) have been accepted and paid for (except for amounts notyet due and payable), as evidenced by the Borrower having issued finalacceptance certificates relating to each of the material Project Documents; and(E) have been and are being properly operated and maintained in all respects.

 

(ii)           Construction Work.  All Construction Work under the ConstructionContracts has been completed, including without limitation all Punch ListItems, except for warranty issues that do not affect performance of the Project Facility and do not have amaterial impact on environmental or occupational health and safety matters.

 

(iii)          [*****]

 

(iv)          O&MActivities.  The Operator has performed all obligationsthen required to be performed by it in accordance with the O&M Agreement.

 

(b)           Operational Completion Tests:

 

(i)            Performance Testing.  The Project Facility has successfully completed all testsdemonstrating satisfaction of allrequired performance standards under the applicable Project Documents, including without limitation verification thatthe Project Facility Performance Targets have been met.

 

(ii)           Construction Contracts.  (A) Final completion under each of the ConstructionContracts has occurred, and (B) no further payments are due and owing fromBorrower to any Construction Contractor.

 

(iii)          InsuranceProgram for Operating Period.  The Loan Servicer has received,in form and substance satisfactory to DOE, (x) an Insurance Advisor’sCertificate, and (y) an Insurance Consultant’s Certificate(A) describing in reasonable detail the Borrower’s insurance program withrespect to the Operating Period (including without limitation with respect toany new insurance since the date of the final Advance, copies of certificatesor policies with respect thereto, designating the Administrative Agent in itscapacity as the Collateral Agent as loss payee, as appropriate, all certifiedby the Borrower as being true and complete), and (B) certifying that ithas reviewed and analyzed such insurance program and that in its opinion suchinsurance program satisfies all the requirements of Schedule 6.3(b).

 

(c)           Legal Conditions:

 

(i)            Title to Assets.  The Borrower has good and marketable feetitle to, or valid leasehold interests in, free and clear of all Liens andencumbrances (except for Permitted

 

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Liens),the Project Facility and all ofthe land and all buildings, equipment, and facilities referred to above, and toall other facilities known to be required for the Project.

 

(ii)           Liens Under SecurityDocuments.  TheBorrower has granted Liens in favor of the Administrative Agent in its capacityas the Collateral Agent for the benefit of the Secured Parties with respect toall of the assets required to be subject to the Security Documents.

 

(iii)          Representations andWarranties.  Allrepresentations and warranties in the Loan Documents are true and correct inall material respects as of the Physical Completion Date (except to the extentrelating to an earlier date).

 

(iv)          Approvals, Permits andLicenses.  All suchGovernmental Approvals required to have been obtained as of the PhysicalCompletion Date (including any Governmental Approvals disclosed in writing bythe Borrower and required to have been obtained as of that date) have beenobtained and are in full force and effect and are not under appeal or subjectto other proceedings or unsatisfied conditions that could reasonably beexpected to result in a material modification or cancellation as of the datehereof.  The Borrower is in compliancewith all such Governmental Approvals, the non-compliance with which couldreasonably be expected to have a Material Adverse Effect.

 

(v)           No Event of Default orDefault.  No Event of Default orPotential Default exists.

 

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IN WITNESS WHEREOF, the undersigned hasexecuted this Physical Completion Certificate as of the date first writtenabove.

 

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

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**Exhibit Q**to Common Agreement

 

**FORM OF PROJECT COMPLETION CERTIFICATE**

 

**[Letterhead of the Borrower]**

 

(Delivered pursuant to the definition of Project Completionin Exhibit A2 to the Common Agreement)

 

Date of this Certificate:                ,20   

 

U.S.Department of Energy

 

MidlandLoan Services, Inc., as CollateralAgentAttn:       Brad Haugerand, GeneralCounselRe:          DOE Loan Guarantee, [                             ]

 

Ladiesand Gentlemen:

 

ThisProject Completion Certificate is delivered to you pursuant to the CommonAgreement, dated as of August 6, 2010 (the “Common Agreement”), byand among (i) Stephentown Regulation Services LLC, as Borrower, (ii) theU.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) MidlandLoan Services, Inc., as Administrative Agent in its capacity as theCollateral Agent.

 

Allcapitalized terms used in this Project Completion Certificate shall have therespective meanings specified in the Common Agreement.

 

Tothe extent that this Project Completion Certificate evidences, attests, orconfirms compliance with any covenants, conditions, procedures, orrequirements, we have made such examination or investigation as was, in ouropinion, necessary to enable us to express an opinion as to whether suchcovenants, conditions, procedures, or requirements have been complied with.

 

THEUNDERSIGNED HEREBY CERTIFIES FOR THE BENEFIT OF THE LOAN SERVICER THAT, each ofthe requirements set forth in clauses (a) through (c) below has beensatisfied as of the date hereof:

 

(a)           Physical Completion:

 

(i)            Physical Completion has occurred.

 

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(b)           Financial Completion:

 

(i)            First Two Principal Payments.  The Borrower has paid in full the first twoconsecutive scheduled principal and interest payments due under the DOE CreditFacility on, or at any time before, the date such payments were due.

 

(ii)           Cash Available For Debt Service.  The Borrower has generated Cash Available forDebt Service for each of the preceding two consecutive fiscal quarters in anamount sufficient to pay in full the scheduled principal and interest paymentsnext becoming due under the DOE Credit Facility.

 

(iii)          Debt Service Reserve.  The Debt Service Reserve Account has beenfully funded (or Reserve Letters of Credit have been posted in lieu thereof).

 

(c)           Legal Conditions:

 

(i)            Representation and Warranties.  All representations and warranties in theLoan Documents are true and correct in all material respects as of the ProjectCompletion Date (except to the extent relating to an earlier date).

 

(ii)           Approvals, Permits and Licenses.  All Governmental Approvals required to havebeen obtained as of the Project Completion Date (including any GovernmentalApprovals disclosed in writing by the Borrower and required to have beenobtained as of that date) have been obtained and are in full force and effectand are not under appeal or subject to other proceedings or unsatisfiedconditions that could reasonably be expected to result in a materialmodification or cancellation as of the date hereof.  The Borrower is in compliance with all suchGovernmental Approvals, the non-compliance with which could reasonably beexpected to have a Material Adverse Effect.

 

(iii)          No Event of Default or Default.  No Event of Default or Potential Defaultexists.

 

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IN WITNESS WHEREOF, the undersigned hasexecuted this Project Completion Certificate as of the date first writtenabove.

 

 
|   | **STEPHENTOWN  REGULATION SERVICES LLC** |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Its:                                     |   |

 

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**Schedules to Common Agreement**

 
| **2.1(b)**  |   | Advance  Schedule                   |
|-------------|--------|-------------------------------------|
| ** **  |   |                                |
| **6.3(b)**  |   | Insurance  Requirements             |
| ** **  |   |                                |
| **6.30(d)** |   | Davis-Bacon  Act Wage Determination |
| ** **  |   |                                |
| **13.1**    |   | Notice  Addresses                   |

 

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**Schedule 2.1(b)**to Common Agreement

 

**Advance Schedule**

 

[*****]

 

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**Schedule 6.3(b)**to Common Agreement

 

**Insurance Requirements**

 

[*****]

 

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**Schedule 6.30(d)**to Common Agreement

 

**Davis-Bacon Act Wage Determination**

 

See attached, as shown athttp://www.wdol.gov/wdol/scafiles/archive/davisbacon/2008/ny2.r29

 

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**Schedule 13.1**to Common Agreement

 

**Notice Addresses**

 

[*****]

 

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