Exhibit 10.1


 


Execution Version


 


 


CREDIT AGREEMENT


 


 


dated as of December 26, 2007


 


 


among


 


 


NOVA BIOFUELS SENECA, LLC


 


 


as Borrower,


 


 


THE LENDERS REFERRED TO HEREIN,


 


 


WESTLB AG, NEW YORK BRANCH,


as Administrative Agent for the Lenders,


 


 


WESTLB AG, NEW YORK BRANCH,


as Collateral Agent for the Senior Secured Parties,


 


 


WESTLB AG, NEW YORK BRANCH,


as Issuing Bank with respect to the Letters of Credit,


 


 


STERLING BANK,


as Accounts Bank,


 


 


and


 


 


WESTLB AG, NEW YORK BRANCH,


as Lead Arranger and Sole Bookrunner


 


 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS AND INTERPRETATION

  	
  1

  
	
   

  	
   

  
	
  Section 1.01

  	
  Defined Terms

  	
  1

  
	
  Section 1.02

  	
  Principles of Interpretation

  	
  1

  
	
  Section 1.03

  	
  UCC Terms

  	
  2

  
	
  Section 1.04

  	
  Accounting and Financial Determinations

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II COMMITMENTS AND FUNDING

  	
  3

  
	
   

  	
   

  
	
  Section 2.01

  	
  Construction Loans

  	
  3

  
	
  Section 2.02

  	
  Term Loans

  	
  3

  
	
  Section 2.03

  	
  Working Capital Loans

  	
  3

  
	
  Section 2.04

  	
  Notice of Fundings

  	
  4

  
	
  Section 2.05

  	
  Funding of Loans

  	
  5

  
	
  Section 2.06

  	
  Evidence of Indebtedness

  	
  7

  
	
  Section 2.07

  	
  Termination or Reduction of Commitments

  	
  8

  
	
  Section 2.08

  	
  Letters of Credit

  	
  9

  
	
   

  	
   

  
	
  ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES 

  	
  11

  
	
   

  	
   

  
	
  Section 3.01

  	
  Repayment of Construction Loan Fundings

  	
  11

  
	
  Section 3.02

  	
  Repayment of Term Loan Fundings

  	
  12

  
	
  Section 3.03

  	
  Repayment of Working Capital Loan Fundings

  	
  12

  
	
  Section 3.04

  	
  Interest Payment Dates

  	
  13

  
	
  Section 3.05

  	
  Interest Rates

  	
  13

  
	
  Section 3.06

  	
  Default Interest Rate

  	
  14

  
	
  Section 3.07

  	
  Interest Rate Determination

  	
  15

  
	
  Section 3.08

  	
  Computation of Interest and Fees

  	
  15

  
	
  Section 3.09

  	
  Optional Prepayment

  	
  15

  
	
  Section 3.10

  	
  Mandatory Prepayment

  	
  17

  
	
  Section 3.11

  	
  Time and Place of Payments

  	
  18

  
	
  Section 3.12

  	
  Fundings and Payments Generally

  	
  19

  
	
  Section 3.13

  	
  Fees

  	
  20

  
	
  Section 3.14

  	
  Pro Rata Treatment

  	
  21

  
	
  Section 3.15

  	
  Sharing of Payments

  	
  21

  
	
  Section 3.16

  	
  Termination of Interest Rate Protection Agreement in Connection with
  Any Prepayment

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV EURODOLLAR RATE AND TAX PROVISIONS

  	
  22

  
	
   

  	
   

  
	
  Section 4.01

  	
  Eurodollar Rate Lending Unlawful

  	
  22

  



 


ii

















 


	
  Section 4.02

  	
  Inability to Determine Eurodollar Rates

  	
  23

  
	
  Section 4.03

  	
  Increased Eurodollar Loan Costs

  	
  23

  
	
  Section 4.04

  	
  Obligation to Mitigate; Replacement of Lender

  	
  24

  
	
  Section 4.05

  	
  Funding Losses

  	
  26

  
	
  Section 4.06

  	
  Increased Capital Costs

  	
  26

  
	
  Section 4.07

  	
  Taxes

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 5.01

  	
  Organization; Power; Compliance with Law and Contractual Obligations

  	
  28

  
	
  Section 5.02

  	
  Due Authorization; Non-Contravention

  	
  29

  
	
  Section 5.03

  	
  Governmental Approvals

  	
  29

  
	
  Section 5.04

  	
  Investment Company Act

  	
  31

  
	
  Section 5.05

  	
  Validity

  	
  31

  
	
  Section 5.06

  	
  Financial Information

  	
  31

  
	
  Section 5.07

  	
  No Material Adverse Effect

  	
  31

  
	
  Section 5.08

  	
  Project Compliance

  	
  31

  
	
  Section 5.09

  	
  Litigation

  	
  32

  
	
  Section 5.10

  	
  Sole Purpose Nature; Business

  	
  32

  
	
  Section 5.11

  	
  Contracts

  	
  32

  
	
  Section 5.12

  	
  Collateral

  	
  34

  
	
  Section 5.13

  	
  Ownership of Properties

  	
  35

  
	
  Section 5.14

  	
  Taxes

  	
  36

  
	
  Section 5.15

  	
  Patents, Trademarks, Etc.

  	
  37

  
	
  Section 5.16

  	
  ERISA Plans

  	
  37

  
	
  Section 5.17

  	
  Property Rights, Utilities, Supplies Etc.

  	
  37

  
	
  Section 5.18

  	
  No Defaults

  	
  37

  
	
  Section 5.19

  	
  Environmental Warranties

  	
  37

  
	
  Section 5.20

  	
  Regulations T, U and X

  	
  39

  
	
  Section 5.21

  	
  Accuracy of Information

  	
  39

  
	
  Section 5.22

  	
  Indebtedness

  	
  39

  
	
  Section 5.23

  	
  Separateness

  	
  40

  
	
  Section 5.24

  	
  Required LLC Provisions

  	
  40

  
	
  Section 5.25

  	
  Subsidiaries

  	
  40

  
	
  Section 5.26

  	
  Foreign Assets Control Regulations, Etc.

  	
  40

  
	
  Section 5.27

  	
  Solvency

  	
  40

  
	
  Section 5.28

  	
  Legal Name and Place of Business

  	
  41

  
	
  Section 5.29

  	
  No Brokers

  	
  41

  
	
  Section 5.30

  	
  Insurance

  	
  41

  
	
  Section 5.31

  	
  Accounts

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI CONDITIONS PRECEDENT 

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 6.01

  	
  Conditions to Closing and First Funding

  	
  42

  
	
  Section 6.02

  	
  Conditions to All Construction Loan Fundings

  	
  51

  



 


iii

















 


	
  Section 6.03

  	
  Conditions to Term Loan Funding

  	
  53

  
	
  Section 6.04

  	
  Conditions to Working Capital Loan Fundings

  	
  55

  
	
  Section 6.05

  	
  Conditions to All Fundings and Issuances

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII COVENANTS 

  	
  59

  
	
   

  	
   

  	
   

  
	
  Section 7.01

  	
  Affirmative Covenants

  	
  59

  
	
  Section 7.02

  	
  Negative Covenants

  	
  69

  
	
  Section 7.03

  	
  Reporting Requirements

  	
  78

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII PROJECT ACCOUNTS 

  	
  84

  
	
   

  	
   

  	
   

  
	
  Section 8.01

  	
  Establishment of Project Accounts

  	
  84

  
	
  Section 8.02

  	
  Deposits into and Withdrawals from Project Accounts

  	
  85

  
	
  Section 8.03

  	
  Construction Account

  	
  87

  
	
  Section 8.04

  	
  Revenue Account

  	
  88

  
	
  Section 8.05

  	
  Operating Account

  	
  93

  
	
  Section 8.06

  	
  Working Capital Reserve Account

  	
  93

  
	
  Section 8.07

  	
  Debt Service Reserve Account

  	
  95

  
	
  Section 8.08

  	
  Prepayment Holding Account

  	
  97

  
	
  Section 8.09

  	
  Insurance and Condemnation Proceeds Accounts

  	
  98

  
	
  Section 8.10

  	
  Extraordinary Proceeds Account

  	
  101

  
	
  Section 8.11

  	
  Warranty Reserve Account

  	
  102

  
	
  Section 8.12

  	
  Sponsor Support Account

  	
  104

  
	
  Section 8.13

  	
  Representations, Warranties and Covenants of Accounts Bank

  	
  105

  
	
  Section 8.14

  	
  Project Accounts

  	
  108

  
	
  Section 8.15

  	
  Project Accounts as Deposit Account

  	
  109

  
	
  Section 8.16

  	
  Duties of Accounts Bank

  	
  110

  
	
  Section 8.17

  	
  Subordination

  	
  110

  
	
  Section 8.18

  	
  Borrower Acknowledgments

  	
  111

  
	
  Section 8.19

  	
  Agreement to Hold In Trust

  	
  111

  
	
  Section 8.20

  	
  Interest and Investments

  	
  111

  
	
  Section 8.21

  	
  Accounts Bank Information

  	
  113

  
	
  Section 8.22

  	
  Notices of Suspension of Accounts

  	
  114

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX DEFAULT AND ENFORCEMENT

  	
  115

  
	
   

  	
   

  	
   

  
	
  Section 9.01

  	
  Events of Default

  	
  115

  
	
  Section 9.02

  	
  Action Upon Bankruptcy

  	
  121

  
	
  Section 9.03

  	
  Action Upon Other Event of Default

  	
  121

  
	
  Section 9.04

  	
  Application of Proceeds

  	
  122

  
	
   

  	
   

  	
   

  
	
  ARTICLE X THE AGENTS

  	
  123

  
	
   

  	
   

  	
   

  
	
  Section 10.01

  	
  Appointment and Authority

  	
  123

  
	
  Section 10.02

  	
  Rights as a Lender or Interest Rate Protection Provider

  	
  126

  



 


iv

















 


	
  Section 10.03

  	
  Exculpatory Provisions

  	
  126

  
	
  Section 10.04

  	
  Reliance by Agents

  	
  128

  
	
  Section 10.05

  	
  Delegation of Duties

  	
  129

  
	
  Section 10.06

  	
  Resignation or Removal of Agent

  	
  129

  
	
  Section 10.07

  	
  No Amendment to Duties of Agent Without Consent

  	
  130

  
	
  Section 10.08

  	
  Non-Reliance on Agent and Other Lenders

  	
  130

  
	
  Section 10.09

  	
  No Lead Arranger or Bookrunner Duties

  	
  130

  
	
  Section 10.10

  	
  Collateral Agent May File Proofs of Claim

  	
  130

  
	
  Section 10.11

  	
  Collateral Matters

  	
  131

  
	
  Section 10.12

  	
  Copies

  	
  132

  
	
  Section 10.13

  	
  No Liability for Clean-up of Hazardous Materials

  	
  132

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI MISCELLANEOUS PROVISIONS 

  	
  133

  
	
   

  	
   

  	
   

  
	
  Section 11.01

  	
  Amendments, Etc.

  	
  133

  
	
  Section 11.02

  	
  Applicable Law; Jurisdiction; Etc.

  	
  135

  
	
  Section 11.03

  	
  Assignments

  	
  137

  
	
  Section 11.04

  	
  Benefits of Agreement

  	
  140

  
	
  Section 11.05

  	
  Consultants

  	
  141

  
	
  Section 11.06

  	
  Costs and Expenses

  	
  141

  
	
  Section 11.07

  	
  Counterparts; Effectiveness

  	
  142

  
	
  Section 11.08

  	
  Indemnification by the Borrower

  	
  142

  
	
  Section 11.09

  	
  Interest Rate Limitation

  	
  143

  
	
  Section 11.10

  	
  No Waiver; Cumulative Remedies

  	
  144

  
	
  Section 11.11

  	
  Notices and Other Communications

  	
  144

  
	
  Section 11.12

  	
  Patriot Act Notice

  	
  147

  
	
  Section 11.13

  	
  Payments Set Aside

  	
  147

  
	
  Section 11.14

  	
  Right of Setoff

  	
  148

  
	
  Section 11.15

  	
  Severability

  	
  148

  
	
  Section 11.16

  	
  Survival

  	
  148

  
	
  Section 11.17

  	
  Treatment of Certain Information; Confidentiality

  	
  149

  
	
  Section 11.18

  	
  Waiver of Consequential Damages, Etc.

  	
  150

  
	
  Section 11.19

  	
  Non-Recourse

  	
  150

  



 


	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  2.01

  	
  Commitments

  	
   

  
	
  Schedule
  3.10(b)(i)

  	
  Target
  Balance Amount

  	
   

  
	
  Schedule 5.03

  	
  Necessary Project
  Approvals

  	
   

  
	
  Part A

  	
  First Funding Project
  Approvals

  	
   

  
	
  Part B

  	
  Deferred Approvals

  	
   

  
	
  Schedule 5.11

  	
  Project Contracts

  	
   

  
	
  Part A

  	
  Necessary Project
  Contracts

  	
   

  
	
  Part B

  	
  Deferred Contracts

  	
   

  
	
  Schedule 5.12(c)

  	
  UCC Filing Offices

  	
   

  



 


v

















 


	
  Schedule 5.13

  	
  Site Description

  	
   

  
	
  Schedule 5.23

  	
  Separateness Provisions

  	
   

  
	
  Schedule 5.24

  	
  Other Required LLC
  Provisions

  	
   

  
	
  Schedule 6.01(b)

  	
  Consents

  	
   

  
	
  Schedule 6.01(t)

  	
  Construction Budget

  	
   

  
	
  Schedule 6.01(o)(iii)

  	
  Performance Guarantee

  	
   

  
	
  Schedule 7.01(h)

  	
  Insurance

  	
   

  
	
  Schedule 7.01(k)

  	
  Approved Performance
  Test Protocols

  	
   

  
	
  Schedule 11.11(a)

  	
  Notice Information

  	
   

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Defined Terms

  	
   

  
	
  Exhibit B

  	
  Form of
  Construction Notes

  	
   

  
	
  Exhibit C

  	
  Form of Term Notes

  	
   

  
	
  Exhibit D

  	
  Form of Working
  Capital Notes

  	
   

  
	
  Exhibit E

  	
  Form of
  Construction Loan Funding Notice

  	
   

  
	
  Exhibit F

  	
  Form of Conversion
  Date Funding Notice

  	
   

  
	
  Exhibit G

  	
  Form of Working
  Capital Loan Funding Notice

  	
   

  
	
  Exhibit H

  	
  Lender
  Statement—Section 881(c)(3)(A) of the Code

  	
   

  
	
  Exhibit I

  	
  Form of Insurance
  Consultant’s Certificate

  	
   

  
	
  Exhibit J-1

  	
  Form of
  Independent Engineer’s Closing Certificate

  	
   

  
	
  Exhibit J-2

  	
  Form of
  Independent Engineer’s Certificate

  	
   

  
	
  Exhibit K

  	
  Financial Model

  	
   

  
	
  Exhibit L

  	
  Form of Operating
  Statement

  	
   

  
	
  Exhibit M

  	
  Form of Blocked
  Account Agreement

  	
   

  
	
  Exhibit N

  	
  Form of Borrowing
  Base Certificate

  	
   

  
	
  Exhibit O

  	
  Form of Interest
  Period Notice

  	
   

  
	
  Exhibit P-1

  	
  Form of Borrower’s
  Commercial Operation Date Certificate

  	
   

  
	
  Exhibit P-2

  	
  Form of
  Independent Engineer’s Commercial Operation Date Certificate

  	
   

  
	
  Exhibit Q

  	
  Form of Lender
  Assignment Agreement

  	
   

  
	
  Exhibit R

  	
  Form of
  Construction Withdrawal Certificate

  	
   

  
	
  Exhibit S

  	
  Form of Revenue
  Account Withdrawal Certificate

  	
   

  
	
  Exhibit T

  	
  Form of Operating
  Account Withdrawal Certificate

  	
   

  
	
  Exhibit U

  	
  Form of
  Restricted Payment Certificate

  	
   

  
	
  Exhibit V

  	
  Form of
  Working Capital Transfer Certificate

  	
   

  
	
  Exhibit W

  	
  Form of
  Debt Service Reserve Letter of Credit

  	
   

  
	
  Exhibit X

  	
  Form of
  Insurance and Condemnation Proceeds Request Certificate

  	
   

  
	
  Exhibit Y

  	
  Form of
  Extraordinary Proceeds Release Notice

  	
   

  
	
  Exhibit Z

  	
  Form of
  Warranty Proceeds Request Certificate

  	
   

  
	
  Exhibit AA

  	
  Form of
  Issuance Request

  	
   

  
	
  Exhibit BB

  	
  Form of
  Construction Status Report

  	
   

  
				



 


vi

















 


This CREDIT
AGREEMENT (this “Agreement”), dated as of December 26, 2007, is by
and among NOVA BIOFUELS SENECA, LLC, a Delaware limited liability company (“Borrower”),
each of the Lenders from time to time party hereto, WESTLB AG, NEW YORK BRANCH,
as administrative agent for the Lenders, WESTLB AG, NEW YORK BRANCH, as Issuing
Bank with respect to the Letters of Credit, WESTLB AG, NEW YORK BRANCH, as
collateral agent for the Senior Secured Parties, WESTLB AG, NEW YORK BRANCH, as
lead arranger and sole bookrunner, and STERLING BANK, a Texas banking
corporation, as accounts bank.


 


RECITALS


 


WHEREAS, the
Borrower has requested that the Lenders establish a credit facility the
proceeds of which are to be used to (a) finance the ownership,
development, engineering, construction, testing and operation of a biodiesel
plant to be located in Seneca, Illinois, which is designed to produce
approximately sixty (60) million gallons-per-year of biodiesel,
(b) fund certain reserves and (c) pay interest during construction
and certain fees and expenses associated with this Agreement and the Loans, in
each case as further described herein; and


 


WHEREAS, the
Lenders are willing to make such credit facility available to the Borrower upon
and subject to the terms and conditions hereinafter set forth;


 


NOW,
THEREFORE, the parties hereto agree as follows:


 


ARTICLE I


 


DEFINITIONS AND INTERPRETATION


 


Section 1.01                                     Defined
Terms. Capitalized terms used in this Agreement, including its preamble and
recitals, shall, except as otherwise defined, have the meanings provided in Exhibit A.


 


Section 1.02                                     Principles
of Interpretation. (a) Unless otherwise defined, terms for which
meanings are provided in this Agreement shall have the same meanings when used
in each other Financing Document and each other notice or other communication
delivered from time to time in connection with any Financing Document.


 


(b)                                         Any
reference in this Agreement to any Transaction Document shall mean such
Transaction Document and all schedules, exhibits and attachments thereto.


 

















 


(c)                                          All
agreements, contracts or documents defined or referred to herein shall mean such
agreements, contracts or documents as the same may from time to time be
supplemented, amended or replaced or the terms thereof waived or modified to
the extent permitted by, and in accordance with, the terms thereof and this
Agreement, and shall disregard any supplement, amendment, replacement, waiver
or modification made in violation of this Agreement.


 


(d)                                         Any
reference in any Financing Document relating to a Default or an Event of
Default that has occurred and is continuing (or words of similar effect) shall
be understood to mean that such Default or Event of Default, as the case may
be, has not been cured or remedied to the satisfaction of, or has not been
waived by, the Required Lenders.


 


(e)                                          Defined
terms in this Agreement shall include in the singular number the plural and in
the plural number the singular.


 


(f)                                            The
words “herein,” “hereof” and “hereunder” and words of similar import when used
in this Agreement shall, unless otherwise expressly specified, refer to this
Agreement as a whole and not to any particular provision of this Agreement and
all references to Articles, Sections, Exhibits and Schedules shall be
references to Articles, Sections, Exhibits and Schedules of this Agreement,
unless otherwise specified.


 


(g)                                         The
words “include,” “includes” and “including” are not limiting.


 


(h)                                         Any
reference to any Person shall include its permitted successors and permitted
assigns in the capacity indicated, and in the case of any Governmental
Authority, any Person succeeding to its functions and capacities.


 


Section 1.03                                     UCC
Terms. Unless otherwise defined herein, terms used herein that are defined
in the UCC shall have the respective meanings given to those terms in the UCC.


 


Section 1.04                                     Accounting
and Financial Determinations. Unless otherwise specified, all accounting
terms used in any Financing Document shall be interpreted, all accounting
determinations and computations hereunder or thereunder shall be made, and all
financial statements required to be delivered hereunder or thereunder shall be
prepared, in accordance with GAAP.


 


2

















 


ARTICLE II


 


COMMITMENTS AND FUNDING


 


On the terms,
subject to the conditions and relying upon the representations and warranties
herein set forth:


 


Section 2.01                                     Construction
Loans. (a) Each Construction/Term Lender agrees, severally and not
jointly, on the terms and conditions of this Agreement, to make loans (each
such loan, a “Construction Loan”) to the Borrower for Project Costs,
from time to time but not more frequently than twice each calendar month and
not more than twelve (12) times in aggregate until the Construction Loan
Maturity Date (except for Loans made on the Conversion Date) in an aggregate
principal amount not in excess of the Construction Loan Commitment of such
Construction/Term Lender; provided, that the aggregate principal amount
of the Construction Loans shall not exceed the Aggregate Construction Loan
Commitment.


 


(b)                                         Proceeds
of each Construction Loan shall be deposited into the Construction Account (except
to the extent applied directly to Debt Service, or as otherwise provided in Section 2.05(e)(i)
(Funding of the Loans)), applied
solely in accordance with this Agreement and used solely for the payment of
Project Costs.


 


(c)                                          Construction
Loans repaid or prepaid may not be reborrowed.


 


Section 2.02                                     Term
Loans. (a) Each Construction/Term Lender agrees, severally and not
jointly, on the terms and conditions of this Agreement, to make loans (each
such loan, a “Term Loan”) to the Borrower for the repayment of the
Construction Loans on the Conversion Date, in an aggregate principal amount not
in excess of such Construction/Term Lender’s Term Loan Commitment; provided,
however, that the aggregate principal amount of the Term Loans shall not
exceed the Aggregate Term Loan Commitment or the aggregate outstanding
principal amount of the Construction Loans (including each Construction Loan
made on the Conversion Date).


 


(b)                                         Proceeds
of the Term Loans shall be used solely for the payment of amounts due in
respect of the Construction Loans (including all Construction Loans made on the
Conversion Date).


 


(c)                                          Term
Loans repaid or prepaid may not be reborrowed.


 


Section 2.03                                     Working
Capital Loans. (a) Each Working Capital Lender agrees, severally and
not jointly, on the terms and conditions of this Agreement, to make loans (each
such loan, a “Working Capital Loan”) to the Borrower for Working Capital


 


3

















 


Expenses, from
time to time but not more frequently than two (2) times each calendar
month, until the last Business Day immediately preceding the Working Capital
Maturity Date in an aggregate principal amount from time to time outstanding,
together with all participations in Letters of Credit acquired by such Working
Capital Lender pursuant to Section 2.08(c) (Letters of
Credit), not in excess of the Working Capital Loan Commitment of
such Lender or of such Lender’s Working Capital Loan Percentage of the Working
Capital Available Amount; provided, however, that the aggregate
principal amount of the Working Capital Loans at any one time outstanding, plus
the aggregate Maximum Available Amounts of all issued and outstanding Letters
of Credit, shall not exceed the Working Capital Available Amount.


 


(b)                                         Each
Funding of Working Capital Loans shall be in the minimum amount of two hundred
fifty thousand Dollars ($250,000) and in integral multiples of fifty thousand
Dollars ($50,000) in excess thereof.


 


(c)                                          Proceeds
of each Working Capital Loan (other than those resulting from a draw on a
Letter of Credit) for (i) Project Costs relating to the initial start-up
and testing of the Project shall be deposited into the Construction Account,
(ii) Operation and Maintenance Expenses shall be deposited into the
Operating Account and (iii) breakage costs or other termination payments
or margin calls under any Permitted Commodity Hedging Arrangement shall be paid
directly to the counterparty to whom such amounts are owed, as specified in the
applicable Funding Notice, and in each such case shall be applied solely in
accordance with this Agreement and shall be used solely for the payment of
Working Capital Expenses. Fundings of Working Capital Loans for Operation and
Maintenance Expenses shall be subject to the restrictions with respect to such
expenses set forth in this Agreement.


 


(d)                                         Within
the limits set forth in Section 2.03(a), the Borrower may pay or prepay
and reborrow Working Capital Loans.


 


Section 2.04                                     Notice
of Fundings. (a) From time to time, but not more frequently than
(i) in the case of Construction Loans (except for Construction Loans made
on the Conversion Date) twice each calendar month and not more than twelve (12)
times in aggregate until the Construction Loan Maturity Date, (ii) in the
case of Working Capital Loans, two (2) times per calendar month and
(iii) once with respect to Term Loans to be made on the Conversion Date,
the Borrower may propose a Funding by delivering to the Administrative Agent a
properly completed Funding Notice not later than 12:00 noon, New York City
time, three (3) Business Days prior to the proposed Funding Date. Each
Funding Notice delivered pursuant to this Section 2.04 shall be
irrevocable and shall refer to this Agreement and specify (w) whether such
Funding is requested to be of Eurodollar Loans and/or Base Rate Loans,
(x) the requested Funding


 


4

















 


Date (which
shall be a Business Day), (y) the amount of such requested Funding and
(z) the type(s) of Loan(s) with respect to which such Funding is
requested.


 


(b)                                         The
Administrative Agent shall promptly advise (i) each Construction/Term
Lender of any Construction Loan Funding Notice or the Conversion Date Funding
Notice as applicable and (ii) each Working Capital Lender of any Working
Capital Loan Funding Notice, in each such case given pursuant to this Section
2.04, together with each such Lender’s portion of the requested Funding.


 


Section 2.05                                     Funding
of Loans. (a) Subject to Section 2.05(d), each Funding shall
consist of Loans made by the Lenders ratably in accordance with their
respective applicable Commitment Percentages and shall consist of Eurodollar
Loans or Base Rate Loans as the Borrower may request, or as otherwise provided,
pursuant to Section 2.04 (Notice of Fundings);
provided, however, that the failure of any Lender to make any
Loan shall not in itself relieve any other Lender of its obligation to lend
hereunder (it being understood, however, that no Lender shall be responsible
for the failure of any other Lender to make any Loan required to be made by
such other Lender).


 


(b)                                         Subject
to Section 4.04 (Obligation to Mitigate),
each Lender may (without relieving the Borrower of its obligation to repay a
Loan in accordance with the terms of this Agreement and the Notes) at its
option fulfill its Commitment with respect to any such Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan.


 


(c)                                          Subject
to Section 2.05(d), (i) each Construction/Term Lender shall make a
Loan in the amount of its applicable Commitment Percentage of each Construction
Loan Funding or Term Loan Funding, as applicable, hereunder on the proposed
Funding Date by (in the case of each Construction Loan Funding) wire transfer
of immediately available funds to the Administrative Agent, not later
than 12:00 noon, New York City time, and (A) the Administrative Agent
shall in the case of Construction Loans, deposit the amounts so received
(except to the extent applied directly to the payment of Debt Service, or as
otherwise provided in Section 2.05(e)(i)) into the Construction Account,
(B) in the case of Term Loans, the proceeds of such Term Loan shall be
applied solely to repay outstanding Construction Loans (and the Lenders shall
not be obligated to pay the proceeds of any Term Loan to, or upon the direction
of, the Borrower, and the Borrower shall not be entitled to receive such
proceeds) and (ii) each Working Capital Lender shall make a Loan in the
amount of its applicable Commitment Percentage of each Working Capital Loan
Funding hereunder on the proposed Funding Date by wire transfer of immediately
available funds to the Administrative Agent, not later than 12:00 noon New York
City time, and the Administrative Agent shall deposit the amounts so received
into the Account specified in the relevant Funding Notice; provided, in
the case of (i) or


 


5

















 


(ii) above, that if a Funding does not occur on the proposed
Funding Date because any condition precedent to such requested Funding herein
specified has not been met, the Administrative Agent shall return the amounts
so received to the respective Lenders without interest.


 


(d)                                         Unless the
Administrative Agent has been notified in writing by any Lender prior to a
proposed Funding Date that such Lender will not make available to the
Administrative Agent its portion of the Funding proposed to be made on such
date, the Administrative Agent may assume that such Lender has made such
amounts available to the Administrative Agent on such date and the
Administrative Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender and the Administrative Agent has made such amount available to
the Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender and, if such Lender pays such
amount (together with the interest noted below), then the amount so paid shall
constitute such Lender’s Loan included in such Funding. If such Lender does not
pay such corresponding amount upon the Administrative Agent’s demand or within
two (2) Business Days from the date of such Funding, the Administrative Agent
shall promptly notify the Borrower and the Borrower shall repay such
corresponding amount to the Administrative Agent within two (2) Business
Days from the Administrative Agent’s request. The Administrative Agent shall
also be entitled to recover from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the Administrative
Agent, at an interest rate per annum equal to (i) in the case of a payment
made by such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation and (ii) in the case of a payment made by
the Borrower, the Base Rate plus the Applicable Margin. Nothing herein shall be
deemed to relieve any Lender from its obligation to fulfill its commitment
hereunder. A notice by the Administrative Agent to any Lender or the Borrower
with respect to any amounts owing under this Section 2.05(d) shall be
conclusive, absent manifest error.


 


6

















 


(e)                                          On
the Conversion Date, the Construction/Term Lenders shall, to the extent
required to pay the amounts specified below (and in accordance with the
Conversion Date Funding Notice), disburse any unused portion of the Aggregate
Construction Loan Commitment to the Administrative Agent to be applied, and any
amounts on deposit in or standing to the credit of the Construction Account on
the Conversion Date shall be applied, in the following order of priority:


 


(i)                                first, to the
Borrower for the payment of any remaining Project Costs, including the funding
of the Debt Service Reserve Account;


 


(ii)                             second, for deposit
into the Working Capital Reserve Account in an amount which, when taken
together with all other amounts then on deposit in or credited to the Working
Capital Reserve Account, equals the then-current Working Capital Reserve
Required Amount, if any; and


 


(iii)                          third, if any amounts
remain on deposit in or standing to the credit of the Construction Account, to
the Revenue Account.


 


Section 2.06                                     Evidence
of Indebtedness. (a) Each Loan made by each Lender shall be evidenced
by one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business, including the Register
for the recordation of the Loans maintained by the Administrative Agent in
accordance with the provisions of Section 11.03(c) (Assignments). The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive evidence, absent
manifest error, of the amount of the Loans made by the Lenders to the Borrower
and the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall
control, absent manifest error.


 


(b)                                         The
Borrower agrees that in addition to the Register and any other accounts and
records maintained pursuant to Section 2.06(a), the Loans made by each
Lender may, if requested by the Lenders, be evidenced by a Note or Notes duly
executed on behalf of the Borrower. Construction Notes and Working Capital
Notes shall be dated the Closing Date (or, if later, the date of any request
therefor by a Lender). Term Notes shall be dated the Conversion Date (or, if
later, the date of any request therefor by a Lender). Each such Note shall be
payable to the order of such Lender in a principal amount equal to such Lender’s
Construction Loan Commitment,


 


7

















 


Term Loan Commitment or Working Capital Loan Commitment, as applicable.
Each Lender may attach schedules to its Note and endorse thereon the date,
amount and maturity of its Loan and payments with respect thereto.


 


Section 2.07                                     Termination
or Reduction of Commitments. (a) Any unused Construction Loan
Commitments shall be automatically and permanently terminated on the earlier to
occur of the Conversion Date and the Conversion Date Certain, in either case
after giving effect to all Construction Loans, if any, to be made on such day.


 


(b)                                         Any
unused Term Loan Commitments shall be automatically and permanently terminated
on the earlier to occur of the Conversion Date and the Conversion Date Certain,
in either case after giving effect to all Term Loans, if any, to be made on
such day.


 


(c)                                          If
the Conversion Date does not occur on or before the Conversion Date Certain,
all Working Capital Loan Commitments shall be automatically and permanently
terminated on the Conversion Date Certain.


 


(d)                                         Upon
any prepayment of the Construction Loans pursuant to Section 3.09 (Optional Prepayment) or Section 3.10 (Mandatory Prepayment), the Term Loan Commitments shall
be automatically and permanently reduced in an amount equal to such prepayment.


 


(e)                                          Any
unused Construction Loan Commitments, Term Loan Commitments and Working Capital
Loan Commitments shall be terminated upon the occurrence of an Event of Default
if and to the extent required pursuant to Section 9.02 (Action Upon
Bankruptcy) or Section 9.03 (Action Upon
Other Event of Default) in accordance with the terms thereof.


 


(f)                                            Any
Working Capital Loan Commitments shall be automatically and permanently
terminated in full on the Working Capital Maturity Date.


 


(g)                                         Any
Working Capital Loan Commitments may be terminated or reduced, in whole or in
part (in integral multiples of one hundred thousand Dollars ($100,000)), by the
Borrower upon no less than five (5) Business Days’ prior written notice to
the Administrative Agent; provided, that upon any such termination or
reduction, the sum of (x) the amounts on deposit in or standing to the
credit of the Working Capital Reserve Account (not including amounts in the LC
Cash Collateral Sub-Account) plus (y) the Aggregate Working Capital Loan
Commitment is equal to or greater than the Working Capital Reserve Required
Amount.


 


8

















 


(h)                                         The
Aggregate Working Capital Loan Commitment shall be automatically reduced to the
extent of, and in the amount of, any prepayment of the Working Capital Loans
that is applied, at the Borrower’s option, to fund the Working Capital Reserve
Account pursuant to Section 3.09(d)(ii)(C) (Optional
Prepayment).


 


(i)                                             The
Aggregate Working Capital Loan Commitment shall be automatically reduced to the
extent of, and in the amount of, any prepayment of the Working Capital Loans
pursuant to Section 3.10(e)(ii) or (iv) (Mandatory Prepayment).


 


Section 2.08                                     Letters
of Credit. (a) The Issuing Bank agrees at any time on or after the
Closing Date, and from time to time on the terms and conditions of this
Agreement, upon receipt from the Borrower of an Issuance Request, to issue a Letter
of Credit on behalf of the Borrower on the date and in the amount set forth in
such Issuance Request; provided, that (i) Letters of Credit may only be issued
to satisfy Contractual Obligations of the Borrower related to the Project, (ii)
the aggregate Maximum Available Amounts of all issued and outstanding Letters
of Credit shall not exceed the LC Cap, (iii) the aggregate of, at any time, the
aggregate Maximum Available Amounts of all issued and outstanding Letters of
Credit plus the aggregate outstanding principal amount of all Working Capital
Loans shall not exceed the lesser of the Aggregate Working Capital Loan
Commitment and the Working Capital Available Amount and (iv) there shall
not be more than five (5) Letters of Credit at any one time outstanding.


 


(b)                                         The
Borrower shall give the Administrative Agent at least five (5) Business
Days irrevocable prior written notice (such notice, in substantially the form
of Exhibit AA, an “Issuance Request”) (effective upon receipt) specifying the
date (which shall be a day that is no later than thirty (30) days
preceding the Working Capital Loan Maturity Date) a Letter of Credit is
requested to be issued, describing in reasonable detail the nature of the
transactions or obligations proposed to be supported thereby (which shall be of
the nature described in Section 2.08(a)(i)) and the Maximum
Available Amount of such Letter of Credit, which shall be no less than two
hundred fifty thousand Dollars ($250,000)). Upon receipt of an Issuance
Request, the Administrative Agent shall promptly advise the Issuing Bank of the
contents thereof.


 


(c)                                          Each
Working Capital Lender (other than the Issuing Bank) agrees that, upon the
issuance of any Letter of Credit hereunder, it shall automatically acquire a
participation in the Issuing Bank’s liability thereunder in an amount equal to
such Lender’s Working Capital Loan Commitment Percentage of such liability, and
each Working Capital Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and shall be unconditionally obligated to the Issuing Bank to pay
and discharge when due,


 


9

















 


its Working Capital Loan Commitment Percentage of the Issuing Bank’s liability
under each Letter of Credit.


 


(d)                                         Upon
receipt from a beneficiary under a Letter of Credit of a demand for payment
thereunder, in proper form to accomplish a draw in accordance with the terms
thereof, the Issuing Bank (through the Administrative Agent) shall promptly
notify each other Working Capital Lender and the Borrower of the amount to be
paid by the Issuing Bank as a result of such demand and the date on which
payment is to be made by the Issuing Bank to such beneficiary in respect of
such demand. Immediately following such demand by a beneficiary of payment
under a Letter of Credit, the Administrative Agent shall give each Working
Capital Lender prompt notice of the amount of the actual demand for payment,
specifying such Lender’s Working Capital Loan Commitment Percentage of the
amount of such demand.


 


(e)                                          Upon
receipt of the notice described in Section 2.08(d), each Working
Capital Lender (other than the Issuing Bank) shall pay, on the proposed funding
date of a draw under the Letter of Credit, the amount of such Lender’s Working
Capital Loan Commitment Percentage of any payment under the Letter of Credit by
wire transfer of immediately available funds to the Administrative Agent for
the account of the Issuing Bank, not later than 11:00 a.m. New York City time.
Each Working Capital Lender’s obligation to make such payments to the
Administrative Agent for the account of the Issuing Bank under this Section 2.08(e),
and the Issuing Bank’s right to receive the same, shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including (i) the failure of any other Working Capital Lender to make its
payment under this Section 2.08(e), (ii) the financial condition of
the Borrower, (iii) the existence of any Default or Event of Default or (iv)
the termination of any Commitments. Each such payment to the Issuing Bank shall
be made without any offset, abatement, withholding or reduction whatsoever.


 


(f)                                            To
the extent that any Working Capital Lender fails to pay any amount required to
be paid pursuant to Section 2.08(e) on the date such amounts are
due to be paid, such Working Capital Lender shall pay interest to the Issuing
Bank (through the Administrative Agent) on such amount from and including such
due date to but excluding the date such payment is made at a rate per annum
equal to the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation plus (in either such case) two percent (2%).


 


10
















 


(g)                                         Each
drawing honored by the Issuing Bank under a Letter of Credit shall reduce the
Maximum Available Amount under such Letter of Credit by the amount of such
drawing.


 


(h)                                         Notwithstanding
anything herein to the contrary (including Section 6.05 (Conditions to All Fundings and Issuances)),
any payments by the Issuing Bank under any Letter of Credit shall automatically
be considered to be a Working Capital Loan to the Borrower from the Issuing
Bank and the other Working Capital Lenders making payments to the Issuing Bank
in accordance with Section 2.08(e) in an amount equal to such
Issuing Bank’s and each such other Working Capital Lenders’ Working Capital
Loan Commitment Percentage of the amount of the drawing on the Letter of
Credit.  All such Working Capital Loans
shall be repaid or prepaid by the Borrower in accordance with the provisions of
ARTICLE III (Repayments,
Prepayments, Interest and Fees). 
Such Working Capital Loan shall initially be made as a Base Rate Loan.


 


(i)                                             The
issuance of each Letter of Credit shall be subject to, in addition to the
conditions precedent set forth in Section 6.05 (Conditions to All Fundings and Issuances),
the conditions precedent that (i) such Letter of Credit shall be in such form
and contain such terms as shall be satisfactory to the Issuing Bank consistent
with its then-current practices and procedures with respect to letters of
credit of the same type; (ii) such Letter of Credit shall be issued solely for
the purposes set forth in Section 2.08(a)(i); (iii) the term of
each Letter of Credit shall expire no later than the Working Capital Loan
Maturity Date; and (iv) the Borrower shall have executed and delivered such
other instruments and agreements relating to such Letter of Credit as the
Issuing Bank shall have reasonably requested consistent with its then-current
practices and procedures with Letters of Credit of the same type.


 


ARTICLE III


 


REPAYMENTS, PREPAYMENTS,
INTEREST AND FEES


 


Section
3.01                                     Repayment
of Construction Loan Fundings.  (a)
The Borrower unconditionally and irrevocably promises to pay to the
Administrative Agent for the ratable account of each Construction/Term Lender
the aggregate outstanding principal amount of the Construction Loans in
accordance with this Section 3.01.


 


(b)                                         The
Construction Loans shall be repaid in full on the Conversion Date with the
proceeds of the Term Loans or, if earlier, on the Conversion Date Certain in
accordance with Section 3.01(c).


 


11

















 


(c)                                          If
the Conversion Date does not occur on or prior to the Conversion Date Certain,
then on the Conversion Date Certain, (i) each outstanding Construction
Loan shall automatically and without further action become due and payable,
(ii) all amounts in any Project Accounts shall be promptly applied at the
written instruction of the Administrative Agent to Obligations then outstanding
in accordance with Section 9.04 (Application of Proceeds),
and (iii) the Borrower shall pay all accrued interest on and repay the
entire remaining principal amount of all outstanding Construction Loans to the
Administrative Agent, for the pro  rata account of the Lenders
(based on their respective Construction Loan Commitment Percentages), together
with any and all Fees and other Obligations owed to the Senior Secured Parties.


 


Section
3.02                                     Repayment
of Term Loan Fundings.  (a) The
Borrower unconditionally and irrevocably promises to pay to the Administrative
Agent for the ratable account of each Construction/Term Lender the aggregate
outstanding principal amount of the Term Loans, on the Initial Quarterly
Payment Date and on each Quarterly Payment Date thereafter, in an amount equal
to one and one-half percent (1.5%) of the aggregate total amount of the
Term Loans made on the Conversion Date (which amount shall be reduced as a
result of any prepayments of the Term Loans made in accordance with Section
3.09 (Optional Prepayment) or Section 3.10
(Mandatory Prepayment) in accordance
with the terms set forth therein).


 


(b)                                         Notwithstanding anything to the contrary set
forth in Section 3.02(a), the final principal repayment installment
on the Final Maturity Date shall in any event be in an amount equal to the
aggregate principal amount of all Term Loans outstanding on such date.


 


Section
3.03                                     Repayment
of Working Capital Loan Fundings. 
(a) The Borrower unconditionally and irrevocably promises to pay to
the Administrative Agent for the ratable account of each Working Capital Lender
the aggregate outstanding principal amount of the Working Capital Loans in
accordance with this Section 3.03.


 


(b)                                         The
Working Capital Loans shall be repaid in full on the Working Capital Maturity
Date.


 


(c)                                          If
the Conversion Date does not occur on or prior to the Conversion Date Certain,
then on the Conversion Date Certain, (i) each outstanding Working Capital Loan
shall automatically and without further action become due and payable, (ii) all
amounts in any Project Accounts shall be promptly applied to the Obligations
then outstanding in accordance with Section 9.04 (Application
of Proceeds), and (iii) the Borrower shall pay all accrued
interest on and repay the entire remaining principal amount of all outstanding
Working Capital Loans to the


 


12

















 


Administrative Agent, for
the pro  rata account of the Lenders (based on their respective
Working Capital Loan Commitment Percentages), together with any and all Fees
and other Obligations owed to the Senior Secured Parties.


 


Section
3.04                                     Interest
Payment Dates.  (a) Interest
accrued on each Loan shall be payable, without duplication:


 


(i)                               on
the Maturity Date for such Loan;


 


(ii)                            on
each Interest Payment Date for such Loan; and


 


(iii)                         with
respect to any Loan, on any date when such Loan is prepaid hereunder.


 


(b)                                         Interest
accrued on the Loans or other monetary Obligations after the date such amount
is due and payable (whether on the Maturity Date for such Loan, any Quarterly
Payment Date, any Interest Payment Date, upon acceleration or otherwise) shall
be payable upon demand.


 


(c)                                          Interest
hereunder shall be due and payable in accordance with the terms hereof, before
and after judgment, regardless of whether an Insolvency or Liquidation
Proceeding exists in respect of the Borrower and, to the fullest extent
permitted by law, the Lenders shall be entitled to receive post-petition
interest during the pendency of an Insolvency or Liquidation Proceeding.


 


Section
3.05                                     Interest
Rates.  (a) Pursuant to each
properly delivered Funding Notice and Interest Period Notice, (i) each
Eurodollar Loan shall accrue interest at a rate per annum during each Interest
Period applicable thereto equal to the sum of the Eurodollar Rate for such
Interest Period plus the Applicable Margin and (ii) each Base Rate Loan
shall accrue interest at a rate per annum during each Quarterly Period equal to
the sum of the Base Rate for such Quarterly Period plus the Applicable Margin.


 


(b)                                         On
or before 2:00 p.m., New York City time, at least five (5) Business
Days prior to the end of each Interest Period for each Eurodollar Loan, and at
least three (3) Business Days prior to the end of any Quarterly Period for
any Base Rate Loans, the Borrower shall deliver to the Administrative Agent an
Interest Period Notice setting forth the Borrower’s election (i) to
continue any such Eurodollar Loan as (or convert any such Base Rate Loan to) a
Eurodollar Loan and setting forth the Borrower’s election with respect to the
duration of the next Interest Period applicable to such continued or converted
Eurodollar Loan, which Interest Period shall be one (1), two (2), three
(3) or six (6) months in length or (ii) to convert any such
Eurodollar Loan to a Base Rate Loan at the end of the then-current Interest


 


13

















 


Period; provided,
that if an Event of Default has occurred and is continuing, all Eurodollar
Loans shall automatically convert into Base Rate Loans at the end of the
then-current Interest Periods.  Upon the
waiver or cure of such Event of Default, the Borrower shall have the option to
continue such Loans as Base Rate Loans and/or to convert such Loans to
Eurodollar Loans (by delivery of an Interest Period Notice), subject to the
notice periods set forth above. 
Notwithstanding anything to the contrary, any portion of the Loans
maturing in less than one month may not be continued as, or converted to,
Eurodollar Loans and will automatically convert to Base Rate Loans at the end
of the then-current Interest Period.


 


(c)                                          If
the Borrower fails to deliver an Interest Period Notice in accordance with Section
3.05(b), (i) with
respect to any Eurodollar Loan, such Eurodollar Loan shall automatically
continue as a Eurodollar Loan with an Interest Period of one (1) month or
(ii) with respect to any Base Rate Loan, such Base Rate Loan shall
automatically continue as a Base Rate Loan.


 


(d)                                         All
Eurodollar Loans shall bear interest from and including the first day of the
applicable Interest Period to (and excluding) the last day of such Interest
Period at the interest rate determined as applicable to such Eurodollar Loan.


 


(e)                                          Notwithstanding
anything to the contrary, the Borrower shall have, in the aggregate, no more
than eight (8) separate Eurodollar Loans outstanding at any one time prior
to the Conversion Date or five (5) separate Eurodollar Loans outstanding
at any one time after the Conversion Date. 
For purposes of the foregoing, (i) Eurodollar Loans having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Eurodollar Loans and (ii) all
Eurodollar Loans having the same Interest Period and commencing on the same
date shall be considered to be a single Eurodollar Loan.


 


(f)                                            All
Base Rate Loans shall bear interest from and including the first day of each
Quarterly Period (or the day on which Eurodollar Loans are converted to Base
Rate Loans as required under Section 3.05(b) or under ARTICLE IV (Eurodollar Rate and Tax Provisions)) to (and including)
the next succeeding Quarterly Payment Date at the interest rate determined as
applicable to such Base Rate Loan.


 


Section
3.06                                     Default
Interest Rate.


 


(a)                                          If
(i) all or a portion of the principal amount of or interest on any Loan is
not paid when due (whether on a scheduled payment date, the Maturity Date for
such Loan, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate that would otherwise be
applicable thereto


 


14

















 


plus two percent
(2%), or (ii) any Obligation (other than principal or interest on the
Loans) is not paid when due (whether on the due date thereof, by acceleration
or otherwise), such overdue amount shall bear interest at a rate per annum
equal to the rate then applicable to Base Rate Loans plus two percent
(2%), in each case, with respect to clauses (i) and (ii) above,
from the date of such non-payment until such amount is paid in full (before as
well as after judgment).


 


(b)                                         Upon
the occurrence and during the continuance of any Event of Default (other than
an Event of Default under Section 9.01(a) (Events of
Default - Nonpayment), for which provision is made in Section
3.06(a)), the Borrower shall pay, but only to the extent permitted by Law,
in addition to the interest then payable on any Loan, additional interest
(before as well as after judgment) on the Loans at two percent (2%) per
annum (the rate in effect plus such two percent (2%) per annum, the “Default
Rate”) until such Event of Default is cured or waived.


 


Section
3.07                                     Interest
Rate Determination.  The
Administrative Agent shall determine the interest rate applicable to the Loans
in accordance with the terms of this Agreement, and shall give prompt notice to
the Borrower and the Lenders of such determination, and its determination
thereof shall be conclusive, absent manifest error.


 


Section
3.08                                     Computation
of Interest and Fees.  (a) All
computations of interest for Base Rate Loans when the Base Rate is determined
by WestLB’s “prime rate” shall be made on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed.  All computations of interest for Eurodollar
Loans and for Base Rate Loans when the Base Rate is determined by the Federal
Funds Effective Rate shall be made on the basis of a 360-day year and actual
days elapsed.


 


(b)                                         Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid; provided, that any Loan or portion thereof
(other than a Construction Loan made on the Conversion Date that is repaid on
the Conversion Date with proceeds of a Term Loan) that is repaid on the same
day on which it is made shall bear interest for one (1) day.


 


(c)                                          Each
determination by the Administrative Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.


 


Section
3.09                                     Optional
Prepayment.  (a) The Borrower
shall have the right at any time, and from time to time, to prepay the
Construction Loans (in whole but not in part), Term Loans or the Working
Capital Loans, in whole or in part, upon not fewer than five (5) Business
Days’ prior written notice to the Administrative Agent.


 


15

















 


(b)                                         Any
partial prepayment of the Term Loans or Working Capital Loans shall be in a
minimum amount of five hundred thousand Dollars ($500,000) and in integral
multiples of one hundred thousand Dollars ($100,000) in excess thereof.


 


(c)                                          Each
notice of prepayment given by the Borrower under this Section 3.09 shall specify the
prepayment date and the portion of the principal amount of Loans to be
prepaid.  All prepayments under this Section 3.09 shall be made by the
Borrower to the Administrative Agent for the account of the Lenders and shall
be accompanied by accrued interest on the principal amount being prepaid to but
excluding the date of payment and by any additional amounts required to be paid
under Section 4.05 (Funding Losses).


 


(d)                                         Amounts
of principal prepaid under this Section 3.09 shall be applied by
the Administrative Agent:


 


(i)                               in
the case of a prepayment of Construction Loans or Term Loans, to the
Construction Loans or Term Loans, as the case may be, pro  rata
among the Construction/Term Lenders based on their respective outstanding
principal amounts of Construction Loans or Term Loans, as the case may be, on
the date of such prepayment (and then, in the case of the Term Loans, to the
remaining outstanding installments of principal of the Term Loans under Section 3.02(a)
(Repayment of Term Loan Fundings)
in inverse order of maturity;


 


(ii)                            in the
case of a prepayment of Working Capital Loans:


 


(A)                             first,
to the Working Capital Loans, pro  rata among the Working Capital
Lenders in proportion to their respective principal amounts of outstanding
Working Capital Loans;


 


(B)                               second,
to the LC Cash Collateral Sub-Account in an amount up to the Maximum Available
Amounts under all Letters of Credit then outstanding as cash collateral to
secure the repayment of any Working Capital Loans that may result from a draw
on any such Letter of Credit; and


 


(C)                               third,
if all outstanding Working Capital Loans have been paid in full and all Letters
of Credit have been cash collateralized in full in accordance with priority second above, at Borrower’s option, to
reduce the Working Capital


 


16

















 


Loan Commitment by depositing an amount equal to such
reduction in the Working Capital Reserve Account.


 


(e)                                          Amounts
of Construction Loans and Term Loans prepaid pursuant to this Section 3.09 may not be
reborrowed.


 


Section
3.10                                                             Mandatory
Prepayment.  (a) The Borrower
shall be required to prepay the Loans:


 


(i)                               upon
receipt by the Borrower of Insurance Proceeds as required pursuant to Section 8.10
(Insurance and Condemnation Proceeds Account);


 


(ii)                            upon
receipt by the Borrower of Condemnation Proceeds, as required pursuant to Section 8.10
(Insurance and Condemnation Proceeds Account);


 


(iii)                         upon
receipt of any Project Document Termination Payments, as required pursuant to
Section Section 8.11 (Extraordinary Proceeds
Account); and


 


(iv)                        upon
receipt of proceeds of any asset disposal (other than proceeds received from
the sale of Products) that are not used for replacement, as required pursuant
to Section Section 8.11 (Extraordinary Proceeds
Account).


 


(b)                                         The
Borrower shall be required to prepay the Term Loans:


 


(i)                               on
each Quarterly Payment Date, as required pursuant to priorities tenth and eleventh of Section 8.04(b)
(Revenue Account);


 


(ii)                            on any
Quarterly Payment Date, if required pursuant to Sections 8.09(c)(ii) or
(d)(i) (Prepayment Holding Account); and


 


(iii)                         on the
Conversion Date, if required pursuant to Section 8.04(c) (Revenue Account).


 


(c)                                          The
Borrower shall be required to prepay the Working Capital Loans if a Borrowing
Base Certificate demonstrates that the then-outstanding principal amount of the
Working Capital Loans exceeds the then-effective Working Capital Commitment or
the Working Capital Loan Available Amount, within three (3) Business Days
following the delivery of such Borrowing Base Certificate, in the amount of
such excess.


 


17

















 


(d)                                         All
prepayments under this Section 3.10
shall be made by the Borrower to the Administrative Agent for the account of
the applicable Lenders and shall be accompanied by accrued interest on the
principal amount being prepaid to but excluding the date of payment and by any
additional amounts required to be paid under Section 4.05 (Funding Losses).


 


(e)                                          Amounts
of principal prepaid under this Section
3.10 (other than pursuant to Section 3.10(c) shall be
allocated by the Administrative Agent:


 


(i)                               first,
to the Construction Loans or Term Loans, as the case may be, pro  rata
among the Construction/Term Lenders in proportion to their respective principal
amounts of outstanding Construction Loans or Term Loans, as the case may be;


 


(ii)                            second,
if all outstanding Construction Loans or Term Loans, as the case may be, have
been paid in full, to the Working Capital Loans, pro  rata among
the Working Capital Lenders in proportion to their respective principal amounts
of outstanding Working Capital Loans (and the Aggregate Working Capital Loan
Commitment shall be reduced by an amount equal to the amount so applied);


 


(iii)                         third,
to the LC Cash Collateral Sub-Account in an amount up to the Maximum Available
Amounts under all Letters of Credit then outstanding as cash collateral to
secure the repayment of any Working Capital Loans that may result from a draw
on any such Letter of Credit; and


 


(iv)                        fourth,
if all outstanding Working Capital Loans have been paid in full, and all
Letters of Credit have been cash collateralized in full in accordance with
priority third above, to fund the
Working Capital Reserve Account (and the Aggregate Working Capital Loan
Commitment shall be reduced by an amount equal to the amount so applied).


 


(f)                                            Amounts
of Construction Loans, Term Loans and Working Capital Loans prepaid pursuant to
this Section 3.10
may not be reborrowed, with the exception of any Working Capital Loans prepaid
pursuant to paragraph (c) of this Section 3.10 which may be
reborrowed.


 


Section
3.11                                     Time
and Place of Payments.  (a) The
Borrower shall make each payment (including any payment of principal of or
interest on any Loan or any Fees


 


18

















 


or other Obligations) hereunder and under any other
Financing Document without setoff, deduction or counterclaim not later
than 12:00 noon, New York City time on the date when due in Dollars in
immediately available funds to the Administrative Agent at the following account:  JPMorgan Chase Bank (Swift ID: CHASUS33XXX),
Account Number: 920-1-060663, for the Account of WestLB AG-NY Branch, ABA
#021-000-021, Ref: Nova Biofuels Seneca, LLC, Attention: Andrea Bailey, or at
such other office or account as may from time to time be specified by the
Administrative Agent to the Borrower. 
Funds received after 12:00 noon New York City time shall be deemed
to have been received by the Administrative Agent on the next succeeding
Business Day.


 


(b)                                         The
Administrative Agent shall promptly (but in no event later than 5:00 p.m. New
York City time on the date such payment is received or deemed to be received)
remit in immediately available funds to each Senior Secured Party its share, if
any, of any payments received by the Administrative Agent for the account of
such Senior Secured Party.


 


(c)                                          Whenever
any payment (including any payment of principal of or interest on any Loan or
any Fees or other Obligations) hereunder or under any other Financing Document
shall become due, or otherwise would occur, on a day that is not a Business
Day, such payment shall (except as otherwise required by the proviso to the
definition of “Interest Period” with respect to Eurodollar Loans) be made on
the immediately succeeding Business Day, and such increase of time shall in
such case be included in the computation of interest or Fees, if applicable.


 


Section
3.12                                     Fundings
and Payments Generally. 
(a) Unless the Administrative Agent has received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance with this Agreement and may, in reliance
upon such assumption, distribute to the Lenders the amount due.  If the Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Lender
in immediately available funds with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, at the greater of (i) the Federal
Funds Effective Rate and (ii) a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.  A notice by the Administrative Agent to any
Lender with respect to any amount owing under this Section 3.12(a)
shall be conclusive, absent manifest error.


 


(b)                                         Nothing
herein shall be deemed to obligate any Lender to obtain funds for any Loan in
any particular place or manner or to constitute a representation


 


19

















 


by any Lender that it has
obtained or will obtain funds for any Loan in any particular place or manner.


 


(c)                                          The
Borrower hereby authorizes each Lender, if and to the extent payment owed to
such Lender is not made when due under this Agreement or under any Notes held
by such Lender, to charge from time to time against any or all of the Borrower’s
accounts with such Lender (other than, in the event that the Accounts Bank or
any bank holding a Local Account is also a Lender, any Project Account or Local
Account) any amount so due.


 


Section
3.13                                     Fees.  (a) From and including the date hereof
until the Final Maturity Date, the Borrower agrees to pay to the Administrative
Agent, for the account of the Lenders, on each Quarterly Payment Date, a
commitment fee (a “Commitment Fee”) equal to one-half of one percent
(0.50%) per annum on the average daily amount by which (i) the Aggregate
Construction Loan Commitment exceeds the aggregate outstanding principal amount
of Construction Loans and (ii) the Aggregate Working Capital Loan Commitment exceeds
the sum of (x) the aggregate outstanding principal amount of Working Capital
Loans plus (y) the Maximum Available Amounts of all outstanding Letters of
Credit, in each case, during the calendar quarter or portion thereof then
ended.  All Commitment Fees shall be
computed on the basis of the actual number of days elapsed in a year of 365 or
366 days, as pro-rated for any partial quarter, as applicable.


 


(b)                                         The
Borrower agrees to pay to the Administrative Agent for the account of the Lead
Arranger, the Lenders and the Agents additional fees in the amounts and at the
times from time to time agreed in writing by the Borrower and the Agents,
including pursuant to the Fee Letters.


 


(c)                                          All
Fees shall be paid on the dates due, in immediately available funds.  Once paid, none of the Fees shall be
refundable under any circumstances.


 


(d)                                         Upon
the issuance of each Letter of Credit pursuant to Section 2.08  (Letters of Credit) and until the
termination, cancellation or expiration of such Letter of Credit, the Borrower
agrees to pay to the Administrative Agent, on each Quarterly Payment Date and
on the date on which such Letter of Credit expires, is cancelled or terminates,
(i) for the account of the Working Capital Lenders, an availability fee (the “Letter
of Credit Availability Fee”) at a rate per annum equal to the Working Capital
Applicable Margin for Eurodollar Loans on the average daily Maximum Available
Amount under such Letter of Credit during the calendar quarter or portion
thereof then ended and (ii) for the account of the Issuing Bank, a fronting fee
(the “Letter of Credit Fronting Fee”) equal to an amount calculated at a rate
per annum equal to two tenths of a percent (0.2%) of the average daily Maximum
Available Amount under such


 


20

















 


Letter of Credit during
the calendar quarter or portion thereof then ended.  All Letter of Credit Availability Fees and
Letter of Credit Fronting Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days, as pro-rated for any partial
quarter, as applicable.


 


Section 3.14                                     Pro
Rata Treatment.  (a) Except as
otherwise expressly provided herein (including Section 4.01 (Eurodollar Rate Lending Unlawful)), each Funding of
Loans and each reduction of commitments of any type shall be allocated by the
Administrative Agent pro  rata among the Lenders holding Loans of
such type in accordance with their respective applicable Commitment
Percentages.


 


(b)                                         Except
as required under Section 3.09 (Optional Prepayment),
Section 3.10 (Mandatory Prepayment) or ARTICLE
IV (Eurodollar Rate and Tax Provisions),
(i) each payment or prepayment of principal of the Loans shall be allocated by
the Administrative Agent pro  rata among the applicable Lenders in
accordance with the respective principal amounts of their outstanding Loans of
the type being repaid, (ii) each payment of interest on the Loans shall be
allocated by the Administrative Agent pro  rata among the
applicable Lenders in accordance with the respective interest amounts
outstanding on their outstanding Loans of the type in respect of which interest
is being paid, and (iii) each payment of fees on the Commitments and/or the
Letters of Credit (other than the Letter of Credit Fronting Fee) shall be
allocated by the Administrative Agent pro  rata among the
applicable Lenders in accordance with their respective Commitments of the type
to which such fees relate.


 


(c)                                          Each
Lender agrees that in computing such Lender’s portion of any Funding to be made
hereunder, the Administrative Agent may, in its discretion, round each Lender’s
percentage of such Funding to the next higher or lower whole Dollar amount in
accordance with market convention.


 


Section 3.15                                     Sharing
of Payments.  (a) If any Lender
obtains any payment or other recovery (whether voluntary, involuntary, by
application of setoff or otherwise) on account of any Loan (other than pursuant
to the terms of ARTICLE IV (Eurodollar Rate and Tax
Provisions)) in excess of its pro  rata share of
payments then or therewith obtained by all Lenders holding Loans of such type,
such Lender shall purchase from the other Lenders holding Loans of such type
such participations in Loans of such type made by them as shall be necessary to
cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and each Lender that
has sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling


 


21

















 


Lender’s ratable share (according to the proportion of
(x) the amount of such selling Lender’s required repayment to the
purchasing Lender to (y) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 3.15 may, to the fullest
extent permitted by law, exercise all of its rights of payment (including pursuant
to Section 11.14 (Right of Setoff))
with respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.


 


(b)                                         If
under any applicable bankruptcy, insolvency or other similar Law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.15 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled under
this Section 3.15 to
share in the benefits of any recovery on such secured claim.


 


Section
3.16                                     Termination
of Interest Rate Protection Agreement in Connection with Any Prepayment.  The Borrower shall, in connection with any
prepayment of Construction Loans or Term Loans made by the Borrower pursuant to
Section 3.09 (Optional Prepayment) or Section 3.10 (Mandatory Prepayment),
terminate an aggregate notional amount under the Interest Rate Protection
Agreements equal to the amount (if any) by which the aggregate notional amount
under the Interest Rate Protection Agreements would exceed the aggregate
outstanding principal amount of the Construction Loans or Term Loans, as the
case may be, immediately after giving effect to such prepayment, and in each case,
such termination shall be made within five (5) Business Days of the date
of such prepayment.


 


ARTICLE IV


 


EURODOLLAR RATE AND TAX
PROVISIONS


 


Section
4.01                                     Eurodollar
Rate Lending Unlawful.  (a) If
any Lender reasonably determines (which determination shall, upon notice
thereof to the Borrower and the Administrative Agent, be conclusive and binding
on the Borrower absent manifest error), but only if such Lender has complied
with its obligations under Section 4.04 (Obligation
to Mitigate)) that the introduction of or any change in or in
the interpretation of any Law after the date hereof makes it unlawful, or any
central bank or other Governmental Authority asserts after the date hereof that
it is unlawful, for such Lender to make, maintain or fund any Loan as a
Eurodollar Loan, the obligations of such Lender to make, maintain or fund any
Loan as a Eurodollar Loan (but not the obligations of such Lender to make,
maintain or fund any Loan as a Base Rate Loan) shall, upon such determination,
forthwith be suspended until such Lender notifies the Administrative


 


22

















 


Agent that the circumstances causing such suspension
no longer exist, and all Eurodollar Loans of such Lender shall automatically
convert into Base Rate Loans at the end of the then-current Interest Periods
with respect thereto or sooner, if required by such Law or assertion.  Upon any such conversion the Borrower shall
pay any accrued interest on the amount so converted and, if such conversion
occurs on a day other than the last day of the then-current Interest Period for
such affected Eurodollar Loans, such Lender shall be entitled to make a request
for, and the Borrower shall in such case pay, compensation for breakage costs
under Section 4.05 (Funding Losses).


 


(b)                                         If
such Lender notifies the Borrower that the circumstances giving rise to the
suspension described in Section 4.01(a)
no longer apply, the Borrower may elect (by delivering an Interest Period
Notice) to convert the principal amount of any such Base Rate Loan to a
Eurodollar Loan in accordance with this Agreement.


 


Section
4.02                                     Inability
to Determine Eurodollar Rates. 
(a) In the event, and on each occasion, that the Administrative
Agent shall have determined in good faith that for any Eurodollar Loan
(i) Dollar deposits in the amount of such Loan and with an Interest Period
similar to such Interest Period are not generally available in the London
interbank market, or (ii) the rate at which such Dollar deposits are being
offered will not adequately and fairly reflect the cost to any Lender of
making, maintaining or funding the principal amount of such Loan during such
Interest Period, or (iii) adequate and reasonable means do not exist for
ascertaining LIBOR, the Administrative Agent shall promptly notify the Borrower
and the Lenders of such determination, whereupon each such Eurodollar Loan will
automatically, on the last day of the then-existing Interest Period for such
Eurodollar Loan, convert into a Base Rate Loan. 
In the event of any such determination pursuant to Section 4.02(a)(i) or (iii),
any Funding Notice delivered by the Borrower shall be deemed to be a request
for a Base Rate Loan until the Administrative Agent determines that the
circumstances giving rise to such notice no longer exist.  In the event of any determination pursuant to
Section 4.02(a)(ii), each
affected Lender shall, and is hereby authorized by the Borrower to, fund its
portion of the Loans as a Base Rate Loan. 
Each determination by the Administrative Agent hereunder shall be
conclusive, absent manifest error.


 


(b)                                         Upon
the Administrative Agent’s determination that the condition that was the
subject of a notice under Section
4.02(a) has ceased, the Administrative Agent shall promptly notify
the Borrower and the Lenders of such determination, whereupon the Borrower may
elect (by delivering an Interest Period Notice) to convert any such Base Rate
Loan to a Eurodollar Loan on the last day of the then-current Quarterly Period
in accordance with this Agreement.


 


Section
4.03                                     Increased
Eurodollar Loan Costs.  If, after the
date hereof, the adoption of any applicable Law or any change therein, or any
change in the


 


23

















 


interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender (or its Eurodollar Office) with any
request or directive (whether or not having the force of law) of any
Governmental Authority increases the cost (other than with respect to Taxes,
which are addressed in Section 4.07 (Taxes)) to
such Lender of, or results in any reduction in the amount of any sum receivable
by such Lender (whether of principal, interest or any other amount) in respect
of, making, maintaining or funding (or of its obligation to make, maintain or
fund) the Loans as Eurodollar Loans, then the Borrower agrees to pay to the
Administrative Agent for the account of such Lender the amount of any such
increase or reduction.  Such Lender shall
promptly notify the Administrative Agent and the Borrower in writing of the
occurrence of any such event, such notice to state, with accompanying support,
the additional amount required to compensate fully such Lender for such
increased cost or reduced amount.  Such
additional amounts shall be payable by the Borrower directly to such Lender
within five (5) Business Days of delivery of such notice, and such notice
and determination shall be binding on the Borrower, absent manifest error.  Notwithstanding anything to the contrary in
this Section 4.03, the Borrower shall not be required to pay a
Lender pursuant to this Section 4.03 for any such increase or
reduction incurred more than 365 days prior to the date that such Lender
notifies the Borrower, or notifies the Borrower of its intention to demand
compensation, in accordance with this Section 4.03; provided that,
if the circumstance giving rise to such increase or reduction is retroactive,
then such 365 day period shall be extended to include the period of
retroactive effect.


 


Section
4.04                                     Obligation
to Mitigate; Replacement of Lender. 
(a) Each Lender agrees that, after it becomes aware of the
occurrence of an event that would entitle it to give notice pursuant to Section 4.01 (Eurodollar
Rate Lending Unlawful), Section 4.03
(Increased Eurodollar Loan Costs) or Section
4.06 (Increased Capital Costs) or to
receive additional amounts pursuant to Section
4.07 (Taxes), such Lender shall use
reasonable efforts to make, fund or maintain its affected Loan through another
lending office (i) if as a result thereof the increased costs would be
avoided or materially reduced or the illegality would thereby cease to exist
and (ii) if, in the opinion of such Lender, the making, funding or
maintaining of such Loan through such other lending office would not be
disadvantageous to such Lender, contrary to such Lender’s normal banking
practices or violate any applicable Law.


 


(b)                                         No
change by a Lender in its Domestic Office or Eurodollar Office made for such
Lender’s convenience shall result in any increased cost to the Borrower.


 


(c)                                          If
any Lender demands compensation pursuant to Section 4.03 (Increased Eurodollar Loan
Costs) or Section 4.06 (Increased Capital Costs)
with respect to any Eurodollar Loan, the Borrower may, at any time upon at least
three (3) Business Days’ prior notice to such Lender through the
Administrative Agent, elect


 


24

















 


to convert such Loan to a
Base Rate Loan.  Thereafter, unless and
until such Lender notifies the Borrower that the circumstances giving rise to
such notice no longer apply, all such Eurodollar Loans by such Lender shall
bear interest as Base Rate Loans.  If
such Lender notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the Borrower may elect (by delivering an Interest
Period Notice) to convert the principal amount of each such Base Rate Loan to a
Eurodollar Loan in accordance with this Agreement.


 


(d)                                         The
Borrower will be permitted, with the approval of the Administrative Agent, to
replace (with one or more replacement Lenders) any Lender that provides notice
under Section 4.01(a) (Eurodollar Rate Lending
Unlawful) that it is unable to make, maintain or fund any Loan
as a Eurodollar Loan or requests reimbursement for, or is otherwise entitled
to, amounts owing pursuant to Section 4.03 (Increased
Eurodollar Loan Costs), Section 4.06 (Increased Capital Costs) or Section 4.07(c) (Taxes-Indemnification by Borrower); provided,
that (i) such replacement does not conflict with any Law or any
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to the Borrower or such Lender or to which the Borrower or
such Lender or any of their respective property is subject, (ii) no
Default or Event of Default shall have occurred and be continuing at the time
of such replacement, (iii) the replacement Lender shall purchase, at par,
the Loans and all other amounts owing to such replaced Lender prior to the date
of replacement, (iv) the Borrower shall be liable to such replaced Lender
under Section 4.05 (Funding Losses)
if any Eurodollar Loan owing to such replaced Lender is purchased other than on
the last day of the Interest Period relating thereto, (v) until such time
as such replacement is consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 4.03 (Increased Eurodollar Loan Costs), Section 4.06 (Increased Capital Costs) or Section 4.07(c) (Taxes-Indemnification by Borrower), as the case may be,
(vi) the replacement Lender is an Eligible Assignee, (vii) such
replacement is made in accordance with the provisions of Section 11.03(b)
(provided, that the Borrower shall be obligated to pay the registration
and processing fee), (viii) any such replacement shall not be deemed to be
a waiver of any rights that the Borrower, any Agent or any other Lender may
have against the replaced Lender, and (ix) prior to any such replacement,
in the case of any replacement of a Lender that has determined that the
maintaining or funding of a Loan as a Eurodollar Loan is unlawful, the Lender
to be replaced shall not have delivered a notice to the Borrower under Section 4.01(b)
(Eurodollar Rate Lending Unlawful)
that it is no longer unable to make, maintain or fund any Loan as a Eurodollar
Loan and, in the case of any replacement of a Lender that has claimed increased
costs, shall have taken no action under Section 4.04 (Obligation To Mitigate) so as to eliminate the need for
payment of amounts owing pursuant to Section 4.03 (Increased Eurodollar


 


25

















 


Loan Costs),
Section 4.06 (Increased Capital Costs)
or Section 4.07(c) (Taxes-Indemnification by
Borrower), as the case may be.


 


Section
4.05                                     Funding
Losses.  In the event that any Lender
incurs any loss or expense (including any loss or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by such
Lender to make, continue or maintain any portion of the principal amount of any
Loan as a Eurodollar Loan, and any customary administrative fees charged by
such Lender in connection with the foregoing) as a result of (a) any
conversion or repayment or prepayment of the principal amount of any Loans on a
date other than the scheduled last day of the Interest Period applicable
thereto, whether pursuant to Section 3.09 (Optional
Prepayment), Section 3.10 (Mandatory
Prepayment), Section
4.01(a)  Eurodollar Rate Lending Unlawful)
or otherwise, or (b) the Borrower failing to borrow a Loan in accordance
with any Funding Notice; then, upon the written notice of such Lender to the
Borrower (with a copy to the Administrative Agent), together with accompanying
support of the amounts owing, the Borrower shall, within five (5) Business
Days of receipt thereof, pay to the Administrative Agent for the account of
such Lender such amount as will (in the reasonable determination of such
Lender) reimburse such Lender for such loss or expense.  Such written notice and determination shall
be binding on the Borrower, absent manifest error.


 


Section
4.06                                     Increased
Capital Costs.  If after the date
hereof any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any applicable Law, guideline
or request (whether or not having the force of law) of any Governmental
Authority, affects the amount of capital required to be maintained by any
Lender, and such Lender reasonably determines that the rate of return on its
capital as a consequence of its Loan is reduced to a level below that which such
Lender could have achieved but for the occurrence of any such circumstance,
then, in any such case upon notice from time to time by such Lender to the
Borrower (with accompanying support for the amount required to compensate such
Lender for such reduction in rate of return), the Borrower shall pay, within
five (5) Business Days after such demand, directly to such Lender
additional amounts sufficient to compensate such Lender for such reduction in
rate of return.  A statement of such
Lender as to any such additional amount or amounts shall be binding on the
Borrower, absent manifest error.


 


Section 4.07                                     Taxes.


 


(a)                                          Payments
Free of Taxes.  Any and all payments
by or on account of any Obligations shall be made free and clear of, and
without deduction for, any Taxes, unless required by Law; provided that
if the Borrower shall be required to deduct any Indemnified Taxes from any such
payment, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including


 


26

















 


deductions applicable to
additional sums payable under this Section 4.07) the Agent or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Law.


 


(b)                                         Payment
of Other Taxes by the Borrower.  In
addition, the Borrower shall timely pay any Indemnified Taxes arising from any
payment made under any Financing Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Financing Document and not
collected by withholding at the source as contemplated by Section 4.07(a)
to the relevant Governmental Authority in accordance with applicable Law.


 


(c)                                          Indemnification
by the Borrower.  The Borrower shall
indemnify each Agent and each Lender, within five (5) Business Days after
written demand therefor, for the full amount of any Indemnified Taxes
(including Indemnified Taxes imposed or asserted on or attributable to amounts
payable under this Section 4.07)
paid by such Agent or Lender, as the case may be, and any penalties, interest,
additions to tax and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or Agent, as the
case may be, shall be conclusive, absent manifest error.


 


(d)                                         Evidence
of Payments.  As soon as practicable
after any payment of Indemnified Taxes by the Borrower to a Governmental
Authority, the Borrower shall deliver to the Administrative Agent the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.


 


(e)                                          Foreign
Lenders.  Each Lender (including any
Participant and any other Person to which any Lender transfers its interests in
this Agreement as provided under Section 11.03 (Assignments))
that is not a United States Person (a “Non-U.S. Lender”) shall
deliver to the Borrower and the Administrative Agent two (2) copies of
U.S. Internal Revenue Service Form W-8ECI, Form W-8BEN or
Form W-8IMY (with supporting documentation and any other certificate or
statements required for exemption from, or reduction of, U.S. federal
withholding tax), or any subsequent versions thereof or successors thereto,
properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments of interest by the Borrower under the Financing Documents if such
Lender is legally entitled to so


 


27

















 


claim, together with, in the case of a Non-U.S. Lender that is relying
on an exemption pursuant to Section 871(h) or 881(c) of the Code, a
certificate substantially in the form of Exhibit H certifying that
such Lender is not a bank described in Section 881(c)(3)(A) of the
Code.  Such forms shall be delivered by
each Non-U.S. Lender on or before the date it becomes a party to this
Agreement.  In addition, to the extent
that it is in a position to legally do so, each Non-U.S. Lender shall deliver
such forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender.  Each
Non-U.S. Lender shall promptly notify the Borrower and the Administrative Agent
at any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by U.S. taxing authorities for such purpose).  The Borrower shall not be obligated to pay
any additional amounts in respect of U.S. federal income taxes pursuant to this
Section 4.07
(or make an indemnification payment pursuant to this Section 4.07) to any Lender (or any Participant or other
Person to which any Lender transfers its interests in this Agreement as
provided under Section 11.03 (Assignments))
if the obligation to pay such additional amounts (or such indemnification)
would not have arisen but for a failure by such Lender to comply with this Section
4.07(e).


 


ARTICLE V


 


REPRESENTATIONS AND
WARRANTIES


 


In order to induce each Agent, each Lender and each
other party hereto (other than the Borrower) to enter into this Agreement and
to induce each Lender to make the Loans hereunder, the Borrower represents and
warrants to each Senior Secured Party as set forth in this ARTICLE V on
the date hereof, on the Closing Date, on the date of each Funding Notice, on
each Funding Date and on the Conversion Date (except with respect to
representations and warranties that expressly refer to an earlier or later
date) as follows:


 


Section
5.01                                     Organization;
Power; Compliance with Law and Contractual Obligations.  The Borrower (a) is a limited liability
company duly formed, validly existing and in good standing under the laws of
the State of Delaware, (b) is duly qualified to do business as is now
being conducted and as is proposed to be conducted and is in good standing as a
foreign limited liability company in each jurisdiction where the nature of its
business requires such qualification (including Illinois), (c) has all
requisite limited liability company power and authority required as of the date
this representation is made or deemed repeated to enter into and perform its
obligations under each Transaction Document to which it is a party and to
conduct its business as currently conducted by it and (d) is in compliance
in all material respects with all Laws and Contractual Obligations applicable
to it, except to the extent that any non-compliance


 


28

















 


with clause (b) of this Section 5.01 in
any jurisdiction (other than Illinois) could not reasonably be expected to
result in a Material Adverse Effect.


 


Section
5.02                                     Due
Authorization; Non-Contravention. 
The execution, delivery and performance by the Borrower of each
Transaction Document to which it is a party are within the Borrower’s limited
liability company powers, have been duly authorized by all necessary limited
liability company action, and do not:


 


(a)                                          contravene
the Borrower’s Organic Documents (including the Borrower LLC Agreement);


 


(b)                                         contravene
in any material respect any Law binding on or affecting the Borrower;


 


(c)                                          (i)
in the case of any Financing Document, contravene any Contractual Obligation
binding on or affecting the Borrower or (ii) in the case of any Project
Document, contravene in any material respect any Contractual Obligation binding
on or affecting the Borrower;


 


(d)                                         require
any consent or approval under the Borrower’s Organic Documents or under any
Contractual Obligation binding on or affecting the Borrower that has not been
obtained; or


 


(e)                                          result
in, or require the creation or imposition of, any Lien on any of the Borrower’s
properties or Equity Interests other than Permitted Liens.


 


Section
5.03                                     Governmental
Approvals.


 


(a)                                          As
of the Closing Date:


 


(i)                                all
material Governmental Approvals that are required to be obtained by the
Borrower in connection with (A) the due execution, delivery and
performance by it of the Transaction Documents to which it is a party,
(B) the ownership, use, construction and operation of the Project as
contemplated by the Transaction Documents, and (C) the grant by the
Borrower and the Pledgor of the Liens granted under the Security Documents and
the validity, perfection and enforceability thereof (the “Necessary Project
Approvals”) are listed in Schedule 5.03;


 


(ii)                            the
Necessary Project Approvals listed in Part A of Schedule 5.03
have been obtained, are in full force and effect, are properly in the


 


29

















 


name of the appropriate Person, and are final and
Non-Appealable;


 


(iii)                       the
Necessary Project Approvals listed in Part B of Schedule 5.03
are not required under applicable Laws to be obtained prior to the Closing Date
(collectively, the “Deferred Approvals”) and are ministerial in nature
or are of a type that can be obtained, as required, in the normal course of
development and construction of the Project; and


 


(iv)                        Part B
of Schedule 5.03 specifies the date by which, or stage of
construction or operation for which, each Deferred Approval included therein is
required to be obtained.


 


(b)                                         On
each Funding Date all Necessary Project Approvals (including all Deferred Approvals)
which as of such Funding Date are required to be obtained have been obtained,
are in full force and effect, are properly in the name of the Borrower, and are
final and Non-Appealable.


 


(c)                                          The
Borrower may update and correct, with approval of the Administrative Agent,
which approval will not be unreasonably withheld, conditioned or delayed, any
reference to a Necessary Project Approval on Schedule 5.03 that has
been replaced in accordance with applicable Law.


 


(d)                                         The
information set forth in each application (including any updates or supplements
thereto) submitted by or on behalf of the Borrower in connection with each
Necessary Project Approval that has been submitted as of the date this
representation is made or deemed repeated, was accurate and complete (except to
the extent such inaccuracy or incompleteness has been or can be cured by the
submission of a supplemental filing within fifteen (15) days of its
discovery) at the time of submission and continues to be accurate and complete,
in each case in all material respects and to the extent required for the
issuance or continued effectiveness of such Necessary Project Approval (except,
with respect to continued effectiveness, for Necessary Project Approvals that
are subject to a supplemental filing shown on Part B of Schedule 5.03
that has not yet been filed and is not yet required to have been filed), and
the Borrower does not have any Knowledge of any material event, act, condition
or state of facts inconsistent with such information.


 


(e)                                          The
Borrower has no reason to believe that each Necessary Project Approval that
remains to be obtained will be obtained in a final and Non-Appealable form in
the ordinary course without undue delay or material expense and without
unanticipated expensive or burdensome conditions prior to the time it is
required to be


 


30

















 


obtained under applicable
Law and Part B of Schedule 5.03. 
There is no action, suit, investigation or proceeding pending or, to the
Knowledge of the Borrower, threatened in writing that would reasonably be
expected to result in the material modification, rescission, termination, or
suspension of any material Governmental Approval obtained prior to the date
this representation is made or deemed made.


 


Section
5.04                                     Investment
Company Act.  The Borrower is not,
and after giving effect to the Loans and the application of the proceeds of the
Loans as described herein will not be, an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940, as amended.


 


Section
5.05                                     Validity.  Each Transaction Document to which the
Borrower is a party has been duly authorized, validly executed and delivered,
and constitutes the legal, valid and binding obligations of the Borrower
enforceable against the Borrower and, to the Borrower’s Knowledge, enforceable
against each other party thereto (other than the Senior Secured Parties), in
each case in accordance with its respective terms, except as the enforceability
hereof or thereof may be limited by (a) bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors’
rights generally and (b) general equitable principles (whether considered
in a proceeding in equity or at law).


 


Section
5.06                                     Financial
Information.  Each of the financial
statements of the Borrower and its Affiliates delivered pursuant hereto has
been prepared in accordance with GAAP, and fairly presents in all material
respects the financial condition of the Borrower or such Affiliate as at the
dates thereof and the results of their operations for the period then ended
(subject, in the case of unaudited financial statements, to changes resulting
from audit and normal year-end adjustments and the absence of footnotes).


 


Section
5.07                                     No
Material Adverse Effect.  Since
April 13, 2007, no Material Adverse Effect has occurred and is continuing.


 


Section
5.08                                     Project
Compliance.  (a) The Project is and
will continue to be owned, developed, constructed and maintained in compliance
in all material respects with all applicable Laws and in compliance in all
material respects with the requirements of all Necessary Project Approvals
(including all Deferred Approvals) then required to have been obtained.


 


(b)                                         The
Project is and will continue to be owned, developed, constructed and maintained
in compliance in all material respects with all of the Borrower’s Contractual
Obligations (including the Project Documents).


 


31
















 


Section
5.09                                     Litigation.
(a) No material action, suit, proceeding or investigation has been
instituted against any of the Borrower, the Pledgor or the Project (including
in connection with any Necessary Project Approval);


 


(b)                                         to
the Knowledge of the Borrower, no action, suit, proceeding or investigation has
been instituted or threatened against any Major Project Party that,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect; and


 


(c)                                          to
the Knowledge of the Borrower, no material action, suit, proceeding or
investigation has been threatened in writing against any of the Borrower, the
Pledgor or the Project (including in connection with any Necessary Project
Approval).


 


Section
5.10                                     Sole
Purpose Nature; Business. The Borrower has not conducted and is not
conducting any business or activities other than businesses and activities
relating to the ownership, development, testing, financing, construction,
operation and maintenance of the Project as contemplated by the Transaction
Documents.


 


Section 5.11                                     Contracts.


 


(a)                                         As
of the Closing Date:


 


(i)                              all
contracts, agreements, instruments, letter agreements, or other documents to
which the Borrower is a party or by which it or any of its properties is bound
as of the date hereof (other than the Financing Documents), including the
Project Documents, and all documents amending, supplementing, interpreting or
otherwise modifying or clarifying such contracts, agreements, instruments,
letter agreements, understandings and other documents are listed in Schedule 5.11,
other than any such contracts that (A) have a term of less than 1
(one) year, (B) under which the Borrower could not reasonably be
expected to have obligations, liabilities or revenues equal to or in excess of
one hundred thousand Dollars ($100,000) per year individually or two hundred
fifty thousand Dollars ($250,000) per year in the aggregate and (C) a
termination of which could not reasonably be expected to result in a Material
Adverse Effect;


 


(ii)                           all contracts,
agreements, instruments, letter agreements, or other documents that are
required to be obtained by the Borrower in the construction and operation of
the Project as contemplated by the


 


32

















 


Transaction Documents
(collectively, the “Necessary Project Contracts”) are listed in Schedule 5.11,
other than any such contracts that (A) have a term of less than 1
(one) year, (B) under which the Borrower could not reasonably be
expected to have obligations, liabilities or revenues equal to or in excess of
one hundred thousand Dollars ($100,000) per year individually or two hundred
fifty thousand Dollars ($250,000) per year in the aggregate and (C) a
termination of which could not reasonably be expected to result in a Material
Adverse Effect;


 


(iii)                        the
Necessary Project Contracts listed in Part A of Schedule 5.11
are in full force and effect;


 


(iv)                       the
Necessary Project Contracts listed in Part B of Schedule 5.11
are not required to be in effect prior to the Closing Date (collectively, the “Deferred
Contracts”) and are not yet in effect; and


 


(v)                          Part
B of Schedule 5.11 specifies the date by which, or stage of
construction or operation for which, each Deferred Contract included therein is
required to be in effect.


 


(b)                                        As
of each date this representation and warranty is made or deemed repeated:


 


(i)                             to
the Knowledge of the Borrower, as of the date(s) made or deemed repeated
(except with respect to representations and warranties that expressly refer to
an earlier date), all representations, warranties and other factual statements
made by each Major Project Party (A) in each Financing Document to which such
Major Project Party is a party are true and correct in all material respects
(or, in the case of any representation and warranty containing any materiality
qualification, in all respects) and (B) in each Project Document to which such
Major Project Party is a party are true and correct except (in the case of this
clause (B) only) where the failure of such representations and warranties to be
so true and correct would not, individually or in the aggregate, result in a
Material Adverse Effect;


 


(ii)                          there
are no material contracts, agreements, instruments or documents between the
Borrower and any other Person relating to the Borrower or the Project other
than (i) the Transaction


 


33

















 


Documents, (ii) the agreements listed in Schedule 5.11,
and (iii) any other agreements permitted by this Agreement;


 


(iii)                      there have
been no Change Orders under any Construction Contract, other than those entered
into prior to the Closing Date and those entered into after the Closing Date in
accordance with Section 7.02(m) (Negative Covenants -
Project Documents); and


 


(iv)                      all
conditions precedent to the obligations of the respective parties under the
Project Documents that have been executed as of the date this representation is
made or deemed repeated have been satisfied or waived by the parties thereto,
except for such conditions precedent that do not and cannot be satisfied until
a later stage of development of the Project, and the Borrower has no reason to
believe that any such condition precedent (other than any condition precedent
that can be waived by the Borrower without any material adverse result) cannot
be satisfied on or prior to the commencement of the appropriate stage of
development of the Project.


 


(c)                                          The
Borrower may update and correct, with approval of the Administrative Agent,
which approval will not be unreasonably withheld, conditioned or delayed, Schedule 5.11
to correct any reference to a Necessary Project Contract that has been replaced
in accordance with this Agreement and/or to reflect any other material
additions after the date hereof.


 


(d)                                         On
each Funding Date, all Necessary Project Contracts (including all Deferred
Contracts) which as of such Funding Date are required to be in place have been
duly executed and delivered and are in full force and effect.


 


Section
5.12                                     Collateral.
(a) The Collateral includes all of the Equity Interests in, and all of the
tangible and intangible assets of, the Borrower.


 


(b)                                         The
Liens and security interests granted to the Collateral Agent (for the benefit
of the Senior Secured Parties) pursuant to the Security Documents in effect on
each date this representation is made or deemed repeated (i) constitute,
as to personal property included in the Collateral, a valid first-priority
security interest in such personal property and (ii) constitute, as to the
Mortgaged Property included in the Collateral, a valid first-priority Lien of
record in the Mortgaged Property, in each case subject only to Permitted Liens.


 


34

















 


(c)                                          As
of and after the Closing Date, the security interest granted to the Collateral
Agent (for the benefit of the Senior Secured Parties) pursuant to the Security
Documents in the Collateral consisting of personal property will be perfected
(i) with respect to any property that can be perfected by filing, upon the
filing of UCC financing statements in the filing offices identified in Schedule 5.12(c),
(ii) with respect to any Account Collateral or any Blocked Account
Collateral that can be perfected solely by control, upon execution of this
Agreement or a Blocked Account Agreement and (iii) with respect to any
property (if any) that can be perfected solely by possession, upon the
Collateral Agent receiving possession thereof, and in each case such security
interest will be, as to Collateral perfected under the UCC or otherwise as aforesaid,
superior and prior to the rights of all third Persons now existing or hereafter
arising whether by way of mortgage, lien, security interest, encumbrance,
assignment or otherwise, in each case subject only to Permitted Liens. After
giving effect to the filings, registrations and giving of notice referred to in
this sentence, all such action as is necessary has been taken to establish and
perfect the Collateral Agent’s rights in and to the Collateral covered by the
Security Documents in effect on the date this representation is made or deemed
repeated to the extent the Collateral Agent’s security interest can be
perfected by filing, including any recordation, filing, registration, giving of
notice or other similar action. No filing, recordation, re-filing or
re-recording other than those listed on Schedule 5.12(c) (as the
same may be updated at the written request of the Borrower, with the written
agreement of the Administrative Agent (which shall not be unreasonably
withheld, conditioned or delayed), following any change in applicable Law) is
necessary to perfect (or maintain the perfection of) the interest, title or
Liens of the Security Documents) (to the extent the Collateral Agent’s security
interest can be perfected by filing or recording), and on and as of each
relevant date on which this representation and warranty is made or deemed
repeated, all such filings or recordings have been made with respect to the
Collateral. The Borrower and the Pledgor have properly delivered or caused to
be delivered to the Collateral Agent, or provided the Collateral Agent control
of, all Collateral relating to assets of or equity in the Borrower that
requires perfection of the Liens and security interests described above by
possession or control. All or substantially all of the Collateral relating to
assets of or equity in the Borrower (other than the Account Collateral, Blocked
Account Collateral, certificates, securities, investments, chattel paper, books
and records and general intangibles), including the Mortgaged Property, is or
will (when acquired) be located on the Site.


 


Section
5.13                                     Ownership
of Properties. (a) The Borrower has a good and valid fee ownership
interest in the Site, subject to Permitted Liens.


 


(b)                                         The
Borrower has a good and valid ownership interest, leasehold interest, license
interest or other right of use in all other property and assets (tangible and
intangible) included in the Collateral relating to assets of or equity in the


 


35

















 


Borrower under each
Security Document, other than the collateral pledged pursuant to the
Pledge Agreement. Such ownership interests, leasehold interest, license
interest or other rights of use are and will be at all times on and after the
Closing Date, together with any other assets or interests contemplated to be
acquired pursuant to the Construction Budget, sufficient to permit construction
and operation of the Project, substantially in accordance with the Project
Documents. To the Knowledge of Borrower, none of said properties or assets of
or equity in the Borrower are subject to any other claims of any Person on and
after the Closing Date, including any easements, rights of way or similar
agreements affecting the use or occupancy of the Project or the Site, other than
Permitted Liens.


 


(c)                                          All
Equity Interests in the Borrower are owned by the Pledgor.


 


(d)                                         The
properties and assets of the Borrower are separately identifiable and are not
commingled with the properties and assets of any other Person and are readily
distinguishable from the property and assets of other Persons.


 


(e)                                          The
Borrower does not have any leasehold interest in, and is not lessee of, any
real property.


 


(f)                                            There
are no easements, rights of way or similar agreements affecting the use or
occupancy of the Project, other than Permitted Liens.


 


Section
5.14                                     Taxes.
(a) The Borrower has (i) filed all income Tax Returns and all other
material Tax Returns required by Law to have been filed by it and (ii) has paid
all Taxes thereby shown to be owing, as and when the same are due and payable,
other than, in the case of this Section 5.14(a)(ii), Taxes that are
subject to a Contest.


 


(b)                                         The
Borrower is not and will not be taxable as a
corporation for federal tax purposes, and Borrower has not and will not take
any action to cause it to be treated as a corporation for state or local tax
purposes if it would, in the absence of such action, not be taxable as a
corporation for state or local purposes.


 


(c)                                          The
Borrower is not a party to any tax sharing agreement with any Person (including
the Pledgor or any other Affiliate of the Borrower).


 


(d)                                         The
Borrower has not agreed to extend the statute of limitations period applicable
to the assessment or collection of any Tax.


 


(e)                                          The
Borrower is not currently under any governmental audit with respect to any Tax
for any period, there are no claims for additional Tax being


 


36

















 


pursued by any
Governmental Authority with respect to the business, income or activities of
the Borrower, and the Borrower has no Knowledge of any such claims that have
not yet been asserted but are likely to be asserted by a Governmental
Authority.


 


Section
5.15                                     Patents,
Trademarks, Etc. The Borrower has obtained and holds in full force and
effect all patents, trademarks, copyrights and other such rights or adequate
licenses therein, free from unduly burdensome restrictions, that are necessary
for the ownership, construction, operation and maintenance of the Project.


 


Section
5.16                                     ERISA
Plans. None of the Borrower nor any ERISA Affiliate has (or within the five
year period immediately preceding the date hereof had) any liability in respect
of any Plan or Multiemployer Plan. The Borrower does not have any contingent
liability with respect to any post-retirement benefit under any “welfare plan”
(as defined in Section 3(1) of ERISA).


 


Section
5.17                                     Property
Rights, Utilities, Supplies Etc. (a) All material property interests,
utility services, means of transportation, facilities and other materials
necessary for the development, engineering, construction, testing, start-up,
use and operation of the Project (including, as necessary, gas, roads, rail
transport, electrical, water and sewage services and facilities) are, or will
be when needed, available to the Project, and arrangements in respect thereof
have been or will be made on commercially reasonable terms.


 


(b)                                         There
are no material supplies, materials or equipment necessary for construction,
operation or maintenance of the Project that are not expected to be available
at the Site on commercially reasonable terms consistent with the Construction
Schedule and the Construction Budget, or the Operating Budget, as
applicable.


 


Section
5.18                                     No
Defaults. No Default or Event of Default has occurred and is continuing.


 


Section
5.19                                     Environmental
Warranties.


 


(a)                                          (i) The
Borrower and its Environmental Affiliates are in compliance in all material
respects with all applicable Environmental Laws, (ii) the Borrower and its
Environmental Affiliates have all Environmental Approvals required to operate
their businesses as presently conducted or as reasonably anticipated to be
conducted and are in compliance in all material respects with the terms and
conditions thereof, (iii) neither the Borrower nor any of its
Environmental Affiliates has received any written communication (other than a
communication that the Administrative


 


37

















 


Agent has agreed in
writing is not materially adverse) from a Governmental Authority that alleges
that the Borrower or any Environmental Affiliate is not in compliance in all
material respects with all Environmental Laws and Environmental Approvals, and
(iv) there are no circumstances that could reasonably be expected to
prevent or interfere in the future with the Borrower’s compliance in all
material respects with all applicable Environmental Laws and Environmental
Approvals.


 


(b)                                         There
is no Environmental Claim pending or, to the Knowledge of the Borrower,
threatened against the Borrower or the Project. To the Knowledge of the
Borrower, there is no Environmental Claim pending or threatened against any
Environmental Affiliate.


 


(c)                                          There
are no present or past actions, activities, circumstances, conditions, events
or incidents, including the release, emission, discharge, presence or disposal
of any Material of Environmental Concern, that could reasonably be expected to
form the basis of any Environmental Claim against the Borrower or any
Environmental Affiliate or could otherwise reasonably be expected to interfere
with the construction or operation of the Project.


 


(d)                                         Without
in any way limiting the generality of the foregoing, (i) there are no
on-site or off-site locations in which the Borrower or, to the Knowledge of the
Borrower, any Environmental Affiliate has stored, disposed or arranged for the
disposal of Materials of Environmental Concern that could reasonably be
expected to form the basis of an Environmental Claim or that is not in
compliance with applicable Environmental Laws, (ii) there are no underground
storage tanks located or to be located on property owned or leased by the
Borrower, (iii) there is no asbestos or lead paint contained in or forming
part of any building, building component, structure or office space owned or
leased by the Borrower, and (iv) no polychlorinated biphenyls
(PCBs) are or will be used or stored at any property owned or leased by
the Borrower.


 


(e)                                          The
Borrower has not received any letter or request for information under
Section 104 of the CERCLA, or comparable state laws, and to the Knowledge
of the Borrower, none of the business or operations of the Borrower is the
subject of any investigation by a Governmental Authority evaluating whether any
remedial action is needed to respond to a release or threatened release of any
Material of Environmental Concern at the Project or at any other location,
including any location to which the Borrower has transported, or arranged for
the transportation of, any Material of Environmental Concern.


 


38

















 


Section
5.20                                     Regulations T,
U and X. The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock, and no proceeds of any
Loan will be used for any purpose that violates, or would be inconsistent with,
F.R.S. Board Regulation T, U or X. Terms for which meanings are provided
in F.R.S. Board Regulation T, U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section 5.20 with such meanings.


 


Section
5.21                                     Accuracy
of Information. (a) All factual information heretofore or contemporaneously
furnished by or on behalf of the Borrower or Pledgor in this Agreement, in any
other Transaction Document or otherwise in writing to any Senior Secured Party,
any Consultant, or counsel for purposes of or in connection with this Agreement
and the other Financing Documents or any transaction contemplated hereby or
thereby (other than projections, budgets and other “forward-looking”
information that have been prepared on a reasonable basis and in good faith by
or on behalf of the Borrower) is, when taken as a whole, after giving effect to
any supplemental information, and as of the date furnished, true and accurate
in every material respect and such information is not, when taken as a whole,
after giving effect to any supplemental information, as of the date furnished,
incomplete by omitting to state any material fact necessary to make such
information not misleading in any material respect.


 


(b)                                         The
assumptions constituting the basis on which the Borrower prepared the
Construction Budget and the Financial Model that are in effect on each date
this representation is made or deemed repeated, and the numbers set forth
therein, were developed and consistently utilized in good faith and are
reasonable and represent the Borrower’s reasonable judgment as of the date
prepared as to the matters contained therein, based on all information known to
the Borrower.


 


(c)                                          The
Borrower reasonably believes that the Conversion Date will occur on or before
the Conversion Date Certain and that the cost to complete the Project will not
exceed the funds available to the Borrower (including funds available under
this Agreement, the Required Equity Contribution and the funds available on a
timely basis under the Completion Guaranty).


 


(d)                                         The
Borrower reasonably believes that the development, engineering, construction,
testing, start-up, use, ownership, operation and maintenance of the Project are
economically feasible and technically feasible.


 


Section
5.22                                     Indebtedness.
(a) The Obligations are, after giving effect to the Financing Documents and the
transactions contemplated thereby, the only outstanding Indebtedness of the
Borrower on and after the Closing Date other than Permitted Indebtedness. The
Obligations rank at least pari  passu with all other Indebtedness
of the Borrower.


 


39

















 


(b)                                         On
the Closing Date, after giving effect to the Financing Documents and the
transactions contemplated thereby, the Borrower will have no outstanding
Indebtedness other than Permitted Indebtedness, and all Liens (other than
Permitted Liens) against assets of the Borrower will have been released.


 


Section
5.23                                     Separateness.
(a) The Borrower maintains separate bank accounts and separate books of account
from the Pledgor. The separate liabilities of the Borrower are readily
distinguishable from the liabilities of each Affiliate of the Borrower,
including the Pledgor.


 


(b)                                         The
Borrower conducts its business solely in its own name in a manner not
misleading to other Persons as to its identity.


 


(c)                                          The
Borrower is in compliance with the provisions set forth on Schedule 5.23.


 


Section
5.24                                     Required
LLC Provisions. The Borrower LLC Agreement includes each of the terms
(collectively, the “Required LLC Provisions”) set forth in Schedule 5.23
and Schedule 5.24.


 


Section
5.25                                     Subsidiaries.
The Borrower has no Subsidiaries.


 


Section
5.26                                     Foreign
Assets Control Regulations, Etc. (a) The use of the proceeds of the Loan by
the Borrower will not violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto.


 


(b)                                       The
Borrower:


 


(i)                             is
not and will not become a Person or entity described by Section 1 of
Executive Order 13224 of September 24, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (12 C.F.R. 595), and the Borrower does not engage in dealings
or transactions with any such Persons or entities; and


 


(ii)                          is not
in violation of the Patriot Act.


 


Section
5.27                                     Solvency.
The Borrower is and, upon the incurrence of any Obligations by the Borrower and
after giving effect to the transactions contemplated hereby, will be Solvent.


 


40
















 


Section
5.28                                     Legal
Name and Place of Business. 
(a) The exact legal name and jurisdiction of formation of the
Borrower is: Nova Biofuels Seneca, LLC, a limited liability company organized
and existing under the laws of the State of Delaware, and the Borrower has not
had any other legal names in the previous five (5) years.


 


(b)                                         The
chief executive office of the Borrower is located at 363 North Sam Houston
Parkway East, Suite 636, Houston, Texas 77060. 
The Borrower also does business at the Site.


 


Section
5.29                                     No
Brokers.  The Borrower has no
obligation to pay any finder’s, advisory, broker’s or investment banking fee,
except for the fees payable pursuant to Section 3.13 (Fees).


 


Section
5.30                                     Insurance.  All insurance required to be obtained and
maintained pursuant to the Transaction Documents by the Borrower is in full
force and effect as of each date this representation is made or deemed repeated
and complies with the insurance requirements set forth on Schedule 7.01(h)
(and, in the case of insurance required under any Project Document, also
complies in all material respects with the insurance requirements in such
Project Document).  All premiums then due
and payable on all such insurance have been paid.  To the Knowledge of the Borrower, all
insurance required to be obtained and maintained by any Major Project Party
with respect to the Project to protect, directly or indirectly, against loss or
liability to the Borrower, the Project or any Senior Secured Party (including
in connection with construction obligations of such Major Project Party), as of
the date this representation is made or deemed repeated, pursuant to any
Project Document has been obtained, is in full force and effect and complies
with the insurance requirements set forth on Schedule 7.01(h) and
is otherwise in all material respects in accordance with such Project Document.


 


Section
5.31                                     Accounts.  The Borrower does not have, and is not the
beneficiary of, any bank account other than (a) the Project Accounts and
(b) Local Accounts with respect to which Blocked Account Agreements have
been duly executed and delivered.


 


41

















 


ARTICLE VI


 


CONDITIONS PRECEDENT


 


Section
6.01                                     Conditions
to Closing and First Funding.  In
addition to the conditions set forth in Section 6.02 (Conditions to All Construction Loan Fundings)  and Section 6.05 (Conditions
to All Fundings and Issuances), the occurrence of the Closing
Date and the initial Construction Loan Funding are subject to the satisfaction
of each of the following conditions precedent:


 


(a)                                          Delivery
of Financing Documents.  The
Administrative Agent shall have received each of the following fully executed
documents, each of which shall be originals, portable document format (“pdf”)
or facsimiles (followed promptly by originals), duly executed and delivered by
each party thereto and in form and substance reasonably satisfactory to each
Lender:


 


(i)                             this
Agreement;


 


(ii)                          if
requested by any Construction/Term Lender, the original Construction Notes,
duly executed and delivered by an Authorized Officer of the Borrower in favor
of each such Construction/Term Lender;


 


(iii)                       if
requested by any Working Capital Lender, the original Working Capital Notes,
duly executed and delivered by an Authorized Officer of the Borrower in favor
of each such Working Capital Lender;


 


(iv)                      the Security
Agreement;


 


(v)                         the
Pledge Agreement;


 


(vi)                      the
Mortgage;


 


(vii)                   the Completion
Guaranty;


 


(viii)                the Blocked
Account Agreement(s);


 


(ix)                        the Fee
Letters;


 


(x)                           the
Subordination Agreement; and


 


(xi)                        the
Affiliate Loans Pledge Agreement.


 


42

















 


(b)                                         Project Documents; Contracts; Consents.  (i)
The Administrative Agent shall have received true, correct and complete copies
of (A) each Project Document, which shall be in form and substance
reasonably satisfactory to the Administrative Agent and the Independent
Engineer, and (B) each other material Contractual Obligation of the
Borrower for which a copy has been reasonably requested by the Administrative
Agent.


 


(ii)                          The
Administrative Agent shall have received a Consent, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to each
Project Document identified on Schedule 6.01(b).


 


(c)                                        Officer’s
Certificates.  The Administrative
Agent shall have received the following certificates, dated as of the Closing
Date, upon which the Administrative Agent and each Senior Secured Party may
conclusively rely:


 


(i)                             a
duly executed certificate of an Authorized Officer of the Borrower certifying
that (A) all conditions set forth in this Section 6.01 have been satisfied on and as of the Closing
Date and (B) all representations and warranties made by the Borrower in
this Agreement and each other Financing Document to which the Borrower is a
party are true and correct on and as of the Closing Date (except with respect
to representations and warranties that expressly refer to an earlier date);


 


(ii)                          a duly
executed certificate of an Authorized Officer of the Borrower certifying that
(A) the copies of each Project Document and other documents delivered
pursuant to Section 6.01(b) are true, correct and complete copies of
such document, (B) each such Project Document or other document is in full
force and effect and no term or condition of any such Project Document or other
document has been amended from the form thereof delivered to the Administrative
Agent, (C) each of the conditions precedent set forth in each Project
Document or other document delivered pursuant to Section 6.01(b) that is
required to be satisfied on or before the Closing Date has been satisfied or
waived by the parties thereto (and, in the case of any material waiver under
any Major Project Document, with the approval of the Administrative Agent,
which will not be unreasonably withheld, conditioned or delayed), and
(D) no material breach, material default or material violation by the
Borrower, or to the Knowledge of the Borrower, by any Major Project Party under


 


43

















 


any such Major Project Document or other document has
occurred and is continuing;


 


(iii)                       a duly
executed certificate of an Authorized Officer of the Pledgor certifying that
all representations and warranties made by the Pledgor in the Pledge Agreement
are true and correct on and as of the Closing Date (except with respect to
representations and warranties that expressly refer to an earlier date); and


 


(iv)                      a duly
executed certificate of an Authorized Officer of the Guarantor certifying that
all representations and warranties made by the Guarantor in the Completion
Guaranty are true and correct on and as of the Closing Date (except with
respect to representations and warranties that expressly refer to an earlier
date).


 


(d)                                       Resolutions,
Incumbency, Organic Documents.  The
Administrative Agent shall have received from each of the Borrower, the Pledgor
and the Guarantor a certificate of an Authorized Officer, dated as of the
Closing Date, upon which the Administrative Agent and each Senior Secured Party
may conclusively rely, as to:


 


(i)                             satisfactory
resolutions of its members, managers or directors, as the case may be, then in
full force and effect authorizing the execution, delivery and performance of
each Transaction Document to which it is party and the consummation of the
transactions contemplated therein;


 


(ii)                          the
incumbency and signatures of those of its officers and representatives duly
authorized to execute and otherwise act with respect to each Financing Document
to which it is party; and


 


(iii)                       such Person’s
Organic Documents, which in the case of the Borrower shall be in form and
substance reasonably satisfactory to the Administrative Agent and shall include
the Required LLC Provisions, and in every case certifying that (A) such
documents are in full force and effect and no term or condition thereof has
been amended from the form thereof delivered to the Administrative Agent and
(B) no material breach, material default or material violation thereunder
has occurred and is continuing.


 


44

















 


(e)                                          Authority
to Conduct Business.  The
Administrative Agent shall have received satisfactory evidence, including
certificates of good standing from the Secretaries of State of each relevant
jurisdiction, dated no more than five (5) Business Days (or such other time
period reasonably acceptable to the Administrative Agent) prior to the Closing
Date, that:


 


(i)                             each
of the Borrower and the Pledgor is duly authorized as a limited liability
company to carry on its business, and is duly formed, validly existing and in
good standing in each jurisdiction in which it is required to be so authorized;
and


 


(ii)                          the
Guarantor is duly authorized as a corporation to carry on its business, and is
duly organized, validly existing and in good standing in each jurisdiction in
which it is required to be so authorized.


 


(f)                                            Opinions
of Counsel.  The Administrative Agent
shall have received the following legal opinions, addressed to the Senior
Secured Parties, and each in form and substance reasonably satisfactory to the
Administrative Agent:


 


(i)                             the
opinion of Baker & McKenzie LLP, New York and Illinois counsel to the Loan
Parties;


 


(ii)                          the
opinion of Woodburn and Wedge, Nevada counsel to the Guarantor;


 


(iii)                       the
reasonably satisfactory opinion of counsel under the laws of the jurisdiction
of each Major Project Party’s organization and the law governing the Project
Documents and Consents to which such Major Project Party is a Party, covering
customary matters relating to such Major Project Party, if reasonably requested
by the Administrative Agent; and


 


(iv)                      the
reasonably satisfactory opinion of counsel under the laws of each jurisdiction
governing each of the Major Project Documents and the Consents, covering
customary matters relating to the Borrower, if reasonably requested by the
Administrative Agent.


 


(g)                                         Lien
Search; Perfection of Security.  The
Collateral Agent shall have been granted a first priority perfected security
interest in all Collateral, and the Administrative Agent shall have received satisfactory
copies or evidence, as the case may be, of the following actions in connection
with the perfection of the Security:


 


45

















 


(i)                             completed
requests for information or lien search reports, dated no more than five
(5) Business Days (or such other, longer time period reasonably acceptable
to the Administrative Agent) before the Closing Date, listing all effective UCC
financing statements, fixture filings or other filings evidencing a security
interest filed in Delaware, Illinois, Nevada and any other jurisdictions
reasonably requested by the Administrative Agent that name the Borrower or the
Pledgor as a debtor, together with copies of each such UCC financing statement,
fixture filing or other filings, which shall show no Liens other than Permitted
Liens;


 


(ii)                          UCC
financing statements and other filings and recordations (including fixture
filings), in proper form for filing in all jurisdictions that the  Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority Liens and security interests
created under the Security Documents covering the Collateral described therein,
and each such UCC financing statement and other filing or recordation shall be
duly filed on or prior to the Closing Date;


 


(iii)                       the
original certificates representing all Equity Interests in the Borrower shall
have been delivered to the Collateral Agent, in each case together with a duly
executed irrevocable proxy and a duly executed transfer power in the forms
attached to the Pledge Agreement;


 


(iv)                      with respect
to the Borrower and the Project, evidence of the making (which may be done on
the Closing Date) of all other actions, recordings and filings of or with
respect to the Security Documents delivered pursuant to Section 6.01(a) (Conditions to Closing and First Funding - Delivery of Financing
Documents) that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first-priority Liens created
thereunder; and


 


(v)                         mortgage
release and UCC termination statements, in proper form for filing in all
jurisdictions that the Administrative Agent may deem necessary or desirable,
terminating the existing mortgage and all existing UCC financing statements and
fixture filings covering the Collateral relating to the Centrue Loan Agreement
Indebtedness, and such mortgage release and each such UCC termination statement
shall be duly filed on the Closing Date.


 


46

















 


(h)                                         Financial
Statements.  The Administrative Agent
shall have received accurate and complete copies of the unaudited annual
financial statements of the Borrower for the Fiscal Years ended
October 31, 2006 and October 31, 2007 and copies of the Guarantor’s
audited annual financial statements for the Fiscal Years ended October 31,
2006 and October 31, 2007.


 


(i)                                           Governmental
Approvals.  The Borrower shall have
obtained all Necessary Project Approvals listed on Schedule 5.03-A,
and the Administrative Agent shall have received a duly executed certificate of
an Authorized Officer of the Borrower certifying that (i) attached to such
certificate are true, correct and complete copies of each such Necessary
Project Approval, (ii) each such Necessary Project Approval was duly
obtained, is in full force and effect, is final and Non-Appealable,
(iii) all Necessary Project Approvals required for the Project at a later
date will be obtained in due course prior to the time when needed and without
conditions that would impose undue burdens or material expense on the Project
or the Borrower, and (iv) Schedule 5.03 accurately identifies
all Necessary Project Approvals.


 


(j)                                             Equator
Principles.  The Administrative Agent
shall have received all documentation requested by the Administrative Agent that
is necessary to evidence compliance with, and otherwise required in connection
with, the Equator Principles.


 


(k)                                          Third
Party Approvals.  The Administrative
Agent shall have received reasonably satisfactory documentation of any approval
by any Person required in connection with any transaction contemplated by this
Agreement or any other Financing Document that the Administrative Agent has
reasonably requested in connection herewith.


 


(l)                                             Fees;
Expenses.  The Administrative Agent
shall have received for its own account, or for the account of each Senior
Secured Party entitled thereto, all fees due and payable on the Closing Date
pursuant to Section 3.13 (Fees), and all costs and expenses (including costs, fees
and expenses of legal counsel and Consultants) for which invoices have been
presented.


 


(m)                                       Establishment
of Project Accounts.  Each of the
Project Accounts shall have been established to the reasonable satisfaction of
the Administrative Agent.


 


(n)                                         Insurance.  The Administrative Agent shall have received:


 


(i)                             satisfactory
evidence that the insurance requirements set forth on Schedule 7.01(h)
with respect to the Borrower and the Project have been satisfied, including
binders or certificates evidencing the commitment of insurers to provide each
insurance policy


 


47

















 


required by Schedule 7.01(h), evidence of
the payment of all premiums then due and owing in respect of such insurance
policies and a certificate of the Insurance Consultant and the Borrower’s insurance
broker (or insurance carrier) certifying that all such insurance policies are
in full force and effect; and


 


(ii)                          a report
of the Insurance Consultant in form and substance reasonably satisfactory to
the Administrative Agent discussing, among other matters that the
Administrative Agent may require, the adequacy of the insurance coverage for
the Project, together with a duly executed certificate of the Insurance
Consultant in the form of Exhibit I, appropriately completed to the
satisfaction of the Administrative Agent.


 


(o)                                         Independent
Engineer’s Report.  The
Administrative Agent shall have received a report of the Independent Engineer
with respect to the Project, accompanied by a duly executed certificate of the
Independent Engineer in the form of Exhibit J-1, each in form and
substance reasonably satisfactory to each Lender, discussing, among other
matters that the Lenders may require:


 


(i)                             the
technical and economic viability of the Project (including the Project’s
capability to conform with all air permit limits) and the technical inputs used
in the Financial Model;


 


(ii)                          the
reasonableness of the Construction Budget and the feasibility of the Borrower’s
approach to construction and start-up of the Project;


 


(iii)                       the
appropriateness of the Performance Tests, Minimum Performance Criteria and
Performance Guarantee;


 


(iv)                      operating
performance and costs assumptions;


 


(v)                         confirmation
that the Environmental Site Assessment Reports comply with the requirements of
this Agreement and that no further Environmental Site Assessment Reports are
required;


 


(vi)                      confirmation
that the Borrower is in compliance in all material respects with all
Environmental Approvals applicable to the Project and does not have any known
present or contingent liability relating to any Environmental Approval,
Environmental Claim regarding the Project; and


 


48

















 


(vii)                   confirmation
that all Environmental Approvals necessary to construct and operate the Project
(other than Environmental Approvals that are Deferred Approvals) have been
obtained and are in full force and effect, final and Non-Appealable.


 


(p)                                         Environmental
Site Assessment Report.  The
Administrative Agent shall have received an Environmental Site Assessment
Report(s) with respect to the Site, accompanied by a corresponding reliance
letter.


 


(q)                                         Biodiesel
Market Report.  The Administrative
Agent shall have received a report of the Biodiesel Market Consultant, in form
and substance reasonably satisfactory to the Required Lenders.


 


(r)                                            Agricultural
Market Report.  The Administrative
Agent shall have received a report of the Agricultural Market Consultant, in
form and substance reasonably satisfactory to the Required Lenders.


 


(s)                                          Appraisal.  The Administrative Agent shall have received
an appraisal with respect to the Project, in form and substance reasonably
satisfactory to the Required Lenders.


 


(t)                                            Construction
Budget.  The Administrative Agent
shall have received (i) the Construction Budget in form and substance
reasonably satisfactory to the Required Lenders, and (ii) a certificate of a
Financial Officer of the Borrower certifying as to the reasonableness of the
underlying assumptions and the conclusions on which the Construction Budget is
based and demonstrating aggregate Project Costs equal to or less than the
amount provided for in the Construction Budget.


 


(u)                                         Survey;
Site Description.  The Administrative
Agent shall have received a current survey of the Site conforming with
ALTA/ACSM 2005 survey standards, including Table A, items 6, 8, 10 and 11(a),
and otherwise acceptable to the Administrative Agent (a “Survey”)
prepared by Etscheid Duttlinger & Associates Inc., or another registered or
licensed surveyor acceptable to the Administrative Agent and the
Title Insurance Company, certified to the Senior Secured Parties and such
Title Insurance Company.  The
Administrative Agent shall have received a detailed description of the parcel
of real property owned by the Borrower and/or on which the Project is situated
and, upon approval by the Administrative Agent, such description shall deemed
to be an amendment to this Agreement and Schedule 5.13 shall be deemed to
be replaced with such description.


 


(v)                                         Title Insurance.


 


49

















 


(i)                             The Administrative
Agent shall have received a paid policy or policies of mortgage title insurance
(the “Title Insurance Policy”), in an aggregate amount equal to the
Aggregate Loan Commitment on a Form 2006 extended coverage lender’s
policy, containing such endorsements (including an endorsement deleting the
creditor’s rights exception) as the Administrative Agent may request and
otherwise in form and substance reasonably satisfactory to the Administrative
Agent, from the Title Insurance Company (with co-insurance or reinsurance
in such amounts and with such title insurance companies as may be required and
approved by the Administrative Agent), containing no exception for mechanics’
or materialmen’s Liens and no other exceptions (printed or otherwise) other than
those approved by the Required Lenders, and insuring that the Collateral Agent
has a good, valid and enforceable first Lien of record on the Mortgaged
Property free and clear of all defects and encumbrances (other than Permitted
Liens).


 


(ii)                          The
Title Insurance Policy shall confirm that the Borrower has good,
marketable title to the Site subject to no Liens (other than Liens in favor of
the Collateral Agent or other Permitted Liens).


 


(w)                                       Bank
Regulatory Requirements.  The
Administrative Agent shall have received at least four (4) Business Days
prior to the Closing Date all documentation and other information required by
bank regulatory authorities under applicable “know your customer” and
anti-money-laundering rules and regulations, including the Patriot Act.


 


(x)                                           Process
Agent.  The Administrative Agent
shall have received, in form and substance reasonably satisfactory to the
Administrative Agent, acceptances from the Process Agent for the Borrower, the
Pledgor and the Guarantor appointed under Section 11.02(d) (Applicable Law; Jurisdiction; Etc. – Appointment of Process Agent and
Service of Process) and as required under each other Financing
Document in effect on the Closing Date.


 


(y)                                         Financial
Model.  The Administrative Agent
shall have received a certificate of a Financial Officer of the Borrower, dated
as of the Closing Date, certifying that the Financial Model attached as Exhibit K
has not been amended or modified and certifying as to the reasonableness of the
underlying assumptions and the conclusions on which the Financial Model is
based.


 


50

















 


(z)                                           Auditors.  The Administrative Agent shall have received
reasonably satisfactory evidence of the appointment of the Auditors.


 


(aa)                                    Equity.  The Administrative Agent shall have received
reasonably satisfactory evidence that the Required Equity Contribution has
been funded and applied to pay Project Costs (as verified by the Independent
Engineer).


 


(bb)                                  Centrue
Debt Discharge.  All of the Borrower’s
obligations and liabilities with respect to the Centrue Loan Agreement
Indebtedness shall have been or shall simultaneously be discharged in full, and
the Borrower shall be released from all of its obligations under each agreement
evidencing or relating to the Centrue Loan Agreement Indebtedness, and the
Administrative Agent shall have received (i) a release letter from the lender
of such debt, in form and substance reasonably satisfactory to the
Administrative Agent, confirming such release and (ii) evidence reasonably
satisfactory to the Administrative Agent that all Liens against assets of the
Borrower in respect of such debt have been released.


 


Section
6.02                                     Conditions
to All Construction Loan Fundings. 
In addition to the conditions set forth in Section 6.01 (Conditions to Closing and First Funding) (with respect
to the first Funding) and Section 6.05 (Conditions
to All Fundings), the obligation of each Construction/Term
Lender to make available each Funding of its Construction Loans shall be
subject to the fulfillment of the following conditions precedent:


 


(a)                                          Funding
Notice.  The Administrative Agent
shall have received a duly executed Funding Notice, as required by and in
accordance with Section 2.04
(Notice of Fundings), which shall
certify that:


 


(i)                             to
the extent requested by the Independent Engineer, all invoices for Project
Costs with respect to which such Funding is requested, each of which shall be
certified as true, correct and complete by the Borrower and substantiated by
the Independent Engineer;


 


(ii)                          Construction
Status Report(s) covering the period since the preceding Funding (or, in the
case of the initial Funding of Construction Loans, since the commencement of
construction), each of which shall be certified as true and complete by the
Borrower and substantiated by the Independent Engineer;


 


(iii)                       absolute
and unconditional sworn Lien waiver statements in form and substance reasonably
satisfactory to the Administrative Agent and the Independent Engineer
evidencing receipt of payment by


 


51

















 


each Construction Contractor, all subcontractors, all
contractors performing the Owners Scope and all other Persons who were paid
from the proceeds of the then last preceding Funding (other than Lien waivers
from contractors whose work, on an aggregate basis (taking into account any and
all contracts or agreements pursuant to which such contractor has performed
work relating to the Project), entitles them to aggregate payment of less than
$100,000; provided that in the case of the initial Funding, such Lien
waiver statements shall evidence receipt of all payments paid or due and
payable by the Borrower to each Construction Contractor, all subcontractors and
all other Persons who have performed work in connection with the Project since
the commencement of construction.  Such
Lien waiver statements shall (A) be dated on or prior to the date of the
Funding Notice and (B) cover all work done and all sums received through
the date of the then last preceding Funding (or, in the case of the initial
Funding, the commencement of construction). 
Each such Lien waiver statement shall be certified as true and correct
and complete by the Borrower to its Knowledge and the applicable contractor and
shall be verified by the Independent Engineer;


 


(iv)                      a list of
all Change Orders not theretofore submitted to the Administrative Agent,
together with a statement by the Borrower that copies of the same have been
submitted to the Independent Engineer prior to the date of such Funding Notice
and a list of all Change Orders to the date of such Funding Notice and a list
of all contemplated Change Orders, together with confirmation that each such
Change Order is in compliance with Section 7.02(m)(iii) (Negative Covenants – Project Documents);


 


(v)                         evidence
(which may include the waiver of Liens required under Section 6.02(a)(iii)
(Conditions to All Construction Loan Fundings –
Funding Notice) and a detailed receipt for payment itemized by
Line Item in the Construction Budget) reasonably satisfactory to the
Independent Engineer that the full amount of the proceeds of the then last
preceding Funding has been paid out by the Borrower or the Construction
Contractors to the Persons with respect to whom such Funding proceeds were
disbursed and otherwise in accordance with this Agreement; provided that
if there has been no such preceding Funding, such evidence shall confirm
receipt of all payments due and payable by the Borrower 


 


52

















 


to the Construction Contractors, all subcontractors
and all other Persons since the commencement of construction; and


 


(vi)                      a
certification of a Financial Officer of the Borrower confirming that the
requested Funding, when considered on its own and when considered on an
aggregate basis with all prior Fundings, is in compliance with the Drawdown
Schedule (or, if such Funding would be in excess of the Drawdown Schedule,
such deviation from the Drawdown Schedule has been approved by the Independent
Engineer and the Administrative Agent).


 


(b)                                         Independent
Engineer’s Certification.  The
Administrative Agent shall have received an Independent Engineer’s Certificate
in respect of such Funding Notice duly executed by the Independent Engineer and
in the form attached as Exhibit J-2.


 


(c)                                          Title Insurance.  The Administrative Agent shall have received
a Title Continuation and a Future Advance Endorsement (or Future Advance
Endorsements) to the Title Insurance Policy, which Future Advance
Endorsement (or Future Advance Endorsements) shall have the effect of
(i) updating the date of the Title Insurance Policy to the date of
the requested Funding and (ii) providing full mechanics’ lien coverage.


 


(d)                                         Updated
Survey.  If the Borrower acquires any
land (leasehold, fee or easement) not shown on the then-current Survey, the
Administrative Agent shall have received an updated Survey of the Site
including such new leasehold, fee or easement areas.


 


(e)                                          Mechanic’s
Liens.  There shall be no mechanic’s,
workmen’s, materialmen’s, construction or other like Liens encumbering the
Collateral (other than Permitted Liens).


 


Section
6.03                                     Conditions
to Term Loan Funding.  In addition to
the conditions set forth in Section 6.05 (Conditions
to All Fundings), the obligation of each Construction/Term
Lender to make its Term Loans shall be subject to the fulfillment of the
following conditions precedent.


 


(a)                                          Term
Notes.  If required by any
Construction/Term Lender, each such Construction/Term Lender shall have
received a Term Note payable to such Lender in the amount of such Lender’s Term
Loan Commitment, duly executed by the Borrower and otherwise complying with the
provisions of Section 2.06 (Evidence of Indebtedness).


 


53

















 


(b)                                         Construction
Loan Payoff.  All of the Construction
Loans shall have been or shall simultaneously be repaid with the proceeds of
such Term Loans.


 


(c)                                          Commercial
Operation Date.  The Commercial
Operation Date shall have occurred.


 


(d)                                         Commercial
Operation Date Certificate.  The
Administrative Agent shall have received (i) the Borrower’s Commercial
Operation Date Certificate in the form of Exhibit P-1, duly executed by
the Borrower and (ii) the Independent Engineer’s Commercial Operation Date
Certificate in the form of Exhibit P-2, duly executed by the Independent
Engineer.


 


(e)                                          Insurance.  The Administrative Agent shall have received
binders or certificates evidencing the commitment of insurers to provide the
insurance policies required by Section 7.01(h) (Affirmative
Covenants - Insurance), together with evidence of the payment of
all premiums then due and payable in respect of such insurance policies and a
certificate of the Borrower’s insurance broker (or insurance carrier)
certifying that all such insurance policies are in full force and effect, and
the Administrative Agent shall have received a certificate of the Insurance
Consultant in substantially the form of Exhibit I with respect
thereto.


 


(f)                                            Security.  The Administrative Agent shall have received
satisfactory evidence that (i) the Collateral Agent continues to have a
perfected first priority security interest in all right, title and interest of
the Borrower and the Pledgor in and to the Collateral prior to all other Liens
thereon and subject only to Permitted Liens, and (ii) all Governmental
Approvals that are necessary or desirable in order to establish, protect,
preserve and perfect the Collateral Agent’s Liens have been duly made or taken
and are in full force and effect.


 


(g)                                         Updated
Operating Budget and Plan.  The
Administrative Agent shall have received a copy of the Operating Budget, in
form and substance reasonably satisfactory to the Administrative Agent.


 


(h)                                         Project
Accounts.  The Project Accounts shall
continue to be maintained in accordance with this Agreement and shall contain
all amounts, if any, required to be deposited therein as of the Conversion
Date, including the amounts on deposit in or standing to the credit of each of
the Debt Service Reserve Account, the Working Capital Reserve Account and the
Warranty Reserve Account, which shall be at, or shall be funded on the
Conversion Date up to, a level no less than (i) the Debt Service Reserve
Required Amount, (ii) the Working Capital Reserve Required Amount and
(iii) the Warranty Reserve Required Amount, respectively.


 


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(i)                                             Legal
Opinions.  The Administrative Agent
shall have received legal opinions from counsel to the Loan Parties, each in
form and substance reasonably satisfactory to the Administrative Agent,
addressing those matters relating to the Project, the Transaction Documents and
the transactions contemplated therein, and the Collateral, as the
Administrative Agent may reasonably request.


 


(j)                                             Title Insurance.  The Administrative Agent shall have received
a Title Continuation and a Future Advance Endorsement (or Future Advance
Endorsements) to the Title Insurance Policy, which Future Advance
Endorsement (or Future Advance Endorsements) shall have the effect of
(i) updating the date of the Title Insurance Policy to the date of the
requested Funding and (ii) providing full mechanics’ lien coverage.


 


(k)                                          Final
Survey.  The Administrative Agent
shall have received a satisfactory final as-built Survey of the Project
demonstrating that the Project has all real property interests required by the
Financing Documents and showing no Liens other than Permitted Liens.


 


(l)                                             Mechanic’s
Liens.  There shall be no mechanic’s,
workmen’s, materialmen’s, construction or other like Liens encumbering the
Collateral (other than Permitted Liens).


 


Section
6.04                                     Conditions
to Working Capital Loan Fundings.  In
addition to the conditions set forth in Section 6.05 (Conditions to All Fundings), the obligation of each
Working Capital Lender to make available each Funding of its Working Capital
Loans shall be subject to the fulfillment of the following conditions
precedent:


 


(a)                                          Timing.  The initial Funding of the Construction Loans
shall have occurred.


 


(b)                                         Funding
Notice.  The Administrative Agent
shall have received (i) a Working Capital Loan Funding Notice, as required
by and in accordance with Section 2.04 (Notice of Fundings),
together with certified evidence of the Working Capital Expenses then due and
payable with respect to which such Funding has been requested, and
(ii) the most recent Borrowing Base Certificate required to be delivered
pursuant to Section 7.03(n) (Reporting Requirements –
Borrowing Base Certificate), executed by an Authorized Officer
of the Borrower, together with supporting schedules, which certificate shall be
in form and substance reasonably satisfactory to the Administrative Agent.


 


55

















 


Section
6.05                                     Conditions
to All Fundings and Issuances.  The
obligation of each Lender to make available each Funding of its Loans and the
issuance of any Letter of Credit shall be subject to the fulfillment of the
following conditions precedent:


 


(a)                                          Borrower’s
Certifications.  The Administrative
Agent shall have received a duly executed certificate of an Authorized Officer
of the Borrower certifying that:


 


(i)                             the
Borrower is in compliance with all conditions set forth in this Section 6.05
and all other applicable conditions in this Article VI on and as of the
proposed Funding Date and/or Proposed Letter of Credit Issuance Date, before
and after giving effect to such (x) Funding and to the application of the
proceeds therefrom and/or (y) Letter of Credit issuance;


 


(ii)                          all
representations and warranties made by the Borrower in this Agreement and each
of the Financing Documents to which it is a party are true and correct in all
material respects (other than representations and warranties that are qualified
Material Adverse Effect or materiality, which shall be true and correct in all
respects) on and as of such Funding Date and/or Proposed Letter of Credit Issuance
Date (except with respect to representations and warranties that expressly
refer to an earlier date), before and after giving effect to such (x) Funding
and to the application of the proceeds therefrom and/or (y) Letter of Credit
issuance;


 


(iii)                       no Default
or Event of Default has occurred and is continuing, or would result from such
Funding and/or Letter of Credit issuance;


 


(iv)                      since
April 13, 2007, there has been no event or occurrence that has had, or
would reasonably be expected to have, a Material Adverse Effect; and


 


(v)                         the
Borrower has no reason to believe that the Commercial Operation Date will not
occur on or prior to the Conversion Date Certain.


 


(b)                                         Government
Approvals.  The Administrative Agent
shall have received evidence reasonably satisfactory to it that:


 


(i)                             all
Governmental Approvals required by the proposed Funding Date and/or Proposed
Letter of Credit Issuance Date for operation


 


56

















 


or development of the Project have been duly obtained,
validly issued, and are in full force and effect, final and Non-Appealable;


 


(ii)                          all
conditions in any Governmental Approval applicable to the Borrower that are
required to have been satisfied by the date of the proposed Funding and/or
Letter of Credit issuance have been satisfied;


 


(iii)                       such
Governmental Approvals do not contain any condition that the Borrower
reasonably believes is not capable of being satisfied on or prior to the time
required or that the Borrower reasonably believes would limit or restrict the
ability of the Project to perform consistently with the projections set forth
in the Financial Model;


 


(iv)                      the Borrower
is in compliance in all material respects with all Governmental Approvals that
have been obtained by it;


 


(v)                         there is
no proceeding pending or, to the Knowledge of the Borrower, threatened in
writing that seeks to appeal, rescind, terminate, modify, condition, suspend or
otherwise alter in any material respect any such Governmental Approval;


 


(vi)                      to the
Borrower’s Knowledge, there exists no impediment that could reasonably be
expected to prevent the Borrower from obtaining in due course all other
Governmental Approvals necessary for the development or operation of the
Project as and when the same may be required; and


 


(vii)                   the
Administrative Agent shall have received copies of all Governmental Approvals
obtained since the last Funding certified by an Authorized Officer of the
Borrower as true, correct, complete and in full force and effect.


 


(c)                                          Additional
Project Documents.  An Authorized
Officer of the Borrower shall have certified that the Borrower has provided to
the Administrative Agent copies of any Additional Project Document entered into
by the Borrower since the date of this Agreement (including any Project Documents
required to be executed on or before the date of the proposed Funding in
accordance with Schedule 5.11), together with all amendments,
supplements, schedules and exhibits thereto and the Ancillary Documents
relating thereto if required, each of which (i) shall have been


 


57

















 


duly authorized, executed
and delivered by each Person party thereto, and (ii) shall be in full
force and effect.


 


(d)                                         No
Default or Event of Default.  No
Default or Event of Default has occurred and is continuing, or would result
from, such Funding and/or Letter of Credit issuance.


 


(e)                                          No
Litigation.


 


(i)                             No
action, suit, proceeding or investigation shall have been instituted or, to the
Borrower’s Knowledge, threatened in writing against any of the Borrower, the
Pledgor, the Guarantor or the Project that, if adversely determined,
individually or in aggregate, has had or could reasonably be expected to have a
Material Adverse Effect; and


 


(ii)                          no
action, suit, proceeding or investigation shall have been instituted or
threatened in writing against any Project Party that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect.


 


(f)                                            Abandonment,
Taking, Total Loss.  (i) No
Event of Abandonment or Event of Total Loss shall have occurred and be
continuing with respect to the Project, (ii) no Event of Taking relating
to any Equity Interests in the Borrower shall have occurred and be continuing,
or (iii) no Event of Taking with respect to a material part of the Project
shall have occurred.


 


(g)                                         Fees;
Expenses.  The Administrative Agent
shall have received for its own account, or for the account of each Senior
Secured Party entitled thereto, all fees due and payable as of the date of such
Funding and/or Letter of Credit issuance pursuant to Section 3.13 (Fees), and
all costs and expenses (including costs, fees and expenses of legal counsel)
for which invoices have been presented.


 


(h)                                         Material
Adverse Effect.  Since April 13,
2007, no Material Adverse Effect has occurred and is continuing.


 


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ARTICLE VII


 


COVENANTS


 


Section 7.01                                     Affirmative
Covenants. The Borrower agrees with each Senior Secured Party that, until
the Discharge Date, the Borrower will perform the obligations set forth in this
Section 7.01.


 


(a)                                          Compliance
with Laws. The Borrower shall comply in all material respects with all Laws
(other than Environmental Laws, which are addressed in Section 7.01(b))
applicable to it or to its business or property.


 


(b)                                         Environmental
Matters.


 


(i)                             The Borrower shall
(A) comply in all material respects with all Environmental Laws,
(B) keep the Project free of any Lien imposed pursuant to any
Environmental Law, (C) pay or cause to be paid when due and payable by the
Borrower any and all costs required in connection with any Environmental Laws,
including the cost of identifying the nature and extent of the presence of any
Materials of Environmental Concern in, on or about the Project or on any real
property owned or leased by the Borrower or on the Mortgaged Property, and the
cost of delineation, management, remediation, removal, treatment and disposal
of any such Materials of Environmental Concern, and (D) use its best
efforts to ensure that no Environmental Affiliate takes any action or violates
any Environmental Law that could reasonably be expected to result in an
Environmental Claim.


 


(ii)                          Without limiting the
provisions of Section 7.01(b)(i), the Borrower shall not use or
allow the Project to generate, manufacture, refine, produce, treat, store,
handle, dispose of, transfer, process or transport Materials of Environmental
Concern other than in compliance in all material respects with Environmental
Laws.


 


(c)                                          Operations
and Maintenance. The Borrower shall own, construct, operate and maintain
(or cause to be operated and maintained) the Project in all material respects
in accordance with (i) the terms and provisions of the Transaction
Documents, (ii) all applicable Governmental Approvals and Laws and
(iii) Prudent Biodiesel Operating Practice.


 


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(d)                                         Construction
and Completion of Project; Maintenance of Properties. (i) The Borrower
shall apply the proceeds of the Loans to the purposes specified in Section
7.01(g) (Affirmative Covenants - Use of Proceeds and Cash
Flow) and in each Funding Notice and shall duly construct and
complete, or cause the construction and completion of, the Project and shall
cause the Final Completion Date to occur, substantially in accordance with
(A) the scope of work and other specifications set forth in the Construction
Contracts (including any Change Orders permitted under this Agreement),
(B) the Construction Budget, and (C) exercise of that degree of
skill, diligence, prudence, foresight and care that are expected of a biodiesel
construction contractor, in order to efficiently accomplish the desired result
consistent with safety standards, applicable Laws, manufacturers’ warranties,
manufacturers’ recommendations and the Project Documents.


 


(ii)                          The Borrower shall keep, or
cause to be kept, in good working order and condition, ordinary wear and tear
excepted, all of its properties and equipment related to the Project that are
necessary or useful in the proper conduct of its business.


 


(iii)                       Except as required in connection
with the construction of the Project, the Borrower shall not permit the Project
or any material portion thereof to be removed, demolished or materially
altered, unless such material portion that has been removed, demolished or
materially altered has been replaced or repaired as permitted under this Agreement.


 


(iv)                      The Borrower shall continue to
engage in business of the same type as now conducted by it and do or cause to
be done all things necessary to preserve and keep in full force and effect
(A) its limited liability company existence and good standing in the State
of Delaware and (B) its material patents, trademarks, trade names,
copyrights, franchises and similar rights.


 


(e)                                          Payment
of Obligations. The Borrower shall pay and discharge as the same shall
become due and payable all of its material obligations and liabilities,
including (i) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are subject to a
Contest, (ii) all of its obligations and liabilities under its Contractual
Obligations and (iii) all lawful claims that, if unpaid, would by law
become a Lien upon its properties (other than Permitted Liens), unless the same
are subject to a Contest.


 


(f)                                            Governmental
Approvals. The Borrower shall maintain in full force and effect, in the
name of the Borrower, all Necessary Project Approvals and


 


60

















 


obtain all
Deferred Approvals, all of which shall be reasonably satisfactory to the
Administrative Agent prior to the time it is required to be obtained hereunder,
including as set forth on Part B of Schedule 5.03, but
in any event no later than the date required to be obtained under applicable
Law.


 


(g)                                         Use
of Proceeds and Cash Flow.


 


(i)                             All proceeds of the
Construction Loans shall be applied to pay Project Costs. All Loan proceeds
shall be applied in accordance with the Funding Notice pursuant to which such
Loans were funded.


 


(ii)                          All proceeds of the Term
Loans shall be applied to repay the Construction Loans.


 


(iii)                       All proceeds of the Working
Capital Loans (other than those resulting from a draw on a Letter of Credit)
shall be applied to pay Working Capital Expenses.


 


(iv)                      All proceeds of the Required
Equity Contributions shall be applied to pay Project Costs.


 


(v)                         The Borrower shall cause all
Cash Flow, Insurance Proceeds and Condemnation Proceeds to be applied in
accordance with ARTICLE VIII  (Project Accounts).


 


(h)                                         Insurance.
Without cost to any Senior Secured Party, the Borrower shall at all times
obtain and maintain, or cause to be obtained and maintained, the types and
amounts of insurance listed and described on Schedule 7.01(h), in
accordance with the terms and provisions set forth therein for the Project and
the Borrower, and shall obtain and maintain such other insurance as may be
required pursuant to the terms of any Transaction Document. The Lenders shall
be additional named insureds on all policies except workers
compensation/employers liability policies, and the Administrative Agent shall
be the loss payee, under casualty, business interruption and builders risk
coverage. The Borrower shall cause such insurance to be in place no less than
ten (10) days prior to the date required, and each required insurance
policy shall be renewed or replaced no less than thirty (30) days prior to
the expiration thereof. In the event the Borrower fails to take out or maintain
the full insurance coverage required by this Section 7.01(h), the
Administrative Agent may (but shall not be obligated to) take out the required
policies of insurance and pay the premiums on the same. All amounts so advanced
by the Administrative Agent shall become an Obligation, and the Borrower shall
forthwith pay such amounts to the


 


61

















 


Administrative
Agent, together with interest from the date of payment by the Administrative
Agent at the Default Rate.


 


(i)                                             Books
and Records; Inspections. The Borrower shall keep proper books of record
and account, separate from the books and records of any other Person (including
any Affiliates of the Borrower), in which complete, true and accurate entries
in conformity with GAAP and all requirements of Law shall be made of all
financial transactions and matters involving the assets and business of the
Borrower, and shall maintain such books of record and account in material
conformity with applicable requirements of any Governmental Authority having
regulatory jurisdiction over the Borrower. The Borrower shall keep books and
records that accurately reflect all of its business affairs, transactions and
the documents and other instruments that underlie or authorize all of its
limited liability company actions. The Borrower shall permit officers and
designated representatives of the Agents to visit and inspect any of the
properties of the Borrower (including the Project), to examine its limited
liability company, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its
members, managers, directors, officers and independent public accountants, all
at the expense of the Borrower (provided that so long as no Default or Event of
Default has occurred and is continuing, such visits or inspections shall be at
the expense of the Borrower only once per fiscal quarter) and at reasonable
times during normal business hours, upon reasonable advance notice to the
Borrower; provided that if a Default or Event of Default has occurred
and is continuing, any Agent, Lender or Consultant (or any of their respective
officers or designated representatives) may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.


 


(j)                                             Operating
Budget.


 


(i)                             The Borrower shall, not
later than forty-five (45) days before the Commercial Operation Date,
adopt an operating plan and a budget setting forth in reasonable detail the
projected requirements for Operation and Maintenance Expenses for the Project
for the period from such date to the conclusion of the then-current Fiscal Year
and provide a copy of such operating plan and budget at such time to the
Administrative Agent. No less than forty-five (45) days in advance of the
beginning of each Fiscal Year thereafter, the Borrower shall similarly adopt an
operating plan and a budget for the Project setting forth in reasonable detail
the projected requirements for Operation and Maintenance Expenses for the
ensuing Fiscal Year and provide a copy of such operating plan and budget at
such time to the


 


62

















 


Administrative
Agent. (Each such operating plan and budget is herein called an “Operating
Budget”.)  Each Operating Budget
shall be prepared in accordance with a form approved by the Independent
Engineer and shall become effective upon approval, which shall not be
unreasonably withheld, conditioned or delayed, of the Administrative Agent
(acting in consultation with the Consultants). If the Borrower shall not have
adopted an annual Operating Budget before the beginning of any Fiscal Year or
any Operating Budget adopted by the Borrower shall not have been accepted by
the Administrative Agent before the beginning of any upcoming Fiscal Year, the
Operating Budget for the preceding Fiscal Year shall, until the adoption of an
annual Operating Budget by the Borrower and acceptance of such Operating Budget
by the Administrative Agent, be deemed to be in force and effective as the
annual Operating Budget for such upcoming Fiscal Year; provided that if
the initial Operating Budget is not approved by the Administrative Agent, the
Borrower may use a budget that is consistent with the Financial Model as of the
Closing Date (or any updated Financial Model that has been approved by the
Administrative Agent) until an initial Operating Budget is approved, and the
Borrower shall work diligently to prepare an initial Operating Budget that is
reasonably acceptable to the Administrative Agent.


 


(ii)                          Each Operating Budget
delivered to the Administrative Agent pursuant to this Section 7.01(j)
shall be accompanied by a memorandum detailing all material assumptions used in
the preparation of such Operating Budget, shall contain a line item for each
Operating Budget Category, shall specify for each month and for each such
Operating Budget Category the amount budgeted for such category for such month,
and shall clearly distinguish Operation and Maintenance Expenses.


 


(k)                                          Performance
Tests.


 


(i)                                   The Administrative
Agent and the Independent Engineer have the right to witness and verify any
Performance Tests. The Borrower shall give the Administrative Agent and the
Independent Engineer notice regarding each proposed Performance Test no less
than five (5) Business Days prior to any Performance Test. If, upon
completion of any Performance Tests, the Borrower has decided to use such
Performance Tests as the basis for declaring the


 


63

















 


Commercial
Operation Date, the Borrower shall so notify the Administrative Agent and the
Independent Engineer and shall deliver a copy of all test results supporting
the results of such Performance Test, accompanied by supporting data and
calculations including a report that indicates the Borrower’s preliminary
opinions as to results of the Performance Tests (each a “Performance Test
Report”) and the Independent Engineer will, upon a thorough review of such
Performance Test Report, certify in writing to the Administrative Agent, within
five (5) Business Days of the receipt of such Performance Test Report, the
results of the Performance Tests and confirm that such Performance Tests were
performed in accordance with the Approved Performance Test Protocols or deliver
a report to the Administrative Agent and the Borrower setting forth in
reasonable detail any objections of the Independent Engineer to such
Performance Test Report. If any such valid objections are made, then the
Borrower shall be permitted to address such objections to the reasonable
satisfaction of the Independent Engineer or conduct additional Performance
Tests in accordance with this Section 7.01(k).


 


(ii)                                  Each
Performance Test shall be conducted in accordance with the Approved Performance
Test Protocols.


 


(l)                                             Project
Documents.


 


(i)                             The Borrower shall
maintain in full force and effect, preserve, protect and defend its material
rights under, and take all actions necessary to prevent termination or
cancellation (except by expiration in accordance with its terms or permitted
replacement) of, each Project Document. The Borrower shall exercise all
material rights, discretion and remedies under each Project Document, if any,
in accordance with its terms and in a manner consistent with (and subject to)
the Borrower’s obligations under the Financing Documents.


 


(ii)                          Promptly upon execution of
any Additional Project Document by the Borrower, the Borrower shall deliver to
the Administrative Agent a certified copy of such Project Document and, if
reasonably requested by the Administrative Agent, any Ancillary Documents
related thereto.


 


64

















 


(iii)                       If any Project Document provides
that such Project Document will expire prior to the Final Maturity Date, then,
on or prior to the date that is ninety (90) days (or such shorter period
as shall be satisfactory to the Administrative Agent) prior to the expiration
date of such Project Document, the Borrower shall enter into an agreement
replacing such Project Document, in form and substance, and with a
counterparty, reasonably satisfactory to the Required Lenders, unless the
Administrative Agent reasonably agrees that such Project Document is no longer
required for the Project; provided, that the Borrower may enter into an
agreement with ConAgra Trade Group, Inc. replacing the Feedstock Agreement,
with substantially similar terms to the ConAgra Feedstock Undertaking, and
otherwise reasonably satisfactory to the Administrative Agent.


 


(m)                                       Preservation
of Title; Acquisition of Additional Property.


 


(i)                             The Borrower shall
preserve and maintain (A) good, marketable and insurable fee interest in
the Site and valid easement interest in its easement interest in the Site and
(B) good, legal and valid title to all of its other respective material
properties and assets, in each case free and clear of all Liens other than
Permitted Liens. If the Borrower at any time acquires any real property or
leasehold or other interest in real property (including, to the extent
reasonably requested by the Administrative Agent, with respect to any material
easement or right-of-way not covered by the Mortgage), the Borrower shall,
promptly upon such acquisition, execute, deliver and record a supplement to the
Mortgage, reasonably satisfactory in form and substance to the Administrative
Agent, subjecting such real property or leasehold or other interest to the Lien
and security interest created by the Mortgage. If reasonably requested by the
Administrative Agent and available on commercially reasonable terms, the
Borrower shall obtain an appropriate endorsement or supplement to the
Title Insurance Policy insuring the Lien of the Security Documents in such
additional property, subject only to Permitted Liens.


 


(ii)                          Prior to the acquisition or
lease of any such additional real property interests (other than easements that
do not involve soil disturbance), the Borrower shall deliver to the
Administrative Agent an Environmental Site Assessment Report(s) with respect to
such real property (if, in the reasonable determination of the


 


65

















 


Administrative
Agent, acting in consultation with the Independent Engineer, such Environmental
Site Assessment Report(s) with respect to such real property interests is
warranted), in each case along with a corresponding reliance letter from the
consultant issuing such report(s) (to the extent such report(s) does not permit
reliance thereon by the Senior Secured Parties). Each such Environmental Site
Assessment Report(s) shall be in form and substance reasonably satisfactory to
the Administrative Agent and shall not identify any material liability
associated with the condition of such real property.


 


(n)                                         Maintenance
of Liens; Creation of Liens on Newly Acquired Property.


 


(i)                             The Borrower shall take or
cause to be taken all action necessary or desirable to maintain and preserve
the Lien of the Security Documents and, on and after the Closing Date,  the first-ranking priority thereof (subject
to Permitted Liens).


 


(ii)                          The Borrower shall take all
actions required to cause each Additional Project Document to be or become
subject to the Lien of the Security Documents (whether by amendment to any Security
Document or otherwise) and shall, if required, deliver or cause to be delivered
to the Administrative Agent all Ancillary Documents related thereto.


 


(iii)                       Simultaneously with the making
of any investment in Cash Equivalents, the Borrower shall take or cause to be
taken all actions required to cause such Cash Equivalents to be or become
subject to a first priority perfected Lien (subject to Permitted Liens) in
favor of the Senior Secured Parties.


 


(o)                                         Certificate
of Formation. The Borrower shall observe all of the separateness and other
provisions and procedures of its certificate of formation and Borrower LLC
Agreement, including the Required LLC Provisions.


 


(p)                                         Separateness.
The Borrower shall comply at all times with the separateness provisions set
forth on Schedule 5.23.


 


(q)                                         Further
Assurances. Upon written request of the Administrative Agent, the Borrower
shall promptly perform or cause to be performed any and all acts


 


66

















 


and execute or
cause to be executed any and all documents (including UCC financing statements
and UCC continuation statements):


 


(i)                             that are necessary or
desirable for compliance with Section 7.01(n)(i) (Affirmative
Covenants - Maintenance of Liens; Creation of Liens on Newly Acquired Property);


 


(ii)                          for the purposes of ensuring
the validity and legality of this Agreement or any other Financing Document and
the rights of the Senior Secured Parties hereunder or thereunder; and


 


(iii)                       for the purposes of facilitating
the proper exercise of rights and powers granted to the Senior Secured Parties
under this Agreement or any other Financing Document.


 


(r)                                            First
Priority Ranking. The Borrower shall cause its payment obligations with
respect to the Loans to constitute direct senior secured obligations of the
Borrower and to rank no less than pari passu in priority of payment, in right
of security (except with respect to Permitted Liens) and in all other respects
to all other Indebtedness of the Borrower.


 


(s)                                          Quarterly
Calculations. Not more than three (3) Business Days prior to each
Quarterly Payment Date.


 


(i)                             the Borrower shall provide
to the Administrative Agent a calculation of the Debt Service Reserve Required
Amount, certified by a Financial Officer of the Borrower; and


 


(ii)                          the Borrower shall calculate
the Historical Debt Service Coverage Ratio and the Prospective Debt Service
Coverage Ratio, and shall provide written evidence to the Administrative Agent
and the Accounts Bank of such calculations certified by a Financial Officer of
the Borrower.


 


Each
such calculation pursuant to this Section 7.01(s) shall be subject
to review by the Administrative Agent.


 


(t)                                            Financial
Model.


 


(i)                             No less than forty-five
(45) days prior to the end of each Fiscal Year, the Borrower shall deliver
the Administrative Agent a proposed updated Financial Model, together with the
underlying assumptions, containing projections of Cash Flow, Operation and


 


67

















 


Maintenance
Expenses (including each Operating Budget Category) and Cash Flow Available for
Debt Service, in each case on a quarterly basis, with respect to the Project
for the immediately succeeding Fiscal Year. If the Administrative Agent does
not approve the updated Financial Model proposed by the Borrower within thirty
(30) days following receipt thereof (and, so long as no Event of Default
has occurred and is continuing, after consultation and no less than ten (10)
days of good faith negotiations with the Borrower), the Administrative Agent
may instruct the Consultants to prepare an updated Financial Model based on the
reasonable professional judgment of the Consultants (and such updated Financial
Model prepared by the Consultants shall be binding on the Lenders and the
Borrower).


 


(ii)                             If
in any Fiscal Year (A) the actual Cash Flow for the completed Fiscal
Quarters in such Fiscal Year (or, in the case of the Fiscal Year in which the
Closing Date occurs, the period from the Closing Date to the end of the most
recent completed Fiscal Quarter) (such period, the “Specified Period”)
is ninety percent (90%) or less of the projections for such period set
forth in the then-current Financial Model, or (B) Operation and Maintenance
Expenses for the Specified Period are, in the aggregate, ten percent (10%) or
more above the projections for such period set forth in the then-current
Financial Model, the Borrower shall, no less than thirty (30) days prior
to the end of the immediately following Fiscal Quarter, deliver to the
Administrative Agent a proposed updated Financial Model, together with the
underlying assumptions, containing projections of Cash Flow, Operation and
Maintenance Expenses (including each Operating Budget Category) and Cash Flow
Available for Debt Service, in each case on a quarterly basis, with respect to
the Project through the end of the immediately following Fiscal Year.


 


(iii)                          If
the Administrative Agent does not approve the updated Financial Model proposed
by the Borrower pursuant to Section 7.01(t)(ii) within fifteen
(15) days following receipt thereof (and, so long as no Event of Default
has occurred and is continuing, after consultation with the Borrower), the
Administrative Agent may instruct the Consultants to prepare an updated
Financial Model based on the reasonable professional judgment of the
Consultants (and such updated Financial Model


 


68

















 


prepared by
the Consultants shall be binding on the Lenders and the Borrower).


 


(iv)                      All costs incurred in connection
with the preparation and review of updated Financial Models under this Section 7.01(t)
shall be for the account of the Borrower.


 


(u)                                         Interest
Rate Protection Agreement. Within thirty (30) days after the Closing
Date, and at all times thereafter, the Borrower shall have in place Interest Rate
Protection Agreements with respect to at least fifty percent (50%) of the
aggregate principal amount of all Construction or Term Loans projected to be
outstanding from time to time; provided, that the Borrower may not enter
into Interest Rate Protection Agreements for notional amounts, in the aggregate
at the time of the execution thereof, in excess of the aggregate principal
amount of Construction or Term Loans outstanding on the date of such
transaction.


 


(v)                                         Commodity
Hedging Programs. On or before the date that is two (2) months prior to the
Commercial Operation Date, the Borrower shall propose a Commodity Risk
Management Plan which shall be approved by the Administrative Agent (such
approval not to be unreasonably withheld, conditioned or delayed). The Borrower
may, from time to time, amend such Commodity Risk Management Plan; provided
that any material changes thereto shall require the prior written approval of
the Administrative Agent, which approval shall not be unreasonably withheld.


 


(w)                                       Final
Completion. The Borrower shall cause Final Completion to occur on or before
the date that is ninety (90) days after the Commercial Operation Date.


 


Section 7.02                                     Negative
Covenants. The Borrower agrees with each Senior Secured Party that, until
the Discharge Date, the Borrower will perform the obligations set forth in this
Section 7.02.


 


(a)                                          Restrictions
on Indebtedness of the Borrower. The Borrower will not create, incur,
assume or suffer to exist any Indebtedness except:


 


(i)                             the Obligations;


 


(ii)                          Indebtedness under the
Permitted Commodity Hedging Arrangements;


 


(iii)                       accounts payable to trade
creditors incurred in the ordinary course of business and (A) not more than
sixty (60) days past due or


 


69

















 


(B) subject to a Contest not more than six (6) months past due and
not exceeding an aggregate amount of two hundred fifty thousand Dollars
($250,000);


 


(iv)                      Indebtedness under the Affiliate
Loans in an aggregate amount not to exceed seventy-five million Dollars ($75,000,000),
or such other (higher) amount reasonably acceptable to the Administrative
Agent;


 


(v)                         until the Closing Date,
Indebtedness arising from the Borrower’s obligations under the Loan Agreement
entered into by the Borrower and Centrue Bank, dated as of January 9, 2007 (the
“Centrue Loan Agreement Indebtedness”);


 


(vi)                      Indebtedness (excluding
Indebtedness otherwise permitted under this Section 7.02(a)), not to
exceed, in the aggregate, two hundred fifty thousand Dollars ($250,000); and


 


(vii)                   obligations as lessee under
operating leases or leases for the rental of any real or personal property
which are required by GAAP to be capitalized where all such leases under this Section 7.02(a)(vi)
do not require the Borrower to make scheduled payments to the lessors in any
Fiscal Year in excess of two hundred fifty thousand ($250,000) in the
aggregate.


 


(b)                                         Liens.
The Borrower shall not create, incur, assume or suffer to exist any Lien upon
any of its property, revenues or assets or its Equity Interests, whether now
owned or hereafter acquired, except:


 


(i)                             Liens in favor, or for the
benefit, of the Collateral Agent pursuant to the Security Documents;


 


(ii)                          Liens for taxes, assessments
and other governmental charges that are not yet due or the payment of which is
the subject of a Contest;


 


(iii)                       Liens of carriers, warehousemen,
mechanics and materialmen incurred in the ordinary course of business for sums
not yet due or the payment of which is the subject of a Contest;


 


(iv)                      Liens of no more than five
hundred thousand Dollars ($500,000) in the aggregate securing judgments for the
payment of money not


 


70

















 


constituting
an Event of Default, provided that each such Lien is subject to a
Contest and any appropriate legal proceedings which may have been initiated for
the review shall not have been terminated or the period within such proceedings
may have been initiated shall not have expired;


 


(v)                         rights of setoff and other
similar Liens of banks holding Local Accounts, solely to the extent permitted
by, and in accordance with, the Blocked Accounts Agreement applicable to such
Local Account;


 


(vi)                      purchase money security interests
in discrete items of equipment not comprising an integral part of the Project
or other Collateral when the obligation secured is incurred for the purchase of
such equipment and does not exceed the lesser of the cost or the fair market
value thereof at the time of acquisition and, in aggregate, an outstanding
value of five hundred thousand Dollars ($500,000);


 


(vii)                   any Liens reflected on the
Title Insurance Policy or any Title Continuation; and


 


(viii)                until the Closing Date, Liens securing
the Centrue Loan Agreement Indebtedness.


 


(c)                                          Permitted
Investments. The Borrower shall not
make any loan or advance to any Person other than (i) accounts receivable
incurred in commercially reasonable amounts in the normal course of the
Borrower’s business and investments received in satisfaction or partial
satisfaction thereof from financially troubled Account Debtors to the extent
reasonably necessary in order to prevent or limit loss, and (ii) investments by
the Borrower in the Interest Rate Protection Agreements and Permitted Commodity
Hedging Arrangements. Except for (i) Permitted Investments and (ii) investments
received in satisfaction or partial satisfaction of accounts receivable
incurred in commercially reasonable amounts in the normal course of the
Borrower’s business from financially troubled Account Debtors to the extent
reasonably necessary in order to prevent or limit loss, the Borrower will not
purchase or otherwise acquire the capital stock, securities, debt, assets or
obligations of, or any interest in, any Person.


 


(d)                                         Change
in Business. The Borrower shall not (i) enter into or engage in any
business other than the ownership, operation, maintenance, development,
start-up, testing, use and financing of the Project and all activities


 


71

















 


reasonably
related thereto or (ii)  change in any material respect the scope of the
Project from that which is contemplated as of the date hereof.


 


(e)                                          Equity
Issuances. The Borrower shall not issue any Equity Interests unless such
Equity Interests are immediately pledged to the Collateral Agent (for the
benefit of the Senior Secured Parties) on a first-priority perfected basis
pursuant to the Pledge Agreement or, if necessary, a supplement thereto or a
pledge and security agreement in substantially the form of the Pledge
Agreement.


 


(f)                                            Asset
Dispositions. The Borrower shall not sell, lease, assign, transfer or
otherwise dispose of assets of the Project or the Borrower (other than
Products), whether now owned or hereafter acquired, except:


 


(i)                             disposal of assets that
are promptly replaced in accordance with the then current Operating Budget;


 


(ii)                          to the extent that such
assets are uneconomical, obsolete or no longer useful or no longer usable in
connection with the operation or maintenance of the Project; and


 


(iii)                       disposal of assets with a fair
market value, or at a disposal price, of less than one million Dollars
($1,000,000) in the aggregate during any Fiscal Year; provided, that
such disposal does not, and would not reasonably be expected to, adversely
affect the construction, operation or maintenance of the Project.


 


(g)                                         Consolidation,
Merger. The Borrower will not (i) directly or indirectly liquidate,
wind up, terminate, reorganize or dissolve itself (or suffer any liquidation,
winding up, termination, reorganization or dissolution); or (ii) acquire
(in one transaction or a series of related transactions) all or any substantial
part of the assets, property or business of, or any assets that constitute a
division or operating unit of, the business of any Person or otherwise merge or
consolidate with or into any other Person.


 


(h)                                         Transactions
with Affiliates. The Borrower shall not enter into or cause, suffer or
permit to exist any arrangement or contract with any of its Affiliates or any
other Person that owns, directly or indirectly, any Equity Interest in the
Borrower unless such arrangement or contract (i) is fair and reasonable to
the Borrower and (ii) is an arrangement or contract that is on an arm’s-length
basis and contains terms no less favorable than those that would be entered
into by a prudent Person in the position of the Borrower with a Person that is
not one of its Affiliates (it being acknowledged that (1) each of the Affiliate
Project Documents are in


 


72

















 


compliance
with this Section 7.02(h), (2) the transactions contemplated by the
Completion Guaranty and the Security Documents are in compliance with this Section 7.02(h)
and (3) the transactions contemplated by the Affiliate Loan(s) are in
compliance with this Section 7.02(h)).


 


(i)                                             Accounts.
(i) The Borrower shall not maintain, establish or use any deposit account,
securities account (as each such term is defined in the UCC) or other banking
account other than the Project Accounts and any Local Account with respect to
which a Blocked Account Agreement is entered.


 


(ii)                          The Borrower shall not change
the name or account number of any of the Project Accounts or Local Accounts
without the prior written consent of the Administrative Agent, which will not
be unreasonable delayed, conditioned or withheld.


 


(iii)                       There shall not be, at any
single point in time, Local Accounts held at more than two (2) banks.


 


(j)                                             Subsidiaries.
The Borrower shall not create or acquire any Subsidiary or enter into any
partnership or joint venture.


 


(k)                                          ERISA.
The Borrower will not engage in any nonexempt prohibited transactions under
Section 406 of ERISA or under Section 4975 of the Code that could
reasonably be expected to result in a material liability. Borrower will not
incur any obligation or liability in respect of any Plan, Multiemployer Plan or
employee welfare benefit plan providing post-retirement welfare benefits (other
than a plan providing continuation coverage under Part 6 of Title I of ERISA)
that could reasonably be expected to result in a material liability and Borrower
shall obtain the prior written approval of the Administrative Agent before
incurring any such obligation or liability.


 


(l)                                             Taxes.
The Borrower shall not make any election to be treated as an association
taxable as a corporation for federal, state or local tax purposes.


 


(m)                                       Project
Documents.


 


(i)                             Subject to Section
7.02(m)(iii), the Borrower shall not direct or consent or agree to any
amendment, modification, supplement, waiver or consent in respect of any
provision of any Project Document (other than any immaterial amendment,
modification, supplement, waiver or consent, in which case a true, correct and
complete copy shall be delivered to the Administrative Agent)


 


73

















 


without the
prior written consent of the Administrative Agent, and in the case of any
amendment to a Project Document due to the removal or replacement of a Major
Project Party, the prior written consent of the Required Lenders.


 


(ii)                          Except for collateral
assignments under the Security Documents, the Borrower shall not assign any of
its rights under any Project Document to any Person, or consent to the
assignment of any obligations under any such Project Document by any other
party thereto, without the prior written approval of the Administrative Agent,
and in the case of any assignment of any obligations under any Project Document
by a Major Project Party, without the prior written approval of the Required
Lenders.


 


(iii)                       The Borrower shall not enter
into or approve any Change Orders without the approval of the Administrative
Agent (acting in consultation with the Independent Engineer), unless each of
the following conditions is satisfied:


 


(A)                              the
amount of such Change Order does not exceed (1) one million  Dollars ($1,000,000) individually, or
(2) two million  Dollars
($2,000,000) together with all prior Change Orders that have not been approved
by the Administrative Agent;


 


(B)                                such
Change Order would not cause the funds available under the Contingency Line
Item (and not yet expended) to be reduced to less than zero;


 


(C)                                such
Change Order could not reasonably be expected to delay the Commercial Operation
Date beyond the Conversion Date Certain;


 


(D)                               such
Change Order could not reasonably be expected to alter in any adverse respect
any guaranty, liquidated damages provision or the standards for any of the
Performance Tests;


 


74
















 


(E)                               such Change Order could
not reasonably be expected to permit or result in any adverse modification or
impair the enforceability of any warranty under the Construction Contracts (or
any of the material subcontracts);


 


(F)                               such Change Order could
not reasonably be expected to impair or reduce the value of the Project or the
value of the Collateral or decrease Cash Flow Available for Debt Service;


 


(G)                              such Change Order could
not reasonably be expected to present a material risk of revocation or material
modification of any Governmental Approval;


 


(H)                             such Change Order could
not reasonably be expected to cause the Borrower or the Project not to comply
or lessen in any material respect the ability of the Borrower or the Project to
comply with any applicable Law; and


 


(I)                                  the Administrative
Agent has received a certificate, duly executed by an Authorized Officer of the
Borrower, confirming that the proposed Change Order will comply with each of
the conditions set forth in clauses (A)-(H) above and, in the case of the
condition set forth in clause (A), setting forth (1) the amount of
such proposed Change Order and (2) the amount of all prior Change Orders
that have not been approved by the Administrative Agent.


 


(n)                                         Additional
Project Documents. The Borrower shall not enter into any Additional Project
Document except with the prior written approval of the Administrative Agent.


 


(o)                                         Suspension
or Abandonment. The Borrower shall not (i) permit or suffer to exist
an Event of Abandonment without the prior written approval of the Required
Lenders or (ii) order or consent to any suspension of work under any Project
Document without the prior written approval of the Administrative Agent.


 


(p)                                         Use of
Proceeds; Margin Regulations. The Borrower shall not use any proceeds of
any Loan other than in accordance with the provisions of ARTICLE II (Commitments and Funding) and Section 7.01(g) (Affirmative Covenants - Use of Proceeds and Cash Flow). The
Borrower shall not use any part of the proceeds of any


 


75

















 


Loan to purchase or carry any Margin Stock (as defined in
Regulation U) or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock. The Borrower shall not use the proceeds of any
Loan in a manner that could violate or be inconsistent with the provisions of
Regulations T, U or X.


 


(q)                                         Environmental
Matters. The Borrower shall not permit (i) any underground storage
tanks to be located on any property owned or leased by the Borrower,
(ii) any asbestos to be contained in or form part of any building,
building component, structure or office space owned or leased by the Borrower,
(iii) any polychlorinated biphenyls (PCBs) to be used or stored at
any property owned or leased by the Borrower or (iv) any other Materials
of Environmental Concern to be used, stored or otherwise be present at any
property owned or leased by the Borrower, other than Materials of Environmental
Concern necessary for the construction or operation of the Project and used in
accordance with all Laws and Prudent Biodiesel Operating Practice.


 


(r)                                            Restricted
Payments. Except as otherwise permitted under Section 2.05(e)  (Funding of Loans) the Borrower shall not make any
Restricted Payments unless each of the conditions set forth below has been
satisfied:


 


(i)                             the
Final Completion Date has occurred;


 


(ii)                          the
Conversion Date has occurred;


 


(iii)                       such
Restricted Payment is made on, or within thirty  (30) days following,
a Quarterly Payment Date (provided that such Restricted Payment is made only
from funds on deposit in or standing to the credit of the Revenue Account or
the Prepayment Holding Account, as the case may be, on such Quarterly Payment
Date);


 


(iv)                      no Default
or Event of Default has occurred and is continuing or would occur as a result
of such Restricted Payment;


 


(v)                         each of
the Debt Service Reserve Account, the Working Capital Reserve Account and the
Warranty Reserve Account is fully funded to any applicable required level;


 


(vi)                      no BBETC
Event has occurred and is continuing;


 


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(vii)                   each of the
Historical Debt Service Coverage Ratio
and the Prospective Debt Service
Coverage Ratio, calculated as of such Quarterly Payment Date, is greater
than or equal to 1.5:1; and


 


(viii)                the Administrative
Agent has received a Restricted Payment Certificate, duly executed by an
Authorized Officer of the Borrower, confirming that each of the conditions set
forth in clauses (i) through (vii) of this Section 7.02(r) has
been satisfied on and as of the date such Restricted Payment is requested to be
made, and setting forth a detailed calculation of each of the Historical Debt Service Coverage Ratio and
Prospective Debt Service Coverage Ratio.


 


(s)                                          Construction
Budget. The Borrower, without the prior written approval of the
Administrative Agent in consultation with the Independent Engineer (such
approval not to be unreasonably withheld, conditioned or delayed), may not
reallocate any portion of any Line Item except to (i) reallocate the
Contingency Line Item to pay for Change Orders permitted under this Agreement,
or to pay for fees and expenses of advisors and consultants (including legal
counsel) incurred in connection with the transactions contemplated by the
Transaction Documents in excess of the amounts then budgeted, up to two hundred
fifty thousand Dollars ($250,000), (ii) apply cost-savings from any
completed Line Item (which completion has been confirmed by the
Independent Engineer) to one or more other Line Items, (iii) with the
prior written consent of the Independent Engineer reallocate cost savings from
a fixed price line item (based upon an executed contract for that fixed
price item) to one or more other Line Items, or (iv) in addition to the
reallocation permitted pursuant to items (i), (ii) and (iii) above,
reallocate amounts from the Contingency Line Item to other Line Items with the
prior written consent of the Independent Engineer.


 


(t)                                            Commodity Hedging Arrangements. The Borrower shall not enter into any
Commodity Hedging Arrangements that:


 


(i)                             are
not in accordance with the Commodity Risk Management Plans; or


 


(ii)                          are for
speculative purposes.


 


(u)                                         Accounting
Changes. The Borrower shall not make any change in (i) its accounting
policies or reporting practices, except as required by GAAP or as otherwise
notified to the Administrative Agent in writing (provided that the
Borrower shall provide a historical reconciliation for the prior period
addressing any such change in accounting practices) or (ii) its Fiscal
Year without the prior written consent


 


77

















 


of the Administrative Agent, which shall not
be unreasonably withheld, conditioned or delayed.


 


Section
7.03                                     Reporting
Requirements. The Borrower will furnish to the Administrative Agent:


 


(a)                                          Quarterly
Financial Statements. As soon as available and in any event within
forty-five (45) days after
the end of the first three (3) Fiscal Quarters of each Fiscal Year, unaudited
financial statements, including balance sheets, statements of income and cash
flows for the Borrower and the Guarantor for such Fiscal Quarter and for the
period commencing at the end of the previous Fiscal Year and ending with the
end of such Fiscal Quarter, prepared in accordance with GAAP.


 


(b)                                         Annual
Financial Statements. As soon as available and in any event within ninety
(90) days after the end of each Fiscal Year, a copy of the annual audit
report for such Fiscal Year for each of the Borrower and the Guarantor
including therein balance sheets as of the end of such Fiscal Year and
statements of income and cash flows for such Fiscal Year, and accompanied by an
unqualified opinion of the Auditors stating that such financial statements
present fairly in all material respects the financial position of the Borrower
or the Guarantor (as applicable)  for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior periods, which report and opinion shall not be subject to any “going concern” or like qualification or
exception or any qualification or exception as to the scope of such audit.


 


(c)                                          Certificate
of Financial Officer. Concurrently with the delivery of the financial
statements referred to in Section 7.03(a) and (b) (Reporting Requirements), a certificate executed by a
Financial Officer of the applicable Loan Party (but to the extent any Loan
Party is a public company subject to the reporting requirements of the
Securities and Exchange Commission (“SEC”), delivery of report filed
with the SEC will satisfy all reporting requirements under this Section
7.03(c)) stating that:


 


(i)                             such
financial statements fairly present in all material respects the financial
condition and results of operations of such Person on the dates and for the
periods indicated in accordance with GAAP subject, in the case of interim
financial statements, to the absence of notes and normally recurring year-end
adjustments;


 


(ii)                          such
Financial Officer has reviewed the terms of the Financing Documents and has
made, or caused to be made under his or her supervision, a review in reasonable
detail of the business and


 


78

















 


financial condition of such Person during the accounting period covered
by such financial statements; and


 


(iii)                       as a result
of such review such Financial Officer has concluded that no Default or Event of
Default has occurred during the period covered by such financial statements
through and including the date of such certificate or, if any Default or Event
of Default has occurred, specifying the nature and extent thereof and, if
continuing, the action that such Loan Party has taken and proposes to take in
respect thereof.


 


(d)                                         Auditor’s
Letters. Promptly upon receipt, copies of any detailed audit reports,
management letters or recommendations submitted to the Borrower (or the audit
or finance committee of the Borrower) by the Auditors in connection with the
accounts or books of the Borrower, or any audit of the Borrower.


 


(e)                                          Notice of
Default or Event of Default. As soon as possible and in any event within
five (5) days after the Borrower becomes or should have become aware of
the occurrence of any Default or Event of Default, a statement of an Authorized
Officer of the Borrower setting forth details of such Default or Event of
Default and the action that the Borrower has taken and proposes to take with
respect thereto.


 


(f)                                            Notice
of Other Events. Within five (5) Business Days after the Borrower
obtains Knowledge thereof, a statement of an Authorized Officer of the Borrower
setting forth details of:


 


(i)                             any
litigation or governmental proceeding pending or threatened in writing against
the Borrower, the Project, the Guarantor or the Pledgor;


 


(ii)                          any
litigation or governmental proceeding pending or threatened in writing against
any Project Party that has or could reasonably be expected to have a Material
Adverse Effect;


 


(iii)                       any other
event, act or condition that has or could reasonably be expected to have a
Material Adverse Effect;


 


(iv)                      notification
of any event of force majeure or similar event under a Project Document; or


 


79

















 


(v)                         notification
of any other change in circumstances that could reasonably be expected to
result in an increase of more than five hundred thousand Dollars ($500,000) in
Project Costs.


 


(g)                                         Project
Document or Additional Project Document Notice. Promptly after delivery or
receipt thereof, copies of all material notices or documents given or received
by the Borrower, pursuant to any of the Project Documents including:


 


(i)                             any
Change Orders or any written notices or communications related thereto;


 


(ii)                          any
written notice alleging any breach or default thereunder; and


 


(iii)                       any written
notice regarding, or request for consent to, any assignment, termination,
modification, waiver or variation thereof.


 


(h)                                         Construction
Contracts Notice. Within three (3) Business Days following receipt
thereof, the Borrower shall deliver to the Administrative Agent and the
Independent Engineer any monthly or other periodic report provided to the
Borrower under any Construction Contract, which shall be subject to review by
the Independent Engineer.


 


(i)                                             ERISA
Event. As soon as possible and in any event within five (5) days after
the Borrower knows, or has reason to know, that any of the events described
below has occurred, a duly executed certificate of an Authorized Officer of the
Borrower setting forth the details of each such event and the action that the
Borrower proposes to take with respect thereto, together with a copy of any
notice or filing from the PBGC, Internal Revenue Service or Department of Labor
or that may be required by the PBGC or other U.S. Governmental Authority with
respect to each such event:


 


(i)                             any
Termination Event with respect to an ERISA Plan or a Multiemployer Plan has
occurred or will occur that could reasonably be expected to result in any
liability to the Borrower;


 


(ii)                          any
condition exists with respect to a Plan that presents a material risk of
termination of a Plan (other than a standard termination under
Section 4041(b) of ERISA) or imposition of an excise tax or other material
liability on the Borrower;


 


80

















 


(iii)                       an
application has been filed for a waiver of the minimum funding standard under
Section 412 of the Code or Section 302 of ERISA under any Plan;


 


(iv)                      the Borrower
or any Plan fiduciary has engaged in a “prohibited transaction,” as defined in
Section 4975 of the Code or as described in Section 406 of ERISA,
that is not exempt under Section 4975 of the Code, Section 408 of
ERISA or another applicable administrative, regulatory or statutory exemption,
that could reasonably be expected to result in material liability to the
Borrower;


 


(v)                         there
exists any Unfunded Benefit Liabilities under any ERISA Plan;


 


(vi)                      any
condition exists with respect to a Multiemployer Plan that presents a risk of a
partial or complete withdrawal (as described in Section 4203 or 4205
of ERISA) from a Multiemployer Plan that could reasonably be expected to result
in any liability to the Borrower;


 


(vii)                   a “default” (as
defined in Section 4219(c)(5) of ERISA) occurs with respect to payments to
a Multiemployer Plan and such default could reasonably be expected to result in
any liability to the Borrower;


 


(viii)                a Multiemployer
Plan is in “reorganization” (as defined in Section 418 of the Code or
Section 4241 of ERISA) or is “insolvent” (as defined in Section 4245
of ERISA);


 


(ix)                        the
Borrower and/or any ERISA Affiliate has incurred any potential withdrawal
liability (as defined in accordance with Title IV of ERISA); or


 


(x)                           there
is an action brought against the Borrower or any ERISA Affiliate under
Section 502 of ERISA with respect to its failure to comply with
Section 515 of ERISA.


 


(j)                                             Notice
of PBGC Demand Letter. As soon as possible and in any event within five
(5) days after the receipt by the Borrower of a demand letter from the
PBGC notifying the Borrower of a final decision finding liability and the date
by which such liability must be paid, a copy of such letter, together with a
duly executed


 


81

















 


certificate of the president or chief financial officer of the Borrower
setting forth the action the Borrower proposes to take with respect thereto.


 


(k)                                          Notice of
Environmental Event. Promptly and in any event within five (5) days
after the existence of any of the following conditions, a duly executed
certificate of an Authorized Officer of the Borrower specifying in detail the
nature of such condition and, if applicable, the Borrower’s proposed response
thereto:


 


(i)                             receipt
by the Borrower of any written communication from a Governmental Authority or
any written communication from any other Person (other than a privileged
communication from legal counsel to the Borrower) or other source of written
information, including reports prepared by the Borrower, that alleges or
indicates that the Borrower or an Environmental Affiliate is not in compliance
in all material respects with applicable Environmental Laws or Environmental
Approvals and such alleged noncompliance could reasonably be expected to form
the basis of an Environmental Claim against the Borrower;


 


(ii)                          the
Borrower obtains Knowledge that there exists any Environmental Claim pending or
threatened in writing against the Borrower or an Environmental Affiliate;


 


(iii)                       the
Borrower obtains Knowledge of any release, threatened release, emission,
discharge or disposal of any Material of Environmental Concern or obtains
Knowledge of any material non-compliance with any Environmental Law that, in
either case, could reasonably be expected to form the basis of an Environmental
Claim against the Borrower or any Environmental Affiliate; or


 


(iv)                      any Removal,
Remedial or Response action is taken, or required to be taken, by the Borrower
or any other person in response to any material release, emission, discharge or
disposal of any Material of Environmental Concern in, at, on or under a part of
or about the Borrower’s properties or any other property in connection with the
Project.


 


(l)                                             Materials
of Environmental Concern. The Borrower will maintain and make available for
inspection by the Administrative Agent, the Consultants and, if an Event of
Default has occurred and is continuing, the Lenders, and each of their
respective agents and employees, on reasonable notice during regular business
hours,


 


82

















 


accurate and complete records of all material non-privileged
correspondence, investigations, studies, sampling and testing conducted, and
any and all remedial actions taken, by the Borrower or, to the best of the
Borrower’s Knowledge and to the extent obtained by the Borrower, by any
Governmental Authority or other Person in respect of Materials of Environmental
Concern that could reasonably be expected to form the basis of an Environmental
Claim on or affecting the Borrower or the Project.


 


(m)                                       Deferred
Approvals. Promptly after receipt thereof, copies of each Deferred Approval
obtained by the Borrower, together with such documents relating thereto as the
Administrative Agent may request, certified as true, complete and correct by an
Authorized Officer of the Borrower.


 


(n)                                         Borrowing
Base Certificate. As soon as available, but not later than fifteen
(15) days after the end of each calendar month, the Borrower shall deliver
to the Administrative Agent a Borrowing Base Certificate as of the last
Business Day of the immediately preceding calendar month.


 


(o)                                         Operating
Statements. Within forty-five (45) days after the end of each Fiscal
Quarter the Borrower shall furnish to the Administrative Agent an Operating
Statement regarding the operation and performance of the Project for each
monthly, quarterly and, in the case of the last quarterly Operating Statement
for each year, annual period substantially in the form of Exhibit L.
Such Operating Statements shall contain (i) line items corresponding to
each Operating Budget Category of the then-current Operating Budget showing in
reasonable detail by Operating Budget Category all actual expenses related to
the operation and maintenance of the Project compared to the budgeted expenses
for each such Operating Budget Category for such period, (ii) information
showing the amount of biodiesel and other Products produced by the Project
during such period and (iii) information showing (A) the amount of biodiesel
sold by the Borrower from the Project to  pursuant
to the Biodiesel Marketing Agreement, (B) the amount, if any, of other
sales of biodiesel and the amount of all sales of glycerin sold by the Borrower
from the Project, together with an explanation of any such sale and
identification of the purchaser, and (C) the amount, if any, of other
Products sold by the Borrower from the Project, together with an explanation of
any such sale and identification of the purchaser. The Operating Statements
shall be certified as complete and correct in all material respects by an
Authorized Officer of the Borrower, subject to auditing review, who also shall
certify that, the expenses reflected therein for the year to date and for each
month or quarter therein did not exceed the provision for such period contained
in the Operating Budget then in effect by more than ten percent (10%) or,
if any of such certifications cannot be given, stating in reasonable detail the
necessary qualifications to such certifications.


 


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(p)                                         Other
Information. Other information reasonably requested by the Administrative
Agent or any Lender (through the Administrative Agent).


 


ARTICLE VIII


 


PROJECT ACCOUNTS


 


Section
8.01                                     Establishment
of Project Accounts. On or prior to the Closing Date, the Accounts Bank
shall establish and maintain, in the name of the Borrower and on the books and
records of the Accounts Bank’s offices located in Houston, Texas the accounts
set forth below:


 


(a)                                          a special, segregated,
Dollar-denominated account entitled “Nova Biofuels Seneca, LLC Construction
Account”, Account No. 021030167
FCC 1381 (the “Construction Account”);


 


(b)                                         a special,
segregated, Dollar-denominated account entitled  “Nova Biofuels Seneca, LLC Revenue Account”, Account No.
021030167 FCC 1382 (the “Revenue Account”);


 


(c)                                          a special,
segregated, Dollar-denominated account entitled “Nova Biofuels Seneca, LLC
Operating Account”, Account No. 021030167 FCC 1383 (the “Operating Account”);


 


(d)                                         a special,
segregated, Dollar-denominated account entitled  “Nova Biofuels Seneca, LLC Working Capital Reserve Account”,
Account No.  021030167 FCC 1384
(the “Working Capital Reserve Account”);


 


(e)                                          a special,
segregated, Dollar-denominated account entitled “Nova Biofuels Seneca, LLC Debt
Service Reserve Account”, Account No. 021030167 FCC 1385 (the “Debt Service
Reserve Account”);


 


(f)                                            a special,
segregated, Dollar-denominated account entitled “Nova Biofuels Seneca, LLC
Prepayment Holding Account”, Account No. 021030167 FCC 1386 (the “Prepayment
Holding Account”);


 


(g)                                         a special,
segregated, Dollar-denominated sub-account of the Prepayment Holding Account
entitled “Nova Biofuels Seneca, LLC BBETC Sub-Account”, Account No. 021030167
FCC 1387 (the “BBETC Sub-Account”);


 


(h)                                         a special,
segregated, Dollar-denominated account entitled “Nova Biofuels Seneca, LLC
Insurance and Condemnation Proceeds Account”, Account No.  021030167 FCC 1388 (the “Insurance and
Condemnation Proceeds Account”);


 


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(i)                                             a special,
segregated, Dollar-denominated account entitled “Nova Biofuels Seneca, LLC
Extraordinary Proceeds Account”, Account No.  021030167
FCC 1389 (the “Extraordinary Proceeds Account”);


 


(j)                                             a special,
segregated, Dollar-denominated account entitled “Nova Biofuels Seneca, LLC
Warranty Reserve Account”, Account No. 021030167 FCC 1390 (the “Warranty
Reserve Account”);


 


(k)                                          a special,
segregated, Dollar-denominated account entitled “Nova Biofuels Seneca, LLC
Sponsor Support Account”, Account No. 021030167 FCC 1391 (the “Sponsor
Support Account”); and


 


(l)                                             a special,
segregated, Dollar-denominated sub-account of the Working Capital Reserve
Account entitled “Nova Biofuels Seneca, LLC LC Cash Collateral Sub-Account”,
Account No. 021030167 FCC 1392 (the “LC Cash Collateral Sub-Account”).


 


Section
8.02                                     Deposits
into and Withdrawals from Project Accounts. (a) Amounts shall be
deposited into and withdrawn from the Project Accounts in strict accordance
with this Article VIII.


 


(b)                                         The Accounts
Bank will only be required to transfer funds hereunder on a “same day” basis if
it has received written notice of such proposed transfer, together with all
certificates, notices, directions and other documents required under this
Agreement to be delivered to the Accounts Bank relating thereto, not later
than 2:00 p.m. New York City time on the Business Day of such transfer
and, if such notice or any such related document is received by the Accounts
Bank after such time, such transfer will be undertaken prior to 12:00 noon
New York City time on the next Business Day succeeding the date of receipt by
the Accounts Bank of all such documentation.


 


(c)                                          If any
transfer, withdrawal, deposit, investment or payment of any funds by the
Accounts Bank or any other action to be taken by the Accounts Bank under this
Agreement is to be made or taken on a day other than a Business Day, such
transfer, withdrawal, deposit, investment, payment or other action will be made
or taken on the next succeeding Business Day (or, if required to be made on any
specified date without receipt of instructions from the Borrower or the
Collateral Agent, and such specified date is not a Business Day, on the
immediately preceding Business Day).


 


(d)                                         Any
instruction, direction, notice, certificate, request or requisition given to
the Accounts Bank by the Borrower with respect to the transfer, withdrawal,


 


85

















 


deposit, investment or payment of any funds under this Agreement or
with respect to any other obligations to be performed by the Accounts Bank
under this Agreement (i) must be in writing and signed by an Authorized
Officer of the Borrower, (ii) in referencing any of the Project Accounts,
must refer to the specific Project Account name and number, (iii) must set
forth the exact amount to be transferred and explicit instructions, if
necessary, as to the recipient of the funds (including, without limitation,
name, style of receiving account, routing number and any other information
reasonably requested by the Accounts Bank, (iv) shall constitute a
representation by the Borrower that all conditions set forth in this Agreement
for such withdrawal have been satisfied, whether or not those conditions are
explicitly stated to be so satisfied and (v) shall be copied to the
Administrative Agent and the Collateral Agent. Any instruction, direction,
notice, certificate, request or requisition given to the Accounts Bank by the
Collateral Agent or the Administrative Agent with respect to the transfer,
withdrawal, deposit, investment or payment of any funds under this Agreement
(x) in referencing any of the Project Accounts, must refer to the specific
Project Account name and number and (y) must set forth the exact amount to
be transferred and explicit instructions, if necessary, as to the recipient of
the funds (including, without limitation, name, style of receiving account,
routing number and any other information reasonably requested by the Accounts
Bank. Notwithstanding anything contained in this Agreement or any other
Financing Document to the contrary, the Accounts Bank may rely and shall be
protected in acting or refraining from acting upon any instruction, direction,
notice, certificate, request or requisition of the Borrower, the Administrative
Agent or the Collateral Agent.


 


(e)                                          None of the
Project Accounts may go into overdraft, and the Accounts Bank shall not comply
with any request or direction (whether from the Borrower, the Administrative
Agent or the Collateral Agent) to the extent that it would cause any of the
Project Accounts to do so.


 


(f)                                            The
Borrower hereby acknowledges that it has (or will, prior to the Closing Date)
irrevocably instructed each Project Party, and agrees that it shall so instruct
each future Project Party, to make all payments due and payable to the Borrower
under any Project Document directly to the Accounts Bank for deposit in, or to
be credited in the manner set forth in this Article VIII. The
Borrower further agrees that it has and will irrevocably instruct each other
Person from whom the Borrower is entitled to receive Cash Flow, Insurance
Proceeds and Condemnation Proceeds, to make all payments due and payable to the
Borrower from such Person directly to the Accounts Bank for deposit, and to be
credited, in the manner set forth in this Article VIII.


 


(g)                                         The Accounts
Bank shall not be charged with knowledge of any Notice of Suspension, Default
or Event of Default unless the Accounts Bank has


 


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received such Notice of Suspension or other written notice of such
Default or Event of Default from the Administrative Agent, the Collateral Agent
or an Authorized Officer of the Borrower. The Accounts Bank shall not be
charged with the knowledge that the Conversion Date has occurred unless it has
received written notice thereof from the Administrative Agent.


 


(h)                                         The Accounts
Bank shall not be charged with the knowledge that any transfer or withdrawal
from any Project Account would result in the occurrence of a Default or Event
of Default, unless it has received written notice thereof from the
Administrative Agent, the Collateral Agent or an Authorized Officer of the
Borrower.


 


(i)                                             Notwithstanding
anything contained in this Agreement or any other Financing Document to the
contrary, the Accounts Bank shall have no obligation to (i) make any
payment, transfer or withdrawal from any Project Account until it has received
written direction to make such payment, transfer or withdrawal from the
Collateral Agent, the Administrative Agent or, if this Agreement explicitly
provides that any such direction may be made by the Borrower, or
(ii) determine whether any payment, transfer or withdrawal from any
Project Account made in accordance with any written direction from the
Collateral Agent, the Administrative Agent or the Borrower complies with the
terms of this Agreement. The Accounts Bank shall have no liability for, nor any
responsibility or obligation to confirm, the use or application by the
Borrower, Administrative Agent, Collateral Agent or any other recipient of
amounts withdrawn or transferred from any Project Account. The Accounts Bank
shall have no liability for, or obligation or liability to determine, the
amount to be transferred or paid in connection with any request.


 


Section
8.03                                     Construction
Account. (a) The Borrower (or, with respect to Loan proceeds, the
Administrative Agent) shall, from and after the Closing Date, cause the
following amounts to be paid into the Construction Account:


 


(i)                             all
proceeds of the Construction Loans (except for proceeds of Fundings applied
directly to the payment of Debt Service or as otherwise applied on the
Conversion Date in accordance with Section 2.05(e) (Funding of Loans));


 


(ii)                          all
proceeds of Working Capital Loans for start-up costs for the Project;


 


(iii)                       until the
Conversion Date, all equity contributions received by the Borrower (including
the Required Equity Contribution);


 


(iv)                      all proceeds
of any Performance Bond;


 


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(v)                         all
damages payable under any Construction Contract; and


 


(vi)                      all amounts
required to be deposited into the Construction Account as required under the
Completion Guaranty.


 


(b)                                         Prior to the
date of the first Funding of the Construction Loans, the Borrower may direct
the transfer or withdrawal of funds standing to the credit of the Construction
Account to pay Project Costs by delivering a Construction Withdrawal
Certificate to the Accounts Bank (with a copy to the Administrative Agent and
the Independent Engineer).


 


(c)                                          From and
after the date of the first Funding of Construction Loans, unless a Notice of
Suspension is in effect or a Default or Event of Default would occur after
giving effect to any application of funds contemplated hereby, the Borrower may
direct the transfer or withdrawal of funds standing to the credit of the
Construction Account to pay Project Costs then due and owing strictly in
accordance with the Construction Budget by delivering a Construction Withdrawal
Certificate to the Accounts Bank (with a copy to the Administrative Agent and
the Independent Engineer) which, in the case of any Loan proceeds, shall be for
application strictly in accordance with the relevant Funding Notice. All
payments from the Construction Account shall be made by the Accounts Bank
pursuant to instructions set forth in the relevant Construction Withdrawal
Certificate directly to the payee. In the event that the Borrower fails to
deliver such a Construction Withdrawal Certificate, the Administrative Agent is
hereby authorized to direct, in writing, the Accounts Bank to transfer or
withdraw the amounts necessary to pay Project Costs that are, from time to
time, due and payable.


 


(d)                                         On the
Conversion Date all amounts on deposit in or standing to the credit of the
Construction Account shall be withdrawn and such account shall be terminated
and closed at the written instruction of the Borrower or the Administrative
Agent and such amounts shall be applied by the Administrative Agent in
accordance with Section 2.05(e) (Funding of Loans)
and the final Construction Loan Funding Notice (a copy of which shall be
delivered to the Accounts Bank).


 


Section 8.04             Revenue Account.
(a) The Borrower shall, from and after the Closing Date, cause the
following amounts to be paid into the Revenue Account:


 


(i)                             all
Cash Flow;


 


(ii)                          except
as set forth in Section 8.10(a)(i) (Extraordinary Proceeds
Account), all proceeds from the sale or disposition of any
assets of the Borrower;


 


88

















 


(iii)                       any other
income received by or on behalf of the Borrower that is not required to be
deposited in or credited to another Project Account, or applied directly to the
Obligations, in accordance with this Agreement; and


 


(iv)                      amounts
transferred to the Revenue Account pursuant to Section 2.05(e) (Funding of Loans), Section 8.06(c) (Working Capital Reserve Account), Section 8.07(d)
(Debt Service Reserve Account) and Sections 8.10(b)(i)
and (c)(i) (Extraordinary Proceeds Account).


 


(b)                                         Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, upon
receipt of a Revenue Account Withdrawal Certificate duly executed by a
Financial Officer of the Borrower, the Accounts Bank shall, in accordance with
the directions set forth therein, cause funds held in the Revenue Account to be
withdrawn or transferred to pay the following amounts on the dates and at the
priorities indicated below:


 


(i)                             first, on each Monthly Date, to the
Operating Account, the amount certified by the Borrower in such Revenue Account
Withdrawal Certificate as required to pay Operation and Maintenance Expenses
that are or will become due and payable during the immediately succeeding
calendar month; provided, that the amount of such transfer of funds does
not exceed the Permitted Operating Budget Deviation Levels;


 


(ii)                          second, on any date when due and payable, to the
Administrative Agent, for the account of the Senior Secured Parties, in the
amount certified by the Borrower in such Revenue Account Withdrawal Certificate
or otherwise instructed in writing to the Accounts Bank by the Administrative
Agent as necessary to pay Fees, costs and expenses then due and payable under
the Financing Documents;


 


(iii)                       third, on any date when due and payable, to the
Administrative Agent, for the account of the Senior Secured Parties, in the
amount certified by the Borrower in such Revenue Account Withdrawal Certificate
or otherwise instructed in writing to the Accounts Bank by the Administrative
Agent as necessary to pay any interest then due and payable under the Financing
Documents and any fees, expenses or Net Swap Payments owing to any Interest
Rate Protection Provider;


 


89

















 


(iv)                      fourth, on any date when required pursuant to Section 3.10(c)
(Mandatory Prepayment), to the
Administrative Agent in the amount certified by the Borrower in such Revenue
Account Withdrawal Certificate or otherwise instructed in writing to the
Accounts Bank by the Administrative Agent, for application as a prepayment of
the Working Capital Loans;


 


(v)                         fifth, on each Quarterly Payment Date, to pay, to the
Administrative Agent, for the account of the Senior Secured Parties, on a pro
rata basis, the amount certified by the Borrower in such Revenue Account
Withdrawal Certificate or otherwise instructed in writing to the Accounts Bank
by the Administrative Agent as (A) the principal amounts due and payable with
respect to the Term Loans and (B) the payments of Swap Termination Value then
due and payable by the Borrower with respect to any Interest Rate Protection
Agreements;


 


(vi)                      sixth, on each Monthly Date, to the Working Capital Reserve
Account, in the amount certified by the Borrower in such Revenue Account
Withdrawal Certificate or otherwise instructed in writing to the Accounts Bank
by the Administrative Agent as equal to the difference between (A) the Working
Capital Reserve Required Amount and (B) the funds on deposit in or standing to
the credit of the Working Capital Reserve Account on such Monthly Date;


 


(vii)                   seventh, on any Monthly Date and on the Working Capital
Maturity Date, to pay to the Administrative Agent, for the account of the
Working Capital Lenders, the amount certified by the Borrower in such Revenue
Account Withdrawal Certificate or otherwise instructed in writing to the
Accounts Bank by the Administrative Agent as the aggregate principal amount due
and payable with respect to the Working Capital Loans, or otherwise at the
option of the Borrower, to repay principal amounts with respect to the Working
Capital Loans;


 


(viii)                eighth, on each Monthly Date, to the Debt Service Reserve
Account, in the amount certified by the Borrower in such Revenue Account
Withdrawal Certificate or otherwise instructed in writing to the Accounts Bank
by the Administrative Agent as equal to the difference between (A) the
Debt Service Reserve Required Amount and (B) the funds on deposit in or
standing to the credit of


 


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the Debt Service Reserve Account (including the Stated Amount of any
Debt Service Reserve Letter of Credit) on such Monthly Date;


 


(ix)                        ninth, on each Quarterly Payment Date, to the Administrative
Agent in the amount certified by the Borrower in such Revenue Account
Withdrawal Certificate or otherwise instructed in writing to the Accounts Bank
by the Administrative Agent, for application as a prepayment of the Term Loans
in accordance with Section 3.10 (Mandatory Prepayment)
in an amount equal to the greater of (x) fifty percent (50%) of the cash
remaining in the Revenue Account after the transfer required pursuant to priority
eighth, if any and (y) an
amount such that after such prepayment the then-outstanding principal amount of
the Term Loans is equal to the Target Balance Amount for such Quarterly Payment
Date (in each case, to the extent funds are available at this priority ninth);


 


(x)                           tenth, on each Quarterly Payment Date (A) if the
Historical Debt Service Coverage Ratio as of such Quarterly Payment Date is
less than 1.5:1, to the Administrative Agent, all amounts on deposit in or
standing to the credit of the Revenue Account after the transfer required to be
made pursuant to priority ninth, for
application as a prepayment of the Term Loans in accordance with Section 3.10
(Mandatory Prepayment), as certified
by the Borrower in such Revenue Account Withdrawal Certificate or instructed in
writing to the Accounts Bank by the Administrative Agent, or (B) if the
Historical Debt Service Coverage Ratio
as of such Quarterly Payment Date is greater than or equal to 1.5:1 and
the Prospective Debt Service Coverage
Ratio as of such Quarterly Payment Date is less than 1.5:1, as
certified by the Borrower in such Revenue Account Withdrawal Certificate or
instructed in writing to the Accounts Bank by the Administrative Agent, to the
Prepayment Holding Account, all amounts on deposit in or standing to the credit
of the Revenue Account after the transfer required pursuant to priority ninth;


 


(xi)                        eleventh, on each Quarterly Payment Date, if a BBETC Event
has occurred and is continuing, as certified by the Borrower in such Revenue
Account Withdrawal Certificate or otherwise instructed in writing to the
Accounts Bank by the Administrative Agent, if the aggregate total amount of
prepayments made on such Quarterly Payment Date pursuant to priority ninth  is in an
amount less than seventy-five percent (75%) of Cash Flow remaining after
all


 


91

















 


payments required to be made at priority eighth  have been made, then an amount equal to the difference
between (x) seventy-five percent (75%) of Cash Flow remaining after
the payments required to be made at priority eighth
have been made and (y) the amount of the prepayments made pursuant to priority
ninth, to the BBETC Sub-Account of
the Prepayment Holding Account, all as certified by the Borrower in such
Revenue Account Withdrawal Certificate or otherwise instructed in writing by
the Administrative Agent to the Accounts Bank;


 


(xii)                     twelfth, after the Conversion Date, provided that no Default
or Event of Default has occurred and is continuing, on each Quarterly Payment
Date, in an amount certified by the Borrower in such Revenue Account Withdrawal
Certificate, to the Persons or accounts specified in such Revenue Account Withdrawal
Certificate (including, if required to be paid directly to any taxing
authority, to such taxing authority), for payment of any Permitted Tax
Distribution; and


 


(xiii)                        thirteenth,
subject to the satisfaction of the conditions set forth in Section 7.02(r)
(Negative Covenants - Restricted Payments),
in the amount certified by an Authorized Officer of the Borrower, to the
Persons or accounts specified in a Restricted Payment Certificate.


 


(c)                                          On the
Conversion Date, upon delivery of a written instruction to the Accounts Bank
duly executed by each of the Borrower and the Administrative Agent, amounts
shall be transferred from the Revenue Account as set forth below:


 


(i)                             to
the Guarantor, in an amount equal to the Guarantor’s Conversion Date Amount;
and


 


(ii)                          to the
Administrative Agent, for the account of the Lenders, the Conversion Date
Prepayment Amount, to be applied as a mandatory prepayment of the Term Loans in
accordance with Section 3.10 (Mandatory Prepayments);


 


provided, that any such transfer may
only be made if the Excess Conversion Date Cash Amount is a positive number. Any
calculation of the Excess Conversion Date Cash Amount, the Guarantor’s
Conversion Date Amount and/or the Conversion Date Prepayment Amount by the
Borrower shall be subject to review and approval by the Administrative Agent. Any
such calculation made by the Administrative Agent shall be binding on the
Borrower, absent manifest error.


 


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Section 8.05             Operating Account.
(a) Funds shall be deposited into the Operating Account pursuant to Sections 8.04(b)(i)
(Revenue Account).


 


(b)                                         Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, and so
long as adequate funds are then available in the Operating Account, the
Borrower:


 


(i)                             may,
by written instruction to the Accounts Bank (with a copy to the Administrative
Agent), withdraw or transfer funds from the Operating Account from time to time
as may be necessary to pay directly any amounts owing by the Borrower for
Operation and Maintenance Expenses; and


 


(ii)                          may
direct the transfer of funds to the Local Accounts from time to time, by
delivery of an Operating Account Withdrawal Certificate to the Accounts Bank
(with a copy to the Administrative Agent); provided, that the funds on
deposit in and standing to the credit of all Local Accounts do not exceed, in
the aggregate at any one time, five hundred thousand Dollars ($500,000), as
certified by the Borrower in such Operating Account Withdrawal Certificate.


 


Section
8.06                                     Working
Capital Reserve Account. (a) Funds shall be deposited into the Working
Capital Reserve Account in accordance with Section 8.04(b)(vi) (Revenue Account), Section 3.09(d)(ii)(B) and
(C) (Optional Prepayments) and
Section 3.10(e) (Mandatory Prepayments).
Amounts deposited into the Working Capital Reserve Account pursuant to priority
second of
Section 3.09(d)(ii) (Optional
Prepayment) and priority third of
Section 3.10(e)  (Mandatory
Prepayment) shall be deposited into the LC Cash Collateral
Sub-Account.


 


(b)                                         Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the Borrower
may direct, by delivery of a Working Capital Transfer Certificate to the
Accounts Bank (with a copy to the Administrative Agent), the transfer or
withdrawal of amounts standing to the credit of the Working Capital Reserve
Account to pay directly:


 


(i)                             amounts
due and owing for Operation and Maintenance Expenses in accordance with the
Operating Budget, but only to the extent that adequate funds are not available
for the payment of such Operation and Maintenance Expenses in the Operating
Account; provided, that the amount of such transfer of funds, when taken


 


93

















 


together with the amounts transferred to the Operating Account during
such month pursuant to Section 8.04(b)(i) (Revenue
Account), does not exceed the Permitted Operating Budget
Deviation Levels;


 


(ii)                          any
breakage costs or other termination payments or margin calls under any
Permitted Commodity Hedging Arrangement not contemplated by the current
Operating Budget; and


 


(iii)                       prior to
the Conversion Date, amounts due and owing for start-up costs.


 


(c)                                          If, on any
Quarterly Payment Date, the funds on deposit in or standing to the credit of
the Working Capital Reserve Account are in excess of the Working Capital
Reserve Required Amount, unless a Notice of Suspension is in effect or a
Default or Event of Default would occur after giving effect to such transfer,
the Borrower may direct, by delivery of a Working Capital Transfer Certificate
to the Accounts Bank (with a copy to the Administrative Agent), the transfer to
the Revenue Account of an amount equal to the difference between (x) the
aggregate total amount of all funds on deposit in or standing to the credit of
the Working Capital Reserve Account (other than amounts standing to the credit
of the LC Cash Collateral Sub-Account) and (y) the Working Capital Reserve
Required Amount, as certified by the Borrower and confirmed by the
Administrative Agent in such Working Capital Transfer Certificate.


 


(d)                                         Following the
funding of the LC Cash Collateral Sub-Account, the Borrower or the
Administrative Agent may direct in writing, in the case of the Borrower by
delivery of a Working Capital Reserve Transfer Certificate to the Accounts Bank
(with a copy to the Administrative Agent), the transfer of amounts standing to
the credit of the LC Cash Collateral Sub-Account to pay to the Administrative
Agent, for the account of the Working Capital Lenders, the amount of any
Working Capital Loans resulting from draws on the Letters of Credit.


 


(e)                                          If at any
time the amounts standing to the credit of the LC Cash Collateral Sub-Account
are in excess of the aggregate Maximum Available Amounts under all Letters of
Credit then outstanding, the Borrower may direct, by delivery of a Working
Capital Reserve Transfer Certificate to the Accounts Bank (with a copy to the
Administrative Agent), the transfer to the Revenue Account of an amount equal
to the difference between (x) the aggregate total amount of all funds on
deposit in or standing to the credit of the LC Cash Collateral Sub-Account and
(y) the aggregate of all such Maximum Available Amounts, as certified by the
Borrower and confirmed by the Administrative Agent in such Working Capital
Reserve Transfer Certificate.


 


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Section 8.07                                     Debt Service
Reserve Account. (a) Funds shall be deposited into the Debt Service
Reserve Account:


 


(i)                                     on the Conversion
Date, pursuant to disbursement priority first as set forth in Section 2.05(e) (Funding of Loans); and


 


(ii)                                  pursuant to Section 8.04(b)(viii) (Revenue Account);


 


provided
that, notwithstanding the foregoing, in lieu of cash, the Borrower may cause
to be delivered to the Accounts Bank one or more Debt Service Reserve Letters
of Credit (each of which shall be accompanied by a Debt Service LC Waiver
Letter), the Stated Amounts of which shall be credited to the Debt Service
Reserve Account.


 


(b)                                         On any date
when the amounts available at priorities second through fifth  as set
forth in Section 8.04(b) (Revenue Account)
are insufficient to pay Debt Service then due and owing, the Accounts Bank
shall (upon written notification from the Borrower or the Administrative Agent
setting forth the amount of such shortfall) withdraw funds from the Debt
Service Reserve Account to pay to the Administrative Agent, for the account of
the Senior Secured Parties, the amount of such shortfall of the Debt Service
then due and payable, which funds shall be applied in the order of priority set
forth in priorities second through fourth of Section 8.04(b) (Revenue
Account). The Accounts Bank shall promptly notify the
Administrative Agent, the Collateral Agent or the Borrower if, at any time,
there are insufficient funds (without taking into account any Debt Service
Reserve Letters of Credit) standing to the credit of the Debt Service Reserve
Account to make the payments required under this Section 8.07(b).


 


(c)                                          Upon the
written instruction of the Administrative Agent, the Collateral Agent shall
make a demand in accordance with the provisions of each Debt Service Reserve
Letter of Credit, drawdown all or a portion of the Stated Amount of any Debt
Service Reserve Letter of Credit that has been delivered in accordance with
this Agreement, and deposit the funds received into the Debt Service Reserve
Account. The Administrative Agent shall instruct Collateral Agent to make such
demand:


 


(i)                                     if amounts are
required to be withdrawn from the Debt Service Reserve Account pursuant to Section 8.07(b),
and the amounts to be so withdrawn exceed the funds, not including the
aggregate Stated Amounts of the Debt Service Reserve Letters of Credit standing
to the credit of the Debt Service Reserve Account, in the


 


95

















 


amount necessary to make the payments of Debt
Service then due and payable;


 


(ii)                                 in
full, if the commercial bank that issued such Debt Service Reserve Letter of
Credit is no longer an Acceptable Bank; or


 


(iii)                              in
full, if (A) no less than thirty (30) days prior to the expiry date
of each such Debt Service Reserve Letter of Credit, the Collateral Agent has
not received notice from the issuing bank that it will extend such expiry date
or renew such Debt Service Reserve Letter of Credit and no substitute or
replacement letter of credit satisfying the requirements of a “Debt Service
Reserve Letter of Credit” has been delivered to the Collateral Agent to replace
the Stated Amount of such expiring Debt Service Reserve Letter of Credit and (B) excluding
the Stated Amount of such Debt Service Reserve Letter of Credit and the Stated
Amount of any other Debt Service Reserve Letter of Credit that similarly could
be drawn down, an amount equal to the Debt Service Reserve Requirement is not
on deposit in or standing to the credit of the Debt Service Reserve Account on
the date of such drawdown.


 


(d)                                         If, on any
Quarterly Payment Date, the funds on deposit in or standing to the credit of
the Debt Service Reserve Account (taking into account the Stated Amounts of any
Debt Service Reserve Letters of Credit standing to the credit of the Debt
Service Reserve Account) are in excess of the Debt Service Reserve Requirement,
unless a Notice of Suspension is in effect or a Default or Event of Default
would occur after giving effect to such transfer, the Borrower may direct,
by delivery of a Debt Service Reserve Release Certificate to the Accounts Bank
(with a copy to the Administrative Agent), the transfer to the Revenue Account
of an amount equal to the difference between (x) the aggregate total amount of
all funds on deposit in or standing to the credit of the Debt Service Reserve
Account (taking into account the Stated Amounts of any Debt Service Reserve
Letters of Credit standing to the credit of the Debt Service Reserve Account)
and (y) the Debt Service Reserve Requirement, as certified by the Borrower and
confirmed by the Administrative Agent in such Debt Service Release Certificate;
provided, that if such difference is positive due to the posting of a
Debt Service Reserve Letter of Credit to the Debt Service Reserve Account to
replace or substitute for cash then on deposit, such amount may be
distributed directly to the Borrower or such other Affiliate of the Borrower
who provided such Debt Service Reserve Letter of Credit (and such distribution
shall not be treated as a Restricted Payment for purposes of this Agreement).


 


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Section 8.08                                     Prepayment
Holding Account. (a) Funds shall be deposited into the Prepayment
Holding Account pursuant to Section 8.04(b)(xi)(B) (Revenue Account).


 


(b)                                         Funds shall be
deposited into the BBETC Sub-Account of the Prepayment Holding Account pursuant
to Section 8.04(b)(xii) (Revenue Account).


 


(c)                                          The Accounts
Bank shall withdraw funds from the Prepayment Holding Account (other than from
BBETC Sub-Accounts) upon receipt of written instructions from the Borrower or
the Administrative Agent in accordance with the terms set forth below.


 


(i)                                    If,
on any such Quarterly Payment Date, each of the Historical Debt Service
Coverage Ratio and the Prospective Debt Service Coverage Ratio are greater than
or equal to 1.5:1 then, subject to the satisfaction of the conditions set forth
in Section 7.02(r) (Negative Covenants -
Restricted Payments), the Borrower may submit a Restricted
Payment Certificate to the Accounts Bank directing the transfer of amounts on
deposit in and standing to the credit of the Prepayment Holding Account for
Restricted Payments by the Borrower.


 


(ii)                                 If,
on any such Quarterly Payment Date, the Historical Debt Service Coverage Ratio
is less than 1.5:1 then all amounts on deposit in and standing to the credit of
the Prepayment Holding Account shall, upon the written instruction of the
Borrower or the Administrative Agent, be transferred to the Administrative
Agent for application as a prepayment of the Term Loans in accordance with Section 3.10
(Mandatory Prepayment).


 


(d)                                         (i) If a
BBETC Event has occurred and is continuing, all funds on deposit in and amounts
standing to the credit of the BBETC Sub-Account of the Prepayment Holding
Account shall be paid to the Administrative Agent, for the account of the
Lenders, upon the written instruction of the Borrower or the Administrative
Agent, and applied as a prepayment of the Term Loans in accordance with Section 3.10
(Mandatory Prepayments) (A) on
the Quarterly Payment Date immediately following the expiration of the
Biodiesel Blender Excise Tax Credit and (B) on each Quarterly Payment Date
thereafter.


 


(ii)                                  If a BBETC Event has
occurred and, thereafter, ceases to exist, the Borrower may submit a
Restricted Payment Certificate to the Accounts Bank (with a copy to the
Administrative Agent) and


 


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direct the transfer of all funds on deposit
in and amounts standing to the credit of the BBETC Sub-Account of the Prepayment
Holding Account for Restricted Payments by the Borrower in accordance with Section 7.02(r)
(Negative Covenants – Restricted Payments).


 


(e)                                          On any
Interest Payment Date, the Borrower may, upon providing written instructions to
the Accounts Bank, withdraw any amount from the Prepayment Holding Account or
BBETC Sub-Account for the purpose of prepaying the Term Loans or Working
Capital Loans in accordance with Section 3.09 (Optional
Prepayment).


 


Section 8.09                                     Insurance and
Condemnation Proceeds Accounts. (a) The Borrower shall cause all
Insurance Proceeds and all Condemnation Proceeds payable to the Borrower, or
otherwise relating to the Project, to be deposited in or credited to the
Insurance and Condemnation Proceeds Account.


 


(b)                                         The Borrower
shall not make, direct, or request the Accounts Bank to make, any withdrawals
from the Insurance and Condemnation Proceeds Account except as permitted by
this Section 8.09, and provided that no Notice of Suspension has
been delivered that has not been withdrawn and no Default or Event of Default
would occur as a result of such transfer or withdrawal.


 


(c)                                          The Borrower may apply
any Insurance Proceeds and Condemnation Proceeds deposited into the Insurance
and Condemnation Proceeds Account in amounts less than or equal to one million
Dollars ($1,000,000) arising from any one claim or any series of claims
relating to the same occurrence directly for the replacement or repair of
damaged assets to which such Insurance Proceeds or Condemnation Proceeds, as
the case may be, relate; provided, that the Borrower delivers to
the Administrative Agent and the Accounts Bank, no fewer than three (3) Business
Days in advance of any such proposed transfers or withdrawals from the
Insurance and Condemnation Proceeds Account, an Insurance and Condemnation
Proceeds Request Certificate setting forth proposed instructions for such
withdrawals or transfers. A Financial Officer of the Borrower shall certify
that each Insurance and Condemnation Proceeds Request Certificate is being
delivered, and the withdrawals specified therein are being directed, in
accordance with this Agreement and the other Transaction Documents, and shall
also certify that the directed withdrawals or transfers will be used
exclusively for repair or replacement of damaged assets to which such Insurance
Proceeds or Condemnation Proceeds, as the case may be, relate.


 


(d)                                         Any Insurance
Proceeds and Condemnation Proceeds deposited into the Insurance and
Condemnation Proceeds Account in amounts greater than one


 


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million Dollars ($1,000,000) but less than or
equal to two million  five-hundred
thousand Dollars ($2,500,000) arising from any one claim or any series of
claims relating to the same occurrence shall:


 


(i)                                    be
applied for repair or replacement of damaged assets to which such Insurance
Proceeds or Condemnation Proceeds, as the case may be, relate in
accordance with the Borrower’s direction in an Insurance and Condemnation
Proceeds Request Certificate delivered to the Administrative Agent and the
Accounts Bank if, within sixty (60) days after the occurrence of the
Casualty Event or Event of Taking giving rise to such proceeds, the Borrower
delivers a Restoration or Replacement Plan to the Administrative Agent and the
Independent Engineer with respect to such Casualty Event or Event of Taking
that is based upon, and accompanied by, each of the following:


 


(A)                              a description of the
nature and extent of such Casualty Event or Event of Taking, as the case may be;


 


(B)                                a bona fide assessment
(from a contractor reasonably acceptable to the Independent Engineer) of the
estimated cost and time needed to restore or replace the Project to
substantially the same value and general performance capability as prior to
such event;


 


(C)                                reasonably satisfactory
evidence that such Insurance Proceeds or Condemnation Proceeds, as the case may be,
are sufficient to make the necessary restorations or replacements;


 


(D)                               a certificate of a
Financial Officer of the Borrower certifying that (1) all work contemplated
to be done under the Restoration or Replacement Plan can be done within the
time periods, if any, required under any Project Document; (2) all
Governmental Approvals necessary to perform the work have been obtained
(or are reasonably expected to be obtained without undue delay); and (3) the
Project once repaired/restored will continue to perform at the levels set
forth in the then-current Operating Budget with respect to production volume,
yield and utility consumption (or other levels approved by the Required
Lenders);


 


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(E)                                 the Casualty Event or
Event of Taking, as the case may be (including the non-operation of the
Project during any period of repair or restoration) has not resulted or would
not reasonably be expected to result in a default giving rise to a termination
of, or a materially adverse modification of, one or more of the Governmental
Approvals or Project Documents (or, in the case of a default giving rise to a
termination of a Project Document, an agreement replacing such Project
Document, in form and substance, and with a counterparty, reasonably
satisfactory to the Required Lenders is entered into (together with all
applicable Ancillary Documents) within forty-five (45) days thereof (or, if
such termination could not reasonably be expected to result in a Material
Adverse Effect, within sixty (60) days thereof));


 


(F)                                 after taking into
consideration the availability of such Insurance Proceeds or Condemnation
Proceeds, as applicable, and Business Interruption Insurance Proceeds and any
additional documented voluntary equity contributions for the purpose of
covering such costs, there will be adequate amounts available to pay all
ongoing expenses including Debt Service during the period of repair or
restoration;


 


(G)                                construction
contractors and vendors of recognized skill, reputation and creditworthiness
and reasonably acceptable to the Administrative Agent have executed
reconstruction contracts, purchase orders or similar arrangements for the
repair, rebuilding or restoration on terms and conditions reasonably acceptable
to the Administrative Agent; and


 


(H)                               a confirmation by the
Independent Engineer of its agreement with the matters set forth in Section 8.09(d)(i)(A)-(G) and
its approval of such Restoration or Replacement Plan; or


 


(ii)                                  if (A) the
Borrower does not deliver such Restoration or Replacement Plan and the
accompanying deliveries referred to in Section 8.09(d)(i) within
such sixty (60) day period or (B) after the completion of such
Restoration or Replacement Plan, there are excess Insurance Proceeds or
Condemnation Proceeds, as the case


 


100

















 


may be, on deposit in or standing to the
credit of the Insurance and Condemnation Proceeds Account, the Accounts Bank
shall on the next succeeding Quarterly Payment Date thereafter, upon the
written instruction of the Borrower or the Administrative Agent, transfer to
the Administrative Agent, for the account of the Lenders, an amount equal to
such Insurance Proceeds or Condemnation Proceeds, as the case may be, for
mandatory prepayment of the Loans in accordance with Section 3.10 (Mandatory Prepayments).


 


(e)                                          Any Insurance
Proceeds or Condemnation Proceeds deposited into the Insurance and Condemnation
Proceeds Account in amounts greater than two million five-hundred thousand
Dollars ($2,500,000) arising from any one claim or any series of claims
relating to the same occurrence shall be applied, at the written instruction of
the Administrative Agent, to prepay the Loans or for repair or replacement of
damaged assets, as determined by the Required Lenders in their sole discretion.


 


Section 8.10                                     Extraordinary
Proceeds Account. (a) The Borrower shall cause (i) all proceeds
of asset disposals (other than proceeds from the sale of Products) that will
not be used for replacement in accordance with Section 7.02(f)(i) (Negative Covenants - Asset Dispositions)
and (ii) all Project Document Termination Payments to be deposited into
the Extraordinary Proceeds Account.


 


(b)                                       If
at any time proceeds of an asset disposal are deposited into the Extraordinary
Proceeds Account, then on any Quarterly Payment Date:


 


(i)                                    if
such proceeds are in an amount in the aggregate of less than one million
Dollars ($1,000,000) (taken together with any other proceeds of asset disposals
deposited in the Extraordinary Proceeds Account during the then-current Fiscal
Year) the Borrower may submit an Extraordinary Proceeds Release Notice to
the Accounts Bank, certified by an Authorized Officer of the Borrower,
directing the transfer of such funds to the Revenue Account; and


 


(ii)                                 if
such proceeds are in an amount equal to or greater than one million Dollars
($1,000,000) (taken together with any other proceeds of asset disposals
deposited in the Extraordinary Proceeds Account during the then-current Fiscal
Year), such amounts shall be transferred, upon the written instruction of the
Borrower or the Administrative Agent, to the Administrative Agent for
application


 


101

















 


as a prepayment of the Loans in accordance
with Section 3.10 (Mandatory Prepayment).


 


(c)                                         If
at any time Project Document Termination Payments are deposited into the
Extraordinary Proceeds Account, then on any Quarterly Payment Date:


 


(i)                                    if
such Project Document Termination Payments are in an amount in the aggregate of
less than one million Dollars ($1,000,000) (taken together with any other
Project Document Termination Payments received during the then-current Fiscal
Year), the Borrower may submit an Extraordinary Proceeds Release Notice to
the Accounts Bank, certified by an Authorized Officer of the Borrower,
directing the transfer of such Project Document Termination Payments to the
Revenue Account; and


 


(ii)                                 if
such Project Document Termination Payments are in an amount equal to or greater
than one million Dollars ($1,000,000) (taken together with any other Project
Document Termination Proceeds received during the then-current Fiscal Year),
such amounts shall be transferred, upon the written instruction of the Borrower
or the Administrative Agent, to the Administrative Agent for application as a
prepayment of the Loans in accordance with Section 3.10 (Mandatory Prepayment).


 


Section 8.11                                     Warranty
Reserve Account. (a)   On or prior to the Conversion Date, an
amount greater than or equal to the Warranty Reserve Required Amount, whichever
is greater, shall be deposited into the Warranty Reserve Account from sources
other than the Loans or the Required Equity Contribution (which sources may be
as contemplated in Section 8.12(c) (Sponsor Support Account) and in the Completion
Guaranty); provided, that notwithstanding the foregoing, in lieu of
cash, the Guarantor may cause to be delivered to the Accounts Bank one or
more Warranty Reserve Letters of Credit, the Stated Amounts of which shall be
credited to the Warranty Reserve Account. If at any time thereafter, funds are
transferred or withdrawn from the Warranty Reserve Account or Warranty Reserve
Letters of Credit are drawn down, such that the amounts on deposit in and
standing to the credit of the Warranty Reserve Account fall below the Warranty
Reserve Required Amount, as required pursuant to the Completion Guaranty, the
Guarantor shall, within thirty (30) days of such transfer or withdrawal, cause
additional amounts to be deposited into the Warranty Reserve Account from
sources other than the Loans or the Required Equity Contribution (or one or
more Warranty Reserve Letters of Credit), so as to replenish the amounts on
deposit in and standing to the credit of the Warranty Reserve Account to the
Warranty Reserve Required Amount.


 


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(b)                                         Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby, the
Borrower may (with the approval of the Independent Engineer, other than
(x) on an individual basis, amounts less than fifty thousand Dollars
($50,000) for any single transfer or series of transfers for Warranty Work
arising out of the same warranty matter and (y) on an aggregate basis,
amounts in excess of two hundred fifty thousand Dollars ($250,000) during the
Warranty Period, and in the case of these clauses (x) and (y) the approval of
the Independent Engineer shall not be required) in the aggregate during the
Warranty Period) direct the transfer or withdrawal of funds standing to the
credit of the Warranty Reserve Account to pay any amounts necessary to cover
costs and expenses incurred by the Borrower in performing or causing to be
performed any Warranty Work by delivering a Warranty Proceeds Request
Certificate to the Accounts Bank (with a copy to the Administrative Agent),
which shall be for application strictly in accordance with the relevant Warranty
Notice. All payments from the Warranty Reserve Account shall be made by the
Accounts Bank pursuant to instructions set forth in the relevant Warranty
Proceeds Request Certificate. In the event that the Borrower fails to deliver
such a Warranty Proceeds Request Certificate, the Administrative Agent is
hereby authorized to direct in writing the Accounts Bank to transfer or
withdraw the funds necessary to pay any amounts necessary to cover costs and
expenses incurred in performing or causing to be performed any Warranty Work.


 


(c)                                          Upon the
written instruction of the Administrative Agent, the Collateral Agent shall
make a demand in accordance with the provisions of each Warranty Reserve Letter
of Credit, drawdown all or a portion of the Stated Amount of any Warranty
Reserve Letter of Credit that has been delivered in accordance with this
Agreement, and deposit the funds received into the Warranty Reserve Account. The
Administrative Agent shall instruct Collateral Agent to make such demand:


 


(i)                                     if
amounts are required to be withdrawn from the Warranty Reserve Account pursuant
to Section 8.11(b), and the amounts to be so withdrawn exceed the
funds, not including the aggregate Stated Amounts of the Warranty Reserve
Letters of Credit standing to the credit of the Warranty Reserve Account, in
the amount necessary to make the payments for Warranty Work then due and
payable;


 


(ii)                                  in
full, if the commercial bank that issued such Warranty Reserve Letter of Credit
is no longer an Acceptable Bank; or


 


(iii)                               in
full, if (A) no less than thirty (30) days prior to the expiry date of
each such Warranty Reserve Letter of Credit, the Collateral


 


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Agent has not received notice
from the issuing bank that it will extend such expiry date or renew such
Warranty Reserve Letter of Credit and no substitute or replacement letter of
credit satisfying the requirements of a “Warranty Reserve Letter of Credit” has
been delivered to the Collateral Agent to replace the Stated Amount of such expiring
Warranty Reserve Letter of Credit and (B) excluding the Stated Amount of
such Warranty Reserve Letter of Credit and the Stated Amount of any other
Warranty Reserve Letter of Credit that similarly could be drawn down, an amount
equal to the Warranty Reserve Requirement is not on deposit in or standing to
the credit of the Warranty Reserve Account on the date of such drawdown.


 


(d)                                         Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby and
following the termination of the Warranty Period (as confirmed in writing by
the Administrative Agent) all amounts on deposit in or standing to the credit
of the Warranty Reserve Account may, at the written direction of the Borrower
(with a copy to the Administrative Agent), be transferred to the Guarantor.


 


(e)                                          Unless a
Notice of Suspension is in effect or a Default or Event of Default would occur
after giving effect to any application of funds contemplated hereby after the
date that is twelve months following the occurrence of Final Completion the
funds on deposit in or standing to the credit of the Warranty Reserve Account
(taking into account the Stated Amounts of any Warranty Reserve Letters of
Credit standing to the credit of the Warranty Reserve Account) are in excess of
the Warranty Reserve Requirement, the Borrower may request the transfer to
the Guarantor of an amount equal to the difference between (x) the aggregate
total amount of all funds on deposit in or standing to the credit of the
Warranty Reserve Account (taking into account the Stated Amounts of any
Warranty Reserve Letters of Credit standing to the credit of the Warranty
Reserve Account) and (y) the Warranty Reserve Required Amount, as certified by the
Borrower and confirmed by the Administrative Agent; provided, that if
such difference is positive due to the posting of a Warranty Reserve Letter of
Credit to the Warranty Reserve Account to replace or substitute for cash then
on deposit, such amount may be distributed directly to the Borrower or
such other Affiliate of the Borrower who provided such Warranty Reserve Letter
of Credit (and such distribution shall not be treated as a Restricted Payment
for purposes of this Agreement).


 


Section 8.12                                     Sponsor Support
Account. (a) On or prior to the Closing Date, and as required under
the Completion Guaranty, at least five million Dollars ($5,000,000) shall be
deposited into the Sponsor Support Account from sources other than the Loans or


 


104

















 


the Required Equity Contribution. If at any
time thereafter, the amounts on deposit in and standing to the credit of the
Sponsor Support Account fall below five million Dollars ($5,000,000),
additional amounts shall be deposited into the Sponsor Support Account pursuant
to the Completion Guaranty.


 


(b)                                         The Accounts
Bank shall transfer funds from the Sponsor Support Account to the Construction
Account upon receipt by the Accounts Bank of a Deficiency Notice (as defined in
the Completion Guaranty) from the Administrative Agent, if the Guarantor fails
to make any payment as and when required following delivery of a Deficiency
Notice under the Completion Guaranty.


 


(c)                                          If,
on the Conversion Date, the amounts on deposit in or standing to the credit of
the Warranty Reserve Account are below one million five hundred thousand
Dollars ($1,500,000) then any amounts on deposit in or standing to the credit
of the Sponsor Support Account shall, upon the written instruction of the
Borrower or the Administrative Agent, be transferred to the Warranty Reserve
Account so that the funds on deposit in or standing to the credit of the
Warranty Reserve Account after such transfer are one million five hundred
thousand Dollars ($1,500,000).


 


(d)                                         Unless
a Notice of Suspension is in effect or a Default or Event of Default would
occur after giving effect to any application of funds contemplated hereby and
following the termination of the Completion Guaranty (as confirmed in writing
by the Administrative Agent) all amounts on deposit in or standing to the
credit of the Sponsor Support Account may, at the written direction of the
Borrower (with a copy to the Administrative Agent), be transferred to the
Guarantor; provided, however, that venue for any action brought under
this Agreement exclusively related to a claim against the Accounts Bank is
proper in Harris County, Texas.


 


Section 8.13                                     Representations,
Warranties and Covenants of Accounts Bank. The Accounts Bank hereby
represents and warrants, covenants and agrees with the Senior Secured Parties
and the Borrower (and the other parties hereto agree, to the extent set forth
below) as follows:


 


(a)                                          it will act
as depositary agent, as “securities intermediary” (within the meaning of Section 8-102(a)(14)
of the UCC) with respect to each of the Project Accounts that is a “securities
account” (within the meaning of Section 8-501 of the UCC) and the
Financial Assets credited to such Project Accounts, and as “bank” (within the
meaning of 9-102(a)(8) of the UCC) with respect to each of the Project
Accounts as described in Section 8.15 (Project
Accounts as Deposit Account) and credit balances not
constituting Financial Assets credited thereto and to accept all cash,
payments, other amounts and Cash Equivalents to be delivered to or held by the
Accounts Bank pursuant to the terms of this Agreement. The Borrower, the Senior


 


105

















 


Secured Parties and the Accounts Bank agree
that, for purposes of Articles 8 and 9 of the UCC, notwithstanding
anything to the contrary contained in any other agreement relating to the
establishment and operation of the Project Accounts, the jurisdiction of the
Accounts Bank (in its capacity as the securities intermediary and bank) is the
State of New York;


 


(b)                                         the Accounts
Bank hereby agrees and confirms that it has established and maintains the
Project Accounts as set forth and defined in this Agreement. The Accounts Bank
agrees that (i) each such Project Account established by the Accounts Bank
is and will be maintained as a “securities account” (within the meaning of Section 8­501
of the UCC); (ii) the Borrower is the “entitlement holder” (within the
meaning of Section 8­102(a)(7) of the UCC) in respect of the “financial
assets” (within the meaning of Section 8­102(a)(9) of the UCC, the “Financial
Assets”) credited to such Project Accounts that are “securities accounts”; (iii) all
Financial Assets in registered form or payable to or to the order of and
credited to any such Project Account shall be registered in the name of,
payable to or to the order of, or specially endorsed to, the Accounts Bank or
in blank, or credited to another securities account maintained in the name of
the Accounts Bank ; and (iv) in no case will any Financial Asset credited
to any such Project Account be registered in the name of, payable to or to the
order of, or endorsed to, the Borrower except to the extent the foregoing have
been subsequently endorsed by such Person to the Accounts Bank or in blank. Each
item of property (including a security, security entitlement, investment
property, instrument or obligation, share, participation, interest or other
property whatsoever) credited to any Project Account shall to the fullest
extent permitted by law be treated as a Financial Asset. Until the Discharge
Date, this Agreement is intended to provide the Collateral Agent with “control”
(within the meaning of Section 8­106(d)(2) or Section 9-104(a) (as
applicable) of the UCC) of the Project Accounts and the Borrower’s “security
entitlements” (within the meaning of Section 8­102(a)(17) of the UCC) with
respect to the Financial Assets credited to the Project Accounts. The Borrower
hereby irrevocably directs, and the Accounts Bank (in its capacity as
securities intermediary) hereby agrees, that the Accounts Bank will comply with
all instructions and orders (including entitlement orders within the meaning of
Section 8-102(a)(8) of the UCC) regarding each Project Account and
any Financial Asset therein originated by the Collateral Agent without the
further consent of the Borrower or any other Person. In the case of a conflict
between any instruction or order originated by the Collateral Agent and any
instruction or order originated by the Borrower or any other Person other than
a court of competent jurisdiction, the instruction or order originated by the
Collateral Agent shall prevail. The Accounts Bank shall not change the name or
account number of any Project Account without the prior written consent of the
Collateral Agent and at least five (5) Business Days’ prior notice to the
Borrower, and shall not change the entitlement holder;


 


106

















 


(c)                                          it shall
promptly perform all duties imposed upon a securities intermediary and a
bank under the UCC and this Agreement. In this regard, (i) if the Accounts
Bank has knowledge that an issuer of any Financial Asset is required to make a
payment or distribution in respect of such Financial Asset, the Accounts Bank
shall have fulfilled its duty under applicable Law to take action to obtain
such payment or distribution if (A) it credits such payment or
distribution to the Project Accounts in accordance with this Agreement if such
payment or distribution is made or (B) it notifies the Borrower, the
Collateral Agent and the Administrative Agent that such payment or distribution
has not been made, and (ii) if the Accounts Bank is required by applicable
Law or this Agreement to credit to any Project Account any Financial Asset
purported to be transferred or credited to the Accounts Bank pursuant to
applicable Law, the Accounts Bank shall have fulfilled its duty to so credit
any Project Account if it credits as a security entitlement to the applicable
party whatever rights the Accounts Bank purportedly has, in its capacity as
Accounts Bank, in the Financial Asset transferred or credited to the Accounts
Bank, in its capacity as Accounts Bank, and the Accounts Bank shall have no
duty to ensure that applicable Law has been complied with in respect of the
transfer of the Financial Asset or to create a security interest in or Lien on
any Financial Asset purported to be transferred or credited to the Accounts
Bank and subsequently credited to any Project Account;


 


(d)                                         all Financial
Assets acquired by or delivered to the Accounts Bank shall be held by the
Accounts Bank and credited by book entry to the relevant Project Account or
otherwise accepted by the Accounts Bank for credit to the relevant Project
Account;


 


(e)                                          each item of
property (including any cash, security, general intangible, document,
instrument or obligation, share, participation, interest or other property
whatsoever) deposited in or credited to any Project Account shall be treated as
a Financial Asset for the purposes of Section 8-102(a)(9)(iii) of the
UCC. Notwithstanding any provision herein contained to the contrary, any
property contained in the Project Accounts that is not deemed to be a Financial
Asset under applicable Law, to the extent permitted by applicable Law, will be
deemed to be deposited in a deposit account and subject to Section 8.15
(Project Accounts as Deposit Account);


 


(f)                                            The
Collateral Agent shall have control of the security entitlements carried in the
Project Accounts and of the Financial Assets carried in the Project Accounts,
and the Borrower hereby disclaims any entitlement to claim control of such
security entitlements;


 


(g)                                         all property
delivered to the Accounts Bank pursuant to this Agreement or the other
Financing Documents will be promptly deposited in or


 


107

















 


credited to a Project Account by an
appropriate entry in its records in accordance with this Agreement;


 


(h)                                         if
any Person (other than the Collateral Agent, on behalf and for the benefit of
the Senior Secured Parties) asserts any lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against any Project Account or in any Financial Asset or other
property deposited therein or credited thereto of which the Accounts Bank has
actual knowledge, the Accounts Bank may comply with such order, without
authorization from the Borrower or the Collateral Agent; provided, that
the Accounts Bank reasonably believes that as a matter of law the Accounts Bank
is obligated to comply with such order and provided that the Accounts Bank
promptly notifies the Collateral Agent, the Administrative Agent and the
Borrower in writing thereof; and


 


(i)                                             the
Accounts Bank has not entered into and will not enter into any agreement with
respect to the Project Accounts or any Financial Assets or other property
deposited in or credited to any Project Account other than this Agreement and
its Fee Letter. The Accounts Bank has not entered into and will not enter into
any agreement with the Borrower or any other Person purporting to limit or
condition the obligation of the Accounts Bank to comply with entitlement orders
or any other order originated by the Collateral Agent in accordance with Sections 8.13(b) (Representations, Warranties and Covenants of Accounts Bank)
or Sections 8.15(b) or (c) (Project
Accounts as Deposit Account).


 


Section 8.14                                     Project
Accounts. (a) The Accounts Property will not constitute repayment of
the Obligations until so applied as payments in accordance with the terms of this
Agreement and the other Financing Documents.


 


(b)                                         The Accounts
Bank shall not have title to the funds on deposit in the Project Accounts, and
shall credit the Project Accounts with all receipts of interest, dividends and
other income received on the property held in the Project Accounts. The
Accounts Bank shall administer and manage the Project Accounts in strict
compliance with its duties with respect to the Project Accounts pursuant to
this Agreement, and shall be subject to and comply with all of the obligations
that the Accounts Bank owes to the Borrower and the Collateral Agent, on behalf
of the Senior Secured Parties, with respect to the Project Accounts, including
all subordination obligations set forth in Section 8.17 (Subordination) with respect to the Accounts Bank’s right
of set-off or recoupment or right to obtain a Lien, pursuant to the terms of
this Agreement. The Accounts Bank hereby agrees to comply with (i) any and
all instructions originated by the Collateral Agent directing the disbursement,
deposit and/or transfer of any funds and all other property held in the Project
Accounts without any further consent of the Borrower or any other Person and


 


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(ii) any and all instructions originated
by the Borrower directing the disbursement, deposit and/or transfer of any
funds and all other property held in the Project Accounts in accordance with
this Agreement without any further consent of the Collateral Agent, the
Administrative Agent or any other Person, except to the extent such consent is
required pursuant to this Agreement.


 


Section 8.15                                     Project
Accounts as Deposit Account. (a)  To the extent that the Project
Accounts are not considered securities accounts, the Project Accounts shall be
deemed to be deposit accounts in respect of any property deposited in or
credited to the Project Accounts that is not deemed to be a Financial Asset
under applicable Law. Such deposit accounts and such property shall be
maintained with the Accounts Bank acting not as a securities intermediary, but
as a bank.


 


(b)                                         The Borrower
shall be deemed the customer of the Accounts Bank for purposes of the Project
Accounts and, as such, shall be entitled to all of the rights that customers of
banks have under applicable Law with respect to deposit accounts, including the
right to withdraw funds from, or close, the Project Accounts, in each such case
subject to, and in accordance with, the terms of this Agreement.


 


(c)                                          The parties
hereto agree that, to the extent that the Project Accounts are not considered “securities
accounts” (within the meaning of Section 8-501(a) of the UCC), the
Project Accounts shall be deemed to be “deposit accounts” (as defined in Section 9-102(a)(29)
of the UCC) to the extent a security interest can be granted and perfected
under the UCC in the Project Accounts as deposit accounts, which the Borrower
shall maintain with the Accounts Bank acting not as a securities intermediary
but as a “bank” (within the meaning of Section 9-102(a)(8) of the
UCC). The Accounts Bank shall not have title to the funds on deposit in the
Project Accounts, and shall credit the Project Accounts with all receipts of
interest, dividends and other income received on the property held in the
Project Accounts. The Accounts Bank shall administer and manage the Project
Accounts in strict compliance with all the terms applicable to the Project
Accounts pursuant to this Agreement, and shall be subject to and comply with
all the obligations that the Accounts Bank owes to the Collateral Agent with
respect to the Project Accounts, including all subordination obligations,
pursuant to the terms of this Agreement. The Accounts Bank hereby agrees to
comply with any and all instructions originated by (i) the Collateral
Agent directing disposition of funds and all other property in the Project
Accounts without any further consent of the Borrower or any other Person and (ii) the
Borrower directing the disbursement, deposit and/or transfer of any funds and
all other property held in the Project Accounts in accordance with this
Agreement, without any further consent of the Collateral Agent, the
Administrative Agent or any other Person, except to the extent such consent is
required pursuant to this Agreement.


 


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Section 8.16                                     Duties of
Accounts Bank. (a) The Accounts Bank will also have those duties and
responsibilities expressly set forth in this Agreement, and no additional
duties, responsibilities, obligations or liabilities shall be inferred from the
provisions of this Agreement or imposed on the Accounts Bank. The Accounts Bank
will act at the written direction of the Collateral Agent, the Administrative
Agent and, as expressly provided in this Agreement, Borrower, but will not be
required to take any action that is contrary to this Agreement or applicable
Law or that, in its reasonable judgment, would involve it in expense or
liability, unless it has been furnished with adequate indemnity against such
expense or liability. The Accounts Bank will have no responsibility to ensure
the performance by any other party of its duties and obligations hereunder. The
Accounts Bank will use the same care with respect to the safekeeping and
handling of property held in the Project Accounts as the Accounts Bank uses in
respect of property held for its own sole benefit.


 


(b)                                         In performing its functions and duties under
this Agreement, the Accounts Bank will act solely as the depository
agent and as securities intermediary or as a bank, as the case may be, with respect to the Project Accounts.
None of the Senior Secured Parties or the Borrower will have any rights against
the Accounts Bank hereunder, other than for the Accounts Bank’s gross
negligence or willful misconduct. Except as otherwise expressly provided in this
Agreement, the Borrower will not have any right to direct the Accounts Bank to
distribute or allocate any funds, instruments, securities, Financial Assets or
other assets in the Project Accounts or to withdraw or transfer any funds,
instruments, securities, Financial Assets or other assets from the Project
Accounts. Except as otherwise expressly provided in this Agreement, the
Collateral Agent will have the sole right to issue directions and instructions
to the Accounts Bank, acting as securities intermediary or bank, as the case may be,
in accordance with this Agreement, and to issue entitlement orders with respect
to the Project Accounts. It is expressly understood and agreed that any
investment made with funds held in the Project Accounts may be made only
in accordance with the express provisions of Section 8.20 (Interest and Investments). The Accounts Bank shall not
in any way whatsoever be liable for any loss or depreciation in the value of
the investments made pursuant to the terms of this Agreement.


 


Section 8.17                                     Subordination.
(a) The Accounts Bank hereby acknowledges the security interest granted
hereby to the Collateral Agent, on behalf and for the benefit of the Senior
Secured Parties, by the Borrower. In the event that the Accounts Bank has or
subsequently obtains by agreement, operation of applicable Law or otherwise a
right of recoupment or set-off or any Lien in any of the Project Accounts or
any Financial Asset or other property deposited therein or credited thereto or
any security entitlement related thereto, the Accounts Bank hereby agrees that
such right of recoupment or set-off and/or any such Lien shall be subordinate
to the security interest of the Collateral Agent, on


 


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behalf of and for the benefit of the Senior
Secured Parties. The Accounts Bank agrees that it shall not assert or enforce
any such right of recoupment or set-off and/or any Lien until the Discharge
Date.


 


(b)                                         The Financial
Assets and other items deposited in or credited to the Project Accounts and the
Accounts Property will not be subject to deduction, set-off, banker’s lien or
any other right in favor of any Person other than the Collateral Agent, on
behalf and for the benefit of the Senior Secured Parties.


 


Section 8.18                                     Borrower
Acknowledgments. (a) The Borrower acknowledges that neither any
insufficiency of funds in the Project Accounts (or any of them), nor any
inability to apply any funds in the Project Accounts (or any of them) against
any or all amounts owing under any Financing Document, shall at any time limit,
reduce or otherwise affect the Borrower’s obligations under any Financing
Document.


 


(b)                                         Each party to
this Agreement acknowledges that the Accounts Bank and the Collateral Agent
shall not incur any obligation or liability in circumstances where there are
insufficient funds deposited in or credited to any Project Account to make a
payment in full that would otherwise have been made pursuant to the terms of
this Agreement, except (i) in the case of the Accounts Bank to the extent
that the loss arises directly from the Accounts Bank’s gross negligence or
willful misconduct, and (ii) in the case of the Collateral Agent, to the
extent that the loss arises directly from the Collateral Agent’s gross
negligence or willful misconduct.


 


Section 8.19                                     Agreement to
Hold In Trust. All payments received directly by the Borrower that are
required to be deposited into the Project Accounts in accordance with the terms
of this Agreement or any other Financing Document shall be held by the Borrower
in trust for the Collateral Agent, on behalf and for the benefit of the Senior
Secured Parties, shall be segregated from other funds of the Borrower and
shall, forthwith upon receipt by the Borrower, be turned over to the Collateral
Agent or its designee in the same form as received by the Borrower (duly
endorsed by the Borrower to the Collateral Agent or the Accounts Bank, if
requested) for deposit and disbursement in accordance with this Agreement.


 


Section 8.20                                     Interest and
Investments. (a) Each amount deposited in or credited to a Project
Account from time to time shall, from the time it is so deposited or credited
until the time it is withdrawn from that Project Account (whether for the
purpose of making an investment in Cash Equivalents or otherwise applied in
accordance with the terms of this Agreement), earn interest at such rates as may be
agreed from time to time by the Borrower and the Accounts Bank.


 


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(b)                                         Prior to the
receipt by the Accounts Bank of a Notice of Suspension, any amounts held by the
Accounts Bank in the Project Accounts shall be invested by the Accounts Bank
from time to time, at the risk and expense of the Borrower, solely in such Cash
Equivalents as the Borrower may direct in writing. The Borrower shall
select Cash Equivalents having such maturities as shall cause the Project
Accounts to have a cash balance as of any day sufficient to cover the transfers
to be made from the Project Accounts on such day in accordance with this
Agreement, the other Financing Documents and the Project Documents. Upon
delivery by the Collateral Agent to the Accounts Bank of a Notice of Suspension
and until written revocation of such Notice of Suspension is delivered to the
Accounts Bank by the Collateral Agent, any amounts held by the Accounts Bank in
the Project Accounts shall be invested by the Accounts Bank from time to time,
solely in such Cash Equivalents as the Collateral Agent may direct.


 


(c)                                          In the event
that the cash balance in any of the Project Accounts is as of any day
insufficient to cover the transfers to be made from such Project Account on
such day, the Collateral Agent may direct the Accounts Bank to sell or
liquidate the Cash Equivalents standing to the credit of such Project Account
(without regard to maturity date) in such manner as the Collateral Agent may deem
necessary in order to obtain cash at least sufficient to make such transfers
and to pay any expenses and charges incurred in connection with effecting any such
sale or liquidation, which expenses and charges the Accounts Bank shall be
authorized to pay with cash on deposit in such Project Account. Neither the
Accounts Bank nor any Senior Secured Party shall be liable to any Person for
any loss suffered because of any such sale or liquidation.


 


(d)                                         All interest
and other investment income earned from Cash Equivalents made from amounts in
any Project Account shall remain in such Project Account until transferred from
such Project Account in accordance with the terms of this Article VIII.


 


(e)                                          It is
acknowledged by the parties hereto that all investment income earned on amounts
on deposit in or credited to the Project Accounts for all Tax purposes shall be
attributed to and be income of the Borrower. The Borrower shall be responsible
for determining any requirements for paying Taxes or reporting or withholding
any payments for Tax purposes hereunder. The Borrower shall prepare and file
all Tax information required with respect to the Project Accounts. The Borrower
agrees to indemnify and hold each Senior Secured Party harmless against all
liability for Tax withholding and/or reporting for any investment income earned
on the Project Accounts and payments in respect thereof. Such indemnities shall
survive the termination or discharge of this Agreement or resignation of the
Accounts Bank. No Senior Secured Party shall have any obligation with respect
to the making of or the


 


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reporting of any payments for Tax purposes. From
time to time, and as reasonably requested by the Accounts Bank, the Borrower
shall provide to the Accounts Bank a United States Department of the Treasury
Internal Revenue Service tax Form W-8 or W-8BEN or other appropriate form required
with respect to the withholding or exemption from withholding of income tax on
any investment income earned on the Project Accounts.


 


Section 8.21                                     Accounts Bank
Information. (a) The Accounts Bank will:


 


(i)                                   within
five (5) Business Days after the end of the month in which the first
deposit is made into any Project Account and within five (5) Business Days
after the end of each month thereafter, provide the Borrower, the Collateral
Agent and the Administrative Agent a report with respect to the Project
Accounts, setting forth in reasonable detail all deposits to and disbursements
from each of the Project Accounts during such month, including the date on
which made, and the balances of and any investments in each of the Project
Accounts at the end of such month, including information regarding categories,
amounts, maturities and issuers of Cash Equivalents; and


 


(ii)                                within
three (3) Business Days after receipt of any written request by the
Borrower, the Collateral Agent or the Administrative Agent, provide to the
Borrower, the Collateral Agent or the Administrative Agent, as the case may be,
such other information as the Borrower, the Collateral Agent or the
Administrative Agent may specify regarding all Cash Equivalents and any
other investments made by the Accounts Bank pursuant hereto and regarding
amounts available in the Project Accounts.


 


Notwithstanding the
foregoing, the Accounts Bank will provide the Borrower, the Collateral Agent
and the Administrative Agent such additional information regarding the Project
Accounts and the balances and Cash Equivalents therein as any of them may reasonably
request from time to time.


 


(b)                                         The Accounts
Bank will maintain all of the Project Accounts and all books and records with
respect thereto as may be necessary to record properly all transactions
carried out by it under this Agreement.


 


(c)                                          If any Cash
Equivalent ceases to be a Cash Equivalent, the Accounts Bank will, as soon as
reasonably practicable after becoming aware of such


 


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cessation, notify the Collateral Agent and
the Borrower in writing of such cessation and, upon the written direction of
the Borrower or the Collateral Agent, as the case may be, will cause the
relevant investment to be replaced by a Cash Equivalent or by cash; provided
that this Section 8.21(c) will not oblige the Accounts Bank to
liquidate any investment earlier than its normal maturity date unless:


 


(i)                                   directed
to do so under Section 8.20 (Interest and Investments);
or


 


(ii)                                the
maturity date of the relevant investment exceeds the maturity date that would
enable it to continue to qualify as a Cash Equivalent.


 


Section 8.22                                     Notices of
Suspension of Accounts. (a) The Collateral Agent may, but shall not be
required to, suspend the right of the Accounts Bank and the Borrower to
withdraw or otherwise deal with any funds deposited in or credited to the
Project Accounts at any time during the occurrence and continuance of an Event
of Default by delivering a notice to the Accounts Bank (with a copy to the Borrower
and the Administrative Agent) (a “Notice of Suspension”).


 


(b)                                         Notwithstanding
any other provision of the Financing Documents, after the issuance by the
Collateral Agent of a Notice of Suspension in accordance with Section 8.22(a) and
until such time as the Collateral Agent advises the Accounts Bank and the
Borrower (with a copy to the Administrative Agent) that it has withdrawn such
Notice of Suspension, (which it shall promptly do if such Event of Default is
no longer continuing or has been waived) no amount may be withdrawn by the
Accounts Bank from any Project Account, including for investment in Cash
Equivalents, without the express prior written consent of the Collateral Agent.


 


(c)                                          Notwithstanding
any other provision of the Financing Documents (but without limitation of Sections 8.02(g) or
(h) (Deposits into and Withdrawals from Project
Accounts), without the express prior written consent of the
Required Lenders, no amount may be withdrawn from any Project Account if a
Default or Event of Default would occur as a result of such withdrawal.


 


(d)                                         On the date of
each withdrawal by the Accounts Bank from a Project Account, the Borrower shall
be deemed to represent and warrant that no Notice of Suspension is in effect
and that that no Default or Event of Default would occur as a result of such
withdrawal, unless the Required Lenders have previously consented in writing to
such withdrawal, notwithstanding that a Notice of Suspension is in effect or
that a Default or Event of Default would occur as a result of such withdrawal.


 


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ARTICLE IX


 


DEFAULT AND ENFORCEMENT


 


Section 9.01                                     Events of
Default. Each of the following events or occurrences described in this Section 9.01 shall constitute
an Event of Default.


 


(a)                                          Nonpayment.
(i) The Borrower fails to pay any amount of principal of any Loan when the
same becomes due and payable or (ii) the Borrower fails to pay any
interest on any Loan or any fee or other Obligation or amount payable hereunder
or under any other Financing Document within three (3) Business Days after
the same becomes due and payable.


 


(b)                                         Breach of
Warranty. Any representation or warranty of any Loan Party or any Major
Project Party made or deemed to be repeated in any Financing Document is
incorrect or misleading in any material respect when made or deemed made; provided
that (i) if such Loan Party or Major Project Party, as the case may be,
was not aware that such representation or warranty was incorrect or misleading
at the time such representation or warranty was made or deemed repeated, (ii) the
fact, event or circumstance resulting in such incorrect or misleading
representation or warranty is capable of being cured, corrected or otherwise
remedied, (iii) such fact, event or circumstance resulting in such
incorrect or misleading representation or warranty is cured, corrected or
otherwise remedied within thirty (30) days from the date any Loan Party
obtains, or should have obtained, Knowledge thereof, and (iv) no Material
Adverse Effect shall have occurred as a result of such representation or
warranty being incorrect or misleading, then such incorrect representation or
warranty shall not constitute an Event of Default.


 


(c)                                          Non-Performance
of Certain Covenants and Obligations. (i) The Borrower defaults in the
due performance and observance of any of its obligations under Sections 7.01(d)(ii),
(iii) and (iv)(A) (Affirmative Covenants –
Construction and Completion of the Project; Maintenance
of Properties), Section 7.01(g) (Affirmative Covenants – Use of Proceeds and Cash Flow), Section 7.01(h) (Affirmative Covenants – Insurance), Section 7.01(k)
(Affirmative Covenants – Performance Tests),
Section 7.01(r) (Affirmative Covenants –
First Priority Ranking), Section 7.02 (Negative Covenants), Section 7.03(e) (Reporting Requirements – Notice of Default or Event of Default)
or Section 7.03(f) (Reporting Requirements
-Notice of Other Events) of this Agreement, or Section 5.02
(Limitation of Liens), Section 5.04
(No Sale of Collateral) or Section 5.07
(Name; Jurisdiction of Organization) of
the Security Agreement; or  (ii) the
Borrower or the Pledgor defaults in the due performance and


 


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observance of any of its obligations under Section 5.02
(Limitation of Liens), Section 5.04
(No Sale of Collateral), Section 5.05
(No Impairment of Security), Section 5.06
(Filing of Bankruptcy Proceedings) or Section 5.09
(Name; Jurisdiction of Organization) of
the Pledge Agreement; or (iii) the Borrower of the Guarantor defaults in
the due performance and observance of any of its obligations under the
Completion Guaranty.


 


(d)                                         Non-Performance
of Other Covenants and Obligations. Any Loan Party or any Major Project
Party defaults in the due performance and observance of any covenant or
agreement (other than covenants and agreements referred to in Section 9.01(a) (Events of Default – Nonpayment) or Section 9.01(c) (Events of Default – Non-Performance of Certain Covenants and
Obligations) contained in any Financing Document to which it is
a party, and such default continues unremedied for a period of thirty
(30) days after the Borrower obtains, or should have obtained, Knowledge
thereof.


 


(e)                                          Project
Completion. The Commercial Operation Date does not occur on or before the
Conversion Date Certain.


 


(f)                                            Cross
Defaults. Any one of the following occurs with respect to any Loan Party or
any Major Project Party with respect to any of its Indebtedness (other than the
Obligations):


 


(i)                               a
default occurs in the payment when due (subject to any applicable grace period
and notice requirements), whether by acceleration or otherwise, of such
Indebtedness; or


 


(ii)                            such
Person fails to observe or perform (subject to any applicable grace
periods and notice requirements) any other agreement or condition relating to
any such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event occurs, the effect of which
default or other event is to cause, or to permit the holder or holders of such
Indebtedness or the beneficiary or beneficiaries of any Guarantee (or a trustee
or agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice if required, such Indebtedness to be
demanded or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be
demanded; and


 


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(A)                             in the case of Section 9.01(f)(i) or
Section 9.01(f)(ii) with respect any Loan Party, with respect
to Indebtedness in an amount greater than or equal to one million Dollars
($1,000,000) in the aggregate; or


 


(B)                               in the case of Section 9.01(f)(i) or
Section 9.01(f)(ii) with respect to any Major Project Party,
has resulted in or could reasonably be expected to result in a Material Adverse
Effect; provided, that such occurrence shall not constitute an Event of
Default with respect to any such other Major Project Party if an agreement
replacing each Project Document to which such Major Project Party is a party,
in form and substance, and with a counterparty, reasonably satisfactory to
the Required Lenders, is entered into (together with all applicable Ancillary
Documents) within forty-five (45) days thereof.


 


(g)                                         Judgments.
(i) Any judgment or order that has or could reasonably be expected to have
a Material Adverse Effect is rendered against any Loan Party or any Major
Project Party, or (ii) any judgment or order is rendered against the
Borrower, the Guarantor or the Pledgor in an amount in excess of one million
Dollars ($1,000,000) in the aggregate and, in any such case, (x) enforcement
proceedings are commenced by any creditor upon such judgment or order or (y)
there is a period of thirty (30) consecutive days during which a stay of
enforcement of such judgment is not in effect; provided, that any such
occurrence shall not constitute an Event of Default with respect to any Major
Project Party (other than a Major Project Party to the Design-Build Agreement
or the License Agreement) if an agreement replacing each Major Project Document
to which such Major Project Party is a party, in form and substance, and
with a counterparty, reasonably satisfactory to the Required Lenders, is
entered into (together with all applicable Ancillary Documents) within
forty-five (45) days thereof.


 


(h)                                         ERISA
Events. (i) Any Termination Event occurs, (ii) any Plan incurs an
“accumulated funding deficiency” (as defined in Section 412 of the Code or
Section 302 of ERISA), (iii) the Borrower or an ERISA Affiliate
engages in a transaction that is prohibited under Section 4975 of the Code
or Section 406 of ERISA for which there is no regulatory, statutory or
administrative exemption, (iv) the Borrower or any ERISA Affiliate fails
to pay when due any amount it has become liable to pay to the PBGC, any Plan or
a trust established under Title IV of ERISA, (v) a condition exists
by reason of which the PBGC would be entitled to obtain a decree adjudicating
that an ERISA Plan must be terminated or have a trustee appointed to administer
it, (vi) the Borrower or any ERISA Affiliate suffers a partial


 


117

















 


or complete withdrawal from a Multiemployer
Plan or is in “default” (as defined in Section 4219(c)(5) of ERISA)
with respect to payments to a Multiemployer Plan, (vii) a proceeding is
instituted against the Borrower to enforce Section 515 of ERISA, (viii) the
aggregate amount of the then “current liability” (as defined in Section 412(l)(7) of
the Code, as amended) of all accrued benefits under such Plan or Plans exceeds
the then current value of the assets allocable to such benefits by more than
five hundred thousand Dollars ($500,000) at such time, or (ix) any other
event or condition occurs or exists with respect to any Plan that would subject
the Borrower to any material tax, material penalty or other material liability.


 


(i)                                             Bankruptcy,
Insolvency. Any of the Loan Parties or any Major Project Party:


 


(i)                               generally
fails to pay, or admits in writing its inability or unwillingness to pay, debts
as they become due;


 


(ii)                            applies
for, consents to, or acquiesces in, the appointment of a trustee, receiver,
sequestrator or other custodian for such Person or a substantial portion of its
property, or makes a general assignment for the benefit of creditors;


 


(iii)                         in the
absence of such application, consent or acquiescence, permits or suffers to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for such Person or for a substantial part of its property, and such
trustee, receiver, sequestrator or other custodian is not discharged within
sixty (60) days; provided that nothing in the Financing Documents
shall prohibit or restrict any right any Senior Secured Party may have
under applicable Law to appear in any court conducting any relevant proceeding
during such sixty (60) day period to preserve, protect and defend its
rights under the Financing Documents (and such Person shall not object to any
such appearance);


 


(iv)                        permit or
suffer to exist the commencement of any bankruptcy, reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding up or liquidation proceeding, in respect of such
Person and, if any such case or proceeding is not commenced by such Person,
such case or proceeding is consented to or acquiesced in by such Person or
results in the entry of an order for relief or remains for sixty (60) days
undismissed; provided that nothing in the Financing Documents shall
prohibit or restrict any right any


 


118

















 


Senior Secured Party may have under
applicable Law to appear in any court conducting any such case or proceeding
during such sixty (60) day period to preserve, protect and defend its
rights under the Financing Documents (and such Person shall not object to any
such appearance);


 


(v)                           takes
any action authorizing, or in furtherance of, any of the foregoing; or


 


(vi)                        ceases to
be Solvent;


 


provided, that such
occurrence shall not constitute an Event of Default with respect to any Major
Project Party if either such occurrence has not and could not reasonably be
expected to result in a Material Adverse Effect or an agreement replacing each
Project Document to which such Major Project Party is a party, in form and
substance, and with a counterparty, reasonably satisfactory to the Required
Lenders, is entered into (together with all applicable Ancillary Documents)
within forty-five (45) days thereof.


 


(j)                                             Project
Document Defaults; Termination.


 


(i)                               The
Borrower or any Major Project Party shall be in material breach of or otherwise
in material default under any Project Document, and such breach or default has
continued beyond any applicable grace period expressly provided for in such
Project Document (or, if no such cure period is provided, thirty
(30) days); provided, that any such breach or default by any Major
Project Party under any Major Project Document (other than the License
Agreement) shall not constitute an Event of Default if an agreement replacing
such Project Document, in form and substance, and with a counterparty,
reasonably satisfactory to the Required Lenders, is entered into (together with
all applicable Ancillary Documents) within forty-five (45) days thereof.


 


(ii)                            Any
Major Project Document ceases to be in full force and effect prior to its
scheduled expiration, is repudiated, or its enforceability is challenged or
disaffirmed by or on behalf of the Borrower or any Major Project Party thereto;
provided, that such occurrence shall not constitute an Event of Default
with respect to any Major Project Document (other than the License Agreement)
if an agreement replacing such Major Project Document, in form and
substance, and with a counterparty, reasonably satisfactory to


 


119

















 


the Required Lenders, is entered into
(together with all applicable Ancillary Documents) within forty-five
(45) days thereof.


 


(k)                                          Governmental
Approvals. The Borrower fails to obtain, renew, maintain or comply in all
material respects with any Necessary Project Approval then required to be
maintained or any Necessary Project Approval then required to be maintained is
revoked, canceled, terminated, withdrawn or otherwise ceases to be in full
force and effect, or any Necessary Project Approval then required to be
maintained is adversely modified without the consent of the Required Lenders,
or a proceeding is commenced which could reasonably produce any such result.


 


(l)                                             Unenforceability
of Documentation. At any time after the execution and delivery thereof:


 


(i)                               any
material provision of any Financing Document shall cease to be in full force
and effect;


 


(ii)                            any
Financing Document is revoked or terminated, becomes unlawful or is declared
null and void by a Governmental Authority of competent jurisdiction;


 


(iii)                         any
Financing Document becomes unenforceable, is repudiated or the enforceability
thereof is contested or disaffirmed by or on behalf of any party thereto other
than the Senior Secured Parties; and


 


(iv)                        any Liens
against any of the Collateral cease to be a first-priority, perfected security
interest in favor of the Collateral Agent, or the enforceability thereof is
contested by any Loan Party or any of the Security Documents ceases to provide
the security intended to be created thereby with the priority purported to be
created thereby.


 


(m)                                       Environmental
Matters. (i) Any Environmental Claim has occurred with respect to the Borrower,
the Project or any Environmental Affiliate, (ii) any release, Threat of
Release, emission, discharge or disposal of any Material of Environmental
Concern occurs, and such event would reasonably be expected to form the
basis of an Environmental Claim against the Borrower, the Project or any
Environmental Affiliate, or (iii) any violation or alleged violation of
any Environmental Law or Environmental Approval occurs that could reasonably
result in an Environmental Claim against the Borrower or the Project or, to the
extent the Borrower may have liability, any Environmental Affiliate that,
in the case of any of


 


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Section 9.01(m)(i),
(ii) or (iii), could reasonably be expected to result in
liability for the Borrower in an amount greater than two hundred fifty thousand
Dollars ($250,000) for any single claim or five hundred fifty thousand Dollars
($550,000) for all such claims during any twelve (12) month period or
could otherwise reasonably be expected to result in a Material Adverse Effect.


 


(n)                                         Loss of
Collateral. Any portion of the Collateral (other than a portion that is
immaterial) is damaged, seized or appropriated; provided that such an
occurrence shall not constitute an Event of Default if the Borrower repairs,
replaces, rebuilds or refurbishes such damaged, seized or appropriated
Collateral (i) in accordance with Section 8.10 (Insurance and Condemnation Proceeds Account), or (ii) otherwise
with the approval of the Required Lenders, in consultation with the Independent
Engineer (provided that such approval is obtained within sixty
(60) days thereof).


 


(o)                                         Event of
Abandonment. An Event of Abandonment occurs.


 


(p)                                         Taking or
Total Loss. An Event of Taking with respect to all or a material portion of
the Project or any Equity Interests in the Borrower occurs, or an Event of
Total Loss occurs.


 


(q)                                         Change of
Control. A Change of Control occurs.


 


Section 9.02                                     Action Upon
Bankruptcy. If any Event of Default described in Section 9.01(i) (Events of Default – Bankruptcy, Insolvency)
occurs with respect to the Borrower, any outstanding Construction Loan
Commitments, Term Loan Commitments or Working Capital Loan Commitments (if not
theretofore terminated) shall automatically terminate. The outstanding principal
amount of the outstanding Loans and all other Obligations shall automatically
be and become immediately due and payable, without notice, demand or further
act of the Administrative Agent, the Collateral Agent or any other Senior
Secured Party.


 


Section 9.03                                     Action Upon
Other Event of Default. (a)  If any other Event of Default occurs and
is continuing for any reason, whether voluntary or involuntary, and is
continuing, the Administrative Agent may, or upon the direction of the Required
Lenders shall, by written notice to the Borrower, declare all or any portion of
the outstanding principal amount of the Loans and other Obligations to be due
and payable and/or any outstanding Construction Loan Commitments, Term Loan
Commitments or Working Capital Loan Commitments (if not theretofore terminated)
to be terminated, whereupon the full unpaid amount of such Loans and other
Obligations that has been declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment
and/or, as the case may be, any


 


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outstanding Construction Loan Commitments or
Term Loan Commitments shall terminate. During the continuance of an Event of
Default, the Administrative Agent may, or upon the direction of the Required
Lenders shall, instruct the Collateral Agent to exercise any or all remedies
provided for under this Agreement or the other Financing Documents.


 


(b)                                         Any
declaration made pursuant to Section 9.03(a) may, should the
Required Lenders in their sole and absolute discretion so elect, be rescinded
by written notice to the Borrower at any time after the principal of the Loans
has become due and payable, but before any judgment or decree for the payment
of the monies so due, or any part thereof, has been entered; provided
that no such rescission or annulment shall extend to or affect any subsequent
Event of Default or impair any right consequent thereon.


 


Section 9.04                                     Application of
Proceeds. Any moneys received by the Collateral Agent after the occurrence
and during the continuance of an Event of Default may be held by the
Collateral Agent as Collateral and/or, at the direction of the Administrative
Agent, may be applied in full or in part by the Collateral Agent
against the Obligations in the following order of priority (but without
prejudice to the right of the Collateral Agent to recover any shortfall from
the Borrower):


 


(a)                                          first,
to payment of that portion of the Obligations constituting fees, costs,
expenses (and interest owing thereon (if any)) and any other amounts (including
fees, costs and expenses of counsel and amounts payable under Article IV
(Eurodollar Rate and Tax Provisions))
payable to the Agents in their capacities as such ratably among them in
proportion to the amounts described in this clause first;


 


(b)                                         second,
to payment of that portion of the Obligations constituting fees, costs,
expenses (and interest owing thereon (if any)) and any other amounts (including
fees, costs and expenses of counsel and amounts payable under Article IV
(Eurodollar Rate and Tax Provisions))
but excluding principal of and accrued interest on the Loans or any Interest
Rate Protection Agreement payable to the Lenders and the Interest Rate
Protection Providers, ratably among the Lenders and the Interest Rate
Protection Providers in proportion to the amounts described in this clause second
payable to them;


 


(c)                                          third,
to payment of the portion of the Obligations constituting accrued and unpaid
interest (including default interest) with respect to the Loans and Interest
Rate Protection Agreement (other than any payments of Swap Termination Value),
ratably among the Lenders and the Interest Rate Protection Providers in
proportion to the respective amounts described in this clause third
payable to them;


 


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(d)                                         fourth,
to the principal amount of the Loans and any Primary Swap Obligations payable
by the Borrower to the Lenders and Interest Rate Protection Providers, ratably
among the Lenders and the Interest Rate Protection Providers in proportion to
the respective amounts described in this clause fourth held by them; and


 


(e)                                          last,
the balance, if any, after all of the Obligations have been paid in full, to
the Borrower or as otherwise required by Applicable Law.


 


ARTICLE X


 


THE AGENTS


 


Section 10.01                               Appointment and
Authority. (a) Each Lender (in its capacity as Lender and on behalf of
itself and its Affiliates as a potential Interest Rate Protection Provider)
hereby irrevocably appoints, designates and authorizes each Agent to take such
action on its behalf under the provisions of this Agreement and each other
Financing Document and to exercise such powers and perform such duties as
are expressly delegated to such Agent by the terms of this Agreement or any
other Financing Document, together with such actions as are reasonably
incidental thereto. The provisions of this ARTICLE X are solely for
the benefit of the Agents and the Lenders, and neither the Borrower nor any
other Person shall have rights as a third party beneficiary of any of such
provisions.


 


(b)                                         Each Lender
(in its capacity as Lender and on behalf of itself and its Affiliates as a
potential Interest Rate Protection Provider) hereby appoints WestLB as its
Administrative Agent under and for purposes of each Financing Document to which
it is a party. WestLB hereby accepts this appointment and agrees to act as the
Administrative Agent for the Lenders in accordance with the terms of this
Agreement. Each Lender appoints and authorizes the Administrative Agent to act
on behalf of such Lender under each Financing Document to which it is a party
and, in the absence of other written instructions from the Required Lenders
received from time to time by the Administrative Agent (with respect to which the
Administrative Agent agrees that it will comply, except as otherwise provided
in this Section 10.01
or as otherwise advised by counsel), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof, together with such powers as may be
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in any Financing Document, the Administrative Agent shall
not have any duties or responsibilities except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into any
Financing Document or otherwise exist against the Administrative Agent. Without


 


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limiting the generality of the foregoing
sentence, the use of the term “agent” in this Agreement with reference to the
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable Law. Instead,
such term is used merely as a matter of market custom, and is intended to create
or reflect only an administrative relationship between independent contracting
parties.


 


(c)                                          Each Lender
(in its capacity as Lender and on behalf of itself and its Affiliates as a
potential Interest Rate Protection Provider) hereby appoints WestLB as its
Collateral Agent under and for purposes of each Financing Document to which it
is a party. WestLB hereby accepts this appointment and agrees to act as the
Collateral Agent for the Senior Secured Parties in accordance with the terms of
this Agreement. Each of the Lenders hereby irrevocably appoints and authorizes
the Collateral Agent to act as the agent of such Lender for purposes of
acquiring, holding and enforcing any and all Liens on Collateral granted by any
of the Borrower or the Pledgor to the Collateral Agent in order to secure any
of the Obligations, together with such powers and discretion as are reasonably
incidental thereto. In this connection any co-agents, sub-agents and
attorneys-in-fact appointed by the Collateral Agent pursuant to Section 10.05
(Delegation of Duties) for purposes
of holding or enforcing any Lien on the Collateral (or any portion thereof)
granted under the Security Documents, or for exercising any rights and remedies
thereunder at the direction of the Collateral Agent, as the case may be,
shall be entitled to the benefits of all provisions of this ARTICLE X
and ARTICLE XI (Miscellaneous Provisions)
(including Section 11.08 (Indemnification by the
Borrower), as though such co-agents, sub-agents and
attorneys-in-fact were the Collateral Agent under the Financing Documents. Notwithstanding
any provision to the contrary contained elsewhere in any Financing Document,
the Collateral Agent shall not have any duties or responsibilities except those
expressly set forth herein or in the other Financing Documents to which the
Collateral Agent is party, nor shall the Collateral Agent have or be deemed to
have any fiduciary relationship with the Borrower or any Senior Secured Party,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into any Financing Document or otherwise exist
against the Collateral Agent. Each of the Collateral Agent and the
Administrative Agent shall have the right at any time to seek instructions from
the Required Lenders or, in the case of the Collateral Agent, the
Administrative Agent as to any discretionary actions contemplated hereby or in
any other Financing Document or if this Agreement or any other Financing Document
is silent as to any matter requiring action by the Collateral Agent and shall
be fully protected in accordance with Section 10.03 (Exculpatory Provisions) and Section 10.04 (Reliance by Agents) when acting upon such instructions.
Any action taken by the Collateral Agent or the Administrative Agent under or
in relation to this Agreement and any other Financing


 


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Document to which it is party with requisite
authority or on the basis of appropriate instructions received from the Lenders
(other otherwise as duly authorized) shall be binding on each Lender and, in
the case of the Collateral Agent, each Interest Rate Protection Provider. Without
limiting the generality of the foregoing sentence, the use of the term “agent”
in this Agreement with reference to the Collateral Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.


 


(d)                                         Each Lender
(in its capacity as Lender and on behalf of itself and its Affiliates as a
potential Interest Rate Protection Provider) hereby appoints and authorizes the
Accounts Bank to act as depository for the Collateral Agent, on behalf of the
Senior Secured Parties, and as the securities intermediary or bank with respect
to the Project Accounts for the benefit of the Collateral Agent, on behalf of
the Senior Secured Parties, with such powers as are expressly delegated to the
Accounts Bank by the terms of this Agreement, together with such other powers
as are reasonably incidental thereto. The Accounts Bank hereby accepts this
appointment and agrees to act as the depository for the Collateral Agent, on
behalf of the Senior Secured Parties, and as the securities intermediary or
bank with respect to the Project Accounts, for the benefit of the Collateral
Agent, on behalf of the Senior Secured Parties, in accordance with the terms of
this Agreement. The Accounts Bank further agrees to accept and hold, as
securities intermediary or as a bank, in its custody and in accordance with the
terms of this Agreement, for the Collateral Agent, on behalf of the Senior
Secured Parties, the Project Accounts and the Accounts Property. Each Lender
also appoints and authorizes the Accounts Bank to act on its behalf for the
purpose of the creation and perfection of a first priority security interest in
favor of the Collateral Agent, on behalf of the Senior Secured Parties, in the
Project Accounts to the extent that they are deemed under applicable Law not to
constitute securities accounts or deposit accounts and in any Accounts Property
that is deemed under applicable Law not to constitute a Financial Asset. The
Accounts Bank accepts this appointment and agrees to act as the Accounts Bank
for the Collateral Agent, on behalf and for the benefit of the Senior Secured
Parties, for such purpose and to hold and maintain exclusive dominion and
control over the Project Accounts and any such Accounts Property on behalf of
the Collateral Agent, acting on behalf of the Senior Secured Parties. Notwithstanding
any provision to the contrary contained elsewhere in any Financing Document,
the Accounts Bank shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Accounts Bank have or be deemed to
have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into any Financing Document or otherwise exist against the Accounts Bank. Without
limiting the generality of the


 


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foregoing sentence, the use of the term “agent”
in this Agreement with reference to the Accounts Bank is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.


 


Section 10.02                               Rights as a Lender or
Interest Rate Protection Provider. Each Person serving as Agent hereunder
or under any other Financing Document shall have the same rights and powers in
its capacity as a Lender or Interest Rate Protection Provider, as the case may be,
as any other Lender or Interest Rate Protection Provider, as the case may be,
and may exercise the same as though it were not an Agent. Each such Person
and its Affiliates may accept deposits from, lend money to, act as the
financial advisor for or in any other advisory capacity for and generally
engage in any kind of business with the Borrower or Affiliates of the Borrower
as if such Person were not an Agent hereunder and without any duty to account
therefor to the Lenders, any other Agent or the Interest Rate Protection
Provider.


 


Section 10.03                               Exculpatory
Provisions. (a) No Agent nor any of its respective directors,
officers, employees or agents shall have any duties or obligations except those
expressly set forth herein and in the other Financing Documents to which it is
party. Without limiting the generality of the foregoing, no Agent shall:


 


(i)                               be
subject to any fiduciary or other implied duties, regardless of whether a
Default or Event of Default has occurred and is continuing;


 


(ii)                            have
any duty to take any discretionary action or exercise any discretionary powers
except discretionary rights and powers expressly contemplated hereby or by the
other Financing Documents to which it is party that such Agent is required to
exercise as directed in writing by the Required Lenders (or such other number
or percentage of the Lenders as shall be expressly provided for herein or in
such other Financing Documents); provided
that such Agent shall not be required to take any action that, in its opinion
or the opinion of its counsel, may expose the Agent to liability or that
is contrary to any Financing Document or applicable Law; and provided
further that no such direction given to such Agent that in the sole
judgment of such Agent imposes, or purports to impose, or might reasonably be
expected to impose upon such Agent any obligation or liability not set forth in
this Agreement or arising under this Agreement or other Financing Documents to
which it is party shall be binding upon


 


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such Agent unless such Agent,
in its sole discretion, accepts such direction;


 


(iii)                         except as
expressly set forth herein and in the other Financing Documents to which it is
party, have any duty to disclose, or be liable for any failure to disclose, any
information relating to the Borrower or any of its Affiliates that is
communicated to or obtained by the Person serving as an Agent or any of its
Affiliates in any capacity; or


 


(iv)                        be
required to institute any legal proceedings arising out of or in connection
with, or otherwise take steps to enforce, this Agreement or any other Financing
Document other than on the instructions of the Lenders.


 


(b)                                         No Agent nor
any of its respective directors, officers, employees or agents shall be liable
for any action taken or not taken by it (i) with the prior written consent
or at the request of the Required Lenders (or such other number or percentage
of the Lenders as may be necessary, or as such Agent may reasonably
believe in good faith to be necessary, under the circumstances as provided in Section 10.01 (Appointment and Authority)), (ii) in connection
with any amendment, consent, approval or waiver which it is permitted under the
Financing Documents to enter into, agree to or grant or (iii) in the
absence of its own gross negligence or willful misconduct. Each Agent shall be
deemed not to have knowledge of any Default or Event of Default unless and
until notice describing such Default or Event of Default is given to such Agent
in writing by the Borrower or a Lender.


 


(c)                                          No Agent nor
any of its respective directors, officers, employees or agents shall be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or any other Financing Document, (ii) the contents of any
certificate, report, opinion or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein  (including
the use of proceeds) or the occurrence or continuance of any Default or Event
of Default, (iv) the execution, validity, enforceability, effectiveness,
genuineness or admissibility into evidence of this Agreement, any other
Financing Document or any other agreement, instrument or document, or the
creation, perfection or priority of any Lien or security interest created or
purported to be created by any Security Document (or title to or rights in any
Collateral under any Security Document), or (v) the satisfaction of any
condition set forth in ARTICLE VI (Conditions Precedent)
or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to any such Agent.


 


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(d)                                         Each Agent
may, unless and until it shall have received directions from the Lenders, take
such action or refrain from taking such action in respect of a Default or Event
of Default of which such Agent has been advised in writing by the Lenders as it
shall reasonably deem advisable in the best interests of the Lenders (but shall
not be obligated to do so).


 


(e)                                          The
Collateral Agent may refrain from acting in accordance with any
instructions of the Lenders to institute any legal proceedings arising out of
or in connection with this Agreement or any other Financing Document until it
has been indemnified and/or secured to its satisfaction against any and all
costs, expenses or liabilities (including legal fees and expenses) which it
would or might reasonably be expected to incur as a result.


 


(f)                                            No Agent
shall be required to advance or expend any funds or otherwise incur any
financial liability in the performance of its duties or the exercise of its
powers or rights hereunder or under any Financing Document to which it is party
unless it has been provided with security or indemnity reasonably satisfactory
to it against any and all liability or expense which may be incurred by it
by reason of taking or continuing to take such action.


 


Section 10.04                               Reliance by Agents.
Each Agent shall be entitled to rely upon, and shall not (nor shall any of its
directors, officers, employees or agents) incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, internet or intranet website
posting or other distribution) reasonably believed by it to be genuine and to
have been signed, sent or otherwise authenticated by the proper Person. Each
Agent also may rely upon any statement made to it orally or by telephone
and reasonably believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. In determining compliance with any
condition hereunder to the making of a Loan that by its terms must be fulfilled
to the satisfaction of a Lender, each Agent may presume that such condition
is satisfactory to such Lender unless such Agent shall have received written
notice to the contrary from such Lender prior to the making of such Loan. Each
Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts reasonably selected by it,
and shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts. Each Agent may at
any time and from time to time solicit written instructions in the form of
directions from the Required Lenders or an order of a court of competent
jurisdiction as to any action that it may be requested or required to
take, or that it may propose to take, in the performance of any of its
obligations under this Agreement or any other Financing Document to which it is
party.


 


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Section 10.05                               Delegation of Duties.
Each Agent may perform any and all of its duties and exercise any and
all its rights and powers hereunder or under any other Financing Document by or
through any one or more sub-agents appointed by such Agent. Absent gross
negligence or willful misconduct in selecting a sub-agent, no Agent shall be
responsible for any action of, or failure to act by, any sub-agent that has
been approved by the Required Lenders. Each Agent and any such sub-agent may perform any
and all of its duties and exercise its rights and powers by or through their
respective Related Parties. The exculpatory provisions of this ARTICLE X
shall apply to any such sub-agent and to the Related Parties of such Agent and
any such sub-agent, and shall apply to their respective activities in
connection with their acting as Agent.


 


Section 10.06                               Resignation or
Removal of Agent. (a)  Any Agent may resign from the performance
of all its functions and duties hereunder and/or under the other Financing
Documents at any time by giving thirty (30) days’
prior notice to the Borrower and the Lenders. Any Agent may be removed at
any time by the Required Lenders. Such resignation or removal shall take effect
upon the appointment of a successor Agent, in accordance with this Section 10.06.


 


(b)                                         Upon any
notice of resignation by any Agent or upon the removal of any Agent by the
Required Lenders, the Required Lenders shall, in consultation with the Borrower
(provided that no Default or Event of Default has occurred and is continuing),
appoint a successor Agent hereunder and under each other Financing Document who
shall be a commercial bank having a combined capital and surplus of at least
two hundred fifty million Dollars ($250,000,000).


 


(c)                                          If no
successor Agent has been appointed by the Required Lenders within thirty
(30) days after the date such notice of resignation was given by such
Agent or the Required Lenders elected to remove such Agent, any Senior Secured
Party may petition any court of competent jurisdiction for the appointment
of a successor Agent. Such court may thereupon, after such notice, if any,
as it may deem proper, appoint a successor Agent, as applicable, who shall
serve as Agent hereunder and under each other Financing Document until such
time, if any, as the Required Lenders appoint a successor Agent, as provided
above.


 


(d)                                         Upon the
acceptance of a successor’s appointment as Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or removed) Agent, and the retiring (or removed)
Agent shall be discharged from all of its duties and obligations hereunder and under
the other Financing Documents. After the retirement or removal of any Agent
hereunder and under the other Financing Documents, the provisions of this ARTICLE X
shall continue in effect for the benefit of such retiring (or removed)


 


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Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any
of them while such Agent was acting as Agent.


 


(e)                                          If a retiring
(or removed) Agent is the Collateral Agent, such Collateral Agent will promptly
transfer any Collateral in the possession or control of such Collateral Agent
to the successor Collateral Agent and will, subject to payment of its
reasonable costs and expenses (including counsel fees and expenses), execute
and deliver such notices, instructions and assignments as may be
reasonably necessary or desirable to transfer the rights of the Collateral
Agent with respect to such Collateral property to the successor Collateral
Agent.


 


(f)                                            If a
retiring or removed Agent is the Accounts Bank, such Accounts Bank will
promptly transfer all of the Project Accounts and the Accounts Property to the
possession or control of the successor Accounts Bank and will execute and
deliver such notices, instructions and assignments as may be reasonably
necessary or desirable to transfer the rights of the Accounts Bank with respect
to the Project Accounts and the Accounts Property to the successor Accounts
Bank.


 


Section 10.07                               No Amendment to
Duties of Agent Without Consent. No Agent shall be bound by any waiver,
amendment, supplement or modification of this Agreement or any other Financing
Document that affects its rights or duties hereunder or thereunder unless such
Agent shall have given its prior written consent, in its capacity as Agent,
thereto.


 


Section 10.08                               Non-Reliance on Agent
and Other Lenders. Each Lender acknowledges that it has, independently and
without reliance upon any Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and make its Loans. Each Lender also acknowledges that it will,
independently and without reliance upon any Agent or any other Lender or any of
their Related Parties and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other
Financing Document or any related agreement or any document furnished hereunder
or thereunder.


 


Section 10.09                               No Lead Arranger or
Bookrunner Duties. Anything herein to the contrary notwithstanding, no Lead
Arranger or Bookrunner shall have any powers, duties or responsibilities under
this Agreement or any of the other Financing Documents, except in its capacity,
as applicable, as an Agent or a Lender hereunder.


 


Section 10.10                               Collateral Agent May File
Proofs of Claim. (a) In case of the pendency of any Insolvency or
Liquidation Proceeding relative to the Borrower or the


 


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Pledgor (including any event described in Section 9.01(i) (Events of Default – Bankruptcy, Insolvency),
the Collateral Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Collateral Agent or any other Senior Secured Party
shall have made any demand on the Borrower) shall be entitled and empowered,
but shall not be obligated, by intervention in such proceeding or otherwise:


 


(i)                               to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable
in order to have the claims of the Senior Secured Parties (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Senior Secured Parties and their respective agents and counsel and all other
amounts due the Senior Secured Parties under Section 3.13 (Fees), Section 11.06
(Costs and Expenses) and Section 11.08
(Indemnification by the Borrower))
allowed in such judicial proceeding; and


 


(ii)                            to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same.


 


(b)                                         Any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make
such payments to the Collateral Agent and, in the event that the Collateral
Agent consents to the making of such payments directly to the Lenders, to pay
to the Collateral Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Agents and their respective agents
and counsel, and any other amounts due the Agents under Section 3.13 (Fees), Section 11.06 (Costs and
Expenses) and Section 11.08 (Indemnification
by the Borrower).


 


(c)                                          Nothing
contained herein shall be deemed to authorize the Collateral Agent to authorize
or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Collateral Agent to
vote in respect of the claim of any Lender in any such proceeding.


 


Section 10.11                               Collateral Matters.
(a)  The Lenders irrevocably authorize the Collateral Agent to release any
Lien on any property granted to or held by the Collateral Agent under any
Financing Document for the benefit of the Senior Secured Parties (i) upon
the occurrence of the Discharge Date, (ii) if approved, authorized or
ratified in writing in accordance with Section 11.01 (Amendments, Etc.) or (iii) as


 


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permitted pursuant to the terms of the
Financing Documents (including as contemplated by Section 7.02(f) (Negative Covenants - Asset Dispositions)).


 


(b)                                         Upon request
by the Collateral Agent at any time and from time to time, the Lenders will
confirm in writing the Collateral Agent’s authority to release its interest in
particular types or items of property pursuant to this Section 10.11. In each case
as specified in this Section 10.11,
the Collateral Agent will, at the Borrower’s expense, execute and deliver to
the Borrower or the Pledgor, as the case may be, such documents as such
Person may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the Security
Documents in accordance with the terms of the Financing Documents and this Section 10.11.


 


(c)                                          Except for
the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder or under any of the other Financing
Documents to which it is party, the Collateral Agent shall have no duty as to
any Collateral, as to ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Collateral, whether or not the Collateral Agent is deemed to have knowledge of
such matters, or as to taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral (including the
filing of UCC continuation statements). The Collateral Agent shall be deemed to
have exercised appropriate and due care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which other collateral agents accord similar
property.


 


Section 10.12                               Copies. Each
Agent shall give prompt notice to each Lender of each material notice or
request required or permitted to be given to such Agent by the Borrower
pursuant to the terms of this Agreement or any other Financing Document (other
than instructions for the transfer of funds from Project Accounts or if
otherwise concurrently delivered to the Lenders by the Borrower) and copies of
all other communications received by such Agent from the Borrower for distribution
to the Lenders by such Agent in accordance with the terms of this Agreement or
any other Financing Document.


 


Section 10.13                               No Liability for
Clean-up of Hazardous Materials. If the Collateral Agent is required to
acquire title to an asset for any reason, or take any managerial action of any
kind in regard thereto, in order to carry out any duty or obligation for the
benefit of another, which in the Collateral Agent’s sole discretion may cause
the Collateral Agent to be considered an “owner or operator” under any
Environmental Laws or otherwise cause the Collateral Agent to incur, or be
exposed to, any Environmental Liabilities or any liability under any other
federal, state or local law,


 


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the Collateral Agent reserves the right,
instead of taking such action, either to resign as Collateral Agent or to
arrange for the transfer of the title or control of the asset to a
court-appointed receiver. The Collateral Agent will not be liable to any Person
for any Environmental Liabilities or any environmental claims or contribution
actions under any federal, state or local law, rule or regulation by
reason of the Collateral Agent’s action and conduct as authorized, empowered or
directed hereunder or relating to any kind of discharge or release or
threatened discharge or release of any Hazardous Materials into the
environment.


 


ARTICLE XI


 


MISCELLANEOUS PROVISIONS


 


Section 11.01                               Amendments, Etc. No
amendment or waiver of any provision of this Agreement or any other Financing
Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders (or, if expressly contemplated hereby, the Administrative Agent) and,
in the case of an amendment, the Borrower and in each such case acknowledged by
the Administrative Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given; provided
that no such amendment, waiver or consent shall:


 


(a)                                          extend or
increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Section 9.03(a) (Action Upon Other Event
of Default) without the prior written consent of such Lender
(other than any Non-Voting Lender or extend or increase the Aggregate Loan
Commitment);


 


(b)                                         postpone any
date scheduled for any payment of principal or interest under Section 3.01
(Repayment of Construction Loan Fundings),
Section 3.02 (Repayment of Term Loan Fundings) or Section 3.03
(Repayment of Working Capital Loan Fundings)  or Section 3.04
(Interest Payment Dates), or any date
fixed by the Administrative Agent for the payment of fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Financing Document
without the prior written consent of each Lender affected thereby (other than
any Non-Voting Lender);


 


(c)                                          reduce the
principal of, or the rate of interest specified herein on, any Loan, or any
Fees or other amounts (including the Required Cash Sweep or any other mandatory
prepayments under Section 3.10
(Mandatory Prepayment)) payable
hereunder or under any other Financing Document to any Lender without the prior
written consent of each Lender directly affected thereby (other than any
Non-Voting Lender); provided
that only the prior written consent of the Required Lenders shall be


 


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necessary to amend the definition of Default Rate or to waive any
obligation of the Borrower to pay interest at the Default Rate;


 


(d)                                         change the
order of application of any reduction in the Commitments or any prepayment of
Loans from the application thereof set forth in the applicable provisions of Section 2.07 (Termination or Reduction of Commitment), Section 3.09 (Optional Prepayment) or Section 3.10 (Mandatory Prepayment)
in any manner without the prior written consent of each Lender affected thereby
(other than any Non-Voting Lender);


 


(e)                                          change any
provision of this Section 11.01,
the definition of Required Lenders or any other provision of any Financing
Document specifying the number or percentage of Lenders required to amend,
waive or otherwise modify any rights under any Financing Document (including
any such provision specifying the number or percentage of Lenders required to
waive any Event of Default or forbear from taking any action or pursuing any
remedy with respect to any Event of Default), or make any determination or
grant any consent under any Financing Document, without the prior written
consent of each Lender (other than any Non-Voting Lender); or


 


(f)                                            release (i) the
Borrower from all or substantially all of its obligations (except for
obligations that are expressly covered in clause (a) - (e) above or (g) below)
under any Financing Document, or (ii) all or substantially all of the
Collateral in any transaction
or series of related transactions, without the prior written consent of
each Lender (other than any Non-Voting Lender); and provided  further
that (i) no amendment, waiver or consent shall, unless in writing and
signed by an Agent in addition to the Lenders required above, affect the rights
or duties of, or any fees or other amounts payable to, such Agent under this
Agreement or any other Financing Document; and (ii) Section 11.03(h) (Assignments) may not be amended, waived or
otherwise modified without the prior written consent of each Granting Lender
all or any part of whose Loan is being funded by an SPV at the time of
such amendment, waiver or other modification.


 


Notwithstanding
the other provisions of this Section 11.01,
the Borrower, the Collateral Agent and the Administrative Agent may (but
shall have no obligation to) amend or supplement the Financing Documents
without the consent of any Lender solely: (i) to cure any ambiguity,
defect or inconsistency; (ii) to make any change that would provide any
additional rights or benefits to the Lenders or (iii) to make, complete or
confirm any grant of Collateral permitted or required by this Agreement or any
of the Security Documents or any release of any Collateral that is otherwise
permitted under the terms of this Agreement and the Security Documents.


 


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Section 11.02                               Applicable Law;
Jurisdiction; Etc. (a) GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).


 


(b)                                         SUBMISSION
TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR
ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND THE BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. THE BORROWER AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER FINANCING DOCUMENT
SHALL AFFECT ANY RIGHT THAT ANY SENIOR SECURED PARTY MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.


 


(c)                                          WAIVER OF
VENUE. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT IN ANY COURT
REFERRED TO IN SECTION 11.02(b).
THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.


 


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(d)                                         Appointment
of Process Agent and Service of Process. The Borrower hereby irrevocably
appoints  CT Corporation, with an
office on the date hereof at 111 Eighth Avenue, New York, New York 10011, as
its agent to receive on behalf of itself services of copies of the summons and
complaint and any other process that may be served in any such action or
proceeding in the State of New York. If for any reason the Process Agent shall
cease to act as such for any Person, such Person hereby agrees to designate a
new agent in New York City on the terms and for the purposes of this Section 11.02 reasonably satisfactory to the
Administrative Agent. Such service may be made by mailing or delivering a
copy of such process to such Person in care of the Process Agent at the Process
Agent’s above address, and the Borrower hereby irrevocably authorizes and
directs the Process Agent to accept such service on its behalf. As an
alternative method of service, the Borrower also irrevocably consents to the
service of any and all process in any such action or proceeding by the air
mailing of copies of such process to such Person at its then effective notice
addresses pursuant to Section 11.11 (Notices and
Other Communications). Nothing in this Agreement shall affect
any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any other Financing Document in the
courts of any jurisdiction.


 


(e)                                          Immunity.
To the extent that the Borrower has or hereafter may acquire any immunity
from jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Borrower hereby irrevocably and unconditionally waives such immunity in respect
of its obligations under the Financing Documents and, without limiting the
generality of the foregoing, agrees that the waivers set forth in this Section 11.02(e) shall
have the fullest scope permitted under the Foreign Sovereign Immunities Act of
1976 of the United States and are intended to be irrevocable for purposes of
such Act.


 


(f)                                            WAIVER
OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS


 


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AGREEMENT AND THE OTHER FINANCING DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.02.


 


Section 11.03                               Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of
each Agent and Lender, and no Lender may assign or otherwise transfer any
of its rights or obligations hereunder except (i) to an Eligible Assignee
in accordance with Section 11.03(b),
(ii) by way of participation in accordance with Section 11.03(d), (iii) by way of pledge or
assignment of a security interest subject to the restrictions of Section 11.03(f), or (iv) to
an SPV in accordance with the provisions of Section 11.03(h) (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, express or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in this Section 11.03 and, to the extent expressly
contemplated hereby, the Related Parties of each Agent and Lender) any legal or
equitable right, remedy or claim under or by reason of this Agreement.


 


(b)                                         Any Lender may at
any time after the date hereof assign to one or more Eligible Assignees all or
a portion of its rights and obligations under this Agreement (including all or
a portion of its Commitment and the Loans at the time owing to it); provided
that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or
an Approved Fund with respect to a Lender, the Commitment (which for this
purpose includes the Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the
Loans of the assigning Lender subject to each such assignment, determined as of
the date the Lender Assignment Agreement with respect to such assignment is
delivered to the Administrative Agent or, if “Trade Date”
is specified in the Lender Assignment Agreement, as of the Trade Date, shall
not be less than three million Dollars ($3,000,000) and in integral multiples
of one million Dollars ($1,000,000) in excess thereof, unless the
Administrative Agent otherwise consents in writing; (ii) each partial
assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement with respect
to the Loan or the Commitment assigned; (iii) the parties to each
assignment shall execute and deliver to the Administrative Agent a Lender
Assignment Agreement, together with a processing and recordation fee of two
thousand five hundred Dollars ($2,500); provided that (A) no such
fee shall be payable in the case of an assignment to a Lender, an Affiliate of
a Lender or an Approved Fund with respect to a Lender and (B) in the case
of


 


137

















 


contemporaneous assignments by a Lender to
one or more Approved Funds managed by the same investment advisor (which
Approved Funds are not then Lenders hereunder), only a single such two thousand
five hundred Dollar ($2,500) fee shall be payable for all such contemporaneous
assignments and (iv) the Eligible Assignee, if it is not a Lender prior to
such assignment, shall deliver to the Administrative Agent an administrative
questionnaire. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to Section 11.03(c), on and
after the effective date specified in each Lender Assignment Agreement, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Lender Assignment Agreement, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Lender
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of a Lender Assignment Agreement covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 4.01
(Eurodollar Rate Lending Unlawful), Section 4.03 (Increased Eurodollar Loan Costs), Section 4.05 (Funding Losses), Section 11.06 (Costs and Expenses) and Section 11.08 (Indemnification by the Borrower) with respect to facts
and circumstances occurring prior to the effective date of such assignment). Upon
request, the Borrower (at its expense) shall execute and deliver a Note to the
assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 11.03(b) shall
be treated for purposes of this Agreement as a sale by such Lender of a participation
in such rights and obligations in accordance with Section 11.03(d).


 


(c)                                          The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s office a copy of each
Lender Assignment Agreement delivered to it and a register for the recordation
of the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from
time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Agents and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower at any
reasonable time and from time to time upon reasonable prior notice. In
addition, at any time that a request for a consent for a material or other
substantive change to the Financing Documents is pending, any Lender may request
and receive from the Administrative Agent a copy of the Register.


 


(d)                                         Any Lender may at
any time, without the consent of, or notice to, the Borrower or any Agent, sell
participations to any Person (each, a “Participant”) in all or a portion
of such Lender’s rights and/or obligations under this Agreement


 


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(including all or a portion of its Commitment
and/or the Loans owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrower, the Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of
the Participant, agree to any amendment, waiver or other modification described
in the first proviso to Section 11.01 (Amendments, Etc.)
that directly affects such Participant. Subject to Section 11.03(e), the Borrower agrees that each
Participant shall be entitled to the benefits of Section 4.01 (Eurodollar Rate Lending
Unlawful), Section 4.03
(Increased Eurodollar Loan Costs) and
Section 4.05 (Funding Losses), to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 11.03(b). To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.14 (Right of Setoff)
as though it were a Lender; provided
such Participant agrees to be subject to Section 3.15 (Sharing of Payments)
as though it were a Lender.


 


(e)                                          A Participant
shall not be entitled to receive any greater payment under Section 4.01 (Eurodollar Rate Lending Unlawful) or Section 4.03 (Increased Eurodollar Loan Costs) than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
participant is made with the prior written consent of the Borrower.


 


(f)                                            Any Lender may at
any time pledge or assign a security interest in all or any portion of its rights
under this Agreement (including under its Notes, if any) to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.


 


(g)                                         The words “execution,” “signed,” “signature,”
and words of like import in any Lender Assignment Agreement shall be deemed to
include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as
a manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any applicable
Law, including the Federal Electronic Signatures in Global and National
Commerce Act, the New York State Electronic Signatures and


 


139

















 


Records Act, or any other similar state laws
based on the Uniform Electronic Transactions Act.


 


(h)                                         Notwithstanding
anything to the contrary contained herein, any Lender (a “Granting Lender”)
may grant to a special purpose funding vehicle identified as such in
writing from time to time by the Granting Lender to the Administrative Agent
and the Borrower (an “SPV”) the option to provide all or any part of
any Loan that such Granting Lender would otherwise be obligated to make
pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPV to fund
any Loan, and (ii) if an SPV elects not to exercise such option or
otherwise fails to make all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof or, if it
fails to do so, to make such payment to the Administrative Agent as is required
under Section 3.15 (Sharing of Payments). Each party hereto hereby agrees
that (A) neither the grant to any SPV nor the exercise by any SPV of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of the Borrower under this Agreement (including their obligations
under Section 4.03 (Increased Eurodollar Loan Costs), (B) no SPV shall
be liable for any indemnity or similar payment obligation under this Agreement
for which a Lender would be liable, and (C) the Granting Lender shall for
all purposes, including the approval of any amendment, waiver or other
modification of any provision of any Financing Document, remain the lender of
record hereunder. The making of a Loan by an SPV hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender. In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one (1) year and one (1) day
after the payment in full of all outstanding commercial paper or other senior
debt of any SPV, it will not institute against, or join any other Person in
instituting against, such SPV in any Insolvency or Liquidation Proceeding under
the laws of the United States or any State thereof. Notwithstanding anything to
the contrary contained herein, any SPV may (1) with notice to, but
without prior consent of the Administrative Agent and without paying any
processing fee therefor, assign all or any portion of its right to receive
payment with respect to any Loan to the Granting Lender and (2) disclose
on a confidential basis any non-public information relating to its funding of
any Loan to any rating agency, commercial paper dealer or provider of any
surety or Guarantee or credit or liquidity enhancement to such SPV.


 


Section 11.04                               Benefits of Agreement.
Nothing in this Agreement or any other Financing Document, express or implied,
shall give to any Person, other than the parties hereto and thereto, and each
of their successors and permitted assigns under this Agreement or any other
Financing Document, any benefit or any legal or equitable right or remedy under
this Agreement.


 


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Section 11.05                               Consultants. (a) The
Required Lenders acting jointly or the Administrative Agent may, in
consultation with the Borrower (provided that no Default or Event of Default
has occurred and is continuing), appoint any Consultant for the purposes
specified herein. If any of the Consultants is removed or resigns and thereby
ceases to act for purposes of this Agreement and the other Financing Documents,
the Required Lenders acting jointly or the Administrative Agent, as the case may be,
shall, in consultation with the Borrower (provided that no Default or Event of
Default has occurred and is continuing), designate a Consultant in replacement.


 


(b)                                         The Borrower
shall reimburse each Consultant appointed hereunder for the reasonable fees and
documented expenses of such Consultant retained on behalf of the Lenders
pursuant to this Section 11.05.


 


(c)                                          In all cases
in which this Agreement provides for any Consultant to “agree,” “approve,”
“certify” or “confirm” any report or other document or
any fact or circumstance, such Consultant may make the determinations and
evaluations required in connection therewith based upon information provided by
the Borrower or other sources reasonably believed by such Consultant to be
knowledgeable and responsible, without independently verifying such
information; provided
that, notwithstanding the foregoing, such Consultant shall engage in such
independent investigations or findings as it may from time to time deem
necessary in its reasonable discretion to support the determinations and
evaluations required of it.


 


Section 11.06                               Costs and Expenses.
The Borrower shall pay (a) all reasonable and documented out-of-pocket
expenses incurred by the Lead Arranger, the Lenders and the Agents (including
all reasonable fees, costs and expenses of counsel for any Agent), in
connection with the preparation, negotiation, syndication, execution and
delivery of this Agreement and the other Financing Documents (whether or not
the transactions contemplated hereby or thereby are consummated); (b) all
reasonable out-of-pocket expenses incurred by the Lenders and the Agents
(including all reasonable fees, costs and expenses of counsel for any Agent),
in connection with any amendments, modifications or waivers of the provisions
of this Agreement and the other Financing Documents (whether or not the
transactions contemplated hereby or thereby are consummated); (c) all
reasonable out-of-pocket expenses incurred by the Agents (including all
reasonable fees, costs and expenses of counsel for any Agent), in connection
with the administration of this Agreement and the other Financing Documents
(whether or not the transactions contemplated hereby or thereby are
consummated); and (d) all out-of-pocket expenses incurred by the Agents or
any Lender (including all fees, costs and expenses of counsel for any Senior
Secured Party), in connection with the enforcement or protection of its rights
in connection with this Agreement and the other Financing Documents, including
its rights under this Section 11.06,
including in connection with any workout, restructuring or negotiations in
respect of the Obligations.


 


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Section 11.07                               Counterparts;
Effectiveness. This Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement shall become effective when it has been
executed by the Administrative Agent and when the Administrative Agent has
received counterparts hereof that, when taken together, bear the signatures of
each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or portable document format (“pdf”) shall
be effective as delivery of a manually executed counterpart of this
Agreement.


 


Section 11.08                               Indemnification by
the Borrower. (a) In addition to the indemnity by the Borrower set
forth in Section 10.11(f) (Notices
and Other Communications) and except for Taxes (which are
addressed in Section 4.07 (Taxes)),
the Borrower hereby agrees to indemnify each Agent (and any sub-agent thereof),
each Lender and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses (including all reasonable fees, costs and expenses of counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrower arising out of, in connection with, or as a
result of:


 


(i)                              the
execution or delivery of this Agreement, any other Transaction Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or thereby;


 


(ii)                           any
Loan or the use or proposed use of the proceeds therefrom;


 


(iii)                        any actual
or alleged presence, release or threatened release of Materials of
Environmental Concern on or from the Project or any property owned, leased or
operated by the Borrower, or any liability pursuant to an Environmental Law
related in any way to the Project, the Site or the Borrower;


 


(iv)                       any actual
or prospective claim, litigation, investigation or proceeding relating to any
of the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower or any of the Borrower’s members,
managers, or creditors, and regardless of whether any Indemnitee is a party
thereto and whether or not any of the transactions contemplated


 


142

















 


hereunder or under any of the other Financing
Documents is consummated, in all cases, whether or not caused by or arising, in
whole or in part, out of the comparative, contributory or sole negligence of
the Indemnitee; and/or


 


(v)                          any
claim, demand or liability for broker’s or finder’s or placement fees or
similar commissions, whether or not payable by the Borrower, alleged to have
been incurred in connection with such transactions, other than any broker’s or
finder’s fees payable to Persons engaged by the Lenders or the Agents without
the Knowledge of the Borrower;


 


provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and Non-Appealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.


 


(b)                                         To the extent
that the Borrower for any reason fails to indefeasibly pay any amount required
under Section 11.08(a) to
be paid by it to any Agent (or any sub-agent thereof) or any Related Party of
any of the foregoing, each Lender severally agrees to pay to such Agent (or any
such sub-agent), or such Related Party, as the case may be, such Lender’s
ratable share (determined as of the time that the applicable unreimbursed
expense or indemnity payment is sought) of such unpaid amount; provided that
the unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such
Agent (or any sub-agent thereof) in its capacity as such, or against any
Related Party of any of the foregoing acting for such Agent (or any sub-agent
thereof) in connection with such capacity. The obligations of the Lenders to
make payments pursuant to this Section 11.08(b) are
several and not joint and shall survive the payment in full of the Obligations
and the termination of this Agreement. The failure of any Lender to make payments
on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to do so.


 


(c)                                          Except as
otherwise provided in ARTICLE VI (Conditions Precedent),
all amounts due under this Section 11.08 shall be payable not later than ten (10) Business
Days after demand therefor.


 


Section 11.09                               Interest Rate
Limitation. Notwithstanding anything to the contrary contained in any
Financing Document, the interest paid or agreed to be paid under the Financing
Documents shall not exceed the maximum rate of non-usurious interest permitted
by applicable Law (the “Maximum Rate”). If any Agent or any Lender


 


143

















 


shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.
In determining whether the interest contracted for, charged, or received by any
Agent or any Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude
prepayments and the effects thereof, and (c) amortize, prorate, allocate,
and spread in equal or unequal parts the total amount of interest throughout
the contemplated term of the Obligations hereunder.


 


Section 11.10                               No Waiver; Cumulative
Remedies. No failure by any Senior Secured Party to exercise, and no delay
by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Financing Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided, and provided under each other Financing
Document, are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.


 


Section 11.11                               Notices and Other
Communications. (a)  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in Section 11.11(b)),
all notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopier or electronic mail as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:


 


(i)                              if
to the Borrower or any Agent, to the address, telecopier number, electronic
mail address or telephone number specified for such Person on Schedule 11.11(a);


 


(ii)                           if to
any Lender, to the address, telecopier number, electronic mail address or
telephone number specified in its administrative questionnaire; and


 


(iii)                         if to any
Interest Rate Protection Provider, to the address, telecopier, number,
electronic mail address or telephone number specified on Schedule 11.11(a).


 


(b)                                         Notices sent
by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received;


 


144

















 


notices sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices delivered through
electronic communications to the extent provided in Section 11.11(d) shall
be effective as provided in Section 11.11(d).


 


(c)                                          Notices and
other communications to the Lenders or any Agent hereunder may be
delivered or furnished by electronic communication (including e-mail and
internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, and in the case of notices to the Collateral Agent, by
the Collateral Agent as well; provided
that the foregoing shall not apply to notices to any Lender pursuant to ARTICLE II
(Commitments and Funding) if such
Lender has so notified the Administrative Agent. Each of the Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided
that approval of such procedures may be limited to particular notices or
communications.


 


(d)                                         Unless the
Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested”
function, as available, return e-mail or other written acknowledgement); provided that if such notice or
other communication is not received during the normal business hours of the
recipient, such notice or communication shall be deemed to have been received
at the opening of business on the next Business Day for the recipient, and (ii) notices
or communications posted to an internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in Section 11.11(d)(i) of
notification that such notice or communication is available and identifying the
website address therefor.


 


(e)                                          Each of the
Borrower and the Agents may change its address, telecopier or telephone
number for notices and other communications hereunder by notice to the other
parties hereto. Each Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to
the Borrower and each Agent.


 


(f)                                            The Agents
and the Lenders shall be entitled to rely and act upon any written notices
purportedly given by or on behalf of the Borrower even if (i) such notices
were not made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof. The


 


145

















 


Borrower shall indemnify each Lender and the
Related Parties of each of them from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to
and other telephonic communications with any Agent may be recorded by such
Agent, and each of the parties hereto hereby consents to such recording.


 


(g)                                         So long as
WestLB is the Administrative Agent, the Borrower hereby agrees that it will
provide to the Administrative Agent all information, documents and other
materials that it is obligated to furnish to the Administrative Agent pursuant
to the Financing Documents, including all notices, requests, financial
statements, financial and other reports, certificates and other information
materials, but excluding any such communication that (i) relates to the
Funding, (ii) relates to the payment of any principal or other amount due
under this Agreement prior to the scheduled date therefor, (iii) provides
notice of any Default or Event of Default or (iv) is required to be
delivered to satisfy any condition precedent to Funding (all such non-excluded
communications being referred to herein collectively as “Communications”),
by transmitting the Communications in an electronic/soft medium in a format acceptable
to the Administrative Agent to ny_agency services@westlb.com. In addition, the
Borrower agrees to continue to provide the Communications to the Administrative
Agent in the manner specified in the Financing Documents but only to the extent
requested by the Administrative Agent.


 


(h)                                         So long as
WestLB is the Administrative Agent, the Borrower further agrees that the
Administrative Agent may make the Communications available to the Lenders
by posting the Communications on http: www.intralinks.com (or any
replacement or successor thereto) or a substantially similar electronic
transmission systems (the “Platform”).


 


(i)                                             THE PLATFORM IS
PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENTS DO NOT WARRANT THE ACCURACY OR
COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE
AGENTS IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL
THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY
LENDER OR ANY OTHER


 


146

















 


PERSON OR ENTITY FOR DAMAGES OF ANY KIND,
INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF THE
BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH
THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN
A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.


 


(j)                                             The
Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth in Schedule 10.11(a) shall
constitute effective delivery of the Communications to the Administrative Agent
for purposes of the Financing Documents. Each Lender agrees that notice to it
(as provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the
Communications to such Lender for purposes of the Financing Documents. Each
Lender agrees to notify the Administrative Agent in writing (including by
electronic communication) from time to time of such Lender’s e-mail address to
which the foregoing notice may be sent by electronic transmission and that
the foregoing notice may be sent to such e-mail address.


 


(k)                                          Notwithstanding
clauses (g) to (j) above, nothing herein shall prejudice the
right of any Agent or Lender to give any notice or other communication pursuant
to any Financing Document in any other manner specified in such Financing
Document.


 


Section 11.12                               Patriot Act Notice.
Each Senior Secured Party (for itself and not on behalf of any other) hereby
notifies the Borrower that pursuant to the requirements of the Patriot Act, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Senior Secured Party, to identify the
Borrower in accordance with the Patriot Act.


 


Section 11.13                               Payments Set Aside.
To the extent that any payment by or on behalf of the Borrower is made to any
Agent or Lender, or any Agent or Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by such Agent or Lender in
its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency or Liquidation Proceeding or otherwise, then (a) to
the extent of such recovery, the Obligation or part thereof originally
intended to be satisfied shall be revived


 


147

















 


and continued in full force and effect as if
such payment had not been made or such setoff had not occurred, and (b) each
Lender severally agrees to pay to each Agent upon demand its applicable share
(without duplication) of any amount so recovered from or repaid by such Agent,
plus interest thereon from the date of such demand to the date such payment is
made at a rate per annum equal to
the Federal Funds Effective Rate from time to time in effect. The obligations
of the Lenders under Section 11.13(b) shall survive the payment in full
of the Obligations and the termination of this Agreement.


 


Section 11.14                               Right of Setoff. Each
Lender and each of its respective Affiliates is hereby authorized at any time
and from time to time during the continuance of an Event of Default, to the
fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender or any such Affiliate to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement or any other Financing Document
to such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Financing Document and although such
obligations of the Borrower may be contingent or unmatured or are owed to
a branch or office of such Lender different from the branch or office holding
such deposit or obligated on such indebtedness. The rights of each Lender and
their respective Affiliates under this Section 11.14 are in
addition to other rights and remedies (including other rights of setoff) that
such Lender or their respective Affiliates may have. Each Lender agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff
and application; provided that the failure to give such notice shall not
affect the validity of such setoff and application.


 


Section 11.15                               Severability. If
any provision of this Agreement or any other Financing Document is held to be
illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other
Financing Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.


 


Section 11.16                               Survival. Notwithstanding
anything in this Agreement to the contrary, Section 11.06 (Costs and
Expenses) and Section 11.08
(Indemnification by the Borrower)
shall survive any termination of this Agreement. In addition, each
representation and warranty made hereunder and in any other Financing Document
or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such


 


148

















 


representations and warranties have been or
will be relied upon by each Agent and each Lender, regardless of any
investigation made by any Agent or any Lender or on their behalf and
notwithstanding that any Agent or any Lender may have had notice or
knowledge of any Default or Event of Default at the time of the Funding, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder or under any other Financing Document shall remain unpaid
or unsatisfied.


 


Section 11.17                               Treatment of Certain
Information; Confidentiality. Each of the Agents and the Lenders agrees to
maintain the confidentiality of the Information, except that Information may be
disclosed (a) to its Affiliates and to its Affiliates’ respective
partners, directors, officers, employees, agents, advisors (including legal
counsel and financial advisors) and representatives (it being understood that
the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested or required by any regulatory
authority purporting to have jurisdiction over it; (c) to the extent
required by applicable Law or regulations or by any subpoena or similar legal
process; (d) to any other party to this Agreement; (e) in connection
with the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder (including
any actual or prospective purchaser of Collateral); (f) subject to an
agreement containing provisions substantially the same as those of this Section 11.17,
to (i) any Eligible Assignee of or Participant in, or any prospective
Eligible Assignee of or Participant in, any of its rights or obligations under
this Agreement, (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty’s or prospective
counterparty’s professional advisor) to any credit derivative transaction
relating to obligations of the Borrower or (iii) any Person (and any of
its officers, directors, employees, agents or advisors) that may enter
into or support, directly or indirectly, or that may be considering
entering into or supporting, directly or indirectly, either (A) contractual
arrangements with such Agent or Lender, or any Affiliates thereof, pursuant to
which all or any portion of the risks, rights, benefits or obligations under or
with respect to any Loan or Financing Document is transferred to such Person or
(B) an actual or proposed securitization or collateralization of, or
similar transaction relating to, all or a part of any amounts payable to
or for the benefit of any Lender under any Financing Document (including any
rating agency); (g) with the consent of the Borrower; (h) to the
extent such Information (i) becomes publicly available other than as a
result of a breach of this Section 11.17 or (ii) becomes
available to any Agent, any Lender or any of their respective Affiliates on a
non-confidential basis from a source other than the Borrower; (i) to any
state, federal or foreign authority or examiner (including the National
Association of Insurance Commissioners or any other similar organization)
regulating any Lender; or (j) to any rating agency when required by it (it
being understood that, prior to any such disclosure, such rating agency shall
undertake to preserve the confidentiality of any Information


 


149

















 


relating to the Borrower received by it from
such Lender). In addition, any Agent and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to the Agents and the Lenders in connection with the administration
and management of this Agreement, the other Financing Documents, the
Commitments, and the Funding. For the purposes of this Section 11.17,
“Information” means written information that the Borrower furnishes to
any Agent or Lender after the date hereof (and designated at the time of
delivery thereof in writing as confidential) pursuant to or in connection with
any Financing Document, relating to the assets and business of the Borrower,
but does not include any such information that (i) is or becomes generally
available to the public other than as a result of a breach by such Agent or
Lender of its obligations hereunder, (ii) is or becomes available to such
Agent or Lender from a source other than the Borrower that is not, to the
knowledge of such Agent or Lender, acting in violation of a confidentiality
obligation with the Borrower or (iii) is independently compiled by any
Agent or Lender, as evidenced by their records, without the use of the
Information. Any Person required to maintain the confidentiality of Information
as provided in this Section 11.17 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.


 


Section 11.18                               Waiver of
Consequential Damages, Etc. Except as otherwise provided in Section 11.08 (Indemnification by Borrower) for the
benefit of any Indemnitee, to the fullest extent permitted by applicable Law,
the Borrower shall not assert, and the Borrower hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Financing Document or any agreement or instrument contemplated hereby,
the transactions contemplated hereby or thereby, any Loan or the use of the
proceeds thereof. No Indemnitee shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Financing
Documents or the transactions contemplated hereby or thereby.


 


Section 11.19                               Non-Recourse. The
Loans are the obligations solely of the Borrower, and the Senior Secured
Parties will have access only to the Collateral for repayment. The obligations
of the Borrower and the other Loan Parties are limited to those specifically stated
in the Financing Documents to which each such entity is a party and, except to
the extent expressly set forth in such Financing Documents, the Loan Parties
other than the Borrower have no direct obligation with respect to the payment
of the Loans.


 


150

















 


[Remainder of page intentionally
blank. Next page is signature page.]


 


151
















 


IN WITNESS WHEREOF, the
parties hereto have caused this Credit Agreement to be executed by their
respective officers as of the day and year first above written.


 


 


	
   

  	
  NOVA BIOFUELS SENECA, LLC,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ J.D. McGraw

  	
   

  
	
   

  	
   

  	
  Name: J.D. McGraw

  
	
   

  	
   

  	
  Title:   President

  



 

















 


	
   

  	
  WESTLB AG, NEW YORK BRANCH,

  
	
   

  	
  as Lead Arranger and Sole Bookrunner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ James Anderson

  	
   

  
	
   

  	
        Name: James
  Anderson

  
	
   

  	
        Title:   Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul Vastola

  	
   

  
	
   

  	
        Name: Paul
  Vastola

  
	
   

  	
        Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WESTLB
  AG, NEW YORK BRANCH,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ James Anderson

  	
   

  
	
   

  	
        Name: James
  Anderson

  
	
   

  	
        Title:   Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul Vastola

  	
   

  
	
   

  	
        Name: Paul
  Vastola

  
	
   

  	
        Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WESTLB
  AG, NEW YORK BRANCH,

  
	
   

  	
  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ James Anderson

  	
   

  
	
   

  	
        Name: James
  Anderson

  
	
   

  	
        Title:   Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul Vastola

  	
   

  
	
   

  	
        Name: Paul
  Vastola

  
	
   

  	
        Title:   Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WESTLB
  AG, NEW YORK BRANCH,

  
	
   

  	
  as Issuing Bank

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ James Anderson

  	
   

  
	
   

  	
        Name: James
  Anderson

  
	
   

  	
        Title:   Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul Vastola

  	
   

  
	
   

  	
        Name: Paul
  Vastola

  
	
   

  	
        Title:   Director

  



 

















 


	
   

  	
  STERLING
  BANK,

  
	
   

  	
  as Accounts Bank

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Peter M. Ellen

  	
   

  
	
   

  	
        Name: Peter M.
  Ellen

  
	
   

  	
        Title:   Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Allen D. Brown

  	
   

  
	
   

  	
        Name: Allen D.
  Brown

  
	
   

  	
        Title:   Executive
  Vice President

  



 
















 


Execution Version


 


Exhibit A


 


“Acceptable Bank”
means a bank whose long-term unsecured and unguaranteed debt is rated at least “A-”
(or the then-equivalent rating) by S&P or at least “A3” (or the
then-equivalent rating) by Moody’s.


 


“Account Collateral”
means all Collateral relating to the Project Accounts.


 


“Account Debtor”
means the Person that is obligated on or under any Account owing to the
Borrower.


 


“Accounts” means all “accounts”
as that term is defined in Section 9-102 of the UCC, now or hereafter
owned by the Borrower.


 


“Accounts Bank” means
Sterling Bank, a Texas banking corporation, not in its individual capacity, but
solely as depositary bank and securities intermediary, and includes each other
Person that may, from time to time, be appointed as successor Accounts Bank.


 


“Accounts Property”
means any funds, instruments, securities, financial assets or other assets from
time to time held in any of the Project Accounts or credited thereto or
otherwise in possession or control of the Accounts Bank pursuant to this
Agreement.


 


“Additional Project
Document” means each contract, agreement, letter agreement or other
instrument to which the Borrower becomes a party after the date hereof, other
than any document under which (a) the Borrower could not reasonably be
expected to have obligations or liabilities in the aggregate in excess of one
million Dollars ($1,000,000), or be entitled to receive revenues in the
aggregate in excess of one million Dollars ($1,000,000), in either case in
value in any twelve (12) month period and (b) a termination of which
could not reasonably be expected to result in a Material Adverse Effect; provided,
that for the purposes of this definition, any series of related transactions
(other than transactions, including hedging transactions, relating to the sale
of Products or the purchase of feedstock and natural gas) shall be considered
as one transaction, and all contracts, agreements, letter agreements or other
instruments in respect of such transactions shall be considered as one
contract, agreement, letter agreement or other instrument, as applicable.


 


“Administrative Agent”
means WestLB, not in its individual capacity but solely as administrative agent
for the Lenders hereunder and under the other Financing Documents, and includes
each other Person that may, from time to time, be appointed as successor
Administrative Agent pursuant to Section 10.06 (Resignation
or Removal of Agent).


 

















 


“Affiliate” of any
Person means any other Person that, directly or indirectly, controls, is controlled
by or is under common control with such Person. A Person shall be deemed to be “controlled
by” any other Person if such other Person (a) possesses, directly or
indirectly, power to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise or (b) owns at
least ten percent (10%) of the Equity Interests in such Person.


 


“Affiliate Loan”
means any loan made by the Pledgor to the Borrower and evidenced by grid note
in form and substance reasonably satisfactory to the Administrative Agent;
provided, that each such Affiliate Loan is subject to the Subordination
Agreement and the Pledgor’s rights with respect to each such Affiliate Loan are
pledged to the Collateral Agent pursuant to the Pledge of Affiliate Loans.


 


“Agents” means,
collectively, the Administrative Agent, the Collateral Agent, the Issuing Bank
and the Accounts Bank.


 


“Aggregate Construction
Loan Commitment” means thirty-six million Dollars ($36,000,000), as the
same may be reduced in accordance with Section 2.07 (Termination or Reduction of Commitments).


 


“Aggregate Loan
Commitment” means the sum of the Aggregate Term Loan Commitment and the
Aggregate Working Capital Loan Commitment.


 


“Aggregate Term Loan
Commitment” means thirty-six million Dollars ($36,000,000), as the same may
be reduced in accordance with Section 2.07 (Termination
or Reduction of Commitments).


 


“Aggregate Working Capital
Loan Commitment” means five million Dollars ($5,000,000), as the same may be
reduced in accordance with Section 2.07 (Termination
or Reduction of Commitments).


 


“Agreement” has the
meaning set forth in the Preamble.


 


“Agricultural Market
Consultant” means Highquest Partners, or any replacement agricultural
market consultant appointed by the Administrative Agent.


 


“Ancillary Documents”
means, with respect to each Additional Project Document, the following, each of
which shall be in form and substance reasonably satisfactory to the
Administrative Agent and, in the case of items (i), (ii) and (iv), the
Collateral Agent:


 


(i)                              each
security instrument and agreement necessary or desirable to grant to the
Collateral Agent a first
priority perfected Lien 


 


2

















 


(subject only to Permitted Liens) in such Additional Project Document
and all property interests received by the Borrower in connection therewith;


 


(ii)                           all
recorded UCC financing statements and other filings required to perfect such
Lien;


 


(iii)                        if
reasonably requested by the Administrative Agent, opinions of counsel for the
Borrower addressing such matters relating to such document, each applicable
Security Document and Lien as the Administrative Agent may reasonably request;


 


(iv)                       if
reasonably requested by the Administrative Agent, a Consent with respect to such
Additional Project Document from each Project Party thereto and an opinion of
counsel to such Project Party addressing matters relating to such Additional
Project Document and such Consent as the Administrative Agent may reasonably
request; and


 


(v)                          certified
evidence of the authorization of such Additional Project Document by the
Borrower.


 


“Applicable Margin”
means, with respect to the Construction Loans or Term Loans, the
Construction/Term Applicable Margin and, with respect to the Working Capital
Loans, the Working Capital Applicable Margin.


 


“Approved Fund”
means, with respect to any Lender that is a fund that invests in commercial
loans, any other fund that invests in commercial loans and is managed or
advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.


 


“Approved Management Fees”
means any fees (excluding any special fees, bonus payments or similar amounts)
payable pursuant to the Operation and Maintenance Agreement that are expressly
identified as such and (i) are included in an Operating Budget that has
been approved by the Administrative Agent pursuant to Section 7.01(j)
(Affirmative Covenants – Operating Budget)
or (ii) have been expressly approved by the Administrative Agent in
writing.


 


“Approved Performance
Test Protocols” means the protocols for conducting Performance Tests set
forth in Schedule 7.01(k) as the same may be updated or amended
with the prior written consent of the Independent Engineer and Administrative
Agent.


 


3

















 


“Auditors” means
those nationally recognized independent auditors selected by the Borrower and
approved by the Administrative Agent.


 


“Authorized Officer”
means (i) with respect to any Person that is a corporation, the chief executive
officer, the chief operating officer, the president, any vice president, the
treasurer or the chief financial officer of such Person, (ii) with respect
to any Person that is a partnership, an Authorized Officer of a general partner
of such Person, (iii) with respect to any Person that is a limited
liability company, any manager, the president, any vice president, the
treasurer or the chief financial officer of such Person, or an Authorized
Officer of the managing member of such Person, or (iv) with respect to any
Person, such other representative of such Person that is approved by the
Administrative Agent in writing who, in each such case, has been named as an
Authorized Officer on a certificate of incumbency of such Person delivered to
the Administrative Agent and the Accounts Bank on or after the date hereof.


 


“Base Rate” means,
for any day, a fluctuating rate per annum
equal to the higher of (i) the Federal Funds Effective Rate plus one-half of one percent
(0.50%) and (ii) the rate of interest in effect for such day as
publicly announced from time to time by WestLB as its “prime rate.”  The “prime rate” is a rate set by WestLB based upon various factors
including WestLB’s costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in such rate
announced by WestLB shall take effect at the opening of business on the day
specified in the public announcement of such change.


 


“Base Rate Loan”
means any Loan bearing interest at a rate determined by reference to the Base
Rate and the provisions of Article II (Commitments
and Funding).


 


“BBETC Event” means
that, on any date on or after June 30, 2008, (i) the BBETC has expired,
(ii) is scheduled to expire in less than eighteen (18) months from
such date, (iii) the most recent extension of the BBETC was for less than
one year, or (iv) the BBETC is not renewed at a level at least equal to
the level on the Closing Date or otherwise acceptable to the Required Lenders.


 


“BBETC Sub-Account”
has the meaning provided in Section 8.01(g).


 


“Biodiesel Blender Excise
Tax Credit” or “BBETC” means the “biodiesel mixture credit” provided
for in section 6426 of the Code, which allows as a credit against the
gasoline excise taxes imposed by section 4081 of the Code, as in effect on
the date hereof, together with any successor provisions thereto that provide
for a similar credit at a rate no less than the rate in effect on the date of
this Agreement.


 


4

















 


“Biodiesel Market
Consultant” means Highquest Partners, or any replacement biodiesel market
consultant appointed by the Administrative Agent.


 


“Biodiesel Marketing
Agreement” means that certain Biodiesel Purchase and Sale Agreement dated
as of September 13, 2006, between the Borrower and ConAgra Trade Group,
Inc.


 


“Blocked Account
Agreement” means an agreement, in substantially the form attached hereto as
Exhibit M (or, if requested by the Borrower, such other form
reasonably satisfactory to the Administrative Agent and the Collateral Agent),
with respect to a Local Account among the Borrower, the bank with whom such
Local Account was opened and the Collateral Agent.


 


“Blocked Account
Collateral” has the meaning set forth in each Blocked Account Agreement.


 


“Borrower” has the
meaning set forth in the Preamble.


 


“Borrower LLC Agreement”
means the Limited Liability Company Agreement of Nova Biofuels Seneca, LLC
dated as of December 21, 2007 and entered into by the Pledgor, the initial
Independent Manager and each other Manager of the Borrower.


 


“Borrowing Base”
means, on any given date, an amount equal to, eighty percent (80%) of the
sum of, without duplication:


 


(i)                              the
face amount (less reserves, maximum discounts, credits and allowances that may
be taken by or granted to the Account Debtor thereof in connection therewith)
of all Eligible Accounts for the Project that are set forth in the Borrowing
Base Certificate then most recently delivered by the Borrower to the
Administrative Agent; and


 


(ii)                           the
Value of no more than sixty (60) days of Eligible Inventory for the
Project (less reserves, maximum discounts, credits and allowances that may be
taken by or granted to the Account Debtor thereof in connection therewith) as
set forth in the Borrowing Base Certificate then most recently delivered by the
Borrower to the Administrative Agent.


 


“Borrowing Base
Certificate” means a certificate setting forth the Borrowing Base as of the
date of such certificate, substantially in the form of Exhibit N.


 


5

















 


“Business Day” means:


 


(i)                              any
day that is neither a Saturday or Sunday nor a day on which commercial banks
are authorized or required to be closed in New York, New York; and


 


(ii)                           relative
to the making, continuing, prepaying or repaying of any Eurodollar Loans, any
day on which dealings in Dollars are carried on in the London interbank market.


 


“Business Interruption
Insurance Proceeds” means all proceeds of any insurance policies required
pursuant to this Agreement or otherwise obtained with respect to the Borrower
or the Project relating to business interruption or delayed start-up.


 


“Capitalized Lease
Liabilities” of any Person means all monetary obligations of such Person
under any leasing or similar arrangement that, in accordance with GAAP, would
be classified as capitalized leases on a balance sheet of such Person or
otherwise disclosed as such in a note to such balance sheet and, for purposes
of the Financing Documents, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.


 


“Cash Equivalents”
means:


 


(a)              readily
marketable direct obligations of the government of the United States or any
agency or instrumentality thereof, or obligations unconditionally guaranteed by
the full faith and credit of the government of the United States, in each case
maturing within one (1) year from the date of acquisition thereof;


 


(b)              securities
issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof having
maturities of not more than one (1) year from the date of acquisition
thereof and, at the time of acquisition, having a rating of AA- or higher from
S&P or Aa3 or higher from Moody’s (or, if at any time neither S&P nor
Moody’s shall be rating such obligations, an equivalent rating from another
nationally recognized rating service);


 


(c)              investments
in commercial paper maturing within one hundred eighty (180) days from the
date of acquisition thereof and having, at such date of acquisition, a rating
of at least A-1 or P-1 from either S&P or Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such obligations, an equivalent
rating from another nationally recognized rating service);


 


6

















 


(d)              investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within two hundred and seventy (270) days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, the Administrative Agent or any domestic office
of any commercial bank organized under the laws of the United States of
America, any State thereof, any country that is a member of the Organisation
for Economic Co-Operation and Development or any political subdivision thereof,
that has a combined capital and surplus and undivided profits of not less than
five hundred million Dollars ($500,000,000);


 


(e)              fully
collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria of
clause (d) of this definition; and


 


(f)               investments
in “money market funds” within the meaning of Rule 2a-7 of the Investment
Company Act of 1940, as amended, substantially all of whose assets are
invested in investments of the type described in clauses (a) through
(e) of this definition.


 


“Cash Flow” means,
for any period, the sum (without duplication) of the following:  (i) all cash paid to the Borrower during
such period in connection with the Biodiesel Marketing Agreement and any other
sales of Products, (ii) all interest and investment earnings paid to the
Borrower or the Project Accounts during such period on amounts on deposit in
the Project Accounts, (iii) all cash paid to the Borrower during such
period as Business Interruption Insurance Proceeds, and (iv) all other
cash paid to the Borrower during such period; provided, however,
that Cash Flow shall not include any proceeds of the Loans or any other
Indebtedness incurred by the Borrower; Insurance Proceeds; Condemnation
Proceeds; Required Equity Contributions; proceeds from any disposition of
assets of the Project or the Borrower (other than Products); tax refunds;
amounts received, whether by way of a capital contribution or otherwise, from
any holders of Equity Interests of the Borrower; and any other extraordinary or
non-cash income or receipt of the Borrower under GAAP.


 


“Cash Flow Available for
Debt Service” means, for any period, an amount equal to the amount of Cash
Flow deposited in the Revenue Account during such period minus all
amounts paid during such period pursuant to priorities first
and second of Section 8.04(b) (Revenue Account).


 


“Casualty Event”
means an event that causes the Project, or any material portion thereof, to be
damaged, destroyed or rendered unfit for normal use for any reason whatsoever.


 


7

















 


“Centrue Loan Agreement
Indebtedness” has the meaning provided in Section 7.02(a)(v) (Negative Covenants – Restrictions on Indebtedness of Borrower).


 


“CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
§ 9604, et seq.), as amended, and rules, regulations, standards guidelines and
publications issued thereunder.


 


“Change of Control”
means any transaction or series of related transactions (including any merger
or consolidation) the result of which is that (i) the Pledgor fails to
maintain, directly, legally or beneficially, one hundred percent (100%) of
the Equity Interests of the Borrower, (ii) the Guarantor fails to
maintain, directly or indirectly, at least fifty-one percent (51%) of
the Equity Interests in the Pledgor or (iii) ten percent (10%) or
more of the Equity Interests of the Borrower are indirectly, legally or
beneficially owned by, or under common control of, any Person other than those
identified in clauses (i) or (ii) above.


 


“Change Order” means
each “Change Order” (if any) as described in any Construction Contract.


 


“Closing Date” means
the date on which all the conditions set forth in Section 6.01 (Conditions to Closing and First Funding) have been
satisfied or waived.


 


“Code” means the
Internal Revenue Code of 1986, as amended.


 


“Collateral” means
all assets of and Equity Interests in the Borrower, whether now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document then in effect or contemplated to be in effect.


 


“Collateral Agent”
means WestLB, not in its individual capacity but solely in its capacity as
collateral agent for the Senior Secured Parties under the Financing Documents,
and includes each other Person that may, from time to time, be appointed as
successor Collateral Agent pursuant to Section 10.06 (Resignation or Removal of Agent).


 


“Commercial Operation
Date” means the date (which shall occur on or before the Conversion Date
Certain) on which the following conditions have been satisfied, as certified by
the Borrower and confirmed in writing by the Independent Engineer, each in a
Commercial Operation Date Certificate completed to the reasonable satisfaction
of the Administrative Agent:


 


(i)                              construction
of the Project shall have been completed (other than punch list items) and the
Project shall be ready to process 


 


8

















 


feedstock and begin operation for its intended use as a biodiesel
production facility at its minimum performance capacity;


 


(ii)                           the
Performance Test, in accordance with the Approved Performance Test Protocols
shall have been completed and shall have demonstrated that the Project has
achieved the Minimum Performance Criteria and the Performance Guarantee, while
meeting air emissions requirements;


 


(iii)                        training
shall have been completed for all required Plant personnel in a manner that is
reasonably satisfactory to the Independent Engineer;


 


(iv)                       the
Borrower shall have received a plant operation manual and plant maintenance
manual, training manuals and all materials and documents provided by the
Construction Contractors and other manufacturers, suppliers and vendors for the
Project, and in each case, shall have been verified as being received by the
Independent Engineer;


 


(v)                          the
Borrower shall have received preliminary construction drawings for the Project;


 


(vi)                       all
construction costs for the Project shall have been fully paid (other than
amounts that are subject to a Contest) and the Administrative Agent shall have
received reasonably satisfactory evidence (for example, an ALTA 122
Endorsement to the applicable Title Policy) that there shall be no
mechanic’s, workmen’s, materialmen’s or other similar Liens or other claims on
any part of the Project, Site, or other assets relating to the work or services
of the Project provided by the Construction Contractors or any of their
subcontractors (other than Liens that are subject to a Contest);


 


(vii)                    each
Construction Contractor and each subcontractor for the Project shall have
provided all satisfactory Lien waivers, other than with respect to punch list
items and other than Lien waivers from individual contractors who were paid, in
the aggregate, less than $100,000 for all of their respective work relating the
Project (taking into account any and all contracts or agreements pursuant to
which such contractor has performed such work); and


 


9

















 


(viii)                 all Necessary
Project Approvals required to be obtained at such time shall have been
obtained.


 


“Commercial Operation
Date Certificate” means, as the context requires, (a) a certificate of the
Independent Engineer, in substantially the form of Exhibit P-1, or
(b) a certificate of the Borrower, in substantially the form of Exhibit P-2,
in each case confirming that the Commercial Operation Date has occurred.


 


“Commitment Fee” has
the meaning provided in Section 3.13(a) (Fees).


 


“Commitment Percentage”
means, as to any Lender at any time, such Lender’s Construction Loan Commitment
Percentage, Term Loan Commitment Percentage or Working Capital Commitment
Percentage, as the context may require.


 


“Commitments” means,
with respect to each Lender, as applicable, such Lender’s Construction Loan
Commitment, Term Loan Commitment or Working Capital Commitment, as the context
may require.


 


“Commodity Hedging
Arrangements” means any arrangement to hedge the price of feedstock
purchases, biodiesel sales, glycerin sales or natural gas purchases.


 


“Commodity Risk
Management Plans” means risk management plans prepared by the Borrower and
approved by the Administrative Agent pursuant to Section 7.01(v) (Affirmative Covenants - Commodity Hedging Programs)
setting forth terms and conditions relating to any Commodity Hedging
Arrangements from time to time proposed to be entered into by the Borrower,
including any updates made to such risk management plans with the reasonable
approval of the Administrative Agent.


 


“Completion Guaranty”
means the Completion Guaranty Agreement, dated on or prior to the Closing Date,
among the Guarantor, the Borrower and the Administrative Agent.


 


“ConAgra Feedstock
Undertaking” means that certain Memorandum of Understanding for Feedstock
Agreement for Seneca Biodiesel Refinery to be entered into by ConAgra Trade
Group, Inc. and the Borrower.


 


“Condemnation Proceeds”
means any amounts and proceeds of any kind (including instruments) payable in
respect of any Event of Taking.


 


“Confidential Information
Memorandum” means any information memorandum prepared in connection with
the syndication of the Loan by WestLB, including after the Closing Date,
together with any updates related thereto, describing the Project.


 


10

















 


“Consents” means each
Consent and Agreement entered into among a Project Party, the Borrower, and the
Collateral Agent, each in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent.


 


“Construction Account”
has the meaning provided in Section 8.01(a) (Establishment
of Project Accounts).


 


“Construction Budget”
means the budget attached hereto as Schedule 6.01(t) that sets
forth all categories of costs and expenses required in connection with the
development, construction, start-up, and testing of the Project, including all
construction costs, all costs under the Construction Contracts, all interest,
taxes and other carrying costs related to the Construction Loans, and costs
related to the construction of the facilities described under the Project
Documents, as updated from time to time in accordance with Section 7.02(s)
(Negative Covenants - Construction Budget).


 


“Construction Contractors”
means each party, other than the Borrower, to each Construction Contract.


 


“Construction Contracts”
means collectively, (i) the Development Management Agreement,
(ii) each other construction contract identified on Schedule 5.11,
(iii) any additional contracts relating to the construction of the Project
to which the Borrower is a party addressing matters that are critical to such
construction and (iv) any Additional Project Document related to
construction matters.


 


“Construction Loan”
has the meaning provided in Section 2.01(a) (Construction
Loans).


 


“Construction Loan
Commitment” means, with respect to each Lender, the commitment of such
Lender to make Construction Loans, as set forth opposite the name of such
Lender in Schedule 2.01, as the same may be reduced in accordance
with Section 2.07 (Termination or
Reduction of Commitments).


 


“Construction Loan
Commitment Percentage” means, as to any Lender at any time, the percentage
that such Lender’s Construction Loan Commitment then constitutes of the
Aggregate Construction Loan Commitment.


 


“Construction Loan
Funding Notice” means each request for Funding of Construction Loans in the
form of Exhibit E delivered in accordance with Section 2.04
(Notice of Fundings).


 


“Construction Loan
Maturity Date” means the earlier of (a) the Conversion Date and
(b) the Conversion Date Certain.


 


11

















 


“Construction Notes”
means the promissory notes of the Borrower, substantially in the form of Exhibit B,
evidencing Construction Loans.


 


“Construction Status
Report” means a monthly report on the construction of the Project in
substantially the form of Exhibit BB.


 


“Construction/Term
Applicable Margin” means (a) with respect to the Eurodollar Loans,
4.00% and (b) with respect to the Base Rate Loans, 3.00%.


 


“Construction/Term
Lenders” means those Lenders of Construction Loans and Term Loans, as
identified on Schedule 2.01, and each other Person that acquires
the rights and obligations of any such Lender pursuant to Section 11.03
(Assignments).


 


“Construction Withdrawal
Certificate” means a Construction Withdrawal Certificate substantially in
the form of Exhibit R.


 


“Consultants” means the
Independent Engineer, the Insurance Consultant, the Biodiesel Market Consultant
and the Agricultural Market Consultant.


 


“Contest” means, with
respect to any matter or claim involving any Person, that such Person is
contesting such matter or claim in good faith and by appropriate proceedings
timely instituted; provided that the following conditions are
satisfied:  (a) unless waived by the
Administrative Agent, such Person has posted a bond or cash collateral for the
full amount of such claim or other security reasonably acceptable to the
Administrative Agent; (b) during the period of such contest, the
enforcement of any contested item is effectively stayed; (c) none of such
Person or any of its officers, directors or employees, or any Senior Secured
Party or its respective officers, directors or employees, is or would
reasonably be expected to become subject to any criminal liability or sanction
in connection with such contested items; and (d) such contest and any
resultant failure to pay or discharge the claimed or assessed amount during the
pendency of such contest does not, and could not reasonably be expected to
(i) result in a Material Adverse Effect or (ii) involve a material
risk of the sale, forfeiture or loss of, or the creation, existence or imposition
of any Lien on, any of the Collateral.


 


“Contingency Line Item”
means the Line Item in the Construction Budget identified as “contingency” that
is intended to cover the eventuality of unforeseen Project Costs.


 


“Contingent Liabilities”
means any agreement, undertaking or arrangement by which any Person guarantees,
endorses or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for payment, to
supply funds to, or otherwise to invest in, a debtor, or 


 


12

















 


otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person’s obligation under any contingent liabilities shall
(subject to any limitation set forth therein) be deemed for purposes of this
Agreement to be the outstanding principal amount of the debt, obligation or
other liability guaranteed thereby; provided, however, that if the maximum
amount of the debt, obligation or other liability guaranteed thereby has not
been established, the amount of such contingent liability shall be the maximum
reasonably anticipated amount of the debt, obligation or other liability;
provided, further, that any agreement to limit the maximum amount of such
Person’s obligation under such contingent liability shall not, of and by
itself, be deemed to establish the maximum reasonably anticipated amount of
such debt, obligation or other liability.


 


“Contractual Obligation”
means, as to any Person, any provision of any security issued by such Person or
of any agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its property is bound.


 


“Conversion Date”
means the Business Day upon which (i) all the conditions precedent set
forth in Section 6.03 (Conditions to Term Loan
Funding) shall have been satisfied (or waived in accordance with
the terms of this Agreement) and (ii) the Construction Loans are converted
to Term Loans.


 


“Conversion Date Certain”
means September 30, 2008.


 


“Conversion Date Funding
Notice” means the request for Funding on the Conversion Date in the form of
Exhibit F delivered in accordance with Section 2.04 (Notice of Fundings).


 


“Conversion Date
Prepayment Amount” means an amount equal to the difference between
(x) the Excess Conversion Date Cash Amount minus (y) the
Guarantor’s Conversion Date Amount.


 


“Conversion Date Ratio”
means a ratio where the numerator is the aggregate amount of all outstanding
Eligible Affiliate Loans as of the date of determination and the denominator is
forty-one million Dollars ($41,000,000).


 


“Debt Service” means,
for any period, the sum of (i) all fees (including Fees) scheduled to
become due and payable during such period to the Senior Secured Parties,
(ii) interest on the Loans (taking into account any Interest Rate Protection
Agreements) scheduled to become due and payable during such period to the
Senior Secured Parties, (iii) principal payments of the Loans (excluding
the Required Cash 


 


13

















 


Sweep and any other mandatory prepayments) scheduled to become due and
payable during such period to the Senior Secured Parties and (iv) all
payments due by the Borrower pursuant to Section 4.03 (Increased Eurodollar Loan Costs) and Section 4.07(a)
(Taxes) with respect to such
scheduled principal, interest and fees.


 


“Debt Service LC Waiver
Letter” means, with respect to any Debt Service Reserve Letter of Credit, a
waiver letter from the issuer thereof in substantially the form of Annex W-5
to Exhibit W.


 


“Debt Service Reserve
Account” has the meaning set forth in Section 8.01(e) (Establishment of Project Accounts).


 


“Debt Service Reserve
Letter of Credit” means an irrevocable, standby letter of credit, issued by
an Acceptable Bank in favor of, and in form and substance reasonably satisfactory
to, the Collateral Agent and the Administrative Agent (it being understood that
a Debt Service Reserve Letter of Credit in substantially the form of
Exhibit W will be acceptable), and in respect of which a Debt Service LC
Waiver Letter in favor of, and satisfactory to, the Collateral Agent has been
delivered.


 


“Debt Service Reserve
Required Amount” means, as of any date, the amount equal to the projected
scheduled Debt Service payable in respect of the succeeding six
(6) months.


 


“Default” means any
condition, occurrence or event that, after notice or passage of time or both,
would be an Event of Default.


 


“Default Rate” has
the meaning set forth in Section 3.06 (Default Interest Rate).


 


“Deferred Approvals”
has the meaning provided in Section 5.03(a)(iii) (Representations
and Warranties - Governmental Approvals).


 


“Deferred Contracts”
has the meaning provided in Section 5.11(a)(iv) (Representations
and Warranties - Contracts).


 


“Development Management
Agreement” means that certain Development Management Agreement entered into
by the Borrower and the Development Manager, dated as of January 17, 2007.


 


“Development Manager”
means Biosource America, Inc.


 


“Discharge Date”
means the date on which (a) all outstanding Commitments have been
terminated and (b) all amounts payable in respect of the 


 


14

















 


Obligations have been paid in full in cash (other than obligations
under the Financing Documents that by their terms survive and with respect to
which no claim has been made by the Senior Secured Parties).


 


“Dollar” and the sign
“$” mean lawful money of the United States.


 


“Domestic Office”
means, relative to any Lender, the office of such Lender designated on Schedule 2.01
or designated in the Lender Assignment Agreement pursuant to which such Lender
became a Lender hereunder or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by written notice from such Lender, as the case may be, to the Borrower
and the Administrative Agent.


 


“Drawdown Schedule”
means, with respect to each of the Construction Loans, the schedule set forth
under tab “Funding Schedule”, line 51 of the Financial Model, as the same may
be amended from time to time with the approval of the Administrative Agent and
the Independent Engineer.


 


“Eligible Accounts”
means all Accounts of the Borrower each of which meets the following
requirements:


 


(i)                              it
arises from either (i) the delivery of Products by the Borrower, which
delivery has been fully performed and, if applicable, acknowledged and/or
accepted by the Account Debtor with respect thereto, or (ii) the sale or
lease of goods by the Borrower, and if it arises from the sale of goods, such
goods have been shipped or delivered to the Account Debtor thereof;


 


(ii)                           it is a
valid, legally enforceable obligation of the Account Debtor thereunder, and is
not subject to any reserve, discount, credit, allowance (except any reserve,
discount, credit or allowance that has been deducted in computing the net
amount thereof), offset, counterclaim or other defense on such Account Debtor’s
part or to any claim on such Account Debtor’s part denying liability thereunder
in whole or in part;


 


(iii)                        it is
subject to a perfected Lien in the Collateral Agent’s favor, for the benefit of
the Senior Secured Parties, and is not subject to any other Lien, except for
Permitted Liens;


 


(iv)                       it is
evidenced by an invoice (dated no later than the date of shipment to the
Account Debtor or performance and having a due 


 


15

















 


date not more than ninety (90) days after the date of such
invoice) rendered to such Account Debtor, and is not evidenced by any
instrument or chattel paper;


 


(v)                          it is
payable in Dollars;


 


(vi)                       it is not
owing by any Governmental Authority;


 


(vii)                    it is not
owing by any Account Debtor residing, located or having its principal
activities or place of business outside the United States, unless the sale of
goods giving rise to such Account is credit enhanced by means of a letter of
credit, bankers’ acceptance or other credit support that is satisfactory to the
Administrative Agent and, if required by the Administrative Agent, has been
delivered to the Administrative Agent and is directly drawable by the
Administrative Agent;


 


(viii)                 it is not owing
by any Account Debtor involved in any Insolvency Proceeding or with respect to
which the Borrower has received notice of an imminent Insolvency or Liquidation
Proceeding or a material impairment of the financial condition of such Account
Debtor;


 


(ix)                         it is not
owing by any Affiliate of the Borrower, other than pursuant to a Project
Document between the Borrower and an Affiliate thereof;


 


(x)                            it is
not unpaid more than ninety (90) days after the invoice date;


 


(xi)                            it is not owing by an
Account Debtor that has amounts outstanding more than ninety (90) days
after the due date of any invoice;


 


(xii)                      it is not an
Account arising in a transaction where goods are sold on consignment or are
sold pursuant to a sale on approval, a bill and hold, or any other terms by
reason of which the payment by the Account Debtor may be conditional; and


 


(xiii)                   it is not an
Account as to which the Administrative Agent, at any time or times hereafter,
determines, in its reasonable judgment and in good faith, that the prospect of
payment or performance by the Account Debtor thereof is or will be impaired in
any material respect.


 


16
















 


An Account of the Borrower
that is at any time an Eligible Account, but which subsequently fails to meet
any of the foregoing requirements, shall immediately cease to be an Eligible
Account; provided, that if such an ineligible Account subsequently meets
all of the foregoing requirements, it shall again be deemed an Eligible
Account.


 


“Eligible Affiliate Loans”
means all Affiliate Loans outstanding as of the date of determination other
than Affiliate Loans made to cover Project Costs in excess of the amounts set
forth in the Construction Budget in effect on the Closing Date. The
determination of Eligible Affiliate Loans will be subject to confirmation by
the Independent Engineer.


 


“Eligible Assignee”
means (a) any Lender, (b) an Affiliate of any Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person)
approved by the Administrative Agent (such approval not to be unreasonably
withheld or delayed).


 


“Eligible Inventory”
means the Inventory of the Borrower that meets each of the following
requirements:


 


(i)                              in
the case of Inventory consisting of feedstock, such feedstock that is readily
usable for the operation of the Project in the ordinary course of business;


 


(ii)                           in the
case of Inventory consisting of Products, such Products that are readily
marketable by the Project in the ordinary course of business;


 


(iii)                        in the
case of goods held for sale, the value thereof is adjusted to its then-current
market value;


 


(iv)                       it is owned
by the Borrower and is subject to a perfected Lien in the Collateral Agent’s
favor, for the benefit of the Senior Secured Parties, and is not subject to any
other Lien, except for Permitted Liens;


 


(v)                          it is
not consigned Inventory;


 


(vi)                       it is
located only at the Site or at such other location as is approved in writing by
the Administrative Agent; and


 


(vii)                    the
Administrative Agent, in its reasonable judgment and in good faith, has not
determined that it is unacceptable or should be price-adjusted in any material
respect due to age, type, quality, category and/or quantity.


 


17

















 


Any of the Inventory of the
Borrower that is at any time Eligible Inventory, but which subsequently fails
to meet any of the foregoing requirements, shall immediately case to be
Eligible Inventory; provided that if such ineligible Inventory
subsequently meets all of the foregoing requirements, it shall again be deemed
Eligible Inventory.


 


“Environmental Affiliate”
means any Person, only to the extent of, and only with respect to matters or
actions of such Person for which, the Borrower could reasonably be expected to
have liability as a result of the Borrower retaining, assuming, accepting or
otherwise being subject to liability for Environmental Claims relating to such
Person, whether the source of the Borrower’s obligation is by contract or
operation of Law.


 


“Environmental Approvals”
means any Governmental Approvals required under applicable Environmental Laws.


 


“Environmental Claim”
means any written notice, claim, demand or similar written communication by any
Person alleging potential liability or requiring or demanding remedial or
responsive measures (including potential liability for investigatory costs,
cleanup, remediation and mitigation costs, governmental response costs, natural
resources damages, property damages, personal injuries, fines or penalties) in
each such case (x) either (i) with respect to environmental
contamination-related liabilities or obligations with respect to which the
Borrower could reasonably be expected to be responsible that are, or could
reasonably be expected to be, in excess of two hundred thousand Dollars
($200,000) in the aggregate or (ii) that has or could reasonably be
expected to result in a Material Adverse Effect and (y) arising out of,
based on or resulting from (i) the presence, release or threatened release
into the environment, of any Materials of Environmental Concern at any
location, whether or not owned by such Person; (ii) circumstances forming
the basis of any violation, or alleged violation, of any Environmental Laws or
Environmental Approvals; or (iii) exposure to Materials of Environmental
Concern.


 


“Environmental Laws”
means all Laws applicable to the Project relating to pollution or protection of
human health, safety or the environment (including ambient air, surface water,
ground water, land surface or subsurface strata), including Laws relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise applicable to the Project relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, management, remediation or handling of Materials of Environmental
Concern.


 


“Environmental Site
Assessment Report” means, a Phase I environmental site assessment report
prepared by an environmental consulting firm reasonably acceptable to the
Administrative Agent, which report shall comply with ASTM 


 


18

















 


standard 1527-05 (with
such modifications thereto as may reasonably be requested by the Borrower
and are reasonably acceptable to the Administrative Agent), and a Phase II
environmental site assessment reasonably acceptable to the Administrative
Agent, addressing any recognized environmental conditions or other areas of
concern identified in the relevant Phase I report if in the reasonable
determination of the Administrative Agent, acting in consultation with the
Independent Engineer, a Phase II assessment is warranted.


 


“Equator Principles”
means The Equator Principles – An Industry Framework for Financial Institutions
to Manage Environmental and Social Issues in Project Financing (commonly
referred to as “The Equator Principles”).


 


“Equity Interests”
means, with respect to any Person, all of the shares of capital stock of (or
other ownership or profit interests in) such Person, all of the warrants,
options or other rights for the purchase or acquisition from such Person of
shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of
capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are outstanding on any date of
determination, in each such case including all voting rights and economic
rights related thereto.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and any
successor statute of similar import, together with the regulations thereunder,
in each case as in effect from time to time. References to sections of ERISA
also refer to any successor sections.


 


“ERISA Affiliate”
means any Person, trade or business that, together with the Borrower, is or was
treated as a single employer under Section 414 of the Code or Section 4001
of ERISA.


 


“ERISA Plan” means
any Plan that is not a Multiemployer Plan.


 


“Eurodollar Loan”
means any Loan bearing interest at a rate determined by reference to the
Eurodollar Rate and the provisions of Article II (Commitments
and Funding) and Article III (Repayments,
Prepayments, Interest and Fees).


 


“Eurodollar Office”
means, relative to any Lender, the office of such Lender designated as such on Schedule 2.01
or designated in the Lender Assignment Agreement pursuant to which such Lender
became a Lender hereunder or such other 


 


19

















 


office of a Lender as
designated from time to time by notice from such Lender to the Borrower and the
Administrative Agent pursuant to Section 4.04 (Obligation
to Mitigate) that shall be making or maintaining Eurodollar
Loans of such Lender hereunder.


 


“Eurodollar Rate”
means, for any Interest Period with respect to any Eurodollar Loan, an interest
rate per annum equal to the rate per annum obtained by dividing (x) LIBOR
for such Interest Period and such Eurodollar Loan, by (y) a percentage
equal to (i) 100% minus (ii) the Eurodollar Reserve Percentage for
such Interest Period.


 


“Eurodollar Reserve
Percentage” means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, carried out to five decimal places) in
effect on such day, whether or not applicable to any Lender, under regulations
issued from time to time by the F.R.S. Board for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to eurocurrency funding (currently referred
to as “Eurocurrency Liabilities”). The Eurodollar Rate for each outstanding
Eurodollar Loan shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.


 


“Event of Abandonment”
means any of the following shall have occurred: (i) the abandonment by the
Borrower of the development, construction, operation or maintenance of the
Project for a period of more than sixty (60) consecutive days (other than
as a result of force majeure, an Event of Taking or a Casualty Event), (ii) the
suspension of all or substantially all of the Borrower’s activities with
respect to the Project, other than as the result of a force majeure, Event of
Taking or Casualty Event, for a period of more than sixty (60) consecutive
days, or (iii) any written acknowledgement by the Borrower of a final
decision to take any of the foregoing actions.


 


“Event of Default”
means any one of the events specified in Section 9.01 (Events of Default).


 


“Event of Taking”
means any taking, exercise of rights of eminent domain, public improvement,
inverse condemnation, condemnation or similar action of or proceeding by any
Governmental Authority relating to any material part of the Project with,
any Equity Interests of the Borrower, or any other assets thereof.


 


“Event of Total Loss”
means the occurrence of a Casualty Event affecting all or substantially all of
the Project or the assets of the Borrower.


 


“Excess Conversion Date
Cash Amount” means (x) the aggregate amount of all funds on deposit in
or standing to the credit of the Revenue Account on the 


 


20

















 


Conversion Date minus
(y) the greater (i) two million five hundred thousand Dollars
($2,500,000) and (ii) the dollar amount budgeted for Operation and
Maintenance Expenses for the calendar month immediately following the
Conversion Date.


 


“Excluded Taxes”
means, with respect to any Agent or any Lender or any other recipient of any
payment to be made by or on account of any Obligation of the Borrower
hereunder, (a) income or franchise Taxes imposed on (or measured by) such
Agent’s Lender’s or other recipient’s net income by the United States, or by
the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable office is located, or (b) any branch profits Tax imposed by
the United States, or any similar Tax imposed by any other jurisdiction
described in clause (a) above, (c) any United States withholding
Tax to the extent that it is imposed on amounts payable to such Agent or such
Lender at the time such Agent or such Lender becomes a party to this Agreement
or to the extent it is imposed on amounts payable to such Agent or such Lender
due to a merger, reorganization or acquisition of such Agent or such Lender or (d) in
the case of a Participant, any Taxes (including United States withholding
Taxes) in excess of the amount of Taxes to which the Lender selling the
participation would have been entitled with respect to the participation if the
Lender had not sold the participation to that Participant.


 


“Extraordinary Proceeds
Account” has the meaning provided in Section 8.01(i) (Establishment of Project Account).


 


“Extraordinary Proceeds
Release Notice” means an Extraordinary Proceeds Release Notice,
substantially in the form of Exhibit Y.


 


“F.R.S. Board” means
the Board of Governors of the Federal Reserve System or any successor thereto.


 


“Federal Funds Effective
Rate” means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day for such transactions received
by the Administrative Agent from three federal funds brokers of recognized
standing selected by the Administrative Agent.


 


“Fee Letters” means (i) that
certain Fee Letter among the Administrative Agent, the Collateral Agent and the
Borrower, (ii) that certain Fee Letter among the Accounts Bank and the
Borrower, and (iii) that certain Fee Letter between the Lead 


 


21

















 


Arranger and the Borrower,
each dated on or about the date hereof and setting forth certain fees that
will, from time to time, become due and payable with respect to the Loans and
to the Agents.


 


“Feedstock Agreement”
means that certain Feedstock Agreement, dated as of June 26, 2006, between
Nova Biofuels Seneca, LLC and Lipid Logistics, LLC.


 


“Fees” means,
collectively, each of the fees payable by the Borrower for the account of any
Lender or Agent pursuant to Section 3.13 (Fees).


 


“Final Completion”
means that each of the following conditions has been achieved as certified by
the Borrower and confirmed in writing by the Independent Engineer in a Final
Completion Certificate completed to the reasonable satisfaction of the
Administrative Agent:


 


(i)                              the
Commercial Operation Date shall have occurred;


 


(ii)                           the
Independent Engineer shall have confirmed that the final air emissions test for
the Project has been satisfactorily completed;


 


(iii)                        insurance
required pursuant to Schedule 7.01(h) and under any Project
Document shall be in place, as confirmed by the Insurance Consultant; and


 


(iv)                       all
construction costs for the Project shall have been fully paid (other than
amounts that are subject to a Contest).


 


“Final Completion
Certificate” means, as the context requires, (a) a certificate of the
Borrower and the Independent Engineer, in substantially the form of Exhibit Q
confirming that Final Completion has occurred.


 


“Final Completion Date”
means the date on which the Project has achieved Final Completion, as certified
by the Borrower and the Independent Engineer.


 


“Final Maturity Date”
means, with respect to the Term Loans, the earlier to occur of (a) the
date that occurs five (5) years after the Conversion Date and (b) August 30,
2013.


 


“Financial Assets”
has the meaning provided in Section 8.13(b) (Representations,
Warranties and Covenants of Accounts Bank).


 


“Financial Model”
means the pro forma financial statements and projections of revenue and
expenses and cash flows with respect to the Borrower and the 


 


22

















 


Project for the Fiscal Year
ended 2007 through the Fiscal Year ended 2014, attached hereto as Exhibit K,
as the same may be updated by the Borrower with the prior written approval
of the Administrative Agent.


 


“Financial Officer”
means, with respect to any Person, the controller, treasurer or chief financial
officer of such Person.


 


“Financing Documents”
means:


 


(i)                              this
Agreement;


 


(ii)                           the
Notes;


 


(iii)                        the
Security Documents;


 


(iv)                       the
Completion Guaranty;


 


(v)                          the
Interest Rate Protection Agreements;


 


(vi)                       the Fee
Letters;


 


(vii)                    the other
financing and security agreements, documents and instruments delivered in
connection with this Agreement; and


 


(viii)                 each other
document designated as a Financing Document by the Borrower and the
Administrative Agent.


 


“Fiscal Quarter”
means any quarter of a Fiscal Year.


 


“Fiscal Year” means
any period of twelve (12) consecutive calendar months ending on October 31st.


 


“Funding” means the
incurrence of each Construction Loan, Term Loan or Working Capital Loan (other
than a Working Capital Loan resulting from a draw on a Letter of Credit) made
by the Lenders on a single date.


 


“Funding Date” means,
with respect to each Funding, the date on which funds are disbursed by the
Administrative Agent, on behalf of the relevant Lenders, to the Borrower in
accordance with Section 2.05 (Funding
of Loans).


 


“Funding Notice”
means (i) in the case of a request for a Funding of Construction Loans, a
Construction Loan Funding Notice, (ii) in the case of a request for 


 


23

















 


a Funding of Term Loans, the
Conversion Date Funding Notice, and (iii) in the case of a request for
Funding of Working Capital Loans, a Working Capital Loan Funding Notice.


 


“Future Advance
Endorsement” means an endorsement in substantially the form of Exhibit R.


 


“GAAP” means
generally accepted accounting principles in effect from time to time in the
United States, applied on a consistent basis.


 


“Gas Supply Agreement”
means that certain Gas Supply Agreement entered into by the Borrower and
Blackhawk Energy Services, LLC, dated as of August 22, 2007.


 


“Governmental Approval”
means any authorization, consent, approval, license, lease, ruling, permit,
certification, exemption, filing for registration by or with any Governmental
Authority.


 


“Governmental Authority”
means any nation, state, sovereign, or government, any federal, regional,
state, local or political subdivision and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.


 


“Granting Lender” has
the meaning provided in Section 11.03(h) (Assignments).


 


“Guarantee” means, as
to any Person, (a) any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation payable or performable by another Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of
such Person, direct or indirect, (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of
the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, or (iv) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or
other obligation of the payment or performance thereof or to protect such
obligee against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is
assumed by such 


 


24

















 


Person (or any right,
contingent or otherwise, of any holder of such Indebtedness to obtain any such
Lien).


 


“Guarantor” means
Nova Biosource Fuels, Inc., a Nevada corporation.


 


“Guarantor’s Conversion
Date Amount” means the product of (x) the Conversion Date Ratio multiplied
by (y) the Excess Conversion Date Cash Amount.


 


“Historical Debt Service
Coverage Ratio” or “HDSCR” means, as of any Quarterly Payment Date,
for the four (4) Fiscal Quarters immediately preceding (and not including
the then-current Fiscal Quarter) such Quarterly Payment Date (or, if less than
four (4) Fiscal Quarters have elapsed since the Conversion Date, for such
number of full Fiscal Quarters that has elapsed since the Conversion Date), the
ratio of (i) Cash Flow Available for Debt Service during such period to (ii) Debt
Service during such period.


 


“Indebtedness” means,
as to any Person at a particular time, without duplication, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:


 


(i)                              all
obligations of such Person for or in respect of moneys borrowed or raised,
whether or not for cash by whatever means (including acceptances, deposits,
discounting, letters of credit, factoring, and any other form of financing
which is recognized in accordance with GAAP in such Person’s financial
statements as being in the nature of a borrowing or is treated as “off-balance
sheet” financing);


 


(ii)                           all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;


 


(iii)                        all
obligations of such Person for the deferred purchase price of property or
services;


 


(iv)                       all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets acquired by such Person (even though
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property or are
otherwise limited in recourse);


 


(v)                          the
maximum amount of all direct or contingent obligations of such Person arising
under letters of credit (including standby and 


 


25

















 


commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;


 


(vi)                       all
Capitalized Lease Liabilities;


 


(vii)                    net
obligations of such Person under any Swap Contract;


 


(viii)                 all obligations
of such Person to purchase, redeem, retire, defease or otherwise make any
payment in respect of any Equity Interests in such Person or any other Person
or any warrants, rights or options to acquire such Equity Interests, valued, in
the case of redeemable preferred interests, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; and


 


(ix)                         all
Guarantees of such Person in respect of any of the foregoing.


 


For all purposes hereof, the
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which such Person is a general partner or a joint
venturer, unless such Indebtedness is expressly made non-recourse to such
Person. The amount of any net obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date.


 


“Indemnified Taxes”
means Taxes other than Excluded Taxes.


 


“Indemnitee” has the meaning
provided in Section 11.08 (Indemnification by the
Borrower).


 


“Independent Engineer”
means R.W. Beck, Inc., or any replacement independent engineer appointed
by the Administrative Agent and, so long as no Default or Event of Default has
occurred and is continuing, in consultation with the Borrower.


 


“Independent Engineer’s
Certificate” means a certificate of the Independent Engineer in
substantially the form of Exhibit J.


 


“Independent Manager” means a Person, who is
not at the time of initial appointment as the Independent Manager or at any
time while serving as the Independent Manager and has not been at any time
during the five (5) years preceding such initial appointment:


 


(i)                              a
direct or indirect owner of any Equity Interest in, member (with the exception
of serving as the Independent Manager), officer, 


 


26

















 


employee, partner, director, manager or
contractor, bankruptcy trustee, attorney or counsel of any member of the
Borrower or any Affiliate thereof;


 


(ii)                           a
creditor, customer, supplier, or other person who derives any of its purchases
or revenues from its activities with the Borrower, any member of the Borrower,
or any member of any Affiliate of any of them (with the exception of its
activity of serving as the Independent Manager);


 


(iii)                        a Person
controlling or under common control with the Borrower, any member of the
Borrower, any member of any Affiliate of any of them or any Person excluded
from serving as Independent Manager under clause (i) or (ii) of
this definition;


 


(iv)                       a member of
the immediate family by blood or marriage of any Person excluded from being an
Independent Manager under clause (i) or (ii) of this definition;
or


 


(v)                          a Person
who received, or a member or employee of a firm or business that received, fees
or other income from the Borrower or any Affiliate thereof in the aggregate in
excess of five percent (5%) of the gross income, for any applicable year,
of such Person (with the exception of fees received for its activity of serving
as the Independent Manager).


 


“Information” has the
meaning provided in Section 11.17 (Treatment of Certain
Information; Confidentiality).


 


“Initial Quarterly
Payment Date” means the first Quarterly Payment Date following the
Conversion Date.


 


“Insolvency or
Liquidation Proceeding” means, with respect to any Person:


 


(i)                                    any case commenced
by or against such Person under the Bankruptcy Code or any similar federal or
state law for the relief of debtors, any other proceeding for the
reorganization, recapitalization or adjustment or marshalling of the assets or
liabilities of such Person , any receivership or assignment for the benefit of
creditors relating to such Person  or any
similar case or 


 


27

















 


proceeding relative to
such Person  or its creditors, as such,
in each case whether or not voluntary;


 


(ii)                                 any liquidation,
dissolution, marshalling of assets or liabilities or other winding up of or
relating to such Person , in each case whether or not voluntary and whether or
not involving bankruptcy or insolvency; or


 


(iii)                              any other proceeding
of any type or nature in which substantially all claims of creditors of such
Person are determined and any payment or distribution is or may be made on
account of such claims.


 


“Insurance and
Condemnation Proceeds Account” has the meaning provided in Section 8.01(h) (Establishment of Project Accounts).


 


“Insurance and
Condemnation Proceeds Request Certificate” means an Insurance and
Condemnation Proceeds Request Certificate, substantially in the form of Exhibit X.


 


“Insurance Consultant”
means Equity Risk Partners, Inc., or any replacement insurance consultant
appointed by the Administrative Agent.


 


“Insurance Proceeds”
means all proceeds of any insurance policies required pursuant to this
Agreement or otherwise obtained with respect to the Borrower or the Project
that are paid or payable to or for the account of the Borrower, or the
Collateral Agent as loss payee, or additional insured (other than Business
Interruption Insurance Proceeds and proceeds of insurance policies relating to
third party liability).


 


“Interest Payment Date”
means (i) with respect to Eurodollar Loans, the last day of each
applicable Interest Period (and, if such Interest Period exceeds three months,
on the day three months after such Eurodollar Loan is made or continued) or, if
applicable, any date on which such Eurodollar Loan is converted to a Base Rate
Loan and (ii) with respect to Base Rate Loans, on each Quarterly Payment
Date or, if applicable, any date on which such Base Rate Loan is converted to a
Eurodollar Loan.


 


“Interest Period”
means, with respect to any Eurodollar Loan, the period beginning on (and
including) the date on which such Eurodollar Loan is made pursuant to Section 2.05
(Funding of Loans) or the date on
which each successive interest period for each such Eurodollar Loan is
determined pursuant to Section 3.05 (Interest
Rates) and ending on (and including) the day that numerically
corresponds to such date one (1), two (2), three (3) or six (6) months
thereafter, in either case as the Borrower may select in the 


 


28

















 


relevant Funding Notice or
Interest Period Notice; provided, however, that (i) if such
Interest Period would otherwise end on a day that is not a Business Day, such
Interest Period shall end on the next following Business Day (unless such next
following Business Day is in a different calendar month, in which case such
Interest Period shall end on the next preceding Business Day), (ii) any
Interest Period that begins on the last Business Day of a month (or on a day
for which there is no numerically corresponding day in the month at the end of
such Interest Period) shall end on the last Business Day of the month at the
end of such Interest Period, (iii) the Borrower may not select any
Interest Period that ends after any Quarterly Payment Date unless, after giving
effect to such selection, the aggregate outstanding principal amount of
Eurodollar Loans having Interest Periods which end on or prior to such
Quarterly Payment Date shall be at least equal to the aggregate principal
amount of Eurodollar Loans due and payable on or prior to such Quarterly
Payment Date, and (iv) no Interest Period may end later than the
Maturity Date for the relevant type of Loan.


 


“Interest Period Notice”
means a notice in substantially the form attached hereto as Exhibit O,
executed by an Authorized Officer of the Borrower.


 


“Interest Rate Protection
Agreement” means each interest rate swap, collar, put, or cap, or other
interest rate protection arrangement, with a Qualified Counterparty, in each
such case that is reasonably satisfactory to the Administrative Agent and is
entered into in accordance with Section 7.01(u) (Affirmative
Covenants - Interest Rate Protection Agreement).


 


“Interest Rate Protection
Provider” means a Qualified Counterparty that is party to an Interest Rate
Protection Agreement.


 


“Inventory” means
inventory, as that term is defined in the UCC, now or hereafter owned by the
Borrower, including all products, goods, materials and supplies produced,
purchased or acquired by the Borrower for the purpose of sale or use in the
Borrower’s operations in the ordinary course of business.


 


“Issuance Request”
means an Issuance Request delivered pursuant to Section 2.08(b) (Letters of Credit) and substantially
in the form of Exhibit AA.


 


“Issuing Bank” means
WestLB AG, New York Branch.


 


“Knowledge” means
actual knowledge, after due inquiry, of any Chief Executive Officer, Chief
Financial Officer, President, Vice-President or Chief Operations Officer,
including, with respect to the Borrower as of the Closing Date, Kenneth Hern,
David Gullickson, or J.D. McGraw.


 


29

















 


“Law” means, with
respect to any Governmental Authority, any constitutional provision, law,
statute, rule, regulation, ordinance, treaty, order, decree, judgment,
decision, common law, holding, injunction, Governmental Approval or requirement
of such Governmental Authority. Unless the context clearly requires otherwise,
the term “Law” shall include each of the foregoing (and each provision
thereof) as in effect at the time in question, including any amendments,
supplements, replacements, or other modifications thereto or thereof, and
whether or not in effect as of the date of this Agreement.


 


“LC Cap” means two
million five hundred thousand Dollars ($2,500,000).


 


“LC Cash Collateral
Sub-Account” has the meaning provided in Section 8.01(l) (Establishment of Project Accounts).


 


“Lead Arranger” means
WestLB in its capacity as lead arranger, sole bookrunner and syndication agent
hereunder.


 


“Lender Assignment
Agreement” means a Lender Assignment Agreement, substantially in the form of
Exhibit Q.


 


“Lenders” means the
persons identified as “Lenders” and listed on the signature pages of this
Agreement and each other Person that acquires the rights and obligations of a
Lender hereunder pursuant to Section 11.03 (Assignments).


 


“Letter of Credit”
means each letter of credit issued by the Issuing Bank pursuant to Section 2.08
(Letters of Credit).


 


“Letter of Credit
Availability Fee” has the meaning provided in Section 3.13(d) (Fees).


 


“Letter of Credit
Fronting Fee” has the meaning provided in Section 3.13(d) (Fees).


 


“LIBOR” means, for
any Interest Period for any Eurodollar Loan:


 


(a)                                 the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
that appears on the page of the Telerate screen (or any successor thereto)
that displays an average British Bankers Association Interest Settlement Rate
for deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of such Interest Period; or


 


30

















 


(b)                                if the rate
referenced in the preceding clause (a) does not appear on such page or
service or such page or service is not available, the rate per annum equal
to the rate determined by the Administrative Agent to be the offered rate on
such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period, determined as of approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period; or


 


(c)                                 if the rates
referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the
rate of interest at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the
Eurodollar Loan being made, continued or converted and with a term equivalent
to such Interest Period would be offered by WestLB to major banks in the London
interbank eurodollar market at their request at approximately 4:00 p.m.
(London time) two (2) Business Days prior to the first day of such
Interest Period.


 


“License Agreement”
means that certain License Agreement to be entered into between Nova Biosource
Technologies, LLC and the Borrower.


 


“Lien” means any
security interest, mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, bailment, conditional sales or title retention
agreement, lien (statutory or otherwise), charge against or interest in
property, in each case of any kind, to secure payment of a debt or performance
of an obligation.


 


“Line Item” means a
line item of cost or expense set forth in the Construction Budget.


 


“Lipid Guarantor”
means Kaluzny Brothers, Inc., an Illinois corporation.


 


“Lipid Parent Guaranty”
means a guaranty of Lipid Logistic, LLC’s obligations under the Feedstock
Agreement provided by the Lipid Guarantor for the benefit of the Borrower, in form and
substance reasonably satisfactory to the Administrative Agent.


 


“Loan Parties” means,
collectively, the Borrower, the Pledgor and the Guarantor.


 


31

















 


“Loans” means,
collectively, the Construction Loans, the Term Loans and the Working Capital
Loans.


 


“Local Account” means
any local bank account (other than the Project Accounts) in the name of the
Borrower.


 


“Major Project Document”
means a Project Document with a Major Project Party.


 


“Major Project Party”
means each of ConAgra Trade Group, Inc., Lipid Logistics, LLC, the Lipid
Guarantor, Nova Biosource Technologies, LLC, Biosource America, Inc., the
project counterparty under the Wastewater Disposal Agreement, and each party
replacing any such Major Project Party under the relevant Project Document or
an agreement replacing such relevant Project Document, and any other Project
Party designated as a Major Project Party by the Administrative Agent and the
Borrower.


 


“Mandatory Prepayment”
means a prepayment in accordance with Section 3.10 (Mandatory Prepayment).


 


“Material Adverse Effect”
means any event, development or circumstance that has had or could reasonably
be expected to have a material adverse effect on (i) the business, assets,
property, condition (financial or otherwise), prospects, or operations of the
Borrower or the Project, taken as a whole, (ii) the ability of the
Borrower, the Pledgor, any Project Party or any other Loan Party to perform its
material obligations under any Transaction Document to which it is a party, (iii) creation,
perfection or priority of the Liens granted, or purported to be granted, in
favor, or for the benefit, of the Collateral Agent pursuant to the Security
Documents or (iv) the rights or remedies of any Senior Secured Party under
any Financing Document.


 


“Materials of
Environmental Concern” means chemicals, pollutants, contaminants, wastes,
toxic substances and hazardous substances, any toxic mold, radon gas or other
naturally occurring toxic or hazardous substance or organism and any material
that is regulated in any way, or for which liability is imposed, pursuant to an
Environmental Law.


 


“Maturity Date”
means, as the context may require, (a) with respect to the
Construction Loans, the Construction Loan Maturity Date (b) with respect
to the Term Loans, the Final Maturity Date and (c) with respect to the
Working Capital Loans, the Working Capital Loan Maturity Date.


 


“Maximum Available Amount”
means, with respect to any Letter of Credit at any time, the maximum amount the
beneficiary of such Letter of Credit may 


 


32

















 


draw thereunder at such
time, as such amount may be reduced from time to time pursuant to the
terms of such Letter of Credit.


 


“Maximum Rate” has
the meaning provided in Section 11.09 (Interest
Rate Limitation).


 


“Minimum Performance
Criteria” means that the Project achieved the following performance levels
(as demonstrated in a Performance Test, completed in accordance with the
Approved Performance Test Protocols):


 


(a)                                 biodiesel
throughput (production) rate of 1,920 gallons per hour per train, and a total
of 3 trains;


 


(b)                                biodiesel quality
of ASTM D 6751-07 Grade S15;


 


(c)                                 biodiesel yield of
one gallon of ASTM D 6751-07 Grade S15 biodiesel per 8.7 pounds of 5% FFA
feedstock (or such other feedstock acceptable to the Independent Engineer);


 


(d)                                glycerin purity of
95%; and


 


(e)                                 methanol
consumption of a maximum of 0.15 gallons of methanol per gallon of biodiesel.


 


“Moody’s” means Moody’s
Investors Service Inc., and any successor thereto that is a nationally
recognized rating agency.


 


“Mortgage” means the
Mortgage, Security Agreement, Financing Statement, Fixture Filing and
Assignment of Leases, Rents and Security Deposits, in form and substance
reasonably satisfactory to the Lenders, to be made by the Borrower to the
Collateral Agent for the benefit of the Senior Secured Parties.


 


“Mortgaged Property”
means all real property right, title and interest of the Borrower that is
subject to the Mortgage in favor of the Collateral Agent.


 


“Multiemployer Plan”
means a Plan that is a “multiemployer plan” as defined in Section 4001(a)(3) of
ERISA.


 


“Necessary Project
Approvals” has the meaning set forth in Section 5.03(a)(i) (Representations and Warranties - Governmental Approvals).


 


“Necessary Project
Contracts” has the meaning set forth in Section 5.11(a)(ii) (Representations and Warranties - Contracts).


 


33

















 


“Non-Appealable”
means, with respect to any specified time period allowing an appeal of any
ruling under any constitutional provision, Law, statute, rule, regulation,
ordinance, treaty, order, decree, judgment, decision, certificate, holding or
injunction that such specified time period has elapsed without an appeal having
been brought.


 


“Non-U.S. Lender”
has the meaning set forth in Section 4.07(e) (Taxes -
Foreign Lenders).


 


“Non-Voting Lender”
means any Lender who (a) is also a Loan Party, a Project Party, or any
Affiliate or Subsidiary thereof, or (b) has sold a participation in the Loan
held by it to any such Person.


 


“Notes” means the
Construction Notes, the Term Notes and the Working Capital Notes, including any
promissory notes issued by the Borrower in connection with assignments of any
Loan of a Lender, in each case substantially in the form of Exhibit B,
Exhibit C or Exhibit D as they may be amended,
restated, supplemented or otherwise modified from time to time.


 


“Obligations” means
and includes all loans, advances, debts, liabilities, Indebtedness and
obligations, howsoever arising, owed to the Agents, the Lenders or any other
Senior Secured Party of every kind and description (whether or not evidenced by
any note or instrument and whether or not for the payment of money), direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against the Borrower of any
Insolvency or Liquidation Proceeding naming the Borrower as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, pursuant to the terms of this Agreement or any of the other
Financing Documents, including all principal, interest, fees, charges,
expenses, attorneys’ fees, costs and expenses, accountants’ fees and
Consultants’ fees payable by the Borrower hereunder or thereunder.


 


“Operating Account”
has the meaning provided in Section 8.01(c) (Establishment
of Project Accounts).


 


“Operating Account
Withdrawal Certificate” means an Operating Account Withdrawal Certificate
substantially in the form of Exhibit T.


 


“Operating Budget”
has the meaning set forth in Section 7.01(j) (Affirmative
Covenants - Operating Budget).


 


34
















 


“Operating Budget
Category” means, at any time with respect to each Operating Budget, each
line item set forth in such Operating Budget in effect at such time.


 


“Operating Statement”
means an operating statement with respect to the Project, in substantially the form of
Exhibit L.


 


“Operating and
Maintenance Agreement” means that certain Operation and Maintenance
Agreement to be entered into by the Borrower and Biosource America, Inc.


 


“Operation and
Maintenance Expenses” means, for any period, the sum without duplication of
all (i) reasonable and necessary expenses of administering, managing and
operating, and generating Products for sale from, the Project and maintaining
it in good repair and operating condition, (ii)  costs associated with the
supply and transportation of all feedstock, natural gas, electricity and other
supplies and raw materials to the Project and distribution and sale of Products
from the Project that the Borrower is obligated to pay, (iii) all
reasonable and necessary insurance costs (other than insurance premiums that
are paid as Project Costs), (iv) property, sales and franchise taxes to
the extent that the Borrower is liable to pay such taxes to the taxing
authority (other than taxes imposed on or measured by income or receipts) to which
the Project, may be subject (or payment in lieu of such taxes to which the
Project may be subject), (v) reasonable and necessary costs and fees
incurred in connection with obtaining and maintaining in effect Necessary
Project Approvals, (vi) reasonable and arm’s-length legal, accounting and
other professional fees attendant to any of the foregoing items during such
period, (vii) the reasonable costs of administration and enforcement of
the Transaction Documents, (viii) costs incurred pursuant to the Permitted
Commodity Hedging Arrangements, and (ix) all other costs and expenses
included in the then-current Operating Budget. In no event shall Project Costs
or Maintenance Capital Expenses be considered Operation and Maintenance
Expenses.


 


“Organic Documents”
means, with respect to any Person that is a corporation, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of capital
stock and, with respect to any Person that is a limited liability company, its
certificate of formation or articles of organization and its limited liability
agreement.


 


“Participant” has the
meaning provided in Section 11.03(d) (Assignments).


 


“Patriot Act” means
United States Public Law 107-56, Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and 


 


35

















 


Obstruct Terrorism (USA
PATRIOT ACT) of 2001, and the rules and regulations promulgated thereunder
from time to time in effect.


 


“Payment Bond” means
any payment bond provided for the benefit of the Borrower under any
Construction Contract.


 


“PBGC” means the
Pension Benefit Guaranty Corporation and any entity succeeding to any or all of
its functions under ERISA.


 


“Performance Bond”
means any performance bond provided for the benefit of the Borrower under any
Construction Contract.


 


“Performance Guarantee”
means the guaranteed performance levels set forth on Schedule 6.01(o)(iii).


 


“Performance Test”
means any performance test conducted by the Borrower to determine satisfaction
of the Minimum Performance Criteria and the Performance Guarantees.


 


“Performance Test Report”
has the meaning provided in Section 7.01(k) (Affirmative
Covenants - Performance Tests).


 


“Permitted Commodity
Hedging Arrangements” means those Commodity Hedging Arrangements entered
into by the Borrower in accordance with Section 7.02(t) (Negative Covenants - Commodity Hedging Arrangements).


 


“Permitted Indebtedness”
means Indebtedness identified in Section 7.02(a) (Negative Covenants - Restrictions on Indebtedness of the Borrower).


 


“Permitted Liens”
means Liens identified in Section 7.02(b) (Negative
Covenants - Liens).


 


“Permitted Operating
Budget Deviation Levels” means, with respect to Operation and Maintenance
Expenses ten percent (10%) the amount projected for such expenses in the
then-current Operating Budget.


 


“Permitted Tax
Distribution” means, with respect to any distributee that is required to
pay tax as a result of its direct or indirect ownership of the Borrower, an
amount equal to (a) the Effective Tax Rate at such time multiplied by (b) such
distributee’s estimated share of the taxable income of the Borrower (after
netting or otherwise taking account of a distributee’s shares of the income,
loss, deduction and credit associated with the distributee’s interest in the
Borrower) that the distributee is reasonably expected to have to report for
income tax purposes for the Fiscal Quarter 


 


36

















 


distributed to the extent
necessary to fund a distributee’s timely payment to a Governmental Authority of
tax liability (including estimated payments thereof) and subject to correction
as described below. “Effective Tax Rate” means, as of any date of
calculation, a percentage equal to the sum of (x) the maximum then-current
federal marginal income tax rate plus (y) the then-current Illinois
marginal income tax rate applicable to such distributee. Permitted Tax
Distributions as estimated for purposes of a Quarterly Payment Date shall be
subject to later correction to reflect amounts as actually reported on an
income tax return by a distributee for federal and state income tax purposes. Thus,
on any Quarterly Payment Date, the Permitted Tax Distribution means the amount
calculated as the product of (a) and (b), above, adjusted by the
difference, if any, between the Permitted Tax Distribution for the preceding
Quarterly Payment Date as estimated for such date and the Permitted Tax
Distribution for that preceding Quarterly Payment Date as finally determined.


 


“Person” means any
natural person, corporation, partnership, limited liability company, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.


 


“Plan” means an
employee pension benefit plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA that is sponsored or maintained by the
Borrower or any ERISA Affiliate, or in respect of which the Borrower or any
ERISA Affiliate has any obligation to contribute or liability.


 


“Pledge Agreement”
means the Pledge and Security Agreement, to be entered into on or before the
Closing Date, among the Borrower, the Pledgor and the Collateral Agent,
pursuant to which the Pledgor pledges one hundred percent (100%) of the
Equity Interests in the Borrower to the Collateral Agent.


 


“Pledge of Affiliate
Loans” means the Pledge of Affiliate Loans Agreement dated on or about the
date hereof to be made by the Pledgor in favor of the Collateral Agent.


 


“Pledgor” means Nova
Holding Seneca, LLC, a Delaware limited liability company.


 


“Prepayment Holding
Account” has the meaning set forth in Section 8.01(f) (Establishment of Project Accounts).


 


“Primary Swap Obligations”
means, with respect to any Interest Rate Protection Agreement, all scheduled
obligations due and payable by any Person party to such Interest Rate
Protection Agreement (after giving effect to any netting applicable thereto)
and all payments of Swap Termination Value due and payable by any Person 


 


37

















 


party to such Interest Rate
Protection Agreement, but excluding any amounts owed in respect of Taxes,
expenses and indemnification obligation which do not constitute payments of
Swap Termination Value.


 


“Process Agent” means
any Person appointed as agent by any Loan Party, to the extent required under
the Financing Documents, to receive on behalf of itself and its property
services of copies of summons and complaint or any other process which may be
served in connection with any action or proceeding before any court arising out
of or relating to this Agreement or any other Financing Document to which it is
a party, including CT Corporation.


 


“Products” means
biodiesel, glycerin, and any other co-product or by-product produced in
connection with the production of biodiesel at the Project.


 


“Project” means, the
biodiesel plant to be located in Seneca, Illinois, which is designed to produce
approximately sixty (60) million gallons-per-year of biodiesel, and all
auxiliary and other facilities constructed or to be constructed by or on behalf
of the Borrower pursuant to the Project Documents or otherwise, together with
all fixtures and improvements thereto and the Site and all other real property,
easements and rights-of-way held by or on behalf of the Borrower and all rights
to use easements and rights-of-way of others.


 


“Project Accounts”
means the Construction Account, the Revenue Account, the Operating Account, the
Prepayment Holding Account, the BBETC Sub-account of the Prepayment Holding
Account, the Debt Service Reserve Account, the Working Capital Reserve Account,
the Warranty Reserve Account, the Insurance and Condemnation Proceeds Account,
the Extraordinary Proceeds Account, the Sponsor Support Account and the LC Cash
Collateral Sub-Account.


 


“Project Costs”
means, the following costs and expenses incurred by the Borrower in connection
with the Project prior to the Final Completion Date and set forth in the
Construction Budget or otherwise approved in writing by the Required Lenders
(in consultation with the Independent Engineer):


 


(i)                                    costs incurred by
the Borrower under the Construction Contracts, and other costs related to the
acquisition, site preparation, design, engineering, construction, installation,
start-up, and testing of the Project;


 


(ii)                                 fees and expenses
incurred by or on behalf of the Borrower in connection with the development of
the Project and the consummation of the transactions contemplated by this
Agreement, 


 


38

















 


including
financial, accounting, legal, surveying and consulting fees, and the costs of
preliminary engineering;


 


(iii)                              interest and Fees
on the Construction Loans until the Commercial Operations Date;


 


(iv)                             financing fees and
expenses in connection with the Loans and the fees, costs and expenses of the
Agents’ counsel, any Interest Rate Protection Provider’s counsel and the
Consultants;


 


(v)                                insurance premiums
with respect to the Title Insurance Policy and the insurance required
pursuant to Section 7.01(h) (Affirmative Covenants -
Insurance);


 


(vi)                             costs of feedstock
and natural gas utilized for commissioning, Performance Tests for, and
operation of, the Project prior to the Final Completion Date;


 


(vii)                          amount required to
fund the Debt Service Reserve Account to the Debt Service Reserve Required
Amount;


 


(viii)                       all other costs and
expenses included in the Project Construction Budget; and


 


(ix)                               costs incurred by
the Borrower under the Construction Contracts, and other costs directly related
to the acquisition, site preparation, design, engineering, construction,
installation, start-up, and testing of the Project.


 


“Project Document
Termination Payments” means all payments that are required to be paid to or
for the account of the Borrower as a result of the termination of any Project
Document.


 


“Project Documents”
means:


 


(i)                                    the Construction
Contracts;


 


(ii)                                 the License
Agreement;


 


(iii)                              the Feedstock
Agreement;


 


(iv)                             the Biodiesel
Marketing Agreement;


 


39

















 


(v)                                the Redevelopment
Agreement;


 


(vi)                             the ConAgra
Feedstock Undertaking;


 


(vii)                          the Lipid Parent
Guaranty;


 


(viii)                       the Wastewater
Disposal Agreement;


 


(ix)                               the Gas Supply
Agreement;


 


(x)                                  the Electricity
Supply Agreement;


 


(xi)                               upon the execution
thereof, the Operation and Maintenance Agreement;


 


(xii)                            upon the execution
thereof, the Services Agreement;


 


(xiii)                         any other documents
designated as a Project Document by the Borrower and the Administrative Agent;


 


(xiv)                        each Additional
Project Document; and


 


(xv)                           any replacement
agreement for any such agreement.


 


“Project Party” means
each Person (other than the Borrower) who is a party to a Project Document.


 


“Proposed Letter of
Credit Issuance Date” means, with respect to a Letter of Credit, the
proposed date of issuance of such Letter of Credit set forth in the respective
Issuance Request.


 


“Prospective Debt Service
Coverage Ratio” or “PDSCR” means, for any Quarterly Payment Date,
for the Fiscal Quarter including such Quarterly Payment Date and the three (3) Fiscal
Quarters immediately following such Quarterly Payment Date, the ratio of (i) Cash
Flow Available for Debt Service projected for such period to (ii) Debt
Service projected for such period, in each case based on the then-current
Operating Budget approved in accordance with Section 7.01(j) (Affirmative Covenants - Operating Budget), as the same
has been updated (if necessary) to reflect the then-current projections for
commodity prices, and approved by the Administrative Agent, acting reasonably.


 


“Prudent Biodiesel
Operating Practice” means those reasonable practices, methods and acts that
(i) are commonly used to manage, operate and maintain biodiesel 


 


40

















 


production, distribution,
equipment and associated facilities of the size and type that comprise the
Project safely, reliably, and efficiently and in compliance with applicable
Laws, manufacturers’ warranties and manufacturers’ and licensor’s recommendations
and guidelines, and (ii) in the exercise of reasonable judgment, skill,
diligence, foresight and care are expected of a biodiesel plant operator, in
order to efficiently accomplish the desired result consistent with safety
standards, applicable Laws, manufacturers’ warranties, manufacturers’
recommendations and, in the case of the Project, the Project Documents. Prudent
Biodiesel Operating Practice does not necessarily mean one particular practice,
method, equipment specifications or standard in all cases, but is instead
intended to encompass a broad range of acceptable practices, methods, equipment
specifications and standards.


 


“Qualified Counterparty”
means any of the following:  (i) any
Person who is a Lender, the Administrative Agent, or the Collateral Agent on
the date the relevant Interest Rate Protection Agreement is entered into or (ii) any
Affiliate of any Person listed in clause (i).


 


“Quarterly Payment Date”
means each of January 31, April 30, July 31 and October 31.


 


“Quarterly Period”
means each three (3) month period beginning on (and including) the day
immediately following a Quarterly Payment Date and ending on (and including)
the next Quarterly Payment Date.


 


“RCRA” means the
Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), as
amended, and all rules, regulations, standards, guidelines, and publications
issued thereunder.


 


“Redevelopment Agreement”
means that certain Redevelopment Agreement among the Village of Seneca, LaSalle
and Grundy Counties, Illinois, Shipyard Industrial Park, Inc., and the
Borrower dated as of October 31, 2006.


 


“Register” has the
meaning set forth in Section 11.03(c) (Assignments).


 


“Related Parties” means, with
respect to any Person, such Person’s Affiliates and the partners, directors, officers,
employees, agents and advisors of such Person and of such Person’s Affiliates.


 


“Removal,” “Remedial”
and “Response” actions shall include the types of activities covered by
CERCLA, RCRA, and other comparable Environmental Laws, and whether the activities
are those which might be taken by a Governmental Authority or those which a
Governmental Authority or any other Person might seek to require of 


 


41

















 


potentially responsible
parties, liable parties, waste generators, handlers, distributors, processors,
users, disposers, storers, treaters, owners, operators, transporters,
recyclers, reusers, disposers, or other Persons under “removal,” “remedial,” or
other “response” actions.


 


“Reportable Event”
means a “reportable event” within the meaning of Section 4043(c) of
ERISA other than an event for which the 30 day notice provision has
been waived pursuant to subclause 22, 23, 27 or 28 of the regulations
thereunder.


 


“Required Cash Sweep”
means each mandatory prepayment of the Loans made pursuant to Section 3.10
(Mandatory Prepayment).


 


“Required Equity
Contribution” means the equity contributions to be made to the Borrower on
the Closing Date for Project Costs in the aggregate total amount of forty-four
million, six hundred eight-five thousand, six hundred eighty-eight Dollars
($44,685,688); provided that any amount deposited by the Borrower into
the Construction Account on the Closing Date from its pre-Closing funds for
payment of Project Costs shall be deemed to be an equity contribution.


 


“Required Lenders”
means (a) at any time prior to the Conversion Date, Lenders (excluding all
Non-Voting Lenders) holding Commitments in excess of fifty percent (50.00%) of
the Construction Loan Commitments and the Working Capital Loan Commitments
(excluding the Construction Loan Commitments and the Working Capital Loan
Commitments of all Non-Voting Lenders) and (b) at any time after the
Conversion Date, Lenders (excluding all Non-Voting Lenders) holding Loans and
Commitments in excess of fifty percent (50.00%) of an amount equal to
(x) the then aggregate outstanding principal amount of the Loans plus
(y) the undisbursed amount of the Aggregate Working Capital Loan
Commitment (excluding the principal amounts of any Loans made by, and any
Working Capital Loan Commitments of, any Non-Voting Lenders).


 


“Required LLC Provisions”
has the meaning provided in Section 5.24 (Representations
and Warranties - Required LLC Provisions).


 


“Required Working Capital
Lenders” means Lenders (excluding all Non-Voting Lenders) holding in excess
of fifty percent (50.00%) of an amount equal to (x) the then aggregate
outstanding principal amount of the Working Capital Loans plus (y) the
undisbursed amount of the Aggregate Working Capital Loan Commitment (excluding
the principal amounts of any Working Capital Loans made by, and any Working
Capital Loan Commitments of, any Non-Voting Lenders).


 


42

















 


“Restricted Payment
Certificate” means a certificate in substantially the form of Exhibit U,
duly executed and delivered by an Authorized Officer of the Borrower.


 


“Restricted Payments”
means any (a) dividend or other distribution (whether in cash, securities
or other property), or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any Equity Interests of the Borrower, or on account of any
return of capital to any holder of any such Equity Interest in, or any other
Affiliate of, the Borrower, or any option, warrant or other right to acquire
any such dividend or other distribution or payment or (b) any payment of
any management, consultancy, administrative, services, or other similar
payments, to any Person who owns, directly or indirectly, any Equity Interest
in the Borrower, or any Affiliate of any such Person; provided, that the
payment of the Guarantor’s Conversion Date Amount in accordance with Section 8.04(c) (Revenue Account), the Approved Management Fees, any
Permitted Tax Distribution, transfer from the Sponsor Support Account pursuant
to Section 8.12(c) (Sponsor Support Account)
or transfer from the Warranty Reserve Account pursuant to Section 8.11
(Warranty Account) shall not
constitute a Restricted Payment.


 


“Revenue Account” has
the meaning set forth in Section 8.01(b) (Establishment
of Project Accounts).


 


“Revenue Account
Withdrawal Certificate” means a Revenue Account Withdrawal Certificate substantially
in the form of Exhibit S.


 


“Securities Intermediary”
means Sterling Bank, a Texas banking corporation, not in its individual
capacity, but solely as securities intermediary under this Agreement, and
includes each other Person that may, from time to time, be appointed as
successor Securities Intermediary pursuant to and in accordance with this
Agreement.


 


“Security” means the
security created in favor of the Collateral Agent pursuant to the Security
Documents.


 


“Security Agreement”
means the Assignment and Security Agreement, to be entered into on or before
the Closing Date, by the Borrower in favor of the Collateral Agent.


 


“Security Documents” means:


 


(i)                                    the Mortgage;


 


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(ii)                                 this Agreement (to the
extent that it relates to the Project Accounts);


 


(iii)                              the Consents;


 


(iv)                             the Pledge
Agreement;


 


(v)                                the Security
Agreement;


 


(vi)                             the Subordination
Agreement;


 


(vii)                          the Pledge of
Affiliate Loans;


 


(viii)                       the Blocked Account
Agreements;


 


(ix)                               any other document
designated as a Security Document by the Borrower and the Administrative Agent;
and


 


(x)                                  any fixture
filings, financing statements, notices, authorization letters, or other
certificates filed, recorded or delivered in connection with the foregoing.


 


“Senior Secured Parties”
means the Lenders, the Agents, any Interest Rate Protection Provider, and each
of their respective successors, transferees and assigns.


 


“Services Agreement”
means an administrative services agreement to be entered into by the Borrower
and an administrative services provider reasonably acceptable to the
Administrative Agent (it being understood that either of Nova Biosource Fuels, Inc.
or Biosource America, Inc. are acceptable).


 


“Site” means those
certain parcels described on Schedule 5.13.


 


“Solvent” means, with
respect to any Person, that as of the date of determination both (i) (A) the
then fair saleable value of the property of such Person is (y) greater
than the total amount of liabilities (including Contingent Liabilities but
excluding amounts payable under intercompany loans or promissory notes) of such
Person and (z) not less than the amount that will be required to pay the
probable liabilities on such Person’s then existing debts as they become
absolute and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (B) such Person’s capital is
not unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (C) such Person does not intend to incur, or
reasonably believe that it will incur, debts beyond its ability to pay such
debts as they become due; and (ii) such Person is “solvent” within the
meaning given that term and 


 


44

















 


similar terms under
applicable Laws relating to fraudulent transfers and conveyances. For purposes
of this definition, the amount of any Contingent Liability at any time shall be
computed as the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.


 


“Specified Period”
has the meaning set forth in Section 7.01(t) (Affirmative
Covenants - Financial Model).


 


“Sponsor Support Account”
has the meaning provided in Section 8.01(k) (Establishment
of Project Accounts).


 


“SPV” has the meaning
provided in Section 11.03(h) (Assignments).


 


“Stated Amount” has
the meaning specified for such term in any Debt Service Reserve Letter of
Credit.


 


“Subordination Agreement”
means the Subordination Agreement to be entered into on or before the Closing
Date, by the Borrower and the Pledgor in favor of the Collateral Agent.


 


“Subsidiary” of any
Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other Equity Interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or
both, by such Person.


 


“Survey” has the
meaning provided in Section 6.01(u) (Conditions
to Closing and First Funding - Survey).


 


“Swap Contract” means
(a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, (b) any and all 


 


45

















 


transactions of any kind,
and the related confirmations, which are subject to the terms and conditions
of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International
Foreign Exchange Master Agreement, or any other master agreement, including any
such obligations or liabilities under any such master agreement and (c) for
the avoidance of doubt, includes the Permitted Commodity Hedging Arrangements
and any Interest Rate Protection Agreements and excludes any contract for the
physical sale or purchase of any commodity.


 


“Swap Termination Value”
means, in respect of any one or more Swap Contracts (including any Permitted
Commodity Hedging Arrangements or any Interest Rate Protection Agreements),
after taking into account the effect of any legally enforceable netting agreement
relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date
prior to the date referenced in clause (a), the amount(s) determined as
the mark-to-market value(s) for such Swap Contracts, in accordance with the
terms of the applicable Swap Contract, or, if no provision is made therein, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Contracts (which may include
a Lender or any Affiliate of a Lender).


 


“Target Balance Amount”
means the aggregate principal amount under the Term Loans projected to be
outstanding on each Quarterly Payment Date, as set forth in Schedule 3.10(b)(i).


 


“Tax” or “Taxes”
means any present or future taxes (including income, gross receipts, license,
payroll, employment, excise, severance, stamp, documentary, occupation,
premium, windfall profits, environmental, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value-added,
ad valorem, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever), levies, imposts, duties, fees or charges (including any interest,
penalty, or addition thereof) imposed by any government or any governmental
agency or instrumentality or any international or multinational agency or
commission.


 


“Tax Return” means
all returns, declarations, reports, claims for refund and information returns
and statements of any Person required to be filed with respect to, or in
respect of, any Taxes, including any schedule or attachment thereto and
any amendment thereof.


 


“Term Loan” has the
meaning provided in Section 2.02(a) (Term Loans).


 


46

















 


“Term Loan Commitment”
means, with respect to each Lender, the commitment of such Lender to make Term
Loans, as set forth opposite the name of such Lender in Schedule 2.01,
as the same may be reduced in accordance with Section 2.07 (Termination or Reduction of Commitments).


 


“Term Loan Commitment
Percentage” means, as to any Lender at any time, the percentage that such
Lender’s Term Loan Commitment then constitutes of the Aggregate Term Loan
Commitment.


 


“Term Notes” means
the promissory notes of the Borrower, substantially in the form of Exhibit C,
evidencing Term Loans.


 


“Termination Event”
means (i) a Reportable Event with respect to any ERISA Plan, (ii) the
initiation of any action by the Borrower, any ERISA Affiliate or any ERISA Plan
fiduciary to terminate an ERISA Plan (other than a standard termination under Section 4041(b) of
ERISA) or the treatment of an amendment to an ERISA Plan as a termination under
Section 4041(e) of ERISA (other than treatment as a standard
termination under Section 4041(b) of ERISA), (iii) the
institution of proceedings by the PBGC under Section 4042 of ERISA to
terminate an ERISA Plan or to appoint a trustee to administer any ERISA Plan, (iv) the
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer Plan
during a plan year in which the Borrower or such ERISA Affiliate was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA or the cessation
of operations which results in the termination of employment of twenty percent
(20%) of Multiemployer Plan participants who are employees of the Borrower
or any ERISA Affiliate, (v) the partial or complete withdrawal of the
Borrower or any ERISA Affiliate from a Multiemployer Plan, or (vi) the
Borrower or any ERISA Affiliate is in default (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan.


 


“Threat of Release”
shall mean “threat of release” as used in CERCLA.


 


“Title Continuation”
means a written notice issued by the Title Insurance Company (including
their local title insurance abstractors) confirming the status of title as set
forth in the Title Insurance Policy, which indicates that, since the last
preceding Funding Date (or, if the current Funding is on the Closing Date,
since the date hereof), there has been no change in the title of title to the
Mortgaged Property and no Liens or survey exceptions (in the case of any updated
or “as-built” survey that has been issued) not theretofore approved by the
Required Lenders, which written notice shall contain no recorded mechanic’s
liens except as approved by the Required Lenders or as otherwise subject to a
Contest.


 


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“Title Insurance
Company” means Chicago Title Insurance Company, or such other title
insurance company or companies reasonably satisfactory to the Administrative
Agent.


 


“Title Insurance
Policy” has the meaning provided in Section 6.01(v) (Conditions to Closing and First Funding - Title Insurance).


 


“Transaction Documents”
means, collectively, the Financing Documents and the Project Documents.


 


“Unfunded Benefit
Liabilities” means, with respect to any ERISA Plan at any time, the amount
(if any) by which (i) the present value of all accrued benefits calculated
on an accumulated benefit obligation basis and based upon the actuarial
assumptions used for accounting purposes (i.e., those determined
in accordance with FASB statement No. 35 and used in preparing the
ERISA Plan’s financial statements) exceeds (ii) the fair market value of
all ERISA Plan assets allocable to such benefits, determined as of the then
most recent actuarial valuation report for such ERISA Plan.


 


“Uniform Commercial
Code” or “UCC” means the Uniform Commercial Code as in effect
from time to time in the State of New York; provided, however, in
the event that, by reason of mandatory provisions of law, any or all of the
perfection or priority of the security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than
the State of New York, the term “UCC” shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of provisions
relating to such perfection or priority and for purposes of definitions related
to such provisions.


 


“United States” or “U.S.”
means the United States of America, its fifty States and the District of
Columbia.


 


“United States Person”
means a “United States person” as defined in Section 7701(a)(30) of the
Code.


 


“Value” means, with
respect to any inventory or other goods, the cost thereof to the Borrower,
calculated on a first-in first-out basis in accordance with GAAP.


 


“Warranty Period”
means the period commencing on the Final Completion Date and terminating on the
date that is twelve (12) months from the Final Completion Date; provided,
that if any warranty work is performed, then the “Warranty Period” shall extend
until the later of(i) twelve (12) months from the date of completion
of such warranty work and (ii) the expiration of the original Warranty
Period, but in no event 


 


48

















 


shall such Warranty Period
extend beyond twenty-four (24) months after the Final Completion Date.


 


“Warranty Proceeds
Request Certificate” means a certificate in substantially the form of Exhibit Z,
duly executed by an Authorized Officer of the Borrower and setting forth
proposed instructions for the transfer or withdrawal of funds from the Warranty
Reserve Account.


 


“Warranty Reserve Account”
has the meaning provided in Section 8.01(j) (Establishment
of Project Accounts).


 


“Warranty Reserve Letter
of Credit” means an irrevocable, standby letter of credit issued by an
Acceptable Bank in favor of, and in form and substance reasonably
satisfactory to, the Collateral Agent and the Administrative Agent.


 


“Warranty Reserve
Required Amount” means (x) until the twelve month anniversary of the
Final Completion Date, one million five hundred thousand Dollars ($1,500,000)
and (y) thereafter and until the end of the Warranty Period, an amount to
be determined by the Independent Engineer based on the nature and amount of
Warranty Work done prior to such twelve month anniversary.


 


“Wastewater Discharge
Agreement” means an agreement to be entered into between the Borrower and a
counterparty reasonably acceptable to the Administrative Agent to transport and
dispose of process wastewater, together with all corresponding Governmental
Approvals, including but not limited to approval to land spread process
wastewater.


 


“WestLB” means WestLB
AG, New York Branch.


 


“Working Capital
Applicable Margin” has the means (a) with respect to the Eurodollar
Loans, 4.00% and (b) with respect to the Base Rate Loans, 3.00%.


 


“Working Capital
Available Amount” means:  five
million Dollars ($5,000,000); provided that the Working Capital
Available Amount shall at no time exceed the Aggregate Working Capital Loan
Commitment nor the then-effective Borrowing Base, as certified from time to
time by the Borrower.


 


“Working Capital Expenses”
means, collectively, costs of goods prior to the Conversion Date, Operation and
Maintenance Expenses, Maintenance Capital Expenses, margin calls, Project Costs
relating to the initial start-up and testing of the Project, breakage costs or
other termination payments under any Permitted Commodity Hedging Arrangement .


 


49

















 


“Working Capital Lenders”
means those Lenders of Working Capital Loans, as identified on Schedule 2.01,
and each other Person that acquires the rights and obligations of any such
Lender pursuant to Section 11.03 (Assignments).


 


“Working Capital Loan”
has the meaning provided in Section 2.03(a) (Working
Capital Loans).


 


“Working Capital Loan
Commitment” means, with respect to each Working Capital Lender, the
commitment of such Working Capital Lender to make Working Capital Loans, as set
forth opposite the name of such Working Capital Lender in Schedule 2.01,
as the same may be reduced in accordance with Section 2.07 (Termination or Reduction of Commitments).


 


“Working Capital Loan
Commitment Percentage” means, as to any Working Capital Lender at any time,
the percentage that such Working Capital Lender’s Working Capital Loan Commitment
then constitutes of the Aggregate Working Capital Loan Commitment.


 


“Working Capital Loan
Funding Notice” means each request for Funding of Working Capital Loans in
the form of Exhibit G delivered in accordance with Section 2.04
(Notice of Fundings).


 


“Working Capital Maturity
Date” means (i) the Quarterly Payment Date that next follows the date
that occurs twelve (12) months after the Conversion Date, or (ii) to
the extent that some or all of the Working Capital Lenders decide to extend or
renew the Working Capital Loan Commitment, such date as shall be determined by
such Working Capital Lenders, and (iii)  the date that is ninety
(90) days after the date on which all outstanding Construction Loans and
Term Loans have been paid in full.


 


“Working Capital Notes”
means the promissory notes of the Borrower, substantially in the form of Exhibit D,
evidencing Working Capital Loans.


 


“Working Capital Reserve
Account” has the meaning set forth in Section 8.01(d) (Establishment of Project Accounts).


 


“Working Capital Reserve
Required Amount” means the amount necessary such that the sum of (i) the
Aggregate Working Capital Loan Commitment and (ii) the amount on deposit
in the Working Capital Reserve Account equals five million Dollars
($5,000,000).


 


“Working Capital Transfer
Certificate” means a Working Capital Transfer Certificate substantially in
the form of Exhibit V.


 


50