Document:

Exhibit 10.1

 

STOCK REPURCHASE AGREEMENT

 

This
Stock Repurchase Agreement (this “Agreement”) is made as of the 5th day
of November, 2010, by and among
GT Solar International, Inc., a Delaware corporation (the “Company”)
and GT Solar Holdings, LLC, a Delaware limited liability company (the “Seller”).

 

WHEREAS,
the Seller owns the number of shares of Company common stock, par value $.01
per share (the “Common Stock”), set forth opposite the Seller’s name on Schedule
I hereto;

 

WHEREAS,
the Seller wishes to transfer and sell to the Company, and the Company wishes
to repurchase from the Seller the
number of shares of Common Stock (the “Shares”) set forth
opposite the Seller’s name and classified as the Total Shares on Schedule II
hereto, on the terms and subject to the conditions set forth in this Agreement;

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein set
forth, and for good and valuable consideration, the parties hereto agree as
follows:

 

1.             Purchase and
Sale of Shares

 

(a)       At the Closing (as defined
below), and subject to the terms and conditions hereof, the Seller will
transfer to the Company, and the Company will repurchase from the Seller, all
of the Shares.  In connection with such transfer,
the Seller will cause the Shares to be sold by the Seller to be transferred to
the Transfer Agent on behalf of the Company (as provided in Section 2(a),
below).  In exchange for the transfer of
the Shares, the Company will pay the Seller a per Share price of $7.6606, or an aggregate of $203,004,668 (the “Repurchase
Consideration”); provided, however, that in no event
shall the per Share price paid to the Seller for the Shares exceed the price per share pursuant to which the
Seller transfers and sells up to 7,000,000 shares of the Company’s Common Stock
to the Bank Investors (as defined below) on the date of or the date immediately
following the Closing.

 

(b)       The closing of the purchase
and sale of the Shares (the “Closing”) shall take place on November 12, 2010 at the offices
of Ropes & Gray LLP, Prudential Tower, 800 Boylston Street, Boston,
Massachusetts 02199, or at such other time or place as the parties shall
mutually agree.

 

2.             Deliveries at
Closing.

 

(a)       The Seller shall cause the
Shares to be transferred to Mellon Investor Services LLC (operating with the
service name BNY Mellon Shareowner Services) (the “Transfer Agent”) on
behalf of the Company by book entry accompanied by a medallion signature
guarantee.

 

(b)       The Company shall deliver or
cause to be delivered to the Seller:

 

(i)            On the date of Closing, the
portion of the Repurchase Consideration attributable to those Shares classified
as Firm Shares on Schedule II hereto, to be paid by check or wire transfer in
immediately available funds to an account designated by the Seller.

 

 

(ii)           On or prior to December 10,
2010 (the “Deferred Payment Date”), the portion of the Repurchase
Consideration attributable to those Shares classified as Incremental Shares on
Schedule II hereto, to be paid by check or wire transfer in immediately
available funds to an account designated by the Seller (“Deferred Payment”).  The Deferred Payment amount shall not bear
interest between the date of Closing and the Deferred Payment Date but shall
bear interest thereafter (in an amount equal to the prime rate as published in
the Wall Street Journal on the date of the Closing) if the Company defaults in
its obligation to make the Deferred Payment by the Deferred Payment Date.

 

3.             Company
Representations.  In
repurchasing the Shares, the Company acknowledges, represents and warrants to
the Seller that:

 

(a)       The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware.  The Company has the
corporate power, capacity and authority to enter into, execute, deliver and
perform its obligations under this Agreement.

 

(b)       This Agreement has been duly
authorized by the Company, acting through a special committee of the Board of
Directors of the Company established for the purpose of reviewing the transactions
contemplated by this Agreement and comprised solely of disinterested directors,
has been duly executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.

 

(c)       The repurchase of the Shares
by the Company will not conflict with, result in a material breach or violation
of, or constitute a default under, any law applicable to the Company or the
charter documents of the Company or other agreement or instrument to which the
Company is a party or bound, or any judgment, order or decree applicable to the
Company of any court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Company.

 

(d)       No consent, approval,
authorization or order of any court or governmental agency or body is required
for the consummation by the Company of the repurchase of the Shares hereunder.

 

(e)       Except for the express
representations and warranties contained in this Agreement, none of the Seller,
nor any of its affiliates, attorneys, accountants and financial and other
advisors, has made any representations or warranties to the Company.

 

4.             Seller
Representations.  The Seller
acknowledges, represents and warrants to the Company that:

 

(a)       The Seller is a limited
liability company validly existing and in good standing under the laws of the
State of Delaware.  The Seller has full
limited liability company power, capacity and authority to enter into, execute,
deliver and perform its obligations under this Agreement.

 

(b)       This Agreement has been duly
authorized, executed and delivered by the Seller and constitutes the legal,
valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms.

 

(c)       The Seller is the record and
beneficial owner of the shares of the Company’s Common Stock set forth opposite
the Seller’s name on Schedule I, and upon the Closing will transfer to
the Company good and marketable title to all of the Shares owned by the Seller,
free and clear of any liens, claims, security interests, restrictions, options
or other encumbrances of any kind.  The
Seller has not granted any option of 

 

2

 

any sort with respect to the Shares owned by the
Seller or any right to acquire the Shares owned by the Seller or any interest
therein other than to the Company under this Agreement.

 

(d)       The transfer and sale of the
Shares owned by the Seller will not conflict with, result in a breach or
violation of, or constitute a default under, any law applicable to the Seller
or the certificate of formation or limited liability company agreement of the
Seller or the terms of any indenture or other agreement or instrument to which
the Seller is a party or bound, or any judgment, order or decree applicable to
the Seller of any court, regulatory body, administrative agency, governmental
body or arbitrator having jurisdiction over the Seller.

 

(e)       No consent, approval,
authorization or order of any court or governmental agency or body is required
for the consummation by the Seller of the sale of the Shares owned by the
Seller to the Company hereunder.

 

(f)        The Seller has independently
investigated and evaluated the value of the Shares it owns and has received
from the Company, among other information, information regarding the Company’s
results of operations for the quarter ended October 2, 2010 and certain
projections regarding the Company’s future financial performance.  The Seller has had full opportunity to ask
questions of the Company related thereto. 
Based upon its independent analysis, together with information obtained
from sources other than the Company and its affiliates, the Seller has reached
its own business decision to effect the sale of Shares owned by the Seller
contemplated hereby.

 

(g)       The Seller is sophisticated
and capable of understanding and appreciating, and does understand and
appreciate, that future events may occur that could increase the price of the
Shares, and that the Seller would be deprived of the opportunity to participate
in any gain that might have resulted if the Seller had not transferred the
Shares owned by the Seller to the Company hereunder.

 

(h)       The Seller has not engaged
any investment banker, broker, or finder in connection with the repurchase of
Shares hereunder and no broker’s or similar fee is payable by the Seller or any
of its affiliates in connection with the transfer of the Shares owned by the
Seller hereunder.

 

(i)        The Seller has not taken,
directly or indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise,
stabilization or manipulation of the price of any security of the Company in
connection with the transfer of the Shares owned by the Seller hereunder.

 

(j)        Except for the express
representations and warranties contained in this Agreement, none of the
Company, nor any of its affiliates, attorneys, accountants and financial and
other advisors, has made any representations or warranties to the Seller.

 

5.             Conditions to
the Company’s Obligations.

 

(a)           The obligations of the
Company under Section 1 to purchase the Shares at the Closing from
the Seller are subject to the fulfillment as of the Closing of each of the
following conditions unless waived by the Company in accordance with Section 10(f):

 

(i)            Representations and
Warranties.  The
representations and warranties of the Seller contained in Section 4
shall be true and correct in all material respects on and as of the date of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Closing.

 

3

 

(ii)           Performance.  The Seller shall have performed and complied
in all material respects with all agreements, obligations, and conditions
contained in this Agreement that are required to be performed or complied with
by them on or before the date of the Closing.

 

(iii)          Delivery of Shares.  The Seller shall have caused the Shares to be
delivered to the Transfer Agent on behalf of the Company, free and clear of any
liens, claims or encumbrances, along with all stock powers, assignments or any
other documents, instruments or certificates necessary for a valid transfer.

 

(iv)          Board Resignation.  J. Bradford Forth and R. Chad Van Sweden
shall have tendered their resignations to the Company’s Board of Directors on
the date hereof which resignations shall be effective as of the Closing.

 

6.             Conditions to
the Seller’s Obligations.

 

(a)           The obligations of the Seller under Section 1
to sell the Shares at the Closing are subject to the fulfillment as of the
Closing of each of the following conditions unless waived by the Seller in
accordance with Section 10(f):

 

(i)            Representations and
Warranties. The representations and warranties of the Company
contained in Section 3 shall be true and correct in all material
respects as of the date of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.

 

(ii)           Performance. The Company
shall have performed and complied in all material respects with all agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before the date of the Closing.

 

(iii)          Concurrent Sale.  The concurrent sale of up to seven million
(7,000,000) shares of the Company’s Common Stock by the Seller pursuant to Rule 144
or otherwise to or through one or more investment banks (or their affiliated
entities) (each, a “Bank Investor” and collectively, the “Bank
Investors”) shall have occurred such that OCM/GFI Power Opportunities Fund
II, L.P. and OCM/GFI Power Opportunities Fund II (Cayman), L.P. (collectively,
the “Power Funds”) do not beneficially own more than 9.8% of the Company’s
Common Stock outstanding immediately following the sale of the Repurchase
Shares to the Company and the sale of common shares to such Bank Investors.

 

7.             Concurrent Sale
Limitation.  The Seller
agrees that it shall sell no more than seven million (7,000,000) shares of the
Company’s Common Stock to the Bank Investors on or prior to November 12,
2010.

 

8.             Other
Repurchases.  The Company
shall not purchase shares of the Company’s Common Stock (other than the Shares)
before the six month anniversary of the date of Closing, if the effect of such
purchase or purchases would be to increase the aggregate beneficial ownership
of the Power Funds of shares of the Company’s Common Stock, determined under Section 16
of the Exchange Act, to greater than ten percent (10%) of the shares of the
Company’s Common Stock outstanding.

 

9.             Registration
Rights.  The Company agrees to maintain
its current registration statement with respect to the sale of Common Stock
effective and available for use for ninety calendar days after the Closing by
the Seller or the Power Funds for the resale of the shares of Common Stock held
by the Seller or the Power Funds following Closing and agrees to file promptly
upon request any amendment to such 

 

4

 

registration
statement and to take such further action as may be required to add the Power
Funds as selling stockholders thereunder and to maintain such amended
registration statement effective and available for use by the Power Funds
through the ninetieth calendar day following the Closing (the “Continuing
Registration”).  The Company and the
Seller agree to take such action as may be necessary to cause the Amended and
Restated Registration Rights Agreement, dated as of July 1, 2008, among
the Company and the persons on the signature page thereto (“Registration
Rights Agreement”), to terminate ninety-one (91) calendar days after the
date of Closing; provided, however, that from the date hereof to
the termination date of the Registration Rights Agreement, the parties hereto
agree that the Company shall not be required to (i) pay any fees or
expenses (including Registration Expenses, as that term is defined in the
Registration Rights Agreement) in connection with the Continuing Registration
other than the fees and expenses of its own legal counsel and its accountants
or (ii) make its senior executives available for participation in any “roadshow”
or similar meeting with potential investors. 
After the date hereof, the Seller hereby agrees that it shall bear all
Registration Expenses associated with the Continuing Registration (other than
the fees and expenses of the Company’s legal counsel and the Company’s
accountants).

 

10.           Miscellaneous.

 

(a)       This Agreement contains the
entire agreement between the parties hereto with respect to the subject matter
of this Agreement and supercedes any and all prior agreements related to the
subject matter hereof.  This Agreement is
executed without reliance upon any promise, warranty or representation by any
party or any representative of any party other than those expressly contained
herein.  The respective agreements,
representations, warranties and other statements of the Company and the Seller,
as set forth in this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Company or the Seller or any of their respective officers,
directors or affiliates, and shall survive delivery of and payment for the
Shares.  This Agreement may not be
assigned by the Seller without the written consent of the Company and any such
assignment without its written consent shall be void.

 

(b)       Each of the parties hereto
acknowledge and agree that they shall each bear their own respective costs in
connection with the negotiation and finalization of this Agreement and the
consummation of the transactions as contemplated by this Agreement, including,
but not limited to any costs of legal counsel in connection therewith.

 

(c)       This Agreement may be
amended only by written agreement among the parties hereto.

 

(d)       Each party agrees to execute
any additional documents and to take any further action as may be necessary or
desirable in order to implement the transactions contemplated by this
Agreement.

 

(e)       This Agreement shall be
governed by and construed under the domestic, substantive laws of the State of
New York (without giving effect to any conflict of law or other aspect of New
York law that might result in the application of any law other than that of the
State of New York).

 

(f)        It is agreed that no delay
or omission to exercise any right, power or remedy accruing to any party upon
any breach or default of any other party under this Agreement shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach or default, or any acquiescence therein, or of any similar breach
or default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring.  It is further
agreed that any waiver, permit, consent or approval of any kind or character of
any breach or default under this Agreement, or any waiver of any provisions or
conditions of this Agreement must be in writing and 

 

5

 

shall be effective only to the extent specifically
set forth in writing, and that all remedies, either under this Agreement, by
law or otherwise, shall be cumulative and not alternative.

 

(g)       This Agreement may be
executed in one or more counterparts, each of which constitutes an original and
is admissible in evidence, and all of which constitute one and the same
agreement.

 

(h)       Each party shall bear its
own expenses incurred in connection with this Agreement and the consummation of
the transactions contemplated hereby.

 

[Remainder of Page Intentionally
Left Blank]

 

6

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first set forth above.

 

 

	
   

  	
  GT SOLAR INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  TOM GUTIERREZ

  
	
   

  	
  Name:
  Tom Gutierrez

  
	
   

  	
  Title:
  President and Chief Executive Officer

  

 

 

	
   

  	
  GT SOLAR HOLDINGS, LLC

  
	
   

  	
   

  
	
   

  	
  By:
  OCM/GFI Power Opportunities Fund II L.P.

  
	
   

  	
  Its:
  Managing Member

  
	
   

  	
   

  
	
   

  	
  By:
  OCM Power Opportunities Fund II GP, L.P.

  
	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:
  Oaktree Fund GP I, L.P.

  
	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  IAN SCHAPIRO

  
	
   

  	
   

  	
  Name: Ian Schapiro

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  R. CHAD VAN SWEDEN

  
	
   

  	
   

  	
  Name: R. Chad Van
  Sweden

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
  By:
  OCM/GFI Power Opportunities Fund II (Cayman), L.P.

  
	
   

  	
  Its:
  Managing Member

  
	
   

  	
   

  
	
   

  	
  By:
  OCM Power Opportunities Fund II GP (Cayman) Ltd.

  
	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:
  OCM Power Opportunities Fund II GP, L.P.

  
	
   

  	
  Its:
  Director

  
	
   

  	
   

  
	
   

  	
  By:
  Oaktree Fund GP I, L.P.

  
	
   

  	
  Its:
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  IAN SCHAPIRO

  
	
   

  	
   

  	
  Name: Ian Schapiro

  
	
   

  	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  R. CHAD VAN SWEDEN

  
	
   

  	
   

  	
  Name: R. Chad Van
  Sweden

  
	
   

  	
   

  	
  Title: Vice President

  

 

[Signature
Page to Stock Purchase Agreement]

 

 

Schedule I

 

Ownership of Shares

 

	
  Entity

  	
   

  	
  Number of Shares of

  Common Stock

  	
   

  
	
  GT Solar Holdings, LLC

  	
   

  	
  51,138,149

  	
   

  

 

 

Schedule II

 

Shares to be Repurchased

 

	
  Entity

  	
   

  	
  Share

  Classification

  	
   

  	
  Number of Shares

  of Common Stock

  	
   

  	
  Repurchase

  Consideration

  	
   

  
	
  GT Solar Holdings, LLC

  	
   

  	
  Firm Shares

  	
   

  	
  26,500,000

  	
   

  	
  $

  	
  203,004,668

  	
   

  
	
   

  	
   

  	
  Incremental Shares

  	
   

  	
  0

  	
   

  	
  $

  	
  0

  	
   

  
	
   

  	
   

  	
  Total Shares

  	
   

  	
  26,500,000

  	
   

  	
  $

  	
  203,004,668Exhibit 10.1

 

 

Beacon Power Corporation
has requested that portions of this document be accorded confidential treatment
pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of
1934, as amended.

 

 

COMMON
AGREEMENT

 

dated as of August 6, 2010

 

among

 

STEPHENTOWN REGULATION SERVICES LLC, as Borrower

 

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

 

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

 

and

 

MIDLAND LOAN SERVICES, INC.,

as Administrative Agent in its capacity as the Collateral Agent

 

 

BEACON POWER PROJECT

 

STEPHENTOWN, NEW YORK

 

 

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

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1 DEFINITIONS; RULES
  OF INTERPRETATION

  	
  2

  
	
   

  	
   

  
	
  1.1.

  	
  Definitions

  	
  2

  
	
  1.2.

  	
  Rules of Interpretation

  	
  2

  
	
  1.3.

  	
  Conflict with DOE Credit Facility Documents

  	
  2

  
	
   

  	
   

  
	
  ARTICLE 2 FUNDING

  	
  2

  
	
   

  	
   

  
	
  2.1.

  	
  Financial Plan; Advance and Equity Advance Schedule

  	
  2

  
	
  2.2.

  	
  Availability of Advances

  	
  3

  
	
  2.3.

  	
  Mechanics for Requesting Advances and Equity Advances

  	
  4

  
	
  2.4.

  	
  Mechanics for Funding Advances and Equity Advances

  	
  5

  
	
  2.5.

  	
  Advance Requirements under the DOE Credit Facility

  	
  7

  
	
  2.6.

  	
  No Approval of Work

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 PAYMENTS;
  PREPAYMENTS

  	
  8

  
	
   

  	
   

  
	
  3.1.

  	
  Place and Manner of Payments

  	
  8

  
	
  3.2.

  	
  Interest Provisions Relating to All Advances

  	
  10

  
	
  3.3.

  	
  Change of Circumstances

  	
  10

  
	
  3.4.

  	
  Prepayments

  	
  11

  
	
  3.5.

  	
  Reserved

  	
  13

  
	
  3.6.

  	
  Payment of DOE Credit Facility Fees

  	
  13

  
	
  3.7.

  	
  Evidence of Debt

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 CONDITIONS
  PRECEDENT TO ADVANCES 

  	
  14

  
	
   

  
	
  4.1.

  	
  Initial Conditions Precedent to Financial Closing Date

  	
  14

  
	
  4.2.

  	
  Conditions Precedent to Advances

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5 REPRESENTATIONS
  AND WARRANTIES

  	
  34

  
	
   

  	
   

  
	
  5.1.

  	
  Organization

  	
  34

  
	
  5.2.

  	
  Authorization; No Conflict

  	
  35

  
	
  5.3.

  	
  Legality, Validity and Enforceability

  	
  35

  
	
  5.4.

  	
  Capitalization

  	
  35

  
	
  5.5.

  	
  Investments; Subsidiaries

  	
  36

  
	
  5.6.

  	
  Title

  	
  36

  
	
  5.7.

  	
  Leases

  	
  36

  
	
  5.8.

  	
  Security Interests

  	
  36

  
	
  5.9.

  	
  Liens

  	
  37

  
	
  5.10.

  	
  Permits; Other Required Consents

  	
  37

  
	
  5.11.

  	
  Litigation, Labor Disputes

  	
  37

  
	
  5.12.

  	
  Tax

  	
  38

  
	
  5.13.

  	
  Business, Indebtedness, Contracts, Etc.

  	
  38

  
	
  5.14.

  	
  Transactions with Affiliates

  	
  38

  
	
  5.15.

  	
  Compliance with Governmental Rules

  	
  38

  
	
  5.16.

  	
  Environmental Laws

  	
  39

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  5.17.

  	
  Investment Company Act

  	
  39

  
	
  5.18.

  	
  Regulation of Parties

  	
  39

  
	
  5.19.

  	
  Corrupt Practices Laws

  	
  40

  
	
  5.20.

  	
  ERISA

  	
  40

  
	
  5.21.

  	
  Insurance

  	
  41

  
	
  5.22.

  	
  Intellectual Property

  	
  41

  
	
  5.23.

  	
  No Defaults

  	
  41

  
	
  5.24.

  	
  No Judgment Liens

  	
  41

  
	
  5.25.

  	
  Sufficiency of Project Documents

  	
  42

  
	
  5.26.

  	
  Financial Statements

  	
  43

  
	
  5.27.

  	
  Project Milestone Schedule and Project Budget; Operating
  Forecasts and Base Case Projections

  	
  43

  
	
  5.28.

  	
  Sufficient Funds

  	
  44

  
	
  5.29.

  	
  Fees and Enforcement

  	
  44

  
	
  5.30.

  	
  Immunity

  	
  44

  
	
  5.31.

  	
  No Other Powers-of-Attorney, Etc.

  	
  44

  
	
  5.32.

  	
  No Additional Fees

  	
  44

  
	
  5.33.

  	
  OFAC and USA PATRIOT Act

  	
  44

  
	
  5.34.

  	
  U.S. Government Requirements

  	
  45

  
	
  5.35.

  	
  Insolvency Proceedings

  	
  46

  
	
  5.36.

  	
  Use of Proceeds

  	
  46

  
	
  5.37.

  	
  No Material Adverse Effect

  	
  46

  
	
  5.38.

  	
  Certain Program Requirements

  	
  46

  
	
  5.39.

  	
  Davis-Bacon Act

  	
  47

  
	
  5.40.

  	
  Buy American Provisions

  	
  47

  
	
  5.41.

  	
  Recovery Act Reporting

  	
  47

  
	
  5.42.

  	
  Full Disclosure

  	
  47

  
	
  5.43.

  	
  Force Majeure

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 AFFIRMATIVE
  COVENANTS

  	
  48

  
	
   

  	
   

  
	
  6.1.

  	
  Information Covenants

  	
  48

  
	
  6.2.

  	
  Books, Records and Inspections; Accounting and Auditing
  Matters

  	
  56

  
	
  6.3.

  	
  Maintenance of Property and Insurance

  	
  57

  
	
  6.4.

  	
  Maintenance of Existence; Conduct of Business

  	
  57

  
	
  6.5.

  	
  Compliance with Governmental Rules; Environmental Laws;
  Governmental Approvals

  	
  58

  
	
  6.6.

  	
  Compliance with Debarment Regulations

  	
  58

  
	
  6.7.

  	
  Tax, Duties, Proper Legal Form

  	
  58

  
	
  6.8.

  	
  Approved Project Changes

  	
  59

  
	
  6.9.

  	
  Operating Forecasts

  	
  59

  
	
  6.10.

  	
  Diligent Construction and Installation of Project and
  Operations

  	
  59

  
	
  6.11.

  	
  Ineligible and Overrun Project Costs

  	
  60

  
	
  6.12.

  	
  Cost Overruns and Contingencies

  	
  60

  
	
  6.13.

  	
  Use of Proceeds; Repayment of Indebtedness

  	
  60

  
	
  6.14.

  	
  Performance of Obligations

  	
  60

  
	
  6.15.

  	
  Project Documents

  	
  60

  
	
  6.16.

  	
  Cash Deposits

  	
  60

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  6.17.

  	
  Debt Service Reserve

  	
  61

  
	
  6.18.

  	
  Safety Audit

  	
  61

  
	
  6.19.

  	
  Replacement of Certain Project Participants

  	
  61

  
	
  6.20.

  	
  Security Interest in Newly Acquired Property; Additional
  Project Documents

  	
  61

  
	
  6.21.

  	
  Title; Rights to Land

  	
  62

  
	
  6.22.

  	
  Independent Consultants

  	
  62

  
	
  6.23.

  	
  Additional Documents; Filings and Recordings

  	
  62

  
	
  6.24.

  	
  Intercompany Project Documents

  	
  63

  
	
  6.25.

  	
  Event of Loss

  	
  64

  
	
  6.26.

  	
  Application of Loss Proceeds

  	
  65

  
	
  6.27.

  	
  Acceptance and Startup Testing

  	
  66

  
	
  6.28.

  	
  Technology

  	
  66

  
	
  6.29.

  	
  Compliance With Certain U.S. Government Requirements

  	
  66

  
	
  6.30.

  	
  Davis-Bacon Act

  	
  67

  
	
  6.31.

  	
  ERISA Covenants

  	
  68

  
	
  6.32.

  	
  [Reserved.]

  	
  69

  
	
  6.33.

  	
  Financial Covenants

  	
  69

  
	
  6.34.

  	
  Access to Project Site

  	
  70

  
	
  6.35.

  	
  Key Employees

  	
  70

  
	
  6.36.

  	
  Central Contractor Registration

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7 NEGATIVE COVENANTS

  	
  71

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Indebtedness

  	
  71

  
	
  7.2.

  	
  Liens

  	
  72

  
	
  7.3.

  	
  [Reserved.]

  	
  72

  
	
  7.4.

  	
  Loans, Advances and Investments

  	
  72

  
	
  7.5.

  	
  Capital Expenditures

  	
  72

  
	
  7.6.

  	
  Subsidiaries; Partnerships

  	
  72

  
	
  7.7.

  	
  Ordinary Course of Conduct; No Other Business

  	
  73

  
	
  7.8.

  	
  Merger, Bankruptcy, Dissolution or Transfer of Assets

  	
  73

  
	
  7.9.

  	
  Organizational Documents of Borrower and Holdings; Fiscal
  Year; Legal Form; Capital Structure

  	
  73

  
	
  7.10.

  	
  Restricted Payments

  	
  73

  
	
  7.11.

  	
  Redemption or Issuance of Stock; Changes to Capital
  Structure

  	
  74

  
	
  7.12.

  	
  Other Transactions

  	
  74

  
	
  7.13.

  	
  Accounts

  	
  74

  
	
  7.14.

  	
  Disbursement of Funds

  	
  74

  
	
  7.15.

  	
  Commissions

  	
  75

  
	
  7.16.

  	
  Amendment of and Notices Under Transaction Documents

  	
  75

  
	
  7.17.

  	
  Other Agreements

  	
  75

  
	
  7.18.

  	
  Hedging Agreements

  	
  76

  
	
  7.19.

  	
  Compromise or Settlement of Disputes

  	
  76

  
	
  7.20.

  	
  Abandonment of Project

  	
  76

  
	
  7.21.

  	
  Improper Use

  	
  76

  
	
  7.22.

  	
  Assignment

  	
  76

  
	
  7.23.

  	
  Margin Regulations

  	
  77

  
	
  7.24.

  	
  Environmental Laws

  	
  77

  

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  7.25.

  	
  ERISA

  	
  77

  
	
  7.26.

  	
  Investment Company Act

  	
  77

  
	
  7.27.

  	
  Public Utility Holding Company Act

  	
  77

  
	
  7.28.

  	
  Powers of Attorney

  	
  77

  
	
  7.29.

  	
  Debarment Regulations

  	
  77

  
	
  7.30.

  	
  Corrupt Practices and Foreign Asset Control Regulations

  	
  78

  
	
  7.31.

  	
  OFAC and USA PATRIOT Act

  	
  78

  
	
  7.32.

  	
  U.S. Government Requirements

  	
  79

  
	
  7.33.

  	
  Federal Indebtedness

  	
  79

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 EVENTS OF DEFAULT;
  REMEDIES

  	
  80

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Events of Default

  	
  80

  
	
  8.2.

  	
  Remedies for Events of Default

  	
  85

  
	
  8.3.

  	
  Automatic Acceleration

  	
  87

  
	
  8.4.

  	
  Event of Default Notice

  	
  87

  
	
  8.5.

  	
  Remedies Instructions

  	
  87

  
	
  8.6.

  	
  Appointment of a Receiver

  	
  88

  
	
  8.7.

  	
  DOE

  	
  88

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 AGENTS AND
  ADVISORS

  	
  89

  
	
   

  	
   

  
	
  9.1.

  	
  Appointment of Agents

  	
  89

  
	
  9.2.

  	
  Duties and Responsibilities

  	
  90

  
	
  9.3.

  	
  Rights and Obligations

  	
  91

  
	
  9.4.

  	
  No Responsibility for Certain Conduct

  	
  93

  
	
  9.5.

  	
  Defaults

  	
  94

  
	
  9.6.

  	
  No Liability

  	
  94

  
	
  9.7.

  	
  Fees and Expenses of Agents

  	
  95

  
	
  9.8.

  	
  Resignation and Removal

  	
  96

  
	
  9.9.

  	
  Successor Agents

  	
  96

  
	
  9.10.

  	
  Due Authorization, Execution and Delivery

  	
  97

  
	
  9.11.

  	
  Appointment of Independent Consultants

  	
  97

  
	
  9.12.

  	
  Actions

  	
  98

  
	
  9.13.

  	
  Delegation of Duties

  	
  98

  
	
  9.14.

  	
  Certain Rights of the Agents

  	
  98

  
	
  9.15.

  	
  Authority of the Agents

  	
  99

  
	
  9.16.

  	
  Force Majeure

  	
  99

  
	
  9.17.

  	
  Agents and Independent Consultants Not Prohibited Persons

  	
  99

  
	
  9.18.

  	
  Survival

  	
  99

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 REGARDING THE COLLATERAL AGENT

  	
  99

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Administration of the Collateral

  	
  99

  
	
  10.2.

  	
  Own Funds

  	
  100

  
	
  10.3.

  	
  Waiver of Setoff by Collateral Agent

  	
  100

  
	
  10.4.

  	
  Patriot Act

  	
  100

  
	
  10.5.

  	
  Survival

  	
  100

  

 

iv

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11 REPRESENTATIONS
  AND WARRANTIES OF THE AGENTS

  	
  100

  
	
   

  	
   

  
	
  11.1.

  	
  Organization, Power and Status

  	
  101

  
	
  11.2.

  	
  Power and Authority

  	
  101

  
	
  11.3.

  	
  No Consents

  	
  101

  
	
  11.4.

  	
  Proceedings

  	
  101

  
	
  11.5.

  	
  No Agents’ Liens

  	
  101

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 REIMBURSEMENT
  AGREEMENT

  	
  101

  
	
   

  	
   

  	
   

  
	
  12.1.

  	
  Reimbursement Obligation

  	
  101

  
	
  12.2.

  	
  Payments and Computations

  	
  102

  
	
  12.3.

  	
  Obligations Absolute

  	
  102

  
	
  12.4.

  	
  Security

  	
  104

  
	
  12.5.

  	
  DOE Rights

  	
  104

  
	
  12.6.

  	
  Further Assurances

  	
  105

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13 MISCELLANEOUS

  	
  105

  
	
   

  	
   

  
	
  13.1.

  	
  Addresses

  	
  105

  
	
  13.2.

  	
  Further Assurances

  	
  105

  
	
  13.3.

  	
  Delay and Waiver

  	
  106

  
	
  13.4.

  	
  Right of Set-Off

  	
  106

  
	
  13.5.

  	
  Amendment or Waiver

  	
  106

  
	
  13.6.

  	
  Entire Agreement

  	
  107

  
	
  13.7.

  	
  Governing Law

  	
  107

  
	
  13.8.

  	
  Severability

  	
  107

  
	
  13.9.

  	
  Calculations

  	
  107

  
	
  13.10.

  	
  Limitation on Liability

  	
  107

  
	
  13.11.

  	
  Waiver of Jury Trial

  	
  108

  
	
  13.12.

  	
  Consent to Jurisdiction

  	
  108

  
	
  13.13.

  	
  Successors and Assigns

  	
  109

  
	
  13.14.

  	
  Participations

  	
  109

  
	
  13.15.

  	
  Reinstatement

  	
  109

  
	
  13.16.

  	
  No Partnership; Etc.

  	
  109

  
	
  13.17.

  	
  Payment of Costs and Expenses

  	
  110

  
	
  13.18.

  	
  Counterparts

  	
  112

  

 

v

 

	
  Exhibits

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Definitions

  	
   

  
	
  A1

  	
  Financial
  Plan

  	
   

  
	
  A2

  	
  Definition
  of Physical Completion and Project Completion

  	
   

  
	
  A3

  	
  Definition
  of DOE Requirements

  	
   

  
	
  A4

  	
  Davis-Bacon
  Provisions for Davis-Bacon Act Covered Contracts

  	
   

  
	
  A5

  	
  Disclosure
  Letter

  	
   

  
	
  B

  	
  Rules of
  Interpretation

  	
   

  
	
  C1

  	
  Form of
  Borrower Certificate (Initial Closing)

  	
   

  
	
  C2

  	
  Form of
  Borrower Certificate (Periodic Closing)

  	
   

  
	
  D1

  	
  Form of
  Lender’s Engineer Certificate (Initial Closing)

  	
   

  
	
  D2

  	
  Form of
  Lender’s Engineer Certificate (Periodic Closing)

  	
   

  
	
  E1

  	
  Form of
  Sponsor’s Certificate (Initial Closing)

  	
   

  
	
  E2

  	
  [Intentionally
  Omitted]

  	
   

  
	
  E3

  	
  Form of
  Certificate of Holdings (Initial Closing)

  	
   

  
	
  F1

  	
  Form of
  Insurance Consultant Certificate (Initial Closing)

  	
   

  
	
  F2

  	
  Form of
  Insurance Consultant Certificate (Periodic Closing)

  	
   

  
	
  G

  	
  Form of
  Collateral Agent Certificate (Initial Closing)

  	
   

  
	
  H

  	
  Form of
  Major Project Participant Certificate (Initial Closing)

  	
   

  
	
  I

  	
  Form of
  Financial Officer Certificate (Initial Closing)

  	
   

  
	
  J

  	
  [Intentionally
  Omitted]

  	
   

  
	
  K

  	
  [Intentionally
  Omitted]

  	
   

  
	
  L

  	
  [Intentionally
  Omitted]

  	
   

  
	
  M

  	
  Form of
  Master Advance Notice

  	
   

  
	
  N

  	
  Form of
  Drawstop Notice

  	
   

  
	
  O

  	
  Form of
  Quarterly Reporting Certificate

  	
   

  
	
  P

  	
  Form of
  Physical Completion Certificate

  	
   

  
	
  Q

  	
  Form of
  Project Completion Certificate

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1(b)

  	
  Advance
  Schedule

  	
   

  
	
  6.3(b)

  	
  Insurance
  Requirements

  	
   

  
	
  6.30(d)

  	
  Davis-Bacon
  Act Wage Determination

  	
   

  
	
  13.1

  	
  Notice
  Addresses

  	
   

  

 

vi

 

COMMON AGREEMENT

 

This
COMMON AGREEMENT (the “Common Agreement”), dated as of August 6,
2010, is by and among (i) STEPHENTOWN
REGULATION SERVICES LLC, a limited liability company organized and
existing under the laws of Delaware, as Borrower, (ii) the U.S. DEPARTMENT OF ENERGY, acting by and through the
Secretary of Energy, for itself as a Credit Party and as guarantor of the
Advances made under the DOE Credit Facility Documents (in such capacity, “DOE”),
(iii) the U.S. DEPARTMENT OF ENERGY, acting
through its Loan Guarantee Program Office, as the Loan Servicer (in such
capacity, the “Loan Servicer”), and (iv) MIDLAND LOAN
SERVICES, INC., a corporation organized and existing under the
laws of Delaware, as the Administrative Agent in its capacity as the Collateral
Agent.

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

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

 

AGREEMENT

 

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

 

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

 

 

ARTICLE 1

DEFINITIONS; RULES OF INTERPRETATION

 

1.1.                            Definitions.

 

Except
as otherwise expressly provided herein, capitalized terms used in this Common
Agreement and its exhibits and schedules shall have the meanings given in Exhibit A
hereto.

 

1.2.                            Rules of
Interpretation.

 

Except
as otherwise expressly provided herein, the rules of interpretation set
forth in Exhibit B hereto shall apply to this Common Agreement.

 

1.3.                            Conflict
with DOE Credit Facility Documents.

 

Except
as otherwise expressly provided hereunder, in the case of any conflict between
the terms of this Common Agreement and the terms of any DOE Credit Facility
Document to which Borrower is a party, the terms of such DOE Credit Facility
Document, as between the Borrower and the Credit Parties party thereto, shall
control.

 

ARTICLE 2

FUNDING

 

2.1.                            Financial
Plan; Advance and Equity Advance Schedule.

 

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

 

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

 

(c)                                  Eligible Base
Project Costs shall be funded as follows:

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

2.2.                            Availability
of Advances.

 

2.2.1                        Availability.

 

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

 

2.2.2                        Loan Commitment
Reductions and Cancellations.

 

The
Borrower may, on not less than fifteen (15) days prior written notice to the
Loan Servicer and upon the satisfaction of any consent requirement or other
applicable provisions of each DOE Credit Facility Document, permanently reduce
the unutilized portions of the DOE Credit Facility Commitment, in whole or in
part, but only if:

 

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

 

(b)                                 the Loan
Servicer, in consultation with the Lender’s Engineer, is satisfied that such
cancellation or reduction will not result in the Borrower having insufficient
funds to complete the construction or development of the Project; and

 

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

 

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

 

3

 

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

 

2.3.                            Mechanics
for Requesting Advances and Equity Advances.

 

2.3.1                        Master Advance
Notice.

 

(a)                                  The Borrower
may request an Advance under the DOE Credit Facility and/or an Equity Advance
by delivering to the Credit Parties and the Lender’s Engineer, not less than
eleven (11) Business Days prior to the Requested Advance Date, an appropriately
completed Master Advance Notice with respect to such Advance and/or Equity
Advance.  The Borrower may request an
Advance and/or an Equity Advance no more frequently than once per calendar
month.

 

(b)                                 Each Master
Advance Notice shall specify:

 

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

 

(ii)                                  the Requested
Advance Date, if the Master Advance Notice includes a request for an Advance,
or the requested date for the Equity Advance, if the Master Advance Notice does
not include a request for an Advance, which, in each case, shall be any
Business Day;

 

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

 

(iv)                              the aggregate
amount, on a prospective basis after giving effect to the requested Advance, if
any, and the requested Equity Advance, if any, of (A) all Advances
outstanding under the DOE Credit Facility, (B) the amount of the Approved
Pre-Closing Equity Credit, and (C) all Base Equity and Overrun Equity (if
any) disbursed from the Base Equity Account and the Overrun Equity Account or
in cash;

 

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

 

(vi)                              [Reserved];

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

2.4.                            Mechanics
for Funding Advances and Equity Advances.

 

2.4.1                        DOE-Guaranteed
Loan Funding.

 

(a)                                  Satisfaction of
Conditions Precedent.

 

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

 

(ii)                                  No later than
six (6) Business Days prior to the Requested Advance Date, the Borrower
shall deliver to the Loan Servicer a completed FFB Advance Request with respect
to the requested Advance, including all wire transfer information for the
designated payees of the proceeds of such Advance, together with any other
information required on such FFB Advance Request; and

 

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

 

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

 

5

 

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

 

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

 

2.4.2                        Equity
Contributions.

 

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

 

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

 

(c)                                  Reserve Letter
of Credit.  In lieu of
maintaining the required amounts in the Base Equity Account, the Sponsor may
substitute a Reserve Letter of Credit.

 

(d)                                 Physical
Completion.  Upon
Physical Completion, at the request of the Borrower, provided that no Potential
Default or Event of Default then exists, any remaining balance in the Base
Equity Account and the Overrun Equity Account not otherwise used to fund Total
Project Costs may be disbursed to the Borrower for distribution to the Equity
Owners of the Borrower, without regard to the limitations set forth in Section 7.10
hereof (except for Section 7.10(a)(ii) hereof).

 

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

 

6

 

2.4.3                        Drawstop
Notices.

 

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

 

(i)                                     the conditions
in Article 4 with respect to such Advance or Equity Advance are not
met, or having been met, are no longer met; or

 

(ii)                                  the conditions
precedent to such Advance contained in the DOE Credit Facility are not met, or
having been met, are no longer met.

 

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

 

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

 

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

 

2.4.4                        No Liability.

 

Without
limiting the generality of Section 9.6, no Credit Party shall have
any liability to the Borrower or any Affiliate thereof or to any other Credit
Party solely arising from the issuance of or failure to issue any FFB Advance
Request Approval Notice, Drawstop Notice, or any other notice contemplated by
this Section 2.4.

 

2.5.                            Advance
Requirements under the DOE Credit Facility.

 

Notwithstanding
anything to the contrary contained in this Article 2, the Borrower
also shall comply with all separate disbursement requirements set forth herein
and in the DOE Credit Facility Documents. 
Unless otherwise specified in the DOE Credit Facility Documents, all
determinations to be made with respect to the DOE Credit Facility shall be made
by DOE.

 

2.6.                            No
Approval of Work.

 

The
making of any Advance or Equity Advance under the Loan Documents shall not be
deemed an approval or acceptance by any Credit Party of any work, labor,
supplies, materials or equipment furnished or supplied with respect to the
Project.

 

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

 

7

 

ARTICLE 3

PAYMENTS; PREPAYMENTS

 

3.1.                            Place
and Manner of Payments.

 

3.1.1                        Generally.

 

All
payments due under the DOE Credit Facility shall be made by the Borrower
pursuant to the terms of the DOE Credit Facility Documents and as specified
herein.

 

3.1.2                        Net of Tax, Etc.

 

(a)                                  Tax.  Any and all payments to any Secured Party or
FFB by the Borrower hereunder or under any other Loan Document shall be made
free and clear of, and without deduction for, any and all taxes, levies,
imposts, deductions, charges or withholdings imposed by any central bank or
other Governmental Authority, and all liabilities with respect thereto,
excluding (i) taxes imposed on or measured by the net income (however
denominated) of such Secured Party or FFB by any jurisdiction or any political
subdivision or taxing authority thereof or therein solely as a result of a
present or former connection between such Secured Party or FFB and such jurisdiction
or political subdivision (other than any connection arising as a result of the
transactions contemplated by the Loan Documents), and (ii) any withholding
taxes or other tax based on gross income imposed by the United States of
America that are not attributable to any Change of Law or the interpretation or
administration of any Governmental Rule by any Governmental Authority (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as “Covered Taxes”).  If the Borrower shall be required by law to
withhold or deduct any Covered Taxes from or in respect of any sum payable
hereunder or under any other Loan Document to any Secured Party or FFB,
(A) the sum payable shall be increased as may be necessary so that after
making all such required deductions (including deductions applicable to
additional sums payable under this Section 3.1.2), such Secured
Party or FFB receives an amount equal to the sum it would have received had no
such deductions been made, (B) the Borrower shall make such deductions and
(C) Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with all Governmental Rules.  If the Borrower shall make any payment with
respect to Covered Taxes under this Section 3.1.2(a) to or for
the benefit of any Secured Party or FFB and if such Secured Party or FFB shall
claim any credit or deduction for such Covered Taxes against any other taxes
payable by such Secured Party or FFB then such Secured Party or FFB shall pay
to the Borrower an amount equal to the amount the Secured Party determines in
its reasonable discretion is the amount by which such other taxes are actually
reduced; provided that the aggregate amount payable by such Secured Party or
FFB pursuant to this sentence shall not exceed the aggregate amount previously
paid by the Borrower with respect to such Covered Taxes.

 

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

 

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

 

8

 

Taxes as promptly as is practicable after being
notified of such assertion; provided that any failure to notify the Borrower
promptly of such assertion shall not relieve the Borrower of its obligation
under this Section 3.1.2, except, with respect to any such notice
given by a Secured Party more than ninety (90) days after such Secured Party
has notice or knowledge of such claim, to the extent that the Borrower is
actually prejudiced by such failure. 
Payments by the Borrower pursuant to this indemnification shall be made
within ten (10) days after the date such Secured Party makes written
demand therefor (submitted through the Loan Servicer), which demand shall be
accompanied by a certificate describing in reasonable detail the basis thereof.  Each Secured Party agrees to repay to the
Borrower any refund (including that portion of any interest that was included
as part of such refund with respect to Covered Taxes paid by the Borrower
pursuant to this Section 3.1.2), received by such Secured Party for
Covered Taxes that were paid by the Borrower pursuant to this Section 3.1.2,
and to provide reasonable assistance to the Borrower (and at the expense of the
Borrower) to contest any such Covered Taxes that such Secured Party or the
Borrower reasonably believes not to have been properly assessed.

 

(c)                                  Notice.  Within ten (10) days after the date of
any payment of Covered Taxes by the Borrower, the Borrower shall furnish to the
Loan Servicer and each affected Secured Party the original or a certified copy
of a receipt evidencing such payment, or if the relevant tax authority has not
provided the Borrower with such a receipt, shall furnish such other evidence of
such payment as may be available to the Borrower (in which case the Borrower
shall promptly request a receipt from the relevant tax authority, and so
furnish the original or a certified copy thereof promptly on receipt
thereof).  The Borrower shall compensate
each Secured Party for all reasonable losses and expenses sustained by such
Secured Party as a result of any failure by the Borrower to so furnish such
copy of such receipt.

 

(d)                                 Survival of
Obligations.  The
obligations of the Borrower under this Section 3.1.2 shall survive
the termination of this Common Agreement and the repayment of the Secured
Obligations.

 

(e)                                  Documentation.  Any foreign Secured Party that is entitled to
an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to payments hereunder or
under any other Loan Document shall deliver to the Borrower, at the time or
times prescribed by applicable law or reasonably requested by the Borrower,
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at a reduced
rate of withholding.  In addition, any
Secured Party, if requested by the Borrower, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower as will enable the Borrower to determine whether or not such Secured
Party is subject to backup withholding or information reporting
requirements.  Each Secured Party shall
promptly (i) notify the Borrower of any change in circumstances that would
modify or render invalid any such claimed exemption or reduction and (ii) take
such steps as shall not be disadvantageous to it, in the sole judgment of such
Secured Party, and as may be reasonably necessary (including the re-designation
of its lending office) to avoid any requirement of applicable laws of any such
jurisdiction that the 

 

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

 

9

 

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

 

3.2.                            Interest
Provisions Relating to All Advances.

 

3.2.1                        Interest
Account and Interest Computations.

 

In
accordance with Section 609.10(e)(1) of the Applicable Loan Guarantee
Requirements, interest shall accrue on the unpaid principal amount of each
Advance from the date such Advance is disbursed to the Borrower pursuant to the
DOE Credit Facility Documents, to the date such Advance is paid in full, at a
rate per annum relating thereto as specified in the DOE Credit Facility
Documents.  The Borrower hereby
authorizes each Credit Party to record in an account or accounts maintained by
such Credit Party on its books (A) the interest rates applicable to all
Advances, (B) the interest periods for each Advance outstanding,
(C) the date and amount of each principal and interest payment on each
Advance outstanding, and (D) such other information as such Credit Party may
determine is necessary for the computation of interest payable by the Borrower
hereunder.  The Borrower agrees that all
computations of interest by a Credit Party pursuant to this Section 3.2.1
shall, absent manifest error, constitute prima facie evidence of the amount
thereof, and shall be conclusive absent manifest error.  All computations of interest shall be made as
set forth in the relevant DOE Credit Facility Documents.

 

3.2.2                        Interest
Payment Dates.

 

Subject
to the terms of the DOE Credit Facility, the Borrower shall pay accrued
interest on the outstanding principal amount of each Advance on each Quarterly
Payment Date, on prepayment (on the principal amount prepaid), and at maturity
(whether by acceleration or otherwise).

 

3.3.                            Change
of Circumstances.

 

3.3.1                        Alternate
Office; Minimization of Costs.

 

Upon
any FFB Loan Transfer or receipt by the Borrower or any Credit Party of notice
of FFB’s intention to make any FFB Loan Transfer in accordance with the FFB
Note Purchase Agreement, the Borrower, DOE, the Loan Servicer and the
Administrative Agent shall cooperate with the transferee of the DOE-Guaranteed
Loans to amend this Common Agreement and any other Loan Documents to
incorporate customary provisions for a commercial loan transaction of this type
reasonably satisfactory to such transferee lender with respect to such
transferee lender designating an alternative lending office with respect to its
DOE-Guaranteed Loan to mitigate costs or to avoid any circumstances that might
make it unlawful or impossible for such transferee lender to maintain a
DOE-Guaranteed Loan.

 

3.3.2                        Illegality.

 

Upon
any FFB Loan Transfer or receipt by the Borrower or any Credit Party of notice
of FFB’s intention to make any FFB Loan Transfer in accordance with the FFB
Note Purchase 

 

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

 

10

 

Agreement,
the Borrower and DOE shall cooperate with the transferee of the FFB Loan to
amend this Common Agreement and any other Loan Documents to incorporate
customary provisions for a commercial loan transaction of this type reasonably
satisfactory to such transferee with respect to any Change of Law that makes it
unlawful or impossible for any lender to make or maintain any FFB Loans.

 

3.3.3                        Modifications
upon Transfer.

 

Upon
any FFB Loan Transfer or receipt by the Borrower or any Credit Party of notice
of FFB’s intention to make any FFB Loan Transfer in accordance with the FFB
Note Purchase Agreement, the Borrower, DOE, the Loan Servicer and the
Administrative Agent shall cooperate with the transferee of the FFB Loans to
amend this Common Agreement and any other Loan Documents to incorporate
customary provisions reasonably satisfactory to such transferee with respect to
any Change of Law that subjects such transferee lender to any tax, duty or
other charge with respect to any FFB Loans.

 

3.4.                            Prepayments.

 

3.4.1                        Terms of all
Prepayments.

 

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

 

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

 

(c)                                  The Borrower
may not reborrow the principal amount of any DOE-Guaranteed Loan that is
prepaid.

 

3.4.2                        Voluntary
Prepayments.

 

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

 

(b)                                 After the end
of the Availability Period, the Borrower may prepay all or a portion of the
principal amount of any Advance of the DOE-Guaranteed Loans upon prior written
notice submitted by the Borrower to the Credit Parties not later than the fifth
Business Day prior to the Intended Prepayment Date, and satisfaction of the
following conditions:

 

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

 

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

 

11

 

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

 

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

 

3.4.3                        Mandatory
Prepayments.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

12

 

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

 

3.5.                            Reserved.

 

3.6.                            Payment
of DOE Credit Facility Fees.

 

(a)           Borrower shall pay (i) to DOE on the Financial
Closing Date, the balance of the DOE Credit Facility Fee in an amount equal to
0.8% of the maximum principal amount of the DOE Credit Facility, and
(ii) to FFB, the fees payable to FFB from time to time in accordance with
the requirements of the DOE Credit Facility Documents.

 

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

 

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

 

(d)           All DOE Credit Facility Fees shall be paid on the dates
due, in immediately available funds in Dollars, to DOE.  Once paid, the DOE Credit Facility Fees shall
not be refundable under any circumstances.

 

3.7.                            Evidence
of Debt.

 

(a)           Each of the Credit Parties shall maintain or cause to be
maintained, in accordance with its usual practice, internal records evidencing
the amounts from time to time lent by and owing to it under the DOE Credit
Facility Documents and each of the payments from time to time made in respect
thereof.

 

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

 

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

 

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

 

13

 

ARTICLE 4

CONDITIONS PRECEDENT TO ADVANCES

 

4.1.                            Initial
Conditions Precedent to Financial Closing Date.

 

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

 

4.1.1                        Loan Documents.

 

The
Loan Servicer shall have received fully executed originals in sufficient
counterparts for each Credit Party of each of the following documents, each of
which shall be in form and substance satisfactory to each Relevant Credit
Party:

 

(a)           Common Agreement. 
This Common Agreement;

 

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

 

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

 

(i)            the FFB Note Purchase Agreement;

 

(ii)           the FFB Promissory Note;

 

(iii)          the DOE Guarantee; and

 

(iv)          the Administrative Agent Fee Letter and Agreement;

 

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

 

(i)            the Completion Guaranty;

 

(ii)           the Corporate Guaranty;

 

(iii)          the Sponsor Technology License Agreement;

 

(iv)          the Sponsor Technology Escrow Agreement; and

 

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

 

14

 

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

 

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

 

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

 

(A)          the Mortgage;

 

(B)           the Security Agreement;

 

(C)           the Account Control Agreements;

 

(D)          the Collateral Assignment;

 

(E)           to the extent not included in the Mortgage or Security
Agreement, agreements pledging all other personal property and real property
interests of the Borrower, including all governmental approvals, licenses and
permits for the Project, all Project Accounts, all insurance policies
maintained by the Borrower or otherwise related to the Project, all agreements,
leasehold or other property interests relating to the Project, and all related
fixtures, easements, rights-of-way and licenses, all intellectual property
rights of the Borrower, and general intangibles and goodwill; and

 

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

 

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

 

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

 

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

 

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

 

15

 

4.1.2                        Project
Documents.

 

The
Loan Servicer shall have received a copy of a fully executed original of each
of the following documents, each of which shall be in form and substance
satisfactory to each Relevant Credit Party, and certified by the Borrower that
(x) such copy is a true, correct and complete copy of such document
(including all schedules, exhibits, attachments, supplements and amendments
thereto and any related protocols or side letters), (y) such document has
been duly executed and delivered by the parties thereto and is in full force
and effect (i) against the Borrower and (ii) against each other party
thereto except, in the case of this clause (ii), for instances that would not,
individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect, and (z) to the Borrower’s Actual Knowledge, no
party to such document is, or but for the passage of time or giving of notice
or both will be, in breach of any obligation thereunder:

 

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

 

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

 

(i)            the EPC Agreement;

 

(ii)           the Engineering and Architectural Services Agreement; and

 

(iii)          the Permitting and Engineering Management Agreement.

 

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

 

(i)            the NYISO Membership Agreement;

 

(ii)           the O&M Agreement;

 

(iii)          the Technology License Agreement;

 

(iv)          the Technology Escrow Agreement;

 

(v)           the Administrative Services Agreement; and

 

(vi)          the Flywheel Repair Agreement.

 

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

 

16

 

4.1.3                        Advance
Schedule.

 

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

 

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

 

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

 

(i)            the Financial Plan (Exhibit A1), together with
evidence that the DOE Credit Facility Commitment, when combined with other
funds committed to the Project, including the Base Equity, will be available
and sufficient to carry out the Project;

 

(ii)           the Base Case Projections, including a computer file
containing the Base Case Projections and the underlying models and assumptions
and explanations thereto;

 

(iii)          the Project Milestone Schedule;

 

(iv)          the Project Budget; and

 

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

 

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

 

17

 

4.1.5                        Financial
Statements.

 

At
least fifteen (15) Business Days prior to the Financial Closing Date (or such shorter period as may be
satisfactory to the Loan Servicer), the Loan Servicer shall have
received, in form and substance satisfactory to each Relevant Credit Party, the
most recent audited (except in the case of the Borrower) and unaudited
Financial Statements, together with a Financial Officer Certificate, from each
of the Borrower and the Sponsor.

 

4.1.6                        Update of
Conditional Commitment.

 

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

 

4.1.7                        Update of
Credit Rating.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, a credit rating of the Borrower from the Rating Agency
dated no later than thirty (30) days prior to the Financial Closing Date, based
on the updated commitment of DOE reflected in the DOE Credit Facility Documents
and assuming that the Project does not benefit from the DOE Guarantee.

 

4.1.8                        Coverage
Ratios.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, a certificate setting forth calculations, consistent
with the Base Case Projections delivered pursuant to Section 4.1.4
indicating that throughout the term of the DOE Credit Facility a minimum annual
Debt Service Coverage Ratio of 1.30 to 1 for the period after the
Project Completion Date is expected to be achieved.

 

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

 

The
Loan Servicer shall have received the following items, each in form and
substance satisfactory to each Relevant Credit Party in consultation with the
Lender’s Engineer:

 

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

 

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

 

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

 

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

 

18

 

4.1.10                  Debt Repayment.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, evidence of repayment of any existing Indebtedness of
the Borrower, other than Indebtedness permitted hereunder and release of
associated Liens encumbering any Collateral, other than Permitted Liens.

 

4.1.11                  [Reserved.]

 

4.1.12                  Consents and Approvals.

 

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

 

4.1.13                  Project Plans.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, updated Project Plans, certified by Lender’s Engineer as
being satisfactory and sufficient for the construction of the Improvements on
the Project Site.

 

4.1.14                  Lender’s Engineer Report.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, the Lender’s Engineer Report addressing (a) an
analysis of the Project Plans, (b) an analysis of the roles and
capabilities of all Major Project Participants and (c) such other matters
as any Relevant Credit Party may reasonably request.

 

4.1.15                  Consultants’ and Advisors’
Certificates.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, the following certificates, each dated the Financial
Closing Date:

 

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

 

(ii)           Insurance Advisor and Insurance Consultant Certificates.  An Insurance Advisor Certificate in a form
acceptable to the Loan Servicer and an Insurance Consultant Certificate
regarding the matters specified in Section 4.1.27 and in the form
attached as Exhibit F1; and

 

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

 

19

 

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

 

4.1.16                  Fee Arrangements for
Independent Consultants.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, evidence that the Periodic Expenses of any Independent
Consultants incurred and invoiced prior to the Financial Closing Date (other
than Periodic Expenses not then due) have been paid in full.

 

4.1.17                  Project Document Price.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party in consultation with the Lender’s Engineer, certification
from the Borrower and the Lender’s Engineer that the price set forth in each
Project Document has not been increased from the price as of the Common
Agreement Date.

 

4.1.18                  Payment and Performance
Bonds.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, payment and performance bonds covering all construction
work to be performed under the EPC Agreement after the Financial Closing Date
and naming the Borrower and the Collateral Agent as co-obligees.

 

4.1.19                  Performance Targets.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party in consultation with the Lender’s Engineer, a copy of the
Project Facility Performance Targets, together with a certification from the
Borrower and the Lender’s Engineer that such Project Facility Performance Targets
are achievable.

 

4.1.20                  Market Studies.

 

The
Loan Servicer shall have received a report from National Economic Research
Advisors Incorporated in form and substance satisfactory to each Relevant
Credit Party.

 

4.1.21                  Security Interests.

 

(a)           Security Interests. 
The Loan Servicer shall have received, in form and substance
satisfactory to each Relevant Credit Party, evidence that all security
interests in the Collateral Security intended to be created by the Security
Documents in effect on the Financial Closing Date have been or will be created
and, where appropriate, been registered or otherwise perfected to create a
first priority perfected security interest and Lien, subject only to Permitted
Liens, over the Collateral Security in favor of the Administrative Agent in its
capacity as the Collateral 

 

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

 

20

 

Agent.  Each
such Lien (i) to the extent it arises or attaches under the Uniform
Commercial Code of any jurisdiction in the United States, shall be valid and
enforceable and shall constitute a first priority perfected security interest
(subject to Permitted Liens), and (ii) in all other cases, shall be
enforceable against the Borrower, any subsequent lienor (including a judgment
lienor), any junior lienor, or any transferee for or not for value, in bulk, by
operation of law, for the benefit of creditors, or otherwise.

 

(b)           Filings.  The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, evidence satisfactory to it that (i) each of the
Security Documents has been or will be duly filed and registered or recorded in
every jurisdiction in which such filing and registration or recording is
necessary to make valid and effective the Liens intended to be created thereby
and the rights of the Secured Parties thereunder, (ii) all fees and duties
in connection with such registration (x) have been paid in full,
(y) are to be paid with the proceeds of the requested Advance, or
(z) are to be paid by other satisfactory arrangements.

 

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

 

4.1.22                  Authority and Incumbency of
Major Project Participants.

 

The
Loan Servicer shall have received, all in form and substance satisfactory to
each Relevant Credit Party, certified copies of standard corporate, limited
liability company, partnership, or trust formation documents for each of the
Major Project Participants, including certified copies of organizational
documents, good standing certificates, incumbency certificates and resolutions,
and any other such documents as any Relevant Credit Party may have reasonably
requested, with respect to approval of (i) such Major Project Participant’s
participation in the Project, (ii) to the extent applicable, the financing
therefor and the granting of Liens, and (iii) the execution, delivery and
performance by such Major Project Participant of the Transaction Documents
(including a Direct Agreement) to which it is party.

 

4.1.23                  Borrower Certificate;
Sponsor Certificate.

 

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

 

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

 

21

 

4.1.24                  Major Project Participant
Certificates.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, a Major Project Participant Certificate from each Major
Project Participant regarding familiarity with and enforceability of documents,
absence of defaults, validity of representations and warranties and other
customary provisions.

 

4.1.25                  Legal Opinions.

 

The
Loan Servicer and the Administrative Agent in its capacity as the Collateral
Agent shall have received legal opinions from Edwards Angell Palmer &
Dodge LLP or other legal counsel acceptable to each Relevant Credit Party,
dated the Financial Closing Date and in form and substance satisfactory to each
Relevant Credit Party, with respect to the laws of the jurisdictions governing
the Transaction Documents to which each of the Borrower, Holdings, the Sponsor,
and any Sponsor Affiliate is a party and the laws of the jurisdictions of
organization of the Borrower, Holdings, the Sponsor, and any Sponsor Affiliate
and such legal opinions shall include, but may not be limited to the following:
(i) due authorization, execution, delivery and enforceability of
Transaction Documents to which the Borrower, Holdings, the Sponsor, and any
Sponsor Affiliate is a party, (ii) perfection of security interests, (iii) other
than with respect to permits and approvals that are not necessary to be
obtained until a later date, receipt of all governmental permits and approvals
necessary to (1) construct and operate the Project, (2) enter into
financing arrangements with respect to the Project, and (3) enter into the
applicable Transaction Documents, and that such permits and approvals are in
full force and effect and all applicable appeal periods have expired, (iv) that
none of the Credit Parties will be regulated as an electric corporation or
public utility under the United States or New York law solely as a result of
entering into Transaction Documents, and (v) absence of conflicts with
law, agreements or organizational documents.

 

4.1.26                  Taxes; Costs and Expenses.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, certification from the Borrower, and such other evidence
as any Relevant Credit Party may request, that all required taxes, all Periodic
Expenses, and all recordation and other costs, fees and Periodic Expenses invoiced
and due in connection with the execution, delivery, filing, registration, or
performance of the Transaction Documents or the perfection of the security
interests in the Collateral Security have been paid in full.

 

4.1.27                  Evidence of Insurance.

 

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

 

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

 

22

 

4.1.28                  Project Accounts.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, certification from the Administrative Agent in its
capacity as the Collateral Agent that each of the Project Accounts shall have
been established in accordance with the provisions of Appendix A
hereof.

 

4.1.29                  Accounting Systems.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party in consultation with the Lender’s Engineer, a report
certified by a Financial Officer of the Borrower describing the Borrower’s
accounting systems, controls, and management information systems and reasonably
demonstrating that they are satisfactory for purposes of providing information
necessary for financial reporting in accordance with GAAP.

 

4.1.30                  Lobbying Certification.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, evidence that the Borrower has provided a Standard
Form-LLL “Disclosure Form to Report Lobbying” as required.

 

4.1.31                  Land Acquisition; Title to
Project Site.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, (i) evidence of the Borrower’s ownership of
unencumbered fee title (subject only to Permitted Liens), under the relevant
laws of the State of New York of the Project Site as are necessary for the
development of the Project, (ii) the ALTA Survey with respect to the
Project Site, and (iii) one or more ALTA loan policies (or similar policy
form) issued by the Title Company, with such coinsurers or reinsurers as may be
reasonably acceptable to DOE, in the aggregate amount of not less than
$9,000,000 insuring as of the Financial Closing Date that (y) the Building
Loan Mortgage creates a first and prior Lien on the Project Site subject only
to Permitted Liens and (z) the Project Loan Mortgage creates a second Lien
on the Project Site subject only to Permitted Liens and the Building Loan
Mortgage.

 

4.1.32                  Intellectual Property.

 

The
Loan Servicer shall have received, in form and substances satisfactory to each
Relevant Credit Party, evidence that the Borrower and the Sponsor own all
intellectual property rights necessary for the operation of the Project.

 

4.1.33                  Appraisals.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, an updated listing and description of assets associated,
or to be associated, with the Project and any other asset that will serve as
Collateral, including appropriate data as to the value of the assets and the
useful life of any physical assets, including 

 

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

 

23

 

with
respect to real property assets listed, delivery of an appraisal that is
consistent with the “Uniform Standards of Professional Appraisal Practice,”
promulgated by the Appraisal Standards Board of the Appraisal Foundation, and
performed by Capstone Appraisal Group, Inc.

 

4.1.34                  Environmental.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, (i)  a Phase I environmental site assessment of the
Project Site and reliance letter in connection therewith, (ii) an updated
Phase I environmental site assessment of the Project Site, (iii) a limited
Phase II environmental site assessment of the Project Site, (iv) a Finding
of No Significant Impact with respect to the Project Site, and
(v) evidence of satisfaction of any additional environmental requirements
(including required mitigations) in accordance with applicable Environmental
Laws.

 

4.1.35                  Earthquake Risk Report.

 

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

 

4.1.36                  Utility Services.

 

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

 

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

 

24

 

4.1.37                  [Reserved.]

 

4.1.38                  Conditions Precedent in
Transaction Documents.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, certification from the Borrower, together with such
other evidence as any Relevant Credit Party may request, that all conditions
precedent required to be satisfied by any Major Project Participant under any
Transaction Document as of the Financial Closing Date have been satisfied.

 

4.1.39                  DOE Requirements.

 

All
DOE Requirements required to have been satisfied as of the Financial Closing
Date shall have been satisfied, including the payment of all applicable DOE
fees.

 

4.1.40                  Confirmation of
Non-Disclosure and Assignment of Inventions Agreements.

 

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

 

4.1.41                  Funding of Base Equity
Amount; Equity Commitments.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, evidence in form and substance satisfactory to it that
an amount equal to (x) the Base Equity Commitment, less
(y) the Approved Pre-Closing Equity Credit has been deposited in the
Equity Funding Account.

 

4.1.42                  Due Diligence Review.

 

The
Loan Servicer shall have received from each Relevant Credit Party confirmation
that it has completed its due diligence review of the Project and all other
matters related thereto and that the results thereof are satisfactory to such
Relevant Credit Party.

 

4.1.43                  Review and Payment of Credit
Subsidy.

 

The
Loan Servicer shall have received confirmation, in form and substance
satisfactory to each Relevant Credit Party, that (i) OMB has reviewed and
approved DOE’s calculation of the Credit Subsidy Cost for the DOE Guarantee as
of the Financial Closing Date, and (ii) DOE has received payment in full
of the Credit Subsidy Cost in accordance with the Program Requirements.

 

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

 

25

 

4.1.44                  No Judgment Liens.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, confirmation that that the Borrower does not
have a judgment Lien against any of its property for a debt owed to the United
States of America or any other creditor.

 

4.1.45                  Recovery Act Requirements.

 

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

 

4.1.46                  Application Supplement.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, the Application Supplement.

 

4.1.47                  Commencement of
Construction.

 

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

 

4.1.48                  Material Adverse Effect.

 

(a)           The Loan Servicer shall have received, in form and
substance satisfactory to each Relevant Credit Party, certification from the
Borrower, together with such other evidence as it may request, that since
June 29, 2009 no event has occurred with respect to the Project or any
Major Project Participant that would reasonably be expected to have a Material
Adverse Effect.  With respect to
financial matters related to the Sponsor, such certification may be based upon
the most recent annual Financial Statements of Sponsor.

 

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

 

4.1.49                  Central Contractor
Registration.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, evidence that the Borrower has registered in the United
States federal government Central Contractor Registration (“CCR”)
database.

 

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

 

26

 

4.1.50                  Patriot Act.

 

The
Loan Servicer shall have received at least ten (10) Business Days prior to
the Financial Closing Date, all documentation and other information from the
Borrower, Holdings and Sponsor required by regulatory authorities under
applicable “know-your-customer” and anti-money laundering rules and
regulations, including the Patriot Act.

 

4.1.51                  Fees and Expenses.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, confirmation that all DOE Credit Facility Fees and
Periodic Expense then due, including, without limitation, (i) the balance
of the DOE Credit Facility Fee in an amount equal to 0.8% of the maximum
principal amount of the DOE Credit Facility and (ii) the initial DOE
Maintenance Fee in the amount of $25,000, have been paid in full, subject to
§ 609.10(c) of the Applicable Loan Guarantee Requirements.

 

4.1.52                  No Litigation.

 

There
shall be no pending or threatened (in writing) action, suit, or proceeding, or
investigation by a Governmental Authority, of any kind, including any action or
proceeding of or before any Governmental Authority, that (i) relates to
the Project or to any transactions contemplated by any of the Transaction
Documents or (ii) to which the Borrower, the Sponsor or, to the Borrower’s
Actual Knowledge, any other Major Project Participant is a party, that, in each
case, either singly or in the aggregate, has, or could reasonably be expected
to have, a Material Adverse Effect.  The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer, all such information as it shall have reasonably requested in
respect of any pending or threatened action, suit, or proceeding, or
investigation by a Governmental Authority, of any kind, including any action or
proceeding of or before any Governmental Authority, that (i) relates to
the Project or to any transactions contemplated by any of the Transaction
Documents or (ii) to which the Borrower, the Sponsor or any other Major
Project Participant is a party.

 

4.2.                            Conditions
Precedent to Advances.

 

(a)           The obligation of FFB to make, and
DOE to guarantee, each Advance (including the Initial Advance) under the DOE
Credit Facility is subject to the prior satisfaction (or waiver in writing) as
determined by each Relevant Credit Party in its sole discretion of each of the
conditions precedent set forth in this Section 4.2 (the “Advance
Conditions Precedent”) as of the date of submission of the applicable
Master Advance Notice (the “Advance Notice Date”) and to their continued
satisfaction on the Requested Advance Date for such Advance.

 

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

 

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

 

27

 

4.2.1                        Project
Documents.

 

As
conditions to the Initial Advance, the Loan Servicer shall have received, no
later than October 15, 2010, each of the following: (a) a copy of a
fully-executed original of each of the following documents, each of which shall
be in form and substance satisfactory to the Loan Servicer, (b) a
certification by the Borrower that (i) such copy is a true, correct and
complete copy of such document (including all schedules, exhibits, attachments,
supplements and amendments thereto and any related protocols or side letters),
(ii) such document has been duly executed and delivered by the parties
thereto and is in full force and effect, and (iii) to the Borrower’s
Actual Knowledge, no party to such document is, or but for the passage of time
or giving of notice thereunder, or both, would be in breach of any obligation
thereunder and (c) such other supporting documents and/or opinions as may
be required by the Loan Servicer in connection therewith:

 

(a)           the Interconnection Agreement;

 

(b)           [*****];

 

(c)           [*****];

 

(d)           [*****].

 

Such
other supporting documents may include, without limitation (i) evidence
satisfactory to the Loan Servicer that the Collateral Agent has a perfected
security interest in all of the Borrower’s right, title and interest in and to
the Interconnection Agreement and the [*****] and (ii) an opinion of
counsel in form and substance satisfactory to the Loan Servicer as to such
perfection and the due authorization, execution, delivery and enforceability
against the Sponsor or the Borrower, as applicable, of the Interconnection
Agreement, the [*****].

 

4.2.2                        Approval of
Updated Advance Schedule.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party in consultation with the Lender’s Engineer:

 

(i)            certification from the Borrower and the Lender’s Engineer
that the updated Advance Schedule provided by the Borrower, including the
estimates set forth therein, of the timing and amount of Advances required in
connection with the construction and financing of the Project is consistent
with the Project Budget, consistent with the achievement of Physical Completion
within the time period specified in the Project Milestone Schedule and
consistent with the limitation set forth in Section 2.1(c) hereof;
and

 

(ii)           certification from the Borrower that the proceeds of all
Advances to be made with respect to the updated Advance Schedule will be needed
for Eligible Project Costs that have been incurred or by the Requested Advance
Date will be incurred, together with a description in reasonable detail of such
Eligible Project Costs.

 

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

 

28

 

4.2.3                        Project
Progress Report.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party in consultation with the Lender’s Engineer:

 

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

 

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

 

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

 

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

 

(iv)          evidence that as of the date of such Project Progress
Report (A) each Construction Contractor and the Operator shall have
irrevocably waived and released all Liens, statutory or otherwise, that any of
them may have or acquire on the Collateral Security with respect to work
completed prior to the last submission for payment, except for Liens in favor
of any Person in an aggregate amount for such Person [*****]; and (B) all
unpaid balances that are due or unsettled claims with any Construction
Contractor, if any, have been adequately paid and that those being contested or
negotiated in good faith are provisioned to the reasonable satisfaction of the
Loan Servicer; and

 

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

 

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

 

(ii)           nothing has occurred since the date of the most recent
Project Progress Report or the date of the Lender’s Engineer’s most recent site
visit, whichever is later, that could reasonably be expected to prevent
construction and installation of the Project within the Project Milestone
Schedule and the Project Budget.

 

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

 

29

 

4.2.4                        Fees and
Expenses.

 

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

 

4.2.5                        Consents and
Approvals.

 

The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer, (i) certification from the Borrower, together with such
other evidence as the Loan Servicer may reasonably request prior to the
Requested Advance Date or as may be required under the Transaction Documents,
that all consents and approvals of third Persons as may be required in
connection with the proposed Advances and all Governmental Approvals required
as of the Advance Notice Date have been duly obtained and are in full force and
effect and are not under appeal or subject to other proceedings or unsatisfied
conditions that could reasonably be expected to result in a material
modification or cancellation thereof, and (ii) copies of all material
Governmental Approvals not previously delivered, certified by the Borrower as
being true and complete in all material respects.

 

4.2.6                        Insurance.

 

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

 

4.2.7                        Proceedings and
Other Documents.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, (i) certification from the Borrower that all
corporate and similar proceedings concluded since the last Advance Notice Date
are in proper form and substance, (ii) original counterparts or copies
certified by the Borrower of all Additional Project Documents entered into
since the last Advance Notice Date, and (iii) such other evidence as any
Credit Party may reasonably request prior to the Requested Advance Date in
order to evidence the consummation of the transactions contemplated thereby and
compliance with the Advance Conditions Precedent.

 

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

 

30

 

4.2.8                        Representations
and Warranties; No Default.

 

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

 

4.2.9                        No Change in
Circumstances.

 

The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer in consultation with the Lender’s Engineer, certification from
the Borrower and the Lender’s Engineer that no changes to the technical
requirements of the existing Governmental Approvals has occurred, that has had
or could reasonably be expected to have a Material Adverse Effect.

 

4.2.10                  Performance Metrics.

 

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

 

4.2.11                  Closing Certificates.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party:

 

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

 

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

 

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

 

4.2.12                  Project Budget.

 

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

 

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

 

31

 

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

 

4.2.13                  Payment and Performance
Bonds.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, payment and performance bonds covering all construction
work to be performed under the EPC Agreement after the Financial Closing Date
and naming the Borrower and the Collateral Agent as co-obligees.

 

4.2.14                  No Violation of Law.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, certification from the Borrower, together with such
other evidence as it may request, that the Advance will not result in a
violation of any law, any Transaction Document, any governmental approval, or
any other agreement or consent to which the Borrower is a party or any judgment
or approval to which it is subject.

 

4.2.15                  Material Adverse Effect.

 

(a)           The Loan Servicer shall have received, in form and
substance satisfactory to each Relevant Credit Party, certification from the
Borrower, together with such other evidence as it may request, that since
June 29, 2009 no event has occurred with respect to the Project or any
Major Project Participant that would reasonably be expected to have a Material
Adverse Effect.  With respect to
financial matters relating to the Sponsor, such certification may be based upon
the most recent annual Financial Statement of Sponsor.

 

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

 

4.2.16                  No Litigation.

 

There
shall be no pending or threatened (in writing) action, suit, or proceeding, or
investigation by a Governmental Authority, of any kind, including any action or
proceeding of or before any Governmental Authority, that (i) relates to
the Project or to any transactions contemplated by any of the Transaction
Documents or (ii) to which the Borrower, the Sponsor or, to the Borrower’s
Actual Knowledge, any other Major Project Participant is a party, that, in each
case, either singly or in the aggregate, has, or could reasonably be expected
to have, a Material Adverse Effect.  The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer, all such information as it shall have reasonably requested in
respect of any pending or threatened action, suit, or proceeding, or
investigation by a Governmental Authority, of any kind, including any action or
proceeding of or before any Governmental Authority, that (i) relates to
the Project or to any transactions contemplated by any 

 

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

 

32

 

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

 

4.2.17                  No Change in Law

 

The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer, certification from the Borrower, together with such other
evidence as it may request, that, since the Common Agreement Date, no change in
law or any other event has occurred that would reasonably be expected to have a
Material Adverse Effect.

 

4.2.18                  Compliance with Covenants.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, certification from the Borrower, together with such
other evidence as it may request, that the Borrower is in compliance with its
obligations under the Loan Documents, including all affirmative covenants and
negative covenants, and has furnished all information requested under the Loan
Documents.

 

4.2.19                  Title Continuation.

 

The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer, a title continuation dated no earlier than one day prior to the
Requested Advance Date showing no Liens against the Project, except for
Permitted Liens and such other Liens as are satisfactory to DOE in its sole
discretion.

 

4.2.20                  Governmental Requirements.

 

The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer, copies of all material Governmental Approvals not previously
delivered and required for construction or operation of the Project and such
other Governmental Approvals as DOE may reasonably request prior to the
Requested Advance Date or as may be required under any of the Transaction
Documents.

 

4.2.21                  Prior Disbursements.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, evidence that the proceeds of all prior Advances have
been applied as set forth in the Project Budget or as otherwise approved by
DOE.

 

4.2.22                  Additional Documents.

 

The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer, such other documents, certifications or consents relating to the
Project or the matters contemplated by the Transaction Documents as DOE may
reasonably request prior to the Requested Advance Date.

 

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

 

33

 

4.2.23                  Advance Request; Approved
Advance Schedule.

 

The
Loan Servicer shall have received, in form and substance satisfactory to each
Relevant Credit Party, a Master Advance Notice, together with all certificates
and documentation required under Section 2.3.

 

4.2.24                  Issuance of FFB Advance
Request Approval Notice.

 

FFB
shall have received, in accordance with the DOE Credit Facility Documents, the
FFB Advance Request signed by the Borrower, together with the FFB Advance
Request Approval Notice signed by DOE; provided that this requirement shall not
apply to Equity Advances.

 

4.2.25                  Absence of Drawstop Notice.

 

The
Loan Servicer shall not have received a Drawstop Notice with respect to such
Advance.

 

4.2.26                  Additional Recovery Act
Requirements.

 

The
Loan Servicer shall have received, in form and substance satisfactory to the
Loan Servicer, a Borrower Certificate stating, after due inquiry as of a date
not earlier than fifteen (15) Business Days prior to the relevant Advance Date,
that the Borrower has timely complied in all material respects with
(A) its reporting obligations under Section 6.29(a) with
respect to the Recovery Act, and (B) the requirements set forth in Section 6.30
and Exhibit A4 with
respect to the Davis-Bacon Act.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

 

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

 

5.1.                            Organization.

 

The
Borrower (a) is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware, (b) is duly
qualified to do business and in good standing in the State of New York and in
each other jurisdiction where the failure so to qualify would reasonably be
expected to have a Material Adverse Effect, and (c) has all requisite
power and authority to (i) own or hold under lease and operate the
property it purports to own or hold under lease, (ii) carry on its
business as now being conducted and as now proposed to be conducted in respect
of the Project, except for Governmental Approvals that are not necessary to be
obtained until a later date, (iii) incur Indebtedness and create Liens on
its properties, and (iv) 

 

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

 

34

 

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

 

5.2.                            Authorization;
No Conflict.

 

The
Borrower has duly authorized, executed and delivered the Loan Documents and the
other Transaction Documents to which it is a party, and neither its execution
and delivery thereof nor its consummation of the transactions contemplated thereby
nor its compliance with the terms thereof (a) does or will contravene its
Organizational Documents or any other Governmental Rules, (b) does or will
contravene or result in any breach or constitute any violation of any
Governmental Judgment, (c) does or will contravene or result in any breach
or constitute any default under, or result in or require the creation of any
Lien upon any of its revenues, properties or assets under any agreement or
instrument to which it is a party or by which it or any of its revenues,
properties or assets may be bound, except for Permitted Liens, or (d) does
or will require the consent or approval of any Person other than the Required
Consents and any other consents or approvals that have been obtained, and are in full force and effect, or are
not necessary to be obtained until a later date.

 

5.3.                            Legality,
Validity and Enforceability.

 

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

 

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

 

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

 

5.4.                            Capitalization.

 

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

 

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

 

35

 

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

 

5.5.                            Investments;
Subsidiaries.

 

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

 

5.6.                            Title.

 

The
Borrower owns and has, or will have, valid legal and beneficial title to, or a
valid leasehold interest in, the Project Site, the personal property and other
assets and revenues of the Borrower on which it grants Liens pursuant to the
Security Documents, in each case free and clear of any Lien of any kind except
for the lien created by the Security Documents and Permitted Liens.

 

5.7.                            Leases.

 

Any
Leases material to the Project in existence on the date of this representation
and under which the Borrower is lessee are valid and subsisting, the Borrower
is not in default in any material respect under any of such Leases, and the
Borrower enjoys peaceful and undisturbed possession of the property subject to
such Leases and the right to continue to enjoy such possession during the time
when such property is necessary for the Project.

 

5.8.                            Security
Interests.

 

Pursuant
to the Security Documents, as of the date of each Advance the Administrative
Agent in its capacity as the Collateral Agent (for the benefit of the Credit
Parties) has a perfected first priority Lien in the Collateral Security,
subject only to the Permitted Liens. 
Such security interest in the Collateral Security will, as of the
Financial Closing Date and with respect to any subsequently acquired property
(absent a Change of Law), when so subsequently acquired, be superior and prior
to the rights of all third Persons now existing or hereafter arising whether by
way of mortgage, Lien, security interests, encumbrance, assignment or
otherwise, except for any such rights of third Persons permitted pursuant to
this Common Agreement or the Security Documents.  As of the Financial Closing Date, all
documents and instruments, including the Building Loan Agreement, the Mortgage
and Financing Statements, have been recorded or filed for record in such manner
and in such places as are required, and all other action as is necessary shall
have been taken to establish and perfect the Administrative Agent in its
capacity as the Collateral Agent’s Lien in and to the Collateral Security (for
the benefit of the Secured Parties) to the extent contemplated by the Security Documents.  All taxes and filing fees and Periodic
Expenses that are due and payable in connection with the execution, delivery
and filing or recordation of the Building Loan Agreement, the Mortgage and the
Financing Statements, or the execution, issuance and delivery of the FFB
Promissory Note, or the mortgaging of the mortgaged property under the
Mortgage, have been paid or satisfactory arrangements have been made with the
relevant Credit Parties to satisfy such obligations.

 

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

 

36

 

5.9.                            Liens.

 

Except
for Permitted Liens, the Borrower has not created, and is not under any
obligation to create, any Lien upon any of its revenues, properties or
assets.  There are no Liens on the
Pledged Equity Interests, except for Permitted Liens.

 

5.10.                     Permits;
Other Required Consents.

 

Except
as disclosed in writing by the Borrower from time to time, Schedule 5.10
to the Disclosure Letter sets forth all consents and approvals, including all
Governmental Approvals, that are required to have been obtained or to be
obtained by the Borrower in connection with the Transaction Documents and the
Project either (x) as of the Common Agreement Date, or (y) to the
Borrower’s Knowledge, at a later stage in the development of the Project (the “Required
Consents”).  The Borrower has filed
applications for or obtained such Required Consents required as of the date of
representation and such Required Consents then required to have been obtained
are in full force and effect and are not then under appeal or subject to other
proceedings or unsatisfied conditions that would reasonably be expected to
result in a material modification or cancellation as of such date, and Borrower
has provided the Loan Servicer with copies of all such Required Consents.  The Borrower is in compliance with all such
Required Consents, the non-compliance with which would reasonably be expected to
have a Material Adverse Effect, including all Federal, state, and local
regulatory requirements.

 

5.11.                     Litigation,
Labor Disputes.

 

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

 

(b)           The Borrower has not failed to observe in any material
respect any order of any court, arbitrator, administrative agency or other
Governmental Authority that has, or could reasonably be expected to have, a
Material Adverse Effect.  There is no
injunction, writ, or preliminary restraining order of any nature issued by an
arbitrator, court or other Governmental Authority having jurisdiction over the
Borrower or the Project directing that any of the transactions provided for in
any of the Transaction Documents not be consummated as herein or therein
provided.

 

(c)           There are no strikes, slowdowns or work stoppages by
the employees of any of the Borrower or, to the Borrower’s Knowledge, any Major
Project Participant on-going, or, to the Knowledge of the Borrower, currently
threatened in writing, that would
reasonably be expected to cause a Material Adverse Effect.

 

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

 

37

 

5.12.                     Tax

 

(a)           The Borrower has filed all material tax returns required
by Governmental Rules to be filed by it and has paid (i) all income
taxes payable by it that have become
due pursuant to such tax returns and (ii) all other material taxes and
assessments payable by it that have
become due (other than those taxes that it is contesting in good faith and by
appropriate proceedings, for which reserves have been established to the extent
required by GAAP).  The Borrower has paid
or has provided reserves adequate in the reasonable judgment of the Borrower’s
management and consistent with GAAP for the payment of all income or other
material taxes imposed on it by the applicable governmental authority for all
prior Fiscal Years and accrued for the current Fiscal Year to the date hereof,
which reserves shall be in an amount at least equal to the full assessed amount
of such tax.  The Borrower shall not be
liable for, absent a Change of Law, any material tax liability in connection
with the Project or the other transactions contemplated by the Transaction
Documents that is not specifically
reflected in the Base Case Projections as in effect on the Financial Closing
Date and in the Project Budget or as reflected in the assumptions in the then
applicable Operating Forecast, as the case may be.

 

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

 

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

 

5.13.                     Business, Indebtedness,
Contracts, Etc.

 

The
Borrower has not conducted any business other than the business contemplated by
the Transaction Documents and other business related to the Project, has no
outstanding Indebtedness other than the Indebtedness permitted under the Loan
Documents and has no other liabilities other than those permitted under the
Loan Documents, and is not a party to or bound by any contract other than those
contracts permitted under the Loan Documents.

 

5.14.                     Transactions
with Affiliates.

 

Except
as set forth on Schedule 5.14 to the Disclosure Letter or as
permitted by Section 7.12, the Borrower is not a party to any
contracts or agreements with, and does not have any other loan commitments to,
whether or not in the ordinary course of business, any Affiliate.  The Borrower is not a party to any agreement
requiring the payment of development fees.

 

5.15.                     Compliance
with Governmental Rules.

 

In
accordance with Section 609.10(d)(20) of the Applicable Loan Guarantee
Requirements, the Borrower is in compliance with, and has conducted its
business, operations, 

 

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

 

38

 

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

 

5.16.                     Environmental
Laws.

 

(a)           The Borrower (x) has been issued all Governmental
Approvals relating to, and (y) has received no complaint, order,
directive, claim, citation or notice by any Governmental Authority (that has
not been disclosed to the extent required by the Loan Documents) relating to
its then-existing obligations with respect to: 
(A) air emissions, (B) discharges to surface water or ground
water, (C) noise emissions, (D) solid or liquid waste disposal,
(E) the use, generation, storage, transportation or disposal of toxic or
Hazardous Substances or wastes, or (F) other environmental, health or
safety matters.

 

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

 

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

 

5.17.                     Investment
Company Act.

 

The
Borrower is not required to register as an “investment company” and it is not “controlled”
by a company required to register as an “investment company” under the
Investment Company Act.

 

5.18.                     Regulation
of Parties.

 

The
Borrower is not subject to the Public
Utility Holding Company Act.  None
of the Credit Parties shall by reason if its ownership or operation of the
Project upon the exercise of remedies under the Security Documents be subject
to the Public Utility Holding Company Act.

 

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

 

39

 

5.19.                     Corrupt
Practices Laws.

 

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

 

5.20.                     ERISA.

 

(a)           The Borrower and its ERISA Affiliates have operated the
Employee Benefit Plans in compliance with their terms and with all applicable
provisions and requirements of the Internal Revenue Code, ERISA, and other
applicable Federal or state laws and have performed all their respective
obligations under each Pension Plan, except such noncompliance as could not
reasonably be expected to have a Material Adverse Effect.  As of the date hereof, there are no Pension
Plans or Multiemployer Plans.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

40

 

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

 

5.21.                     Insurance.

 

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

 

5.22.                     Intellectual
Property.

 

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

 

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

 

5.23.                     No
Defaults.

 

No
Event of Default or Potential Default has occurred and is continuing.

 

5.24.                     No
Judgment Liens.

 

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

 

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

 

41

 

5.25.                     Sufficiency
of Project Documents.

 

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

 

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

 

(c)           Each Project Document in existence as of the Financial
Closing Date is in full force and effect (i) against the Borrower and (ii) against
each other party thereto except, in the case of this clause (ii), for instances
that would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.

 

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

 

(e)           Each of Borrower, Holdings, Sponsor and Operator has
complied with all of its respective covenants and obligations under the Project
Documents to which it is a party; and, to the Knowledge of Borrower, each of
the other parties to the Project Documents has complied with all of its
respective covenants and obligations under the Project Documents to which it is
a party, except where such non-compliance by any such other party could not
reasonably be expected to have a Material Adverse Effect.

 

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

 

42

 

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

 

5.26.                     Financial
Statements.

 

Each
of the Financial Statements of the Borrower, Holdings and the Sponsor delivered
to the Credit Parties has been prepared in accordance with GAAP and presents
fairly in all material respects the financial condition of Borrower, Holdings
or the Sponsor as of the respective dates of the balance sheets included
therein and the results of operations of Borrower, Holdings or Sponsor for the
respective periods covered by the statements of income included therein.  In the case of the Borrower, except as
reflected in such Financial Statements, there are no liabilities or obligations
of any nature whatsoever for the period to which such Financial Statements
relate (other than under the Transaction Documents) that are required to be
disclosed in accordance with GAAP.

 

5.27.                     Project
Milestone Schedule and Project Budget; Operating Forecasts and Base Case
Projections.

 

(a)           The Project Milestone Schedule, the Project Budget, the
Operating Forecast and the Base Case Projections, as amended or supplemented by
Approved Project Changes, (i) are complete and based on reasonable
assumptions, (ii) are consistent in all material respects with the
provisions of the Project Documents, (iii) have been prepared in good
faith and with due care, and (iv) fairly represent the Borrower’s
expectation as to the matters covered thereby as of the date of the
representation.

 

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

 

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

 

(d)           Borrower’s good faith estimate and belief as of the Common
Agreement Date is that (i) Physical Completion will occur no later than
the Anticipated Physical Completion Date, (ii) Total Project Costs will
not exceed Base Project Costs except to the extent that the Loan Servicer has
been notified to the contrary in accordance with the Loan Documents, and
(iii) each of Total Project Costs, Base Project Costs, Eligible Base
Project Costs and Ineligible Base Project Costs will not exceed the respective
amounts therefor set forth in the Financial Plan.  Nothing has occurred to cause Borrower to
believe that the Project Milestone Schedule and Base Case Projections, as
amended or supplemented by Approved Project Changes, are unreasonable in any material
respect.

 

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

 

43

 

5.28.                     Sufficient
Funds

 

In
accordance with Section 609.10(d)(8) of the Applicable Loan Guarantee
Requirements, as of the Financial Closing Date, the Total Funding Available to
the Borrower will be sufficient to carry out the Project, including adequate contingency
funds for identified cost overruns.

 

5.29.                     Fees
and Enforcement.

 

Other
than amounts that have been paid in full or are not due and payable or with
respect to which arrangements satisfactory to each Relevant Credit Party have
been made, no fees or taxes including documentary, stamp, transaction,
registration, or similar taxes are required to be paid to ensure the legality,
validity, enforceability, priority or admissibility in evidence in applicable
jurisdictions of any Transaction Documents.

 

5.30.                     Immunity.

 

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

 

5.31.                     No
Other Powers-of-Attorney, Etc.

 

The
Borrower has not executed and delivered any powers of attorney or similar
documents, except (i) to its directors and employees in the ordinary
course of business, and (ii) in connection with Permitted Liens.

 

5.32.                     No
Additional Fees.

 

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

 

5.33.                     OFAC
and USA PATRIOT Act.

 

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

 

(b)           None of the Borrower, Holdings, the Sponsor, nor any of
their directors, officers, or Affiliates: (x) is subject to United States
or multilateral economic or trade sanctions in which the United States
participates; (y) is owned or controlled by, or act on behalf of, any
governments, corporations, entities or individuals that are subject to United
States or multilateral economic or trade sanctions in which the United States
participates; or (z) is a Prohibited Person or is otherwise named,
identified or described on any blocked persons list, designated nationals list,
denied persons list, entity list, debarred party list, unverified list,
sanctions list or other list of 

 

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

 

44

 

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

 

(c)           None of the Collateral is traded or used, directly or
indirectly by a Prohibited Person or by a Person organized in a Prohibited
Jurisdiction.  Neither the making of any
Advances nor the use by the Borrower, Holdings or the Sponsor of the proceeds
thereof will violate any OFAC regulations, or any anti-boycott laws and
regulations.

 

(d)           The Borrower, Holdings, and the Sponsor have established
an anti-money laundering compliance program if and as required by the USA
PATRIOT Act.

 

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

 

5.34.                     U.S.
Government Requirements.

 

(a)           Suspension and Debarment.  No event has occurred and
no condition exists that is likely to result in the debarment or suspension of
the Borrower, Holdings, Sponsor or any of their respective Affiliates from
contracting with the United States Government or any agency or instrumentality
thereof, and none of the Borrower, Holdings, Sponsor or any of their respective
Affiliates is now or ever has been subject to any such debarment or
suspension.  As of the Common Agreement
Date none of the Borrower, Holdings, Sponsor or any of their respective
Affiliates or any Principal Persons of any of the foregoing are
(i) debarred, suspended, proposed for debarment with a final determination
still pending, declared ineligible or voluntarily excluded (as such terms are
defined in any of the Debarment Regulations) from participating in procurement
or nonprocurement transactions with any United States federal government
department or agency pursuant to any of the Debarment Regulations, or
(ii) indicted, convicted or had a Governmental Judgment rendered against
the Borrower, Holdings, Sponsor or any of their respective Affiliates for any
of the offenses listed in any of the Debarment Regulations, and no event has
occurred and no condition exists that is likely to result in the debarment or
suspension of the Borrower, Holdings, Sponsor or any of their respective
Affiliates from contracting with the United States Government or any agency or
instrumentality thereof; and none of the Borrower, Holdings or the Sponsor has
sold ten percent (10) or more of its capital stock (whether in one
transaction or a series of transactions) in a negotiated sale to any Person that,
at the time of such sale, was described in any of clauses (i) or (ii) of
this Section 5.34(a).

 

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

 

45

 

(b)           Lobbying.  In
accordance with 31 U.S.C. §1352, no proceeds of the Advances have been or will
be expended by the Borrower, Holdings or the Sponsor to pay any Person for
influencing or attempting to influence an officer or employee of any agency, a
member of Congress, an officer or employee of Congress, or an employee of a
member of Congress.

 

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

 

5.35.                     Insolvency
Proceedings.

 

The
Borrower is not the subject of any pending, or to the Borrower’s Actual
Knowledge, threatened, Insolvency
Proceedings.

 

5.36.                     Use
of Proceeds.

 

The
Borrower has used and shall continue to use the proceeds of all Advances in
accordance with the terms and conditions of all applicable Loan Documents.

 

5.37.                     No
Material Adverse Effect.

 

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

 

5.38.                     Certain
Program Requirements.

 

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

 

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

 

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

 

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

 

46

 

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

 

(d)           No Tax-Exempt Indebtedness.  In accordance with Section 609.10(d)(7) of
the Applicable Loan Guarantee Requirements, the DOE Credit Facility does not
finance, either directly or indirectly, tax-exempt indebtedness obligations,
consistent with the requirements of Section 149(b) of the Internal
Revenue Code.

 

5.39.                     Davis-Bacon
Act.

 

The
Borrower has taken all steps necessary to comply with, and in all material respects
is in compliance with, Section 6.30 and Exhibit A4
relating to the Davis-Bacon Act.

 

5.40.                     Buy
American Provisions.

 

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

 

5.41.                     Recovery
Act Reporting.

 

The
Borrower has taken all necessary steps to be in compliance as of the Financial
Closing Date with its reporting obligations under Section 6.29(a) with
respect to the Recovery Act.

 

5.42.                     Full
Disclosure.

 

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

 

(b)           Other than the Transaction Documents, there are in
existence no documents or agreements to which Sponsor, Holdings or Borrower is
a party that have not been described
to the Credit Parties that are
material in the context of the Transaction Documents or that have the effect of varying any of the Transaction Documents
or the Project.

 

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

 

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

 

47

 

5.43.                     Force
Majeure

 

No
Event of Force Majeure has occurred and is continuing with respect to the
Borrower or the Project.

 

ARTICLE 6

AFFIRMATIVE COVENANTS

 

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

 

6.1.                            Information
Covenants.

 

At
its own expense the Borrower shall furnish or cause to be furnished to the Loan
Servicer, in each case (y) in unalterable electronic format with a
reproduction of the signatures where required and (z) upon request by the
Loan Servicer, in soft electronic format, the following items, including the
certificates and information identified in Exhibit O:

 

(a)           Monthly Project Progress Reports.

 

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

 

(ii)           The Borrower acknowledges that not later than [*****] days
after the end of each month prior to the Physical Completion Date, the Lender’s
Engineer will deliver to the Loan Servicer a separate report on construction
progress;

 

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

 

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

 

(ii)           a certificate of a Financial Officer of the Borrower with
respect to such quarter, setting forth (A) a statement of all material
financial transactions (other than any transactions contemplated under the
Transaction Documents), and a report of all transactions involving the
Borrower, on the one hand, and on the other hand Holdings and the Sponsor or any Affiliate of Holdings or the
Sponsor (other than any such transaction under the Intercompany Project
Documents); (B) for each such quarter that includes all or a portion of
the Construction Period, calculations showing the amount of Equity
Contributions and the amount of Advances applied to pay Project Costs; and
(C) for each such quarter that includes all or a portion of the Operating
Period, calculations showing compliance with the requirements of Section 6.33
and 

 

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

 

48

 

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

 

(c)           Annual Financial Statements and Reports.  As soon as available, but in any event not
later than ninety (90) days after the end of each Fiscal Year, commencing with
the first Fiscal Year ending on or after the Financial Closing Date:

 

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

 

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

 

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

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

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

 

(f)            Financial Statements of Sponsor.  At any time during which the Sponsor is not
subject to the periodic reporting requirements of the Securities Exchange Act of
1934, as amended, promptly after the same become available, and with respect to
the Sponsor in accordance with the time periods applicable to the Borrower set
forth in Sections 6.1(b) (as part of the Quarterly Reporting
Package) and 6.1(c), unaudited quarterly and audited annual Financial
Statements of the Sponsor prepared by Sponsor’s Accountant in accordance with
GAAP certified by a Financial Officer of the Sponsor as having been prepared in
accordance with GAAP on a consistent basis and as fairly presenting in all
material respects the financial condition of the Sponsor as of the date thereof
and the results of operations and cash flows of the Sponsor for the periods
presented.

 

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

 

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

 

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

 

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

 

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

 

50

 

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

 

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

 

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

 

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

 

(vi)          any material notice or correspondence received or initiated
by the Borrower from or to any Governmental Authority relating to the Project
or any Transaction Document or any notice or correspondence received or
initiated by the Borrower from or to any Governmental Authority relating to any
Governmental Approval, but excluding notices or correspondence received or
initiated in the ordinary course of business or otherwise previously delivered
pursuant to any Transaction Document;

 

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

 

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

 

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

 

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

 

(xi)           any material correspondence from any Construction
Contractor, the Administrator, or the Operator relating to, (A) any
material delay in the completion of the Project, or (B) any event that
could reasonably be expected to interrupt the operation of the Project for more
than [*****];

 

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

 

51

 

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

 

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

 

(xiv)        any Event of Force Majeure affecting, or that either the
Borrower or any other Major Project Participant claims would affect, the
performance by such Person of any material obligation under any Transaction
Document, together with copies of all notices, calculations, data and other
correspondence between such Major Project Participant and the Borrower in
respect of any such event, circumstance or condition;

 

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

 

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

 

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

 

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

 

(xix)         notice and a copy of any other material report filed or
required to be filed by any Major Project Participant with any Governmental
Authority relating to the Project;

 

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

 

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

 

52

 

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

 

(i)            Governmental and Environmental Indemnity Claims and
Reports.  As soon as available, but
in any event:

 

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

 

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

 

(iii)          within [*****] after the close of each Fiscal Year, a
report, satisfactory to the Loan Servicer in its reasonable discretion,
summarizing any violations of Environmental Laws in connection with the Project
over the preceding year, with sufficient information to allow the Credit
Parties (including DOE) to monitor the Project’s performance with respect to
the environment and its compliance with Environmental Laws and including a
narrative summary of (A) the results of environmental monitoring or sampling
activity, (B) any violations of Environmental Laws identified by any
environmental Governmental Authority and any remedial action taken with respect
thereto, and

 

(iv)          within [*****] after an Authorized Official of the Borrower
obtains actual knowledge thereof, any Environmental Claim by any Governmental
Authority or any assertion of an Environmental Claim or claims involving an
amount in [*****] by any other Person or Persons together with a copy of any
correspondence relating thereto and a description of any steps the Borrower is
taking and proposes to take with respect thereto;

 

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

 

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

 

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

 

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

 

53

 

(iii)          Upon the request of any Credit Party, an Authorized
Official of the Borrower shall schedule a date to discuss any updated Operating
Plan, updated Operating Forecast, updated Financial Plan, updated Base Case
Projections, and such other matters relating to the Project as any Credit Party
may reasonably request;

 

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

 

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

 

(m)          Annual Operating Budget.  [*****] the beginning of each Fiscal Year
commencing with the first Fiscal Year in which Borrower reasonably expects to
realize Operating Revenues, the operating budget of Borrower for the first
three (3) months of such Fiscal Year and [*****] of each Fiscal Year
commencing with the first Fiscal Year in which Borrower reasonably expects to
realize Operating Revenues, the operating budget of Borrower for the last nine (9) months
of such Fiscal Year, certified, in each case, by an Authorized Official of the
Borrower (collectively, the “Initial Operating Budget”), which
(i) shall include, on an aggregate and month-by-month basis, reasonable
estimates of all Operating Revenues expected to be received and all Operating
Costs (by category) expected to be incurred during such Fiscal Year and during
each month in such Fiscal Year, (ii) shall include such other information
as may be reasonably requested by the Loan Servicer and (iii) shall be
prepared on a basis consistent from year to year and month to month in
sufficient detail to permit meaningful comparisons, and shall include a
statement of the assumptions on which it is based.  Borrower may amend the Initial Operating
Budget, as the same may have been previously amended, for any Fiscal Year by
furnishing the Loan Servicer an amended operating budget of Borrower for such
Fiscal Year, certified by an Authorized Official of the Borrower (the “Amended
Operating Budget”), which shall include the same information as is
contained in the Initial Operating Budget, together with an explanation of any
changes from the Initial Operating Budget, as the same may have been previously
amended.  The Initial Operating Budget,
as the same may be amended by any Amended Operating Budget, is hereinafter
referred to as the “Operating Budget”.

 

(n)           Additional Project Documents and Governmental Approvals.  As soon as available, but in no event later
than [*****] after the receipt thereof by the Borrower, copies of all
Additional Project Documents, any Governmental Approvals and other Required
Consents obtained or entered into by the Borrower after the Financial Closing
Date;

 

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

 

54

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(u)           Information Made Available.

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

56

 

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

 

(e)            In the event that the Borrower’s Accountant should cease
to be the accountants of the Borrower for any reason, the Borrower shall
appoint and maintain as the Borrower’s Accountant another firm of independent
public accountants, which firm shall be nationally recognized, and shall be
approved by the Loan Servicer; provided, however, that any of Deloitte &
Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers
LLP, if appointed by the Borrower as the Borrower’s Accountant, shall not
require the approval of the Loan Servicer; and

 

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

 

6.3.                            Maintenance
of Property and Insurance.

 

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

 

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

 

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

 

6.4.                            Maintenance
of Existence; Conduct of Business.

 

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

 

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

 

57

 

6.5.                            Compliance
with Governmental Rules; Environmental Laws; Governmental Approvals.

 

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

 

(b)           Each of the following transactions, if, and to the extent,
otherwise permitted pursuant to the terms of the Transaction Documents, shall
be in compliance with all applicable Governmental Rules including, without
limitation, applicable Governmental Rules of FERC: (i) the sale,
transfer, assignment, lease or other disposition (whether in one transaction or
a series of transactions) of all, or substantially all, of the assets of
Sponsor; (ii) the merger or consolidation of Sponsor with any other
Person; and (iii) any negotiated sale by Sponsor of any of the capital
stock of Sponsor.

 

6.6.                            Compliance
with Debarment Regulations.

 

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

 

6.7.                            Tax,
Duties, Proper Legal Form.

 

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

 

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

 

58

 

6.8.                            Approved
Project Changes.

 

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

 

(b)           The Borrower shall not change, reallocate, amend, modify,
or supplement or permit or consent to any changes, reallocations, amendments,
modifications, or supplements (each a “Project Change”) of any of the
provisions of the Project Milestone Schedule or the Project Budget, except for
the following approved Project changes (“Approved Project Changes”):

 

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

 

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

 

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

 

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

 

6.9.                            Operating
Forecasts.

 

From
and after the Project Completion Date, the Borrower shall or shall cause the
Project to operate in all material respects pursuant to the Operating Plan then
in effect.

 

6.10.                     Diligent
Construction and Installation of Project and Operations.

 

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

 

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

 

59

 

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

 

6.11.                     Ineligible
and Overrun Project Costs.

 

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

 

6.12.                     Cost
Overruns and Contingencies.

 

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

 

6.13.                     Use
of Proceeds; Repayment of Indebtedness.

 

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

 

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

 

6.14.                     Performance
of Obligations.

 

The
Borrower shall maintain in full force and effect each of the DOE Credit
Facility Documents and each of the other Loan Documents to which it is a party
in accordance with the respective terms thereof, except for those Loan
Documents that shall by their terms
terminate.  The Borrower shall comply with
the provisions of and perform all of its obligations under each Loan Document
in accordance with the terms thereof. 
The Borrower shall maintain in full force and effect each of the Project
Accounts in accordance with the provisions of Appendix A attached
hereto.

 

6.15.                     Project
Documents.

 

The
Borrower shall (i) maintain all the Project Documents to which it is a
party in full force and effect, (ii) comply with the material provisions
of and perform all of its material obligations under such Project Documents,
and (iii) diligently pursue all of its rights and remedies under such
Project Documents.

 

6.16.                     Cash
Deposits.

 

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

 

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

 

60

 

shall
remit any amounts received by it or received by third parties on its behalf to
the Administrative Agent in its capacity as the Collateral Agent for deposit
with the Depository Bank in accordance with this Agreement.

 

6.17.                     Debt
Service Reserve.

 

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

 

6.18.                     Safety
Audit.

 

Not
less frequently than once each calendar year, the Borrower shall conduct, or
cause the Operator to conduct, a safety audit of the Project in a manner
reasonably satisfactory to the Loan Servicer (in consultation with the Lender’s
Engineer), each in its sole discretion, including an analysis of whether the
Project is in compliance with all Governmental Rules and Environmental
Laws and each such safety audit shall result in the prompt preparation of a written
report with respect thereto which shall be delivered to the Loan Servicer, DOE
and the Lender’s Engineer for review and approval by the Loan Servicer, in
consultation with the Lender’s Engineer. 
The Borrower shall provide for the prompt correction of any deficiencies
identified in such safety audit and for the operation and maintenance of the
Project in accordance with any recommendations set forth therein.

 

6.19.                     Replacement
of Certain Project Participants.

 

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

 

6.20.                     Security
Interest in Newly Acquired Property; Additional Project Documents.

 

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

 

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

 

61

 

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

 

6.21.                     Title;
Rights to Land.

 

The
Borrower shall preserve and maintain good and valid title to the Project and
such rights to use the Project Site as are necessary to construct, operate and
maintain the Project in accordance with the requirements of the Transaction
Documents.

 

6.22.                     Independent
Consultants.

 

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

 

6.23.                     Additional
Documents; Filings and Recordings.

 

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

 

(b)           (i)            The
Borrower shall, at its own expense, take all actions that have been or shall be
requested by the Loan Servicer, DOE, the Administrative Agent in its capacity
as the Collateral Agent or that the Borrower Knows are necessary to establish,
maintain, protect, perfect and continue the perfection of the first priority
(subject to Permitted Liens) security interests of the Secured Parties created by
the Security Documents and shall furnish timely notice of the necessity of any
such action, together with such instruments, in execution form, and such other
information as may be required or reasonably requested to enable any
appropriate Secured Party to effect any such action.  Without limiting the generality of the
foregoing, the Borrower shall, at its own expense, (A) execute or cause to
be executed and shall file or cause to be filed or register or cause to be
registered such financing statements, continuation statements, fixture filings
and mortgages or deeds of trust in all places necessary or advisable (in the
opinion of counsel for the Loan Servicer, DOE or the Administrative Agent in
its capacity as the Collateral Agent) to establish, maintain and perfect such
security interests and in all other places that the Loan Servicer, DOE or the
Administrative Agent in its capacity as the Collateral Agent shall reasonably
request, (B) discharge all other Liens (other than Permitted Liens) or
other claims adversely affecting the rights of the Secured Parties in the
Collateral Security and (C) deliver or publish all notices to third
parties that may be required to establish or maintain the validity, perfection
or priority of any Lien created pursuant to the Security Documents.

 

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

 

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

 

62

 

registering and recording all necessary documents
and paying all fees, taxes, levies, imposts and Periodic Expenses in connection
therewith) to (A) create security arrangements, including, if applicable,
the establishment of a pledge or the perfection of any Lien or, as applicable,
the enforceability of a Lien as against the Borrower and any subsequent lienor
(including a judgment lienor), holder of a charge, or transferee for or not for
value, in bulk, by operation of law, or otherwise, in each case granted, with
respect to future assets in accordance with the requirements of all
Governmental Rules, or the law of any other jurisdiction, as applicable,
(B) maintain the security and pledges created by the Security Documents in
full force and effect at all times (including, as applicable, the priority
thereof) and (C) preserve and protect the Collateral Security and protect
and enforce its rights and title, and the rights and title of the Credit
Parties, to the security created by the Security Documents.  Furthermore, the Borrower shall cause to be
delivered to the Loan Servicer such opinions of counsel and other related
documents as may be reasonably requested by the Loan Servicer, DOE or the
Administrative Agent in its capacity as the Collateral Agent to assure
compliance with this Section 6.23. 
Additionally, when requested by the Loan Servicer, the Borrower shall
cause any party to a Project Document executed subsequent to the Financial
Closing Date to enter into a Direct Agreement with the Administrative Agent in
its capacity as the Collateral Agent in form and substance satisfactory to the
Loan Servicer and the Administrative Agent in its capacity as the Collateral
Agent.

 

6.24.                     Intercompany
Project Documents.

 

Unless
otherwise agreed by each Relevant Credit Party, each of the Intercompany
Project Documents will contain the following provisions:

 

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

 

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

 

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

 

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

 

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

 

(f)            appropriate force majeure provisions protecting the
Borrower;

 

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

 

63

 

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

 

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

 

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

 

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

 

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

 

(l)            consents and subordinations to the terms of the Loan
Documents, including, but not limited to, cash flow waterfall provisions which
could result in the Sponsor or Sponsor Affiliate failing to be paid all or a
portion of its compensation for services rendered;

 

(m)          for contracts that are effective during the development or
construction period, payments shall be limited to actual costs incurred and no
payment shall be made for fees, commissions, profit or mark-up until the
Project Completion Date, except to the extent agreed upon by DOE;

 

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

 

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

 

(p)           waiver of set-off; and

 

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

 

6.25.                     Event
of Loss.

 

If
any material Event of Loss shall occur with respect to the Project or any part
thereof, the Borrower shall (i) diligently pursue all its rights to
compensation involving an amount [*****] per claim against all relevant
insurers, reinsurers and Governmental Instrumentalities, as applicable, in
respect of such event; (ii) not, without the written consent of the Loan
Servicer compromise or settle any claim with respect to any Event of Loss
involving [*****] per claim; and (iii) pay or apply all Loss Proceeds
stemming from such event in accordance with Section 3.4.3(a)(ii) and
Section 6.26.

 

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

 

64

 

6.26.                     Application
of Loss Proceeds.

 

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

 

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

 

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

 

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

 

(ii)           the Borrower is in compliance with such other conditions
and requirements as the Loan Servicer shall consider appropriate in the
circumstances.

 

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

 

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

 

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

 

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

 

65

 

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

 

6.27.                     Acceptance
and Startup Testing.

 

The
Borrower shall consult with and provide reasonable notice to the Loan Servicer
and Lender’s Engineer regarding provisions related to startup and testing of
facility and equipment pursuant to the Construction Contracts and the O&M
Agreement.

 

6.28.                     Technology.

 

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

 

(b)           The Borrower shall take all commercially reasonable
actions necessary to maintain and protect the Technology and Intellectual
Property Rights licensed under the Technology License Agreement.

 

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

 

6.29.                     Compliance
With Certain U.S. Government Requirements.

 

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

 

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

 

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

 

66

 

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

 

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

 

6.30.                     Davis-Bacon
Act.

 

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

 

(b)           The Borrower, on DOE’s behalf, shall systematically review
the certified payroll records that it maintains for its own laborers and
mechanics pursuant to subparagraph (b)(3)(i) of Exhibit A4 and those that it receives for the laborers
and mechanics of any Contract Party (as defined in Exhibit A4) pursuant to subparagraph (b)(3)(ii)(A) of
Exhibit A4.  The Borrower shall promptly notify the DOE
contracting officer in writing when it receives any complaint related to
non-compliance with the Davis-Bacon Act, or discovers in the course of its
systematic review of the certified payroll records an incident that the
Borrower reasonably believes to be a case of such non-compliance and which, in
each case, the Borrower cannot resolve on its own and shall forward to the DOE
contracting officer (1) the complaint or a written summary of the
non-compliant incident, (2) a summary of the Borrower’s investigation into
such complaint or such incident, and (3) the relevant certified payroll
records.  Certified payroll records
maintained by the Borrower shall be preserved for 3 years after completion of
work.  Notwithstanding anything to the
contrary in subparagraph (b)(3)(ii)(A) of Exhibit A4, the Borrower shall maintain such certified
payroll records at a site designated by the Borrower and shall make such
records available to DOE and the U.S. Department of Labor when necessary, and
upon request, for purposes of an investigation or audit of compliance with
prevailing wage requirements.  Certified
payroll records maintained by the Borrower shall be considered federal
government records for the purposes of the Freedom of Information Act, 42
U.S.C. 552.  The Borrower shall provide
such records to DOE within five (5) days of receipt of any written request
for such records from DOE.

 

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

 

67

 

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

 

(d)           The wage determination of the Secretary of Labor attached
hereto as Schedule 6.30(d) may be amended unilaterally by DOE
at any time upon written notice to the Borrower.  In the event of any such unilateral
amendment, Schedule 6.30(d) attached hereto shall be automatically
replaced by such amended Schedule 6.30(d) without any further
action by the Borrower.

 

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

 

6.31.                     ERISA
Covenants.

 

(a)           The Borrower shall do, and shall cause each of its ERISA
Affiliates to do, each of the following: (i) maintain each Employee
Benefit Plan in compliance in all material respects with the applicable
provisions of ERISA, the Internal Revenue Code or other Federal or state law; (ii) cause
each Qualified Plan to maintain its qualified status under Section 401(a) of
the Internal Revenue Code; (iii) timely make all required contributions to
any Pension Plan; (iv) ensure that all liabilities under each Plan are
either (A) funded to at least the minimum level 

 

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

 

68

 

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

 

(b)           The Borrower shall not, nor shall it permit any of ERISA
Affiliate to, (i) terminate any Pension Plan so as to result in any
material (in the reasonable opinion of the Loan Servicer) liability to the
Borrower or any ERISA Affiliate, (ii) permit to exist any ERISA Event, or
any other event or condition, which could reasonably be expected to result in
the risk of a material (in the reasonable opinion of the Loan Servicer)
liability to any ERISA Affiliate, (iii) make a complete or partial
withdrawal (within the meaning of Section 4201 of ERISA) from any Multiemployer
Plan so as to result in any material (in the opinion of the Loan Servicer)
liability to the Borrower or any ERISA Affiliate, or (iv) enter into any
new Plan or modify any existing Employee Benefit Plan so as to increase its
obligations thereunder which could result in any material (in the reasonable
opinion of the Loan Servicer) liability to the Borrower or any ERISA Affiliate.

 

6.32.                     [Reserved.]

 

6.33.                     Financial
Covenants

 

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

 

(i)            following the Project Completion Date, maintain a Current
Ratio measured for the four preceding fiscal quarters of (a) not less than
1.0x during the first four fiscal years following the Project Completion Date
and (b) not less than 1.2x thereafter;

 

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

 

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

 

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

 

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

 

69

 

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

 

(c)           The Borrower shall at all times from and after the first
anniversary of the Project Completion Date maintain in the Maintenance Reserve
Account an amount equal to the MRA Required Amount; provided that, in the event
of any withdrawal from the Maintenance Reserve Account, the Borrower shall not
be deemed to be in breech of this subsection (c) unless the Borrower shall
fail to restore the amount on deposit in the Maintenance Reserve Account to the
MRA Required Amount within ninety (90) days after the date of such withdrawal.

 

(d)           The Borrower shall at all times from and after the first
anniversary of the Project Completion Date maintain in the Capital Account an
amount equal to the Capital Account Requirement; provided that, in the event of
any withdrawal from the Capital Account, the Borrower shall not be deemed to be
in breach of this subsection (d) unless the Borrower shall fail to restore
the amount on deposit in the Capital Account to the Capital Account Requirement
within ninety (90) days after the date of such withdrawal.

 

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

 

6.34.                     Access
to Project Site.

 

The
Borrower shall permit DOE and its representatives and advisors to enter the
Project Site and ancillary facilities at all reasonable times to inspect and
monitor performance of the Project Facility.

 

6.35.                     Key
Employees.

 

(a)           [*****], or such earlier date as may be reasonably
necessary in connection with the development, construction, installation or
operation of the Project, Borrower shall employ, or cause Operator or
Administrator to employ and make available to the Project Facility, individuals
having substantial experience and expertise in each of the following
substantive areas:  [*****]
(collectively, the “Key Employees”). 
On or before the Physical Completion 

 

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70

 

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

 

6.36.                     Central
Contractor Registration.

 

The
Borrower shall at all times maintain its registration in the CCR database or
any successor United States federal government database for the registration of
contractors with DOE, as required by law or as otherwise applicable.

 

ARTICLE 7

NEGATIVE COVENANTS

 

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

 

7.1.                            Indebtedness.

 

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

 

(a)           Indebtedness incurred under the Loan Documents;

 

(b)           Contingent Obligations under the Project Documents (which
shall, in the case of Intercompany Agreements, be subordinated to the Secured
Obligations), but excluding any amounts payable by the Borrower to any
Affiliate other  than (i) payments under the O&M
Agreement and the Administrative Services Agreement, and (ii) payments in
the ordinary course of business under the Project Documents;

 

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

 

(d)           Indebtedness (including capital leases) that is not
secured for the acquisition of equipment or personal property (including
refinancings after the purchase thereof) incurred in connection with the
construction or operation of the Project in accordance with the Loan Documents;

 

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

 

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71

 

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

 

(g)           Permitted Subordinated Loans; and

 

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

 

7.2.                            Liens.

 

The
Borrower shall not, and shall not agree to, create, assume or otherwise permit
to exist any Lien upon any of the Collateral Security or any of its other
property, whether now owned or hereafter acquired, or in any proceeds or income
therefrom, other than Permitted Liens. Any Lien to be granted by the Borrower
on equipment or personal property to secure Indebtedness (including capital
leases) incurred or assumed by the Borrower for the acquisition of such
equipment or personal property shall be subject to the prior written approval
of DOE.

 

7.3.                            [Reserved.]

 

7.4.                            Loans,
Advances and Investments.

 

The
Borrower shall not make or permit to remain outstanding any loans, extensions
of credit or advances by the Borrower to or investments by the Borrower in
(whether by acquisition of any stocks, notes or other securities or obligations)
any Person, except for Permitted Investments or as expressly provided in the
Transaction Documents as in effect on the Financial Closing Date.

 

7.5.                            Capital
Expenditures.

 

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

 

7.6.                            Subsidiaries;
Partnerships.

 

The
Borrower shall not:  (a) form or
have any Subsidiaries; (b) enter into any partnership or a joint venture;
(c) acquire any ownership interest in or make any capital contribution to
any other Person; (d) enter into any partnership, profit-sharing or
royalty agreement or other similar arrangement whereby the Borrower’s income or
profits are, or might be, shared with any other Person; or (e) enter into
any management contract or similar arrangement whereby its business or
operations are managed by any other Person, other than the O&M Agreement
and the Administrative Services Agreement or as otherwise contemplated under
the Transaction Documents.

 

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

 

72

 

7.7.                            Ordinary
Course of Conduct; No Other Business.

 

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

 

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

 

The
Borrower shall not, and shall not agree to: 
(a) enter into any transaction of merger or consolidation or
convey, sell, lease or otherwise transfer any of its property or assets, except
(i) transactions permitted under the Transaction Documents,
(ii) sales or other dispositions in the ordinary course of business, (iii) settlement
of accounts receivable in the normal course of its business, (iv) disposition
of Permitted Investments, (v) sales or other dispositions of equipment or
other assets that are (x) obsolete, (y) no longer used or useful in
the operation of the Project, or (z) are replaced by or exchanged for
other equipment of equal or greater value, and in all cases for which the
Borrower shall have received consideration reflecting value that would have
been obtained in a transaction on an arm’s length basis with an unaffiliated
third party (unless such assets only have scrap value), each of which, with
respect to clause (v), shall be verified by the Lender’s Engineer if requested
by the Loan Servicer; (b) wind up, liquidate, or dissolve itself, commence
an Insolvency Proceeding or file any petition or pass a resolution seeking the
same; or (c) acquire property or assets of any other Person (other than
purchases or other acquisitions of inventory or materials or spare parts or
Capital Expenditures, each in the ordinary course of business in accordance
with the applicable budget).

 

7.9.                            Organizational
Documents of Borrower and Holdings; Fiscal Year; Legal Form; Capital Structure.

 

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

 

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

 

7.10.                     Restricted
Payments.

 

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

 

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73

 

(i)            Physical Completion shall have occurred;

 

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

 

(iii)          the cash balance in (and the Reserve Letters of Credit
available to be drawn into) the Debt Service Reserve Account shall equal or
exceed the then required Debt Service Reserve Requirement, both before and
after the Restricted Payment is made;

 

(iv)          the Distribution Preconditions have been satisfied;

 

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

 

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

 

(b)      Notwithstanding the restrictions set forth above, the Borrower
may make payments to the Sponsor in accordance herewith and in accordance with
and subject to Appendix A attached hereto to reimburse costs that
are incurred by the Sponsor or any Sponsor Affiliate in performing an
Intercompany Project Document.

 

7.11.                     Redemption
or Issuance of Stock; Changes to Capital Structure.

 

The
Borrower shall not (a) redeem, retire, purchase or otherwise acquire,
directly or indirectly, any of its Equity Interests now or hereafter
outstanding (or any options or warrants issued by the Borrower with respect to
its Equity Interests) or set aside any funds for any of the foregoing or issue
any Equity Interests to any other Person or (b) make any changes to its
capital structure (including the issuance of any options, warrants or other
rights with respect thereto).

 

7.12.                     Other
Transactions.

 

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

 

7.13.                     Accounts.

 

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

 

7.14.                     Disbursement
of Funds.

 

The
Borrower shall not disburse any funds in a manner not permitted in the
Transaction Documents.

 

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

 

74

 

7.15.                     Commissions.

 

The
Borrower shall not pay:

 

(a)           any commission or fee to the Sponsor or any Affiliate of
the Sponsor for furnishing guarantees, counter-guarantees or similar credit
support for any obligations undertaken in connection with the Project (other
than as set forth in paragraph (b) below), or

 

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

 

7.16.                     Amendment
of and Notices Under Transaction Documents.

 

The
Borrower shall not (other than to correct minor or technical errors that do not
materially change any Person’s rights or obligations), except with the prior
written consent of the Loan Servicer acting in consultation with the Lender’s
Engineer:

 

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

 

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

 

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

 

(iii)          any Loan Document.

 

(b)           certify, consent to or otherwise permit through a Change
Order or otherwise “Final Completion” to occur under any Project Construction
Contract; or

 

(c)           enter into any agreement other than any Loan Document
restricting its ability to amend or otherwise modify any of the Transaction
Documents.

 

7.17.                     Other
Agreements.

 

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

 

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

 

75

 

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

 

7.18.                     Hedging
Agreements.

 

The
Borrower shall not enter into any Hedging Agreement without the prior written
consent of the Loan Servicer and the Collateral Agent.

 

7.19.                     Compromise
or Settlement of Disputes.

 

The
Borrower shall not agree or otherwise consent to settle or compromise any
litigation, arbitration or other dispute [*****] in any single claim or series
of related claims or [*****], in each case, without the prior written consent
of the Loan Servicer.

 

7.20.                     Abandonment
of Project.

 

The
Borrower shall not (a) abandon, agree to abandon or make any public
statements regarding its intention to abandon the development, construction or
operation of the Project, or take any action that could be deemed an “abandonment”, or transfer the Project to
any Person, or (b) notify any Major Project Participant of its intent to
terminate any Principal Project Document or the construction or operation of
the Project.

 

7.21.                     Improper
Use.

 

The
Borrower shall not use, operate or occupy, or allow the use, maintenance,
operation or occupancy of, any portion of the Project Site or Project in any
manner or for any purpose:  (a) that would be illegal or dangerous (unless
safeguarded as required by Governmental Rules), (b) that could reasonably be expected to have
a Material Adverse Effect, (c) that
may make void, voidable or cancelable, or materially increase the premium of,
any insurance then in force with respect to the Project or any part thereof, or
(d) other than for the intended purpose thereof in the construction,
operation and maintenance of the Project.

 

7.22.                     Assignment.

 

Other
than the assignment of the Project Documents and Governmental Approvals to the
Administrative Agent in its capacity as the Collateral Agent as security for
the benefit of the Secured Parties, the Borrower shall not assign or otherwise
transfer its rights under any of the Transaction Documents or Governmental Approvals
to any Person.  In addition, to the
extent that the Borrower has the right to prohibit any such assignment, the
Borrower shall not permit any party to any Transaction Document to assign such
Transaction Document to a third party without the prior written consent of the
Loan Servicer.

 

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

 

76

 

7.23.                     Margin
Regulations.

 

The
Borrower shall not directly or indirectly apply any part of the proceeds of any
Advance or other revenues to the purchasing or carrying of any margin stock
within the meaning of Regulation T, U or X of the Board of Governors of the
Federal Reserve of the United States, or any regulations, interpretations or
rulings thereunder.

 

7.24.                     Environmental
Laws.

 

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

 

7.25.                     ERISA.

 

Neither
the Borrower nor any ERISA Affiliate shall adopt, establish, participate in, or
incur any obligation to contribute to, any Employee Benefit Plan, in each case,
unless such action could not reasonably be expected to have a Material Adverse
Effect.

 

7.26.                     Investment
Company Act.

 

The
Borrower shall not take any action that
would result in the Borrower being required to register as an “investment
company” under the Investment Company Act.

 

7.27.                     Public
Utility Holding Company Act.

 

The
Borrower shall not take, nor permit any Affiliate to take any action that could result in the Borrower being
subject to regulation under the Public
Utility Holding Company Act.

 

7.28.                     Powers
of Attorney.

 

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

 

7.29.                     Debarment
Regulations.

 

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

 

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

 

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77

 

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

 

7.30.                     Corrupt
Practices and Foreign Asset Control Regulations

 

None
of the Borrower, Holdings or the Sponsor shall engage in any practices that are
prohibited by Governmental Rules, including, without limitation, the Corrupt
Practices Laws, the Foreign Asset Control Regulations, the Patriot Act and any
anti-boycott laws and regulations.

 

7.31.                     OFAC
and USA PATRIOT Act.

 

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

 

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

 

(c)           None of the Collateral shall be traded or used, directly
or indirectly by a Prohibited Person or by a Person organized in a Prohibited
Jurisdiction.  Neither the making of any
Advances nor the use by the Borrower, Holdings or the Sponsor of the proceeds
thereof shall violate any OFAC regulations, or any anti-boycott laws and
regulations.

 

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

 

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

 

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Securities and Exchange Commission.  Asterisks denote such omission.

 

78

 

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

 

7.32.                     U.S.
Government Requirements.

 

(a)           Suspension and Debarment.  None of the Borrower,
Holdings, the Sponsor or any of their respective Affiliates, or any Principal
Person of any of the foregoing, shall be (i) debarred, suspended, declared
ineligible or voluntarily excluded (as such terms are defined in any of the
Debarment Regulations) from participating in procurement or nonprocurement
transactions with any United States federal government department or agency
pursuant to any of the Debarment Regulations, or (ii) indicted, convicted
or have a Governmental Judgment rendered against the Borrower, Holdings, the
Sponsor or any of their respective Affiliates, or any Principal Person of any
of the foregoing, for any of the offenses listed in any of the Debarment
Regulations; and none of the Borrower, Holdings or the Sponsor shall sell ten
percent (10%) or more of its capital stock (whether in one transaction or a
series of transactions) in a negotiated sale to any Person that, at the time of
such sale, is described in any of clauses (i) or (ii) of this Section 7.32(a).

 

(b)           Lobbying.  In
accordance with 31 U.S.C. §1352, no proceeds of the DOE-Guaranteed Loans shall
be expended by the Borrower, Holdings or the Sponsor to pay any Person for
influencing or attempting to influence an officer or employee of any agency, a
Member of Congress, an officer or employee of Congress, or an employee of a
Member of Congress.

 

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

 

7.33.                     Federal
Indebtedness.

 

(a)           None of the Borrower, Holdings, the Sponsor or any of
their respective Affiliates shall have any delinquent federal debt, including
tax liabilities, unless the delinquency has been resolved with the appropriate
Governmental Authority in accordance with the standards of the Debt Collection
Improvement Act.

 

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

 

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

 

79

 

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

 

ARTICLE 8

EVENTS OF DEFAULT; REMEDIES

 

8.1.                            Events
of Default.

 

The
occurrence of any of the following events shall constitute an Event of Default
hereunder:

 

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

 

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

 

(c)             Covenants and Other Agreements with Cure Period.  The Borrower or any Major Project Participant
shall fail to perform or observe any term, covenant or agreement (other than
those set forth in (i) Sections 8.1(a), (b) and (d) and
(ii) Section 6.30(e)) contained in any Loan Document to which
it is a party within the applicable grace period specified therein or, if no
grace period is specified, but such failure is curable, within thirty (30) days
after notice of such failure is given to such party (or, if such failure is
curable but is not reasonably curable within such 30 day period, such
additional period, not to exceed 90 days, during which time the Borrower or
such Major Project Participant shall be taking diligent action to effect such
cure).

 

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

 

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

 

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

 

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

 

(g)           Breach or Default Under Completion Guaranty or
Corporate Guaranty.  The Sponsor
shall fail to perform or observe any term, covenant or agreement contained in
the Completion Guaranty or the Corporate Guaranty in accordance with the terms
thereof.

 

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

 

(i)            Unenforceability, Termination, Repudiation or Transfer
of Any Transaction Document.  This
Common Agreement or any of the other Transaction Documents or any material
provision hereof or thereof at any time for any reason (i) is or becomes
invalid, illegal, void or unenforceable against Borrower, Holdings, Sponsor or
Operator, or Borrower, Holdings, Sponsor or Operator shall have repudiated or
disavowed or taken any action to challenge the validity or enforceability of
such agreement, (ii) is or becomes invalid, illegal, void or unenforceable
against any other party thereto (other than any of the Credit Parties), or any
other party thereto (other than any of the Credit Parties) shall have
repudiated or disavowed or taken any action to challenge the validity or
enforceability of such agreement if, in each case, such invalidity, illegality,
voidness, unenforceability, repudiation, disavowal or action could reasonably
be expected to have a Material Adverse Effect, and, in the case of a Project
Document, such Project Document is not replaced by a replacement Project
Document satisfactory to DOE in its sole discretion within thirty (30) days
after (A) the replaced Project Document became invalid, illegal, void or
unenforceable or (B) any party thereto (other than any of the Credit
Parties) repudiated, disavowed or took any action to challenge the validity or
enforceability of such replaced Project Document, (iii) except as
otherwise permitted hereunder, ceases to be in full force and effect in
accordance with the terms thereof, except at the stated termination date
thereof, or shall be assigned or otherwise transferred or prematurely
terminated by Borrower, Holdings, Sponsor or Operator (or by any other party
thereto, other than any of Credit Parties, if, in each case, such assignment,
transfer or premature termination could reasonably be expected to have a
Material Adverse Effect) prior to the repayment in full of all Secured
Obligations (other than with the prior written consent of the Loan Servicer),
or (iv) shall cease to give the Administrative Agent in its capacity as
the Collateral Agent or any Credit Party in any material respect the Liens,
rights, powers and privileges purported to be created thereby or hereby;
provided that any of the events set forth in this clause (iv) shall not
constitute an Event of Default if the same is caused by any act or failure to
act by any of the Credit Parties.

 

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

 

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(j)            Security Interests.  Any of the Security Documents shall fail in
any material respect to provide the Liens, security interests, rights, titles,
interests, remedies, powers or privileges intended to be created thereby
(including the priority intended to be created thereby) or such Lien shall fail
to have the priority contemplated therefor in such Security Documents, or any
such Security Document or Lien shall cease to be in full force and effect, or
the validity thereof or the applicability thereof to the Advances, or any other
obligations purported to be secured or guaranteed thereby or any part thereof,
shall be disaffirmed by or on behalf of the Borrower or any other party
thereto; provided that any of the events set forth in this clause shall not
constitute an Event of Default if the same is caused by any act or failure to
act by any of the Credit Parties.

 

(k)           Ownership.

 

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

 

(ii)           a Change of Control occurs.

 

(l)            Default under Other Indebtedness.

 

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

 

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

 

(m)          Judgments.

 

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

 

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

 

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

 

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

 

(n)           Bankruptcy; Insolvency.

 

(i)            Involuntary Bankruptcy, Etc.  An Insolvency Proceeding shall have been
commenced against any Major Project Participant, such proceeding continues
undismissed for 60 days.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(t)            Failure of Physical Completion to Occur; Insufficient
Funding.

 

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

 

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

 

(u)           Notice of Termination under Certain Project Agreements.  The giving of a notice of termination (except
at the stated termination date thereof) under any Project Document or the
occurrence of any event or circumstance entitling any Major Project Participant
to give such a notice.

 

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

 

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

 

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

 

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

 

84

 

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

 

(z)            Force Majeure. 
An Event of Force Majeure materially and adversely affecting the Project
shall occur and continue for a period of one hundred eighty (180) consecutive
days.

 

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

 

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

 

For
the avoidance of doubt, each clause of this Section 8.1 shall
operate independently, and the occurrence of any such event shall constitute an
Event of Default.

 

8.2.                            Remedies
for Events of Default.

 

Upon
the occurrence and during the continuance of an Event of Default, the Credit
Parties may, without further notice of default, presentment or demand for
payment, protest or notice of non-payment or dishonor, or other notices or
demands of any kind, all such notices and demands being waived (to the extent
permitted by Governmental Rules), exercise any or all rights and remedies at
law or in equity (in any combination or order that the Credit Parties, may
elect), including, without limitation or prejudice to the Credit Parties’ other
rights and remedies, the following:

 

(i)            (A) refuse, and the Administrative Agent in its
capacity as the Collateral Agent or any Credit Party shall not be obligated, to
make or guarantee any further Advances or any payments from any Project Account
or any Account Proceeds or other funds held by the Administrative Agent in its
capacity as the Collateral Agent by or on behalf of the Borrower, and
(B) suspend or terminate the DOE Credit Facility Commitment;

 

(ii)           take those actions necessary to perfect and maintain the
Liens of the Security Documents;

 

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

 

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

 

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

 

85

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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8.3.                            Automatic
Acceleration.

 

Upon
the occurrence of an Event of Default referred to in Section 8.1(n) (Bankruptcy;
Insolvency), (a) the DOE Credit Facility Commitment shall automatically be
terminated, and (b) the DOE-Guaranteed Loans, together with interest
accrued thereon and all other amounts due under the DOE-Guaranteed Loans and
the other Loan Documents, shall immediately mature and become due and payable,
without any other presentment, demand, diligence, protest, notice of
acceleration, or other notice of any kind, all of which the Borrower hereby
expressly waives.

 

8.4.                            Event
of Default Notice.

 

(a)           Delivery of Notice. 
The Loan Servicer may deliver an Event of Default Notice to the
Collateral Agent at any time when an Event of Default has occurred and is
continuing.

 

(b)           Copy to the Borrower.  Concurrently with the delivery of any Event
of Default Notice to the Collateral Agent, the Loan Servicer shall deliver a
copy thereof to the Borrower, but the effectiveness of any such Event of
Default Notice shall not depend on the delivery of a copy thereof to the
Borrower.

 

(c)           Effect of Notice. 
Upon delivery to the Collateral Agent of an Event of Default Notice and
while such Event of Default Notice remains effective, except to the extent
otherwise set forth in such Event of Default Notice, the Collateral Agent
shall, notwithstanding anything in this Common Agreement to the contrary, (a) cease
to honor any instruction or request from the Borrower to distribute, transfer
or withdraw any funds or other assets from the Project Accounts or directing
the manner in which any such funds or other assets shall be held or invested, (b) hold
funds on deposit in any Project Account only in such Permitted Investments as
the Loan Servicer may from time to time direct in writing (or, failing such
direction, the Overnight Investment), (c) disburse, transfer and withdraw
amounts on deposit in the Project Accounts only as the Loan Servicer may direct
in writing from time to time, and (d) draw upon any or all Reserve Letters
of Credit for the full undrawn face amount in accordance with the terms of such
Reserve Letters of Credit and disburse the aggregate amount of such drawings in
the Project Accounts as the Loan Servicer may direct from time to time. Each of
the parties hereto confirms that the Collateral Agent shall comply with its
obligations set forth in this paragraph, notwithstanding any protest or order
to the contrary by the Borrower at any time.

 

(d)           Revocation. 
Upon request of the Borrower to the Loan Servicer at any time when any
and all Events of Default that gave rise to an Event of Default Notice have
been waived by all Credit Parties, the Loan Servicer shall deliver a written
notice to the Collateral Agent (with a copy to the Borrower and each Credit
Party) revoking the effectiveness of any previously delivered Event of Default Notice.

 

8.5.                            Remedies
Instructions.

 

(a)           Delivery of Remedies Instructions.  At any time when an Event of Default exists,
the Loan Servicer shall be entitled, by delivery of Remedies Instructions to
the Collateral Agent, to:

 

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Commission.  Asterisks denote such omission.

 

87

 

(i)            direct the Collateral Agent to exercise, or to refrain
from exercising, any right, remedy, power or privilege available to or
conferred upon it with respect to the Collateral or otherwise under this
Agreement, the Security Documents or any other Loan Document to which it is a
party; and

 

(ii)           direct the time, place and manner in which the Collateral
Agent is to exercise any such right, remedy, power or privilege.

 

(b)           Exercise of Remedies.  If the Collateral Agent has received Remedies
Instructions, it shall exercise the rights, remedies, powers and privileges
specified in the Remedies Instructions unless and until such Remedies
Instructions are modified or revoked by the Loan Servicer.

 

(c)           Revocation. 
Upon request of the Borrower to the Loan Servicer after any and all
Events of Default that gave rise to a Remedies Instruction have been waived or
cured, the Loan Servicer shall deliver a written notice to the Collateral Agent
(with a copy to the Borrower and each Credit Party) revoking the effectiveness
of any Remedies Instructions, and the Collateral Agent shall be required to
give effect to such revocation not later than the first Business Day after the
date upon which it receives such revocation; provided, however, that to the
extent that the revocation of any Remedies Instructions would require
affirmative actions to be taken on the part of the Collateral Agent, the
Collateral Agent shall be granted a reasonable amount of time to undertake such
actions.

 

(d)           Notwithstanding anything to the contrary contained herein,
the Collateral Agent shall not be required to take, or refrain from taking, any
action which the Collateral Agent determines in its reasonable judgment to be
contrary to any provision of the Loan Documents or applicable law, regulations,
codes, ordinances, court orders or restrictive covenants with respect to the
matters hereunder.

 

8.6.                            Appointment
of a Receiver.

 

Notwithstanding
any appointment of a receiver, subject to mandatory provisions of Governmental
Rule, the Collateral Agent shall be entitled to retain possession and control
of all cash, investments and Reserve Letters of Credit held by, or deposited
with, it or its agents or nominees pursuant to any provision of this Common
Agreement, the Account Control Agreement or any other Loan Document.

 

8.7.                            DOE.

 

DOE,
or any other agency or instrumentality of the United States of America that is
a successor or assignee of DOE under this Common Agreement, may itself exercise
any right given to the Loan Servicer in this Article 8.

 

Confidential
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Commission.  Asterisks denote such omission.

 

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ARTICLE 9

AGENTS AND ADVISORS

 

9.1.                            Appointment
of Agents.

 

In
connection with the Project, each Credit Party hereby appoints the Loan
Servicer and the Administrative Agent, and by its signature below, each such
Agent accepts such appointment:

 

(a)           the Loan Servicer to act as Loan Servicer and authorizes
it to exercise such rights, powers, authorities and discretions as are
specifically delegated to the Loan Servicer by the terms of this Common
Agreement and the other Loan Documents, together with all such rights, powers,
authorities and discretions as are reasonably incidental thereto;

 

(b)           the Administrative Agent or its designee to act as
Collateral Agent and authorizes it to exercise such rights, powers, authorities
and discretions as are specifically delegated to the Administrative Agent in
its capacity as the Collateral Agent by the terms of this Common Agreement and
the other Loan Documents, including, without limitation:

 

(i)            promptly notifying DOE of any material changes in the
value of the Collateral of which it becomes aware;

 

(ii)           monitoring the Borrower’s compliance with covenants and
agreements relating to the Collateral;

 

(iii)          monitoring all regulatory and Uniform Commercial Code
filings related to the Collateral to ensure that continuation statements,
extensions or renewals, as applicable, are timely filed;

 

(iv)          during the continuance of an Event of Default or of any
other breach or default under this Common Agreement or any other Loan Document,
assisting and advising DOE in connection with the liquidation of the Collateral
or any part thereof, including selecting specialists to assist in appraisal and
liquidation of the Collateral, recommending liquidation strategies, identifying
potential buyers of the assets and analyzing bids;

 

(v)           asking for, demanding, collecting, suing for, recovering,
receiving and giving acquittance and receipts for moneys due and to become due
under or in respect of the Collateral;

 

(vi)          receiving, endorsing and collecting any drafts or other
instruments, documents and chattel paper in connection with the preceding
clauses;

 

(vii)         occupying any premises where the Collateral or any part
thereof is assembled or located;

 

(viii)        enforcing any agreements to which it is
a party;

 

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

 

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(ix)           creating, preserving and protecting its Liens on, and
security interest in, the Collateral;

 

(x)            filing any claims or taking any action or instituting any
proceedings that it may deem necessary or desirable for the collection of any
of the Collateral or otherwise to accomplish the purposes of the Security
Documents or enforce its rights with respect to any of the Collateral;

 

(xi)           exercising in respect of the Collateral, in addition to
any other rights or remedies available to it and to the extent not in violation
of any applicable law, all the rights and remedies of a secured party under the
Uniform Commercial Code;

 

(xii)          ensuring that all Security Documents are revised or renewed
as necessary; and

 

(xiii)         ensuring that the Collateral is
properly maintained for the benefit of DOE, FFB and any other third party
lenders or guarantors, together with all such rights, powers, authorities and
discretions as are reasonably incidental thereto;

 

(c)           the Administrative Agent to act as Administrative Agent
and authorizes it to exercise such rights, powers, authorities and discretions
as are specifically delegated to the Administrative Agent by the terms of this
Common Agreement and the other Loan Documents, including, without limitation,
to give notices or provide instructions on behalf of DOE to any Person under the
Loan Documents in accordance with the terms and conditions thereof, maintain
and provide to DOE a quality assurance plan, provide all deliverables in
electronic formats compatible with DOE’s software applications, and take such
other actions as may be reasonably requested in writing by DOE or as shall be
required in respect of the Loan Documents, together with all such rights,
powers, authorities and discretions as are reasonably incidental thereto.

 

9.2.                            Duties
and Responsibilities.

 

(a)           No Agent shall have any duties or responsibilities except
those expressly set out in this Common Agreement or in the other Loan
Documents.  Notwithstanding anything to
the contrary contained herein or in any Loan Document, no Agent shall be
required to take any action that is
contrary to any Governmental Rule.

 

(b)           DOE, and any subsequent Person acting as Loan Servicer
under the Loan Documents, shall comply with all requirements of the Applicable
Loan Guarantee Requirements with respect to servicing the DOE-Guaranteed Loans,
including:

 

(i)            In accordance with Section 609.10(d)(16) and Section 609.10(e)(3) of
the Applicable Loan Guarantee Requirements, the Loan Servicer, with the
assistance of the Administrative Agent
in its capacity as the Collateral Agent, has taken and shall
continue to take those actions necessary to perfect and maintain liens on
assets which are pledged as collateral pursuant to the terms of the Security
Documents;

 

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

 

90

 

(ii)           In accordance with Section 609.10(f)(1) of the
Applicable Loan Guarantee Requirements, the Loan Servicer shall keep such
records concerning the project as are necessary for facilitating the effective
and accurate audit and performance evaluation of the Project pursuant to the Applicable Loan Guarantee Requirements and
Program Requirements;

 

(iii)          In accordance with Section 609.10(g)(1) of the
Applicable Loan Guarantee Requirements, any assignment or transfer of the
servicing, monitoring, tracking, and reporting functions performed by the Loan
Servicer must be approved by DOE in writing in advance of such assignment; and

 

(iv)          In accordance with Section 609.10(g)(2) of the
Applicable Loan Guarantee Requirements, for the purpose of identifying holders
with the right to receive payment under the DOE Guarantee, the Loan Servicer
shall develop a procedure for tracking and identifying holders of
DOE-Guaranteed Loans.

 

(c)           In accordance with Section 609.10(e)(4) of the
Applicable Loan Guarantee Requirements, the Administrative Agent in its capacity as the Collateral Agent shall take
such other actions as DOE may reasonably require to provide for the care,
preservation, protection, and maintenance of all Collateral so as to enable the
United States to achieve maximum recovery upon default by Borrower on the
DOE-Guaranteed Loans.

 

9.3.                            Rights
and Obligations.

 

(a)           Each Agent may:

 

(i)            assume, absent actual knowledge or written notice to the
contrary, that (A) any representation made by any Project Participant in
connection with any Transaction Document is true; (B) no Event of Default
or Potential Default exists; (C) no Project Participant is in breach of or
in default under its obligations under any Transaction Document; and
(D) any right, power, authority or discretion vested herein upon any other
Agent or Independent Consultant has not been exercised;

 

(ii)           assume, absent actual knowledge or written notice to the
contrary, that any notice or certificate given by any Project Participant or
Independent Consultant has been validly given by a Person authorized to do so
and act upon such notice or certificate unless the same is revoked or
superseded by a further such notice or certificate;

 

(iii)          assume, absent actual knowledge or written notice to the
contrary, that the address, telecopy and telephone numbers for the giving of
any written notice to any Person hereunder is that identified in Schedule 11.1
until it has received from such Person a written notice designating some other
office of such Person to replace any such address, or telecopy or telephone
number, and act upon any such notice until the same is superseded by a further
such written notice;

 

(iv)          employ at the expense of the Borrower in accordance with Section 13.17,
lawyers, accountants or other experts whose advice or services such Agent may
reasonably 

 

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determine are necessary, expedient or desirable, may
pay reasonable fees and expenses for the advice or service of any such Person
and may rely upon any advice so obtained; provided, that no Agent shall
be under any obligation to act upon such advice if it does not deem such action
to be appropriate;

 

(v)           rely on any matters of fact that might reasonably be expected to be within the Knowledge of
any Project Participant or any Independent Consultant upon a certificate signed
by or on behalf of such party;

 

(vi)          rely upon any communication or document reasonably believed
by it to be genuine;

 

(vii)         refrain from acting or continuing to act in accordance with
any instructions of the Required Credit Parties to begin any legal action or
proceeding arising out of or in connection with any Transaction Document until
it shall have received such indemnity or security from the Borrower or such
other Person (other than DOE and FFB) as it may reasonably require (whether by
payment in advance or otherwise) for all costs, claims, losses, expenses
(including reasonable legal fees and expenses) and liabilities that it will or may expend or incur in
complying or continuing to comply with such instructions; and

 

(viii)        seek instructions from the Required
Credit Parties as to the exercise of any of its rights, powers, authorities or
discretions hereunder, and in the event that it does so, it shall not be
considered as having acted unreasonably when acting in accordance with such
instructions or, in the absence of any (or any clear) instructions, when
refraining from taking any action or exercising any right, power or discretion
hereunder.

 

(b)           Each Agent shall:

 

(i)            except where the Loan Servicer has supplied such notice
or document to such Agent, promptly inform the Loan Servicer of the contents of
any notice or document that in its
capacity as Agent it received from or delivers to:  (A) the Borrower; (B) any Project
Participant; (C) the Administrative Agent in its capacity as the
Collateral Agent; (D) any Independent Consultant; or (E) any
Governmental Authority;

 

(ii)           promptly notify the Loan Servicer of the occurrence of any
Event of Default or Potential Default of which such Agent has written notice
from any Person;

 

(iii)          except as otherwise expressly provided herein or in any
other Loan Document, perform its duties in accordance with any instructions
given to it by the Required Credit Parties, which instructions shall be binding
on all Credit Parties; and

 

(iv)          except as otherwise expressly provided herein, if so
instructed by the Required Credit Parties, refrain from exercising any right,
power, authority or discretion vested in it as an Agent hereunder or under the
other Loan Documents (other than rights arising under this Article 9
or Section 13.17).

 

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9.4.                            No
Responsibility for Certain Conduct.

 

(a)           In connection with the Loan Documents, notwithstanding
anything to the contrary expressed or implied herein or in the other Loan
Documents, no Agent shall:

 

(i)            be bound to inquire as to (A) whether or not any
representation made by any other Person in connection with any Transaction
Document is true; (B) the occurrence or otherwise of any Event of Default
or Potential Default; (C) the performance by any other Person of its
obligations under any of the Transaction Documents; or (D) any breach of
or default by any other Person of its obligations under any of the Transaction
Documents;

 

(ii)           be bound to account to any Person for any sum or the
profit element of any sum received by it for its own account except as
expressly provided under the Loan Documents;

 

(iii)          be bound to disclose to any Person any information relating
to the Project or to any Person if such disclosure would, or might in its
opinion, constitute a breach of any Governmental Rule or be otherwise
actionable at the suit of any Person; or

 

(iv)          be under any fiduciary duties or obligation other than
those for which express provision is made in this Common Agreement or in any
other Loan Document to which such Person is a party.

 

(b)           No Agent shall have any responsibility for the accuracy or
completeness of any information supplied by any Person (other than such Person)
in connection with the Project or for the legality, validity, effectiveness,
adequacy or enforceability of any Transaction Document or any other document referred
to herein or provided for herein or therein or for any recitals, statements,
representations or warranties made by the Borrower or any other Person
contained in this Common Agreement or any other Transaction Document or in any
certificate or other document referred to or provided for in, or received by
such Agent, hereunder or thereunder.  No
Agent shall be liable as a result of any failure by the Borrower or its
Affiliates or any Person party hereto or to any other Transaction Document
(except such Agent) to perform their respective obligations hereunder or under
any other Transaction Document or any document referred to or provided for
herein or therein or as a result of taking or omitting to take any action
hereunder or in relation to any Transaction Document, except to the extent of
such Agent’s gross negligence or willful misconduct.

 

(c)           Any Agent and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of banking or other business
with any Person, without any duty to account therefor to the Credit Parties.

 

(d)           It is understood and agreed by each Relevant Credit Party
(for itself and any Person claiming through it) that it has itself been, and
will continue to be, solely responsible for making its own independent appraisal
of, and investigations into, the financial condition, creditworthiness,
condition, affairs, status and nature of each Project Participant and, 

 

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accordingly, each such Relevant Credit Party
warrants to each Agent that it has not relied on and will not hereafter rely on
such Agent:

 

(i)            to check or inquire on its behalf into the adequacy,
accuracy or completeness or any information provided by any Project Participant
or Independent Consultant in connection with any of the Transaction Documents
or the transactions therein contemplated (whether or not such information has
been or is hereafter circulated to such Project Participant or Independent
Consultant by an Agent); or

 

(ii)           to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of any
Project Participant or Independent Consultant.

 

9.5.                            Defaults.

 

No
Agent shall be deemed to have knowledge or notice of the occurrence of any
Event of Default or Potential Default unless such Agent has Knowledge of such
Event of Default or Potential Default or has received a notice from a Project
Participant, referring to this Common Agreement, describing such Event of
Default or Potential Default and stating that such notice is a “notice of
default.”  If any Agent has Knowledge of
an Event of Default or Potential Default or receives such a notice of default,
such Agent shall give prompt notice thereof to the Loan Servicer, and the Loan
Servicer shall give prompt notice thereof to each Credit Party and each
Independent Consultant.  Each Agent shall
take such action with respect to such Event of Default or Potential Default as
is provided in Article 8 of this Common Agreement; provided,
however, that unless and until such Agent shall have received such directions,
it may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Event of Default or Potential Default as it
shall deem advisable and in the best interest of the Credit Parties.

 

9.6.                            No
Liability.

 

No
Agent, nor any of its officers, directors, employees or agents shall be liable
to any Project Participant or Independent Consultant for any action taken or
omitted under this Common Agreement or under the other Loan Documents, or in
connection therewith, except to the extent caused by the gross negligence or
willful misconduct of such Agent, as determined by a court of competent
jurisdiction in a final non-appealable Governmental Judgment.  The Relevant Credit Parties each (for itself
and any Person claiming through it) hereby releases, waives, discharges and
exculpates each Agent for any action taken or omitted by such Agent under this
Common Agreement or under the other Loan Documents, or in connection therewith,
except to the extent caused by the gross negligence or willful misconduct of
such Agent as determined by a court of competent jurisdiction in a final
non-appealable Governmental Judgment.

 

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9.7.                            Fees
and Expenses of Agents.

 

(a)           Generally. 
The Borrower shall be responsible for paying the fees and expenses of
each Agent in connection with the Project under all circumstances, pursuant to
a separate written agreement with each Agent, without recourse to DOE by such
Agent, the Sponsor, the Borrower or any other Person.

 

(b)           Administrative Agent Fee Agreement.  The Borrower shall (i) from time to time
on demand by each Agent, indemnify such Agent against any and all reasonable
costs, claims, losses, expenses (including reasonable legal fees and expenses)
and liabilities, that such Agent may
incur in acting in its capacity as an Agent hereunder, other than by reason of
its own gross negligence or willful misconduct; and (ii) without
limitation of the foregoing, reimburse such Agent promptly upon demand for any
reasonable out-of-pocket expenses (including reasonable legal fees and
expenses) incurred by such Agent in connection with the preparation, execution,
administration or enforcement of, or services provided in respect of rights or
responsibilities under, the Transaction Documents.

 

(c)           Payments. 
All payments or reimbursements under Section 9.7(b) shall
be due and payable (i) [*****] after the Borrower’s receipt of the Agent’s
request therefor from time to time, and (ii) whether or not this Common
Agreement is terminated or any Advance of the DOE-Guaranteed Loan is made.

 

(d)           Acknowledgements. 
The Borrower and each Agent expressly acknowledge and agrees that:

 

(i)            DOE shall not be financially liable to any Agent for any
services rendered or expenses incurred in connection with the Project under any
circumstances whatsoever, including whether any Advance occurs or under
circumstances in which the Borrower fails to pay such fees and expenses;

 

(ii)           The Borrower shall acknowledge and pay all fees and
expenses represented by periodic invoices for services rendered by such Agent
to DOE with respect to the Project upon their periodic presentation thereof by
such Agent, including prior to or on the Financial Closing Date;

 

(iii)          While the services provided by such Agent shall be rendered
for the benefit of DOE and the other Credit Parties in connection with the
Project, the invoices of such Agent shall be the sole responsibility of the
Borrower, notwithstanding that such Agent is an agent of DOE and the other
Credit Parties; and

 

(iv)          The Borrower specifically disclaims any implication of
confidential, fiduciary or other client relationship (including an
attorney-client relationship) between the Borrower or the Sponsor and such
Agent as a result of this Section 9.7 and shall not interfere with
the relationship (including any attorney-client relationship and the ability to
terminate the agency relationship) between such Agent and DOE and the other
Credit Parties.

 

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(e)           The provisions of this Section 9.7 shall
survive the termination of this Common Agreement and the other Loan Documents.

 

9.8.                            Resignation
and Removal.

 

(a)           Subject to Section 9.9, any Agent may resign
its appointment hereunder at any time without providing any reason therefor by
giving prior written notice to that effect to each of the other parties hereto.

 

(b)           Subject to Section 9.9, the Required Credit
Parties may remove any Agent from its appointment hereunder with or without
cause by giving prior written notice to that effect to the Loan Servicer and
the Borrower.

 

9.9.                            Successor
Agents.

 

(a)           No resignation or removal pursuant to Section 9.8
shall be effective until:

 

(i)            a successor for such Agent is appointed in accordance
with (and subject to) the provisions of this Section 9.9;

 

(ii)           the resigning or removed Agent has transferred to its
successor all of its rights and obligations in its capacity as an Agent under
this Common Agreement and the other Loan Documents; and

 

(iii)          the successor Agent has executed and delivered an agreement
to be bound by the terms of this Common Agreement and the other Loan Documents
and to perform all duties required of such Agent hereunder and under the other
Loan Documents.

 

(b)           If an Agent has given notice of its resignation pursuant
to Section 9.8(a) or if the Loan Servicer gives each other
Agent notice of removal of any Agent pursuant to Section 9.8(b), or
if the Required Credit Parties give the Loan Servicer notice of removal of the
Loan Servicer pursuant to Section 9.8(b), then a successor to such
Agent may be appointed by the Required Credit Parties (and, unless an Event of
Default or Potential Default has occurred and is continuing, with the written
consent of the Borrower, which consent shall not unreasonably be withheld or
delayed) during the 90 day period beginning on the date of such notice in
accordance with the terms of this Common Agreement but, if no such successor is
so appointed within 90 days after the above notice, the resigning Agent, or the
Loan Servicer, in the case of a removed Agent, may appoint such a successor.  If a resigning Agent or the Loan Servicer
appoints a successor, such successor shall be acceptable to the Required Credit
Parties (and, unless an Event of Default or Potential Default has occurred and
is continuing, the Borrower, approval by which shall not unreasonably be
withheld or delayed); provided, that if the Required Credit Parties and
the Borrower, if applicable, do not confirm such acceptance in writing within
60 days following selection of such successor by the resigning or removed Loan
Servicer or otherwise appoint a successor within such 60 day period, then the
Required Credit Parties and the Borrower, as the case may be, shall be deemed
to have given such acceptance and such successor shall be deemed appointed as
the successor to such resigning or removed Loan Servicer hereunder.  If no 

 

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successor Agent shall have been so accepted or
deemed accepted by the Required Credit Parties within sixty (60) days after the
appointment of a successor Agent, then the resigning or removed Agent may apply
to a court of competent jurisdiction for the appointment of a successor Agent.

 

(c)           If a successor to an Agent is appointed under the
provisions of this Section 9.9, then:

 

(i)            the predecessor Agent shall be discharged from any
further obligation hereunder (but without prejudice to any accrued
liabilities);

 

(ii)           the resignation pursuant to Section 9.8(a) or
removal pursuant to Section 9.8(b) of the predecessor Agent
notwithstanding, the provisions of this Common Agreement shall inure to the
predecessor Agent’s benefit as to any actions taken or omitted to be taken by
it under this Common Agreement and the other Loan Documents while it was an
Agent; and

 

(iii)          the successor Agent and each of the other parties hereto
shall have the same rights and obligations amongst themselves as they would
have had if such successor Agent had been a party hereto beginning on the date
of this Common Agreement.

 

9.10.                     Due
Authorization, Execution and Delivery.

 

Each
Agent is hereby authorized by the Credit Parties to execute, deliver and
perform each of the Loan Documents to which such Agent is or is intended to be
a party.  All action on the part of each
Agent that is required for the authorization, execution, delivery and
performance by such Agent of the Loan Documents to which it is a party has been
duly and effectively taken.  The
obligations of each Agent under the Loan Documents to which it is a party are
the legal, valid and binding obligations of such Agent enforceable in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general principles of
equity (regardless of whether enforcement is sought in proceedings at law or in
equity).

 

9.11.                     Appointment
of Independent Consultants.

 

9.11.1                  Appointment of Insurance
Advisor.

 

In
connection with the Project, each Credit Party hereby appoints the Insurance
Advisor to serve under the Loan Documents and authorizes the Insurance Advisor
to exercise such rights, powers, authorities and discretions as are
specifically delegated to the Insurance Advisor by the terms of this Common
Agreement and the other Loan Documents, which shall include, without
limitation:

 

(a)           advising DOE on the type and appropriate level of property
and casualty, business interruption and other insurance necessary to provide
risk mitigation with respect to the Project,

 

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(b)           advising DOE regarding the Borrower’s representations as
to the availability of appropriate levels and types of insurance coverage for
the Project,

 

(c)           reviewing the type, level, cost and provider of Required
Insurance to ensure that DOE is receiving satisfactory coverage from qualified
insurance carriers, and

 

(d)           reviewing and commenting on requests from the Borrower for
changes or reductions in insurance coverage during the life of the DOE
Guarantee, together with all such rights, powers, authorities and discretions
as are reasonably incidental thereto.

 

9.11.2                  Appointment of Lender’s
Engineer.

 

In
connection with the Project, each Credit Party hereby appoints the Lender’s
Engineer to serve under the Loan Documents and authorizes the Lender’s Engineer
to exercise such rights, powers, authorities and discretions as are
specifically delegated to it pursuant to the Lender’s Engineer Advisory
Agreement.

 

By
its execution of the Lender’s Engineer Advisory Agreement, the Lender’s Engineer
accepts its appointment and delegation.

 

9.12.                     Actions.

 

Except
as otherwise provided in this Article 9, and subject to the other
provisions of this Common Agreement, each Agent shall take any action requested
in writing by the Loan Servicer with respect to the Collateral, this Common
Agreement or any other Loan Document to which it is a party, as applicable.

 

9.13.                     Delegation
of Duties.

 

Subject
to the provisions of Section 9.1 hereof, each Agent may execute any
of the rights, remedies, powers, privileges, duties or obligations under this
Common Agreement and the other Loan Documents to which it is a party either
directly or by or through nominees or agents, and shall not be liable for any
misconduct or negligence of any such nominee or agent appointed with due care
by it hereunder, except to the extent constituting gross negligence or willful
misconduct.

 

9.14.                     Certain
Rights of the Agents.

 

(a)           Each Agent may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties.

 

(b)           Each Agent may consult with counsel of its selection and,
as long as such counsel was selected by such Agent with due care, the advice of
such counsel or any opinion of counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.

 

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9.15.                     Authority
of the Agents.

 

The
Borrower acknowledges that the rights and responsibilities of each Agent under
this Common Agreement with respect to any action taken by such Agent or the
exercise or non-exercise by such Agent of any power, right or remedy provided
for or resulting or arising out of this Common Agreement shall, as between such
Agent and the Credit Parties, be governed by this Common Agreement and by such
other agreements with respect thereto as may exist from time to time among
them, but, as between each Agent and the Borrower, such Agent shall be
conclusively presumed to be acting as the Agent for the Credit Parties with
full and valid authority so to act or refrain from acting, and the Borrower
shall not be under any obligation or entitlement to make any inquiry respecting
such authority.

 

9.16.                     Force
Majeure.

 

In
no event shall any Agent be responsible or liable for any failure or delay in
the performance of its obligations hereunder arising out of or caused by,
directly or indirectly, forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that each Agent shall use
reasonable efforts that are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.

 

9.17.                     Agents
and Independent Consultants Not Prohibited Persons

 

None
of the Agents or the Independent Consultants shall at any time be a Prohibited
Person.  In the event that any of the
Agents or the Independent Consultants shall at any time be or become a
Prohibited Person, such Agent or Independent Consultant shall immediately and
without further action be removed from its appointment hereunder, subject to
the appointment of a successor Agent or Independent Consultant in accordance
with the terms of this Common Agreement.

 

9.18.                     Survival.

 

The
provisions of this Article 9 shall survive the termination of this
Common Agreement.

 

ARTICLE 10

REGARDING THE COLLATERAL AGENT

 

10.1.                     Administration
of the Collateral.

 

The
Collateral Agent shall hold the Collateral and any Lien thereon for the benefit
of the Secured Parties pursuant to the terms of this Common Agreement and the
other Security Documents to which the Collateral Agent is a party. The
Collateral Agent shall administer the Collateral in the manner contemplated by
the Security Documents and the other Loan Documents to which it is a party. The
Collateral Agent shall exercise such rights and remedies 

 

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with
respect to the Collateral as are granted to it under the Security Documents,
the other Loan Documents and Governmental Rule and, except as otherwise
expressly provided herein, in the Security Documents or the other Loan
Documents, as shall be directed in writing by the Loan Servicer.

 

10.2.                     Own
Funds.

 

The
Collateral Agent shall not be under any obligation to take any action other
than as expressly set forth in this Common Agreement or the other Loan
Documents to which it is a party that involves any expense or liability, the
payment of which, within a reasonable time, is not, in the reasonable opinion
of the Collateral Agent, assured to it. Nothing in this Common Agreement shall
be interpreted to require the Collateral Agent to advance or expend its own
funds to make any payments hereunder. The Collateral Agent shall not be
required to invest, or be under any liability for interest, on any monies at
any time received by it pursuant to any of the provisions of this Common
Agreement, except as otherwise expressly provided herein or in any other Loan
Document to which it is a party.

 

10.3.                     Waiver
of Setoff by Collateral Agent.

 

The
Collateral Agent hereby irrevocably waives any right of setoff, banker’s lien,
right to combine accounts or any similar Lien or right that it may have by
agreement, under law or otherwise against any of the Collateral in respect of
amounts owing to the Collateral Agent by any Person.

 

10.4.                     Patriot
Act.

 

The
parties hereto acknowledge that in accordance with Section 326 of the
Patriot Act and in order to help fight the funding of terrorism and money
laundering, the Collateral Agent, like all financial institutions, is required
to obtain, verify, and record information that identifies each person or legal
entity that establishes a relationship or opens an account with the Collateral
Agent. The parties to this Common Agreement agree that they will provide the
Collateral Agent with such information as it may request in order for the
Collateral Agent to satisfy the requirements of the Patriot Act.

 

10.5.                     Survival.

 

The
provisions of this Article 10 shall survive the termination of this
Common Agreement.

 

ARTICLE 11

REPRESENTATIONS AND WARRANTIES OF THE AGENTS

 

Each
Agent makes all of the following representations and warranties, solely with
respect to itself, to and in favor of the other Credit Parties as of the date
hereof.

 

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11.1.                     Organization,
Power and Status.

 

Each
Agent is duly organized and existing under the laws of the jurisdiction of its
formation.

 

11.2.                     Power
and Authority.

 

Each
Agent has the requisite power and authority to (a) execute, deliver and
perform each of the Loan Documents to which it is a party and (b) carry on
its business as now being conducted.

 

11.3.                     No
Consents.

 

Neither
the execution, delivery or performance by each Agent of any Loan Document to
which it is a party, nor the performance by each Agent of the terms and
conditions thereof requires the approval, consent or authorization of any
Person other than (a) such approvals, consents and authorizations as have
been obtained or (b) as may be required from time to time in connection
with the exercise of remedies provided for herein and in the other Loan
Documents (as to which the Agents makes no representation or warranty).

 

11.4.                     Proceedings.

 

There
are no actions, suits or proceedings, claims or investigations pending or, to
the actual knowledge of any officers of each Agent responsible for the
administration of this Common Agreement, threatened against it that challenge
the validity or enforceability of any Loan Document to which it is a party or
that, individually or in the aggregate, if adversely determined would
materially and adversely affect the ability of such Agent to perform its
obligations under any Loan Document to which it is a party.

 

11.5.                     No
Agents’ Liens.

 

There
are no Liens on or against the Collateral that result from (i) claims
against such Agent unrelated to the transactions contemplated by this Common
Agreement or the other Loan Documents or (ii) affirmative acts by such
Agent creating a Lien other than as contemplated or permitted by this Common
Agreement or the other Loan Documents.

 

ARTICLE 12

REIMBURSEMENT AGREEMENT

 

12.1.                     Reimbursement
Obligation.

 

If the Borrower defaults in any payment due to FFB under
the DOE-Guaranteed Loan or otherwise under any FFB Funding Document, and as a
result of such payment default by the Borrower, DOE becomes obligated to make any
payments to FFB pursuant to the DOE Guarantee (a “DOE Guarantee Payment”),
the Borrower shall become immediately obligated to reimburse DOE in an amount
(the “DOE Guarantee Payment Amount”) equal to the sum of 

 

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(i) all
DOE Guarantee Payments paid by DOE to FFB, and (ii) all costs or expenses
incurred by DOE in connection therewith, whether by payment to FFB or
otherwise.

 

12.2.                     Payments
and Computations.

 

12.2.1                  Interest.

 

The
Borrower shall pay to DOE an amount (the “Borrower Reimbursement Obligations”)
equal to the sum of (i) the DOE Guarantee Payment Amount, and
(ii) interest on DOE Guarantee Payment Amount from the date the DOE
Guarantee Payment was paid or incurred by DOE under the DOE Guarantee until
payment in full by the Borrower to DOE of the DOE Guarantee Payment Amount, at
a rate of interest equal to the rate of interest in effect under the FFB Note
Purchase Agreement with respect to Overdue Amounts at the time of the payment
default by the Borrower.

 

12.2.2                  Method of Payment.

 

The
Borrower shall make each payment with respect to Borrower Reimbursement
Obligations hereunder (a “Borrower Reimbursement Payment”), irrespective
of any right of counterclaim or set-off, in Dollars and in immediately
available funds on or before the fifth Business Day following a written demand
by DOE to the Borrower indicating the DOE Guarantee Payment Amount and the date
it was paid or incurred by DOE, by wire transfer to the following account, or
to such other account as may be specified by DOE from time to time:

 

U.S. Treasury Department

ABA No. 0210-3000-4 TREASNYC/CTR/BNF=D89000001

OBI=LGPO Loan No. 1002
– Guarantee Reimbursement

 

12.2.3                  Taxes.

 

All
Borrower Reimbursement Payments by the Borrower hereunder shall be made in
accordance with Section 3.1.2.

 

12.2.4                  Calculations.

 

All
computations of interest or fees under this Common Agreement shall be made by
the Loan Servicer, on the same basis as payments under the FFB Note Purchase
Agreement.

 

12.2.5                  Determinations.

 

Each
determination of an amount of interest or fees payable hereunder by the Loan
Servicer shall be conclusive and binding for all purposes, absent manifest
error.

 

12.3.                     Obligations
Absolute.

 

To
the fullest extent permitted by law, the Borrower Reimbursement Obligations are
absolute, irrevocable and unconditional, and shall be paid strictly in
accordance with the terms of 

 

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this
Common Agreement under all circumstances whatsoever, including without
limitation the following circumstances, whether or not with notice to or the
consent of the Borrower:

 

(i)            the occurrence, or the failure by DOE or any other
Secured Party or any other Person to give notice to the Borrower of the
occurrence, of any Event of Default or Potential Default under this Common
Agreement or any default under any of the other Loan Documents;

 

(ii)           the extension of the time for performance of any
obligations, covenants or agreements of any Person under or arising out of any
of the Loan Documents;

 

(iii)          the existence of any claim set-off, counterclaim, defense
or other rights of any kind or nature which (A) the Borrower, DOE or any
other Person may have at any time against FFB or any transferee, or
(B) the Borrower or any other Person may have at any time against DOE,
whether in connection with the Loan Documents, the transactions contemplated
therein or any unrelated transactions;

 

(iv)          any failure, omission or delay on the part of (A) DOE
to assert a defense to a DOE Guarantee Payment Amount under the DOE Guarantee
or to otherwise contest the DOE Guarantee, or (B) DOE or any other Secured
Party or the Borrower to enforce, assert or exercise any other right, power or
remedy conferred by this Common Agreement or any of the Loan Documents;

 

(v)           the taking or the omission on the part of DOE or any other
Secured Party or the Borrower of any other actions referred to in any of the
Loan Documents;

 

(vi)          the compromise, settlement, release, modification,
amendment (whether material or otherwise) or termination of any or all of the
obligations, conditions, covenants or agreements of any Person in respect of
any of the Loan Documents;

 

(vii)         any amendment or waiver of the payment, performance or
observance of any of the obligations, conditions, covenants or agreements of
any Person contained in any of the Loan Documents;

 

(viii)        the exchange, surrender, substitution or
modification of any security for any of the Loan Documents;

 

(ix)           any disability, incapacity or lack of powers, authority or
legal personality of or dissolution or change in the status of the Borrower or
any other Person;

 

(x)            any release, irregularity, invalidity, illegality, lack
of genuineness, unenforceability or modification affecting this Common
Agreement, the DOE Guarantee, the DOE Credit Facility, or the other Loan
Documents, or the transactions contemplated hereby or thereby;

 

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Commission.  Asterisks denote such omission.

 

103

 

(xi)           the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets of, the
marshaling of assets and liabilities, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition with creditors or readjustment of, or other similar proceedings
which affect the Borrower or any other Person party to any of the Loan
Documents;

 

(xii)          the release or discharge by operation of law of the
Borrower from the performance or observance or any obligation, covenant or
agreement contained in any of the Loan Documents;

 

(xiii)         any statement or any other document
presented under the DOE Guarantee proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect whatsoever;

 

(xiv)        any determination by a court or arbitrator, or any settlement
of a disputed claim by any party hereto or other Person, relating to this
Common Agreement, the DOE Guarantee, or the other Loan Documents, or the
transactions contemplated hereby or thereby; or

 

(xv)         any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.

 

12.4.                     Security.

 

12.4.1                  Borrower Reimbursement
Obligations Secured

 

The
parties expressly acknowledge that the Collateral Security pledged under the
Security Documents is pledged to secure payment by the Borrower of the Borrower
Reimbursement Obligations.

 

12.4.2                  Actions.

 

The
Borrower expressly acknowledges that DOE is free to litigate, settle or otherwise
satisfy or discharge its obligation with respect to any DOE Guarantee Payment
Amount, and take any action under the Security Documents or otherwise with
respect to the Collateral Security, as it may from time to time deem
appropriate, and any failure by DOE to advise, notify, or consult with the
Borrower shall not be a defense to, or in any way diminish, discharge or
derogate from the Borrower Reimbursement Obligations hereunder.

 

12.5.                     DOE
Rights.

 

12.5.1                  Rights Cumulative.

 

DOE’s
right to reimbursement provided for in this Article 12 shall be in
addition to, and not in limitation of, any other claims, rights or remedies of
subrogation, reimbursement, contribution, exoneration or indemnification or
similar claims, rights or remedies, whether arising under contract, by statute,
or otherwise that DOE may have from time to time.

 

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

 

104

 

12.5.2                  Subrogation.

 

Without
limiting the generality of Section 12.5.1, in accordance with Section 609.10(e)(2) of
the Applicable Loan Guarantee Requirements, upon any DOE Guarantee Payment DOE
shall be subrogated to the rights of FFB or any subsequent holder of the FFB
Loans, including all related Liens and Collateral.

 

12.6.                     Further
Assurances.

 

The
Borrower shall cooperate with DOE in connection with the exercise of any of its
rights under this Article 12 and agrees, promptly upon request by
DOE or the Loan Servicer, to execute, acknowledge and deliver all further
instruments and documents, and take all such further acts as DOE or the Loan
Servicer may reasonably request from time to time in order to carry out the
purposes of this Article 12 or to enable DOE to exercise and
enforce its rights and remedies hereunder.

 

ARTICLE 13

MISCELLANEOUS

 

13.1.                     Addresses.

 

Any
communications, including any notices, between or among the parties to the Loan
Documents shall be given to the addresses listed in Schedule 13.1.  All notices or other communications required
or permitted to be given under the Loan Documents shall be in writing and shall
be considered as properly given (a) if delivered in Person, (b) if
sent by overnight delivery service for inland delivery or international courier
for international delivery, (c) in the event overnight delivery service or
international courier service is not readily available, if mailed by first
class mail (or airmail for international delivery), postage prepaid, registered
or certified with return receipt requested, (d) if sent by telecopy with
transmission verified or (e) if transmitted by electronic mail (with such
transmission verified).  Notice so given
shall be effective upon delivery to the addressee, except that communication or
notice so transmitted by telecopy or other direct written electronic means
shall be deemed to have been validly and effectively given on the day (if a
Business Day and, if not, on the next following Business Day) on which it is
validly transmitted if transmitted (with such transmission verified) before
2:00 p.m., recipient’s time, and if transmitted after that time, on the
next following Business Day; provided, however, that if any notice is tendered to an
addressee and the delivery thereof is refused by such addressee, such notice
shall be effective upon such tender.  Any
party shall have the right to change its address for notice under any of the
Loan Documents to any other location by giving prior written notice to the
other parties in the manner set forth hereinabove.

 

13.2.                     Further
Assurances.

 

The
Borrower shall fully cooperate with all Persons as may be necessary to ensure
that each Credit Party receives any notices due to such Credit Party pursuant
to the Transaction Documents.  Each of
the parties agrees that money damages would not be a sufficient remedy for any
breach of this Section 13.2 and Section 6.23(b) and
agrees that in addition to all other 

 

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Commission.  Asterisks denote such omission.

 

105

 

remedies,
any court or arbitrator may award specific performance or other equitable
relief as a remedy for any such breach.

 

13.3.                     Delay
and Waiver.

 

No
delay or omission in exercising any right, power, privilege or remedy under
this Common Agreement or any other Loan Document, including any rights and
remedies in connection with the occurrence of an Event of Default or Potential
Default shall impair any such right, power, privilege or remedy of the Credit
Parties, nor shall it be construed to be a waiver of any right, power,
privilege or remedy or of any breach or default, or an acquiescence therein, or
in any similar breach or default thereafter occurring, nor shall any waiver of
any single right, power, privilege or remedy, or of any breach or default be
deemed a waiver of any other right, power, privilege or remedy or of any other
breach or default therefore or thereafter occurring.  Any waiver, permit, consent or approval of
any kind or character on the part of any of the Credit Parties of any right,
power, privilege or remedy including any rights and remedies in connection with
the occurrence of an Event of Default or Potential Default or of any other
breach or default under this Common Agreement or any other Loan Document, or
any waiver on the part of any of the Credit Parties of any provision or
condition of this Common Agreement or any other Transaction Document, must be
in writing and shall be effective only to the extent in such writing
specifically set forth.  All rights,
powers, privileges and remedies, either under this Common Agreement or any
other Loan Document or by law or otherwise afforded to any of the Credit
Parties, shall be cumulative and not alternative and not exclusive of any other
rights, powers, privileges and remedies that
such Credit Parties may otherwise have.

 

13.4.                     Right
of Set-Off.

 

In
addition to any rights now or hereafter granted under Governmental Rules or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of an Event of Default, each Credit Party is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final) and any other Indebtedness at any time held or owing by such Credit
Party (including by any branches and agencies of such Credit Party wherever
located) to or for the credit or the account of the Borrower against and on
account of the Secured Obligations and liabilities of the Borrower to such
Credit Party under this Common Agreement or any other Loan Document.

 

13.5.                     Amendment
or Waiver.

 

Except
as otherwise provided herein, neither this Common Agreement nor any of the
terms hereof may be changed, waived, discharged or terminated unless such
change, waiver, discharge or termination is in writing and signed by the
Borrower, DOE, the Administrative Agent and the Loan Servicer.  Any amendment to or waiver of this Common
Agreement or any of the terms hereof that constitutes a ‘modification’ within
the meaning set forth in Section 502(9) of the Federal Credit Reform
Act of 1990 and OMB Circular A-11 may be subject to (a) the availability
to DOE of funds appropriated by the United States Congress to meet an 

 

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Commission.  Asterisks denote such omission.

 

106

 

increase,
if any, in the Credit Subsidy Cost or (b) if such funds are not
appropriated or are unavailable, to the payment by the Borrower of any such
increase.

 

13.6.                     Entire
Agreement.

 

This
Common Agreement, including any agreement, document or instrument attached
hereto or referred to herein, integrates all the terms and conditions mentioned
herein or incidental hereto and supersedes all oral negotiations and prior
agreements and understandings of the parties hereto in respect to the subject
matter hereof.

 

13.7.                     Governing
Law.

 

This
Common Agreement and the rights and obligations of the parties hereunder shall
be governed by, and construed and interpreted in accordance with, the Federal
law of the United States.  To the extent
that Federal law does not specify a rule of decision for a particular
matter at issue, it is the intention and agreement of the parties hereto that
the substantive law of the State of New York shall be adopted as the governing
Federal rule of decision.

 

13.8.                     Severability.

 

In
case any one or more of the provisions contained in any Loan Document should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and the parties thereto shall enter into good faith
negotiations to replace the invalid, illegal or unenforceable provision.

 

13.9.                     Calculations.

 

All
financial data submitted pursuant to this Common Agreement and the other Loan
Documents shall be prepared in accordance with GAAP, and all financial ratio
tests applicable to the Borrower shall be based on definitions consistent with
GAAP.

 

13.10.              Limitation
on Liability.

 

No
claim shall be made by the Borrower or any of its Affiliates against any Credit
Party or any of their Affiliates, directors, employees, attorneys or agents for
any special, indirect, consequential or punitive damages (whether or not the
claim therefor is based on contract, tort or duty imposed by law), in
connection with, arising out of or in any way related to the transactions
contemplated by this Common Agreement or the other Transaction Documents or any
act or omission or event occurring in connection therewith; and the Borrower
hereby waives, releases and agrees not to sue upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor; except that the foregoing limitation shall not apply to the
extent that any such claim results from the gross negligence or willful
misconduct of any Credit Party.

 

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Commission.  Asterisks denote such omission.

 

107

 

13.11.              Waiver
of Jury Trial.

 

EACH
OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS COMMON
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE
BORROWER.  THIS PROVISION IS A MATERIAL
INDUCEMENT FOR EACH CREDIT PARTY TO ENTER INTO THIS COMMON AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

 

13.12.              Consent
to Jurisdiction.

 

By
execution and delivery of this Common Agreement, the Borrower irrevocably and
unconditionally:

 

(a)           submits for itself and its property in any legal action or
proceeding against it arising out of or in connection with this Common
Agreement or any other Loan Document, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of (i) the
courts of the United States of America for the District of Columbia, (ii) the
courts of the United States of America for the Southern District of New York,
(iii) any other federal court of competent jurisdiction in any other
jurisdiction where it or any of its property may be found, and
(iv) appellate courts from any of the foregoing;

 

(b)           consents that any such action or proceeding may be brought
in or removed to such courts, and waives any objection, or right to stay or
dismiss any action or proceeding, that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;

 

(c)           agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Schedule 13.1 or at such other
address of which DOE shall have been notified pursuant thereto;

 

(d)           agrees that nothing herein shall (i) affect the right
of any Credit Party to effect service of process in any other manner permitted
by law or (ii) limit the right of any Credit Party to commence proceedings
against or otherwise sue the Borrower or any other Person in any other court of
competent jurisdiction nor shall the commencement of proceedings in any one or
more jurisdictions preclude the commencement of proceedings in any other
jurisdiction (whether concurrently or not) if, and to the extent, permitted by
the Governmental Rules; and

 

(e)           agrees that judgment against it in any such action or
proceeding shall be conclusive and may be enforced in any other jurisdiction
within or without the U.S. by suit on the judgment or otherwise as provided by
law, a certified or exemplified copy of which judgment shall be conclusive
evidence of the fact and amount of the Borrower’s obligation.

 

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Commission.  Asterisks denote such omission.

 

108

 

13.13.              Successors
and Assigns.

 

(a)           The provisions of this Common Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.

 

(b)           The Borrower may not assign or otherwise transfer any of
its rights or obligations under this Common Agreement or under any Transaction
Document without the prior written consent of the Loan Servicer and DOE.

 

(c)           FFB may assign any or all of its rights, benefits and
obligations under the Loan Documents and with respect to the Collateral
Security to any financial institution in accordance with the provisions of the
DOE Credit Facility Documents.

 

(d)           The Borrower or its agent shall maintain a register for
the recordation of the names and addresses of the Lenders and the principal
amounts of the Advances 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, any
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender for all purposes of this Common Agreement, notwithstanding
notice to the contrary.  The Register shall
be available for inspection by the Borrower and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.

 

13.14.              Participations.

 

FFB
may from time to time sell or otherwise grant participations in any or all of
its rights and obligations under the Loan Documents and with respect to the
Collateral Security without the consent of the Borrower or any Agent.  In such case, Borrower and any Agent shall
continue to deal exclusively with FFB and the provisions of this Agreement
shall apply as if no such participation had been sold or granted.

 

13.15.              Reinstatement.

 

This
Common Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time payment and performance of the Borrower’s obligations
hereunder, or any part thereof, is, pursuant to Governmental Rules, rescinded
or reduced in amount, or must otherwise be restored or returned by any Credit
Party.  In the event that any payment or
any part thereof is so rescinded, reduced, restored or returned, such
obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.

 

13.16.              No
Partnership; Etc.

 

The
Credit Parties and the Borrower intend that the relationship between them shall
be solely that of creditor and debtor. 
Nothing contained in this Common Agreement or in any other Loan Document
shall be deemed or construed to create a partnership, tenancy-in-common, joint
tenancy, joint venture or co-ownership by, between or among the Credit Parties
and the Borrower or any other Person. 
The Credit Parties shall not be in any way responsible or liable 

 

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Commission.  Asterisks denote such omission.

 

109

 

for
the indebtedness, losses, obligations or duties of the Borrower or any other
Person with respect to the Project or otherwise.  All obligations to pay real property or other
taxes, assessments, insurance premiums, and all other fees and Periodic
Expenses arising from the ownership, operation or occupancy of the Project and
to perform all obligations under the agreements and contracts relating to the
Project shall be the sole responsibility of the Borrower.

 

13.17.              Payment
of Costs and Expenses.

 

(a)           (i)            The
Borrower shall, whether or not the transactions herein contemplated are
consummated, pay or reimburse:  all
reasonable and invoiced out-of-pocket costs and expenses of each Credit Party
(including all commissions, charges, costs and expenses for the conversion of
currencies and all other costs, charges and expenses, including all fees and
Periodic Expenses of the legal counsel, consultants and advisors for any of the
foregoing) made, paid, suffered or incurred in connection with (A) the
translation, negotiation, preparation, execution and delivery and, where
appropriate, authentication, registration and recordation of this Common
Agreement, the other Transaction Documents and any other documents and
instruments related hereto or thereto (including legal opinions), and
(B) the authentication, registration, translation and recordation (where
appropriate) of any of the Transaction Documents and the delivery of the
evidences of Indebtedness relating to the Advances and the disbursements
thereof.

 

(ii)           The Borrower shall also pay or reimburse all out-of-pocket
costs and expenses of each Credit Party (including all commissions, charges,
costs and expenses for the conversion of currencies and all other costs,
charges and expenses including all fees and Periodic Expenses of the legal
counsel, consultants and advisors for any of the foregoing) made, paid,
suffered or incurred in connection with (A) any amendment or modification
to, or the protection or preservation of any right or claim under, or consent
or waiver in connection with, this Common Agreement or any other Transaction
Document, any such other document or instrument related hereto or thereto or
any Collateral Security, and (B) the administration, preservation in full
force and effect and enforcement (including with respect to a work out) of this
Common Agreement, the other Transaction Documents and any other documents and
instruments referred to herein or therein (including the fees and disbursements
of counsel for each Credit Party and travel costs), and (C) the fees and
expenses of the Lender’s Engineer and other Independent Consultants from time
to time retained pursuant to the Loan Documents.

 

(b)           The Borrower shall, whether or not the transactions herein
contemplated are consummated, (i) indemnify each of the Credit Parties
(each an “Indemnified Person” and, collectively, the “Indemnified
Parties”) and each of its respective officers, directors, employees,
representatives, attorneys and agents from and hold each of them harmless
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses and disbursements incurred
by any of them as a result of, or arising out of, or in any way related to, or
by reason of, any investigation, litigation or other proceeding or inquiry
(whether or not such Indemnified Person is a party thereto) related to the
entering into and performance of any Transaction Document or the disbursement
of, or use of the proceeds of, any DOE-Guaranteed Loans or the consummation of
any transactions contemplated herein or in any Transaction Document, including
the fees and Periodic Expenses of counsel selected by such 

 

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Commission.  Asterisks denote such omission.

 

110

 

Indemnified Person incurred in connection with any
such investigation, litigation or other proceeding or in connection with
enforcing the provisions of this Section 13.17 (but excluding any
such liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, suits, costs, expenses and disbursements to the extent incurred by
reason of the gross negligence or willful misconduct of the Indemnified Person
or its officers, directors, employees, representatives, attorneys or agents, as
the case may be, as determined pursuant to a final, non-appealable judgment by
a court of competent jurisdiction) (collectively, “Indemnity Claims”).

 

(c)           Without limitation to the provisions of Section 13.17(b) above,
the Borrower agrees to defend, indemnify and hold harmless each Indemnified
Person and each of its respective directors, officers, shareholders, agents,
employees, participants, successors and assigns, from and against any and all
Claims.

 

(d)           All sums paid and costs incurred by any Indemnified Person
with respect to any matter indemnified hereunder shall bear interest at the
Late Charge Rate applicable to their respective Advances from the date the
Borrower receives notice thereof from such Indemnified Person, until reimbursed
by the Borrower, and all such sums and costs shall be added to the Secured
Obligations and be secured by the Security Documents and shall be immediately
due and payable on demand.  Each such
Indemnified Person shall promptly notify the Borrower in a timely manner of any
such amounts payable by the Borrower hereunder, provided that any failure to
provide such notice shall not affect the Borrower’s obligations under this Section 13.17.,

 

(i)            Each Indemnified Person within ten (10) days after
the receipt by it of notice of the commencement of any action for which
indemnity may be sought by it, or by any Person controlling it, from the
Borrower on account of the agreements contained in this Section 13.17,
shall notify the Borrower in writing of the commencement thereof, but the
failure of such Indemnified Person to so notify the Borrower of any such action
shall not release the Borrower from any liability that it may have to such Indemnified Person, except to the extent
that the Borrower is actually prejudiced by such delay.

 

(ii)           To the extent that the undertaking in the preceding
clauses of this Section 13.17 may be unenforceable because it is
violative of any law or public policy, the Borrower shall contribute the
maximum portion that it is permitted to pay and satisfy under Governmental Rules to
the payment and satisfaction of such undertakings.

 

(iii)          The provisions of this Section 13.17 shall
survive foreclosure under the Security Documents and satisfaction or discharge
of the Secured Obligations, and shall be in addition to any other rights and
remedies of any Indemnified Person.

 

(iv)          Any amounts payable by the Borrower pursuant to this Section 13.17
shall be payable within the later to occur of (i) [*****] after the
Borrower receives an invoice for such amounts from any applicable Indemnified
Person, and (ii) [*****] to the date on which such Indemnified Person
expects to pay such costs on account of which the Borrower’s indemnity
hereunder is payable, and if not paid by such applicable date shall bear
interest at the Late Charge Rate from and after such applicable date until paid
in full.

 

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Commission.  Asterisks denote such omission.

 

111

 

(v)           The Borrower shall be entitled, at its expense, to
participate in the defense thereof provided that such Indemnified Person shall
have the right to retain its own counsel, at the Borrower’s expense, and such
participation by the Borrower in the defense thereof shall not release the
Borrower of any liability that it may have to such Indemnified Person.  Any Indemnified Person against whom any Claim
is made shall be entitled, after consultation with the Borrower and upon
consultation with legal counsel wherein such Indemnified Person is advised that
such Claim is meritorious, to compromise or settle any such Claim.  Any such compromise or settlement shall be
binding upon the Borrower for purposes of this Section 13.17.

 

(vi)          Upon payment of any Claim by the Borrower pursuant to this Section 13.17,
the Borrower, without any further action, shall be subrogated to any and all
claims that such Indemnified Person may have relating thereto, and such
Indemnified Person shall at the request and expense of the Borrower cooperate
with the Borrower and give at the request and expense of the Borrower such
further assurances as are necessary or advisable to enable the Borrower
vigorously to pursue such claims.

 

(vii)         Notwithstanding any other provision of this Section 13.17,
the Borrower shall not be entitled to any (i) notice, (ii) participation
in the defense of, (iii) consent rights with respect to any compromise or
settlement, or (iv) subrogation rights, in each case except as otherwise
provided for pursuant to this Section with respect to any action, suit or
proceeding against the Borrower, Holdings or the Sponsor.

 

13.18.              Counterparts.

 

This
Common Agreement may be executed in one or more duplicate counterparts and when
signed by all of the parties shall constitute a single binding agreement.

 

[Remainder of page intentionally left blank;
signatures follow.]

 

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Commission.  Asterisks denote such omission.

 

112

 

IN
WITNESS WHEREOF, the parties hereto have caused this Common Agreement to be
executed and delivered by their respective officers or representatives hereunto
duly authorized as of the date first written above.

 

	
  STEPHENTOWN REGULATION SERVICES
  LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  James M. Spiezio

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Treasurer
  and Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  U.S.
  DEPARTMENT OF ENERGY,

  	
   

  
	
   as
  Credit Party

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  David G. Frantz

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  U.S.
  DEPARTMENT OF ENERGY,

  	
   

  
	
   as
  Loan Servicer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  David G. Frantz

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MIDLAND LOAN
  SERVICES, INC.,

  
	
   as Administrative Agent in its capacity as
  the Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Bradley J. Hauger

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  Senior
  Vice President

  	
   

  
	
   

  	
  Servicing Officer

  	
   

  

 

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

 

 

APPENDIX A

 

ACCOUNTS; REVENUES

AND APPLICATION THEREOF

 

Section A.1           Project Accounts

 

(a)           The Borrower shall establish
and maintain (I) the Collateral Account with PNC Bank, National
Association, or another bank or financial institution satisfactory to DOE (the “Depository
Bank”) for the receipt and management of Project-related funds and security
and (II) the following subaccounts within the Collateral Account
established and maintained with the Depository Bank for the management of
Project-related funds and security (the Collateral Account and such
subaccounts, collectively, the “Project Accounts”):

 

(i)            Base Equity Account;

 

(ii)           Overrun Equity Account;

 

(iii)          Loss Proceeds Account;

 

(iv)          Project Revenue Account;

 

(v)           Operating Disbursement
Account;

 

(vi)          Debt Service Payment
Account;

 

(vii)         Debt Service Reserve
Account;

 

(viii)        Maintenance Reserve Account;

 

(ix)           Capital Account;

 

(x)            Post Reserve Account; and

 

(xi)           Distribution Suspense
Account.

 

(b)           All monies at any time
deposited in any account required hereby shall be disbursed, allocated and
applied solely for the uses and purposes provided herein.

 

Section A.2           Control by Collateral Agent; Fees

 

(a)           The Collateral Agent shall
have sole dominion and control over, and the exclusive right of withdrawal from,
all Project Accounts, other than the Operating Disbursement Account and the
Maintenance Reserve Account, in accordance with the terms of this Common
Agreement and the Account Control Agreements. 
The Borrower shall have the right to direct the disposition of funds in
the Operating Disbursement Account by check or wire transfer unless an Event of
Default Notice has been issued and remains effective.

 

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

 

 

(b)           The Borrower shall pay all
fees and expenses of the Secured Parties, the Depository Bank and the
Collateral Agent as may be required by DOE in its sole discretion in connection
with the establishment and maintenance of the Project Accounts.

 

Section A.3           Base Equity Account

 

(a)           On the Financial Closing
Date, the Borrower shall deposit in the Collateral Account, and the Collateral
Agent shall transfer from the Collateral Account to the Base Equity Account,
all Base Equity that has not previously been invested in the Project and
approved and valued by DOE.

 

(b)           Prior to the Physical
Completion Date, all monies on deposit in the Base Equity Account shall be
applied to Equity Advances in accordance with, and in the amounts determined
under, Sections 2.1(b) and 2.4.2 of the Common Agreement.

 

(c)           From and after the Physical
Completion Date, at the request of the Borrower, provided that no Potential
Default or Event of Default shall then exist, the Collateral Agent shall cause
any monies on deposit in the Base Equity Account to be disbursed to the
Borrower for distribution to the Equity Owners of the Borrower without regard
to the limitations set forth in Section 7.10 of the Common
Agreement (except for Section 7.10(a)(ii) thereof).  The Collateral Agent shall cause such amounts
to be deposited in the account specified by the Borrower in the notice referred
to in the preceding sentence within two (2) Business Days after receipt of
such notice.

 

Section A.4           Overrun Equity Account

 

(a)           If at any time the Borrower
or DOE shall determine that the sum of (A) the unadvanced proceeds of the
DOE Credit Facility and (B) the amount remaining on deposit in the Base
Equity Account shall be insufficient to pay all remaining Total Project Costs,
then the Borrower shall [*****] of (y) such determination by the Borrower
or (z) notice of such determination by DOE to the Borrower, deposit the
amount of such deficiency in the Collateral Account, and the Collateral Agent
shall immediately transfer the entire amount so deposited by the Borrower
pursuant to this Section A.4(a) from the Collateral Account to
the Overrun Equity Account.

 

(b)           Prior to the Physical
Completion Date, all monies on deposit in the Overrun Equity Account shall be
applied to Equity Advances in accordance with, and in the amounts determined
under, Sections 2.1(b) and 2.4.2 of the Common Agreement.

 

(c)           From and after the Physical
Completion Date, at the request of the Borrower, provided that no Potential
Default or Event of Default shall then exist, the Collateral Agent shall cause
any monies on deposit in the Overrun Equity Account to be disbursed to the
Borrower or as the Borrower may direct for distribution to the Equity Owners of
the Borrower without regard to the limitations set forth in Section 7.10
of the Common Agreement (except for Section 7.10(a)(ii) thereof).  The Collateral Agent shall cause such amounts
to be deposited in the account specified by the Borrower in the notice referred
to in the preceding sentence within two (2) Business Days after receipt of
such notice.

 

2

 

Section A.5           Loss Proceeds Account

 

All
Loss Proceeds shall be deposited in the Collateral Account immediately upon
receipt, shall be immediately transferred by the Collateral Agent from the
Collateral Account to the Loss Proceeds Account and shall be applied as
provided in Section 3.4.3(a)(ii) and Section 6.26
of the Common Agreement.

 

Section A.6           Deposit of Operating Revenues

 

The
Borrower shall use commercially reasonable efforts to cause all Operating
Revenues to be deposited directly into the Collateral Account immediately upon
receipt and, following the transfer of such Operating Revenues by the
Collateral Agent from the Collateral Account to the Project Revenue Account,
thereafter applied as provided in Section A.7 hereof.  The Collateral Agent shall immediately
transfer any amounts deposited in the Collateral Account pursuant to this Section A.6
from the Collateral Account to the Project Revenue Account.

 

Section A.7           Application of Operating Revenues

 

(a)           Prior to the Physical
Completion Date, the Collateral Agent shall cause all monies on deposit in the
Project Revenue Account to be applied for the following purposes in the
following order of priority, the requirements of each numbered item to be fully
satisfied for any fiscal period before application of any monies to any
succeeding numbered item for such fiscal period:

 

(i)         First:  On the first Business Day of each calendar
month, to the Operating Disbursement Account, (A) such amount, if any,
that, when added to the amount then on deposit in the Operating Disbursement
Account, shall equal the amount of Operating Costs for such calendar month in
accordance with the Operating Budget, and (B) with the consent of DOE in
its sole discretion, an additional amount equal to all or a portion of the
amount of Operating Costs anticipated by Borrower to be paid or incurred during
such calendar month in excess of the amount of Operating Costs for such
calendar month as set forth in the Operating Budget;

 

(ii)        Second:  On the first Business Day of each calendar
month, to the Maintenance Reserve Account, such amount, if any, that, when
added to the amount then on deposit in the Maintenance Reserve Account, shall
equal the MRA Required Amount; and

 

(iii)       Third:  Any monies on deposit in the Project Revenue
Account that are not applied as provided in clauses (i) and (ii) of
this Section A.7(a) shall be retained in the Project Revenue
Account.

 

(b)           From and after the Physical
Completion Date, the Collateral Agent shall cause all monies on deposit in the
Project Revenue Account to be applied for the following purposes in the
following order of priority, the requirements of each numbered item to be fully
satisfied for any 

 

3

 

fiscal period before application of any monies to
any succeeding numbered item for such fiscal period:

 

(i)         First:  On the first Business Day of each calendar
month, to the Operating Disbursement Account, (A) such amount, if any,
that, when added to the amount then on deposit in the Operating Disbursement
Account, shall equal the amount of Operating Costs for such calendar month in
accordance with the Operating Budget, and (B) with the consent of DOE in
its sole discretion, an additional amount equal to all or a portion of the
amount of Operating Costs anticipated by Borrower to be paid or incurred during
such calendar month in excess of the amount of Operating Costs for such
calendar month as set forth in the Operating Budget;

 

(ii)        Second:  On the first Business Day of each calendar
month, to the Debt Service Payment Account, such amount, if any, that, when
added to the amount then on deposit in the Debt Service Payment Account, shall
equal the amount of interest and principal on the DOE-Guaranteed Loan and all
other costs, fees and expenses arising under the Loan Documents that are due
and payable to FFB or DOE on or before the next succeeding Payment Date;

 

(iii)       Third:  On the first Business Day of each calendar
month, to the Debt Service Reserve Account, such amount, if any, that, when
added to the amount then on deposit in the Debt Service Reserve Account, shall
equal the Debt Service Reserve Requirement;

 

(iv)       Fourth:  On the first Business Day of each calendar
month, to the Maintenance Reserve Account, such amount, if any, that, when
added to the amounts then on deposit in the Maintenance Reserve Account, shall
equal the MRA Required Amount;

 

(v)        Fifth:  On the first Business Day of each calendar
month, to the Capital Account, such amount, if any, that, when added to the
amounts on deposit in the Capital Account, shall equal the Capital Account
Requirement;

 

(vi)       Sixth:  On the first Business Day of each calendar
month, to the Post Reserve Account, such amount, if any, that, when added to
the amounts then on deposit in the Post Reserve Account, shall equal the
aggregate amount of Base Fees payable on or before the next succeeding Payment
Date to the Operator under the O&M Agreement and to the Administrator under
the Administrative Services Agreement; and

 

(vii)      Seventh:  On the first Business Day of each January,
April, July and October, commencing on or after the Project Completion
Date, to the Distribution Suspense Account, all remaining monies then on deposit
in the Project Revenue Account.

 

4

 

Section A.8           Operating Disbursement Account

 

The
Borrower shall from time to time, or cause the Operator or the Administrator
to, apply monies on deposit in the Operating Disbursement Account to pay
(a) Operating Costs in accordance with the most recent Operating Budget
and (b) with the consent of DOE in its sole discretion, Operating Costs in
excess of the amount of Operating Costs as set forth in the most recent Operating
Budget.

 

Section A.9           Debt Service Payment Account

 

The
Collateral Agent shall cause monies on deposit in the Debt Service Payment
Account to be applied to pay all amounts payable by Borrower to FFB and DOE
under the Loan Documents including, without limitation, interest and principal
on the DOE-Guaranteed Loan and all other costs, fees and expenses arising under
the Loan Documents, as and when all such amounts are due and payable.

 

Section A.10         Debt Service Reserve Account

 

(a)           If at any time the monies on
deposit in the Debt Service Payment Account shall not be sufficient to pay all
amounts payable to FFB and DOE under the Loan Documents, including, without
limitation, interest and principal on the DOE-Guaranteed Loan and all other
costs, fees and expenses arising under the Loan Documents, as and when all such
amounts are due and payable, then, after application of all monies on deposit
in the Debt Service Payment Account for such purposes, the Collateral Agent
shall cause monies on deposit in the Debt Service Reserve Account to be applied
to pay such deficiency.

 

(b)           On the second Business Day
prior to the date on which any amount is payable by Borrower to FFB or DOE
under the Loan Documents, the Collateral Agent shall give notice to the Sponsor
if the monies on deposit in the Debt Service Payment Account plus the monies on
deposit in the Debt Service Reserve Account are insufficient to cause such
amount to be paid to FFB or DOE under the Loan Documents, which notice shall
specify the amount of such insufficiency.

 

(c)           Within five (5) days
after the date on which any monies are withdrawn from the Debt Service Reserve
Account, the Collateral Agent shall give notice to the Sponsor if the monies
then on deposit in the Debt Service Reserve Account are less than the Debt
Service Reserve Requirement, which notice shall specify the amount of such
deficiency.

 

(d)           If at any time the monies on
deposit in the Debt Service Reserve Account shall exceed the Debt Service
Reserve Requirement, the Collateral Agent shall transfer the amount of such
excess to the Project Revenue Account.

 

Section A.11         Maintenance Reserve Account

 

(a)           If at any time the monies on
deposit in the Operating Disbursement Account shall not be sufficient to pay
Operating Costs, then, after application of all monies on deposit in the
Operating Disbursement Account for such purpose, the Borrower shall transfer
monies on 

 

5

 

deposit in the Maintenance Reserve Account in the
amount of such deficiency to the Operating Disbursement Account to be applied
to pay such deficiency.

 

(b)           If at any time, and to the
extent that (i) the monies on deposit in the Debt Service Payment Account
shall not be sufficient to pay all amounts payable to FFB and DOE under the Loan
Documents as and when such amounts are due and payable and (ii) the monies
on deposit in the Debt Service Reserve Account are insufficient to cover such
deficiency in the Debt Service Payment Account, then the Borrower shall
transfer monies on deposit in the Maintenance Reserve Account in the amount of
such deficiency to the Debt Service Payment Account.

 

(c)           If at any time the monies on
deposit in the Maintenance Reserve Account shall exceed the MRA Required
Amount, the Borrower shall transfer the amount of such excess to the Project
Revenue Account.

 

Section A.12         Capital Account

 

(a)           The Collateral Agent shall
hold monies on deposit in the Capital Account as a reserve fund and shall not
disburse such monies without the consent of the Loan Servicer.

 

(b)           If at any time, and to the
extent that (i) the monies on deposit in the Debt Service Payment Account
shall not be sufficient to pay all amounts payable to FFB and DOE under the
Loan Documents as and when such amounts are due and payable and (ii) the
monies on deposit in the Debt Service Reserve Account and the Maintenance
Reserve Account are insufficient to cover such deficiency in the Debt Service
Payment Account, then the Collateral Agent shall transfer monies on deposit in
the Capital Account in the amount of such deficiency to the Debt Service
Payment Account.

 

Section A.13         Post Reserve Account

 

The
Collateral Agent shall cause monies on deposit in the Post Reserve Account to
be applied as follows:

 

(a)           to pay Base Fees as and when
all such amounts are due and payable, on a pro rata basis in proportion to the
aggregate amounts that are due and payable pursuant to the terms of the O&M
Agreement and the Administrative Services Agreement, respectively; provided
that, to the extent that any shortfall exists in the Operating Disbursement
Account, the Debt Service Payment Account, the Debt Service Reserve Account or
the Maintenance Reserve Account, such monies shall be transferred to each such
account in such order prior to being used to pay Base Fees; and

 

(b)           after the payment of all
Base Fees then due and payable, any monies remaining on deposit in the Post
Reserve Account shall be transferred to the Project Revenue Account.

 

Section A.14         Distribution Suspense Account

 

The
Collateral Agent shall cause all monies on deposit in the Distribution Suspense
Account to be applied for the following purposes in the following order of
priority, the 

 

6

 

requirements
of each numbered item to be fully satisfied for any fiscal period before
application of any monies to any succeeding numbered item for such fiscal
period:

 

(a)           On the 15th day of each
February, May, August and November (each, a “Distribution Date”),
in the event that all of the conditions precedent set forth in Section 7.10(a) of
the Common Agreement are not satisfied, to the Project Revenue Account, all
monies then on deposit in the Distribution Suspense Account.

 

(b)           On each Distribution Date,
provided that all of the conditions precedent set forth in Section 7.10(a) of
the Common Agreement are satisfied, at the direction of the Borrower, the
Collateral Agent shall cause a portion of the monies then on deposit in the
Distribution Suspense Account to be disbursed to the Borrower or as the
Borrower may direct to make any Restricted Payment; provided, however, that at
the same time as the Collateral Agent shall cause any monies on deposit in the
Distribution Suspense Account to be disbursed to make any Restricted Payment,
the Collateral Agent shall cause monies on deposit in the Distribution Suspense
Account in an amount equal to the Prepayment Amount to be applied to the
voluntary prepayment of the DOE-Guaranteed Loan in accordance with clause (v) of
the definition of “Distribution Preconditions” and pursuant to Section 3.4.3(a)(v) of
this Common Agreement.

 

(c)           For purposes of applying
paragraph (a) or paragraph (b) of this Section A.14,
satisfaction or nonsatisfaction of all of the conditions precedent set forth in
Section 7.10(a) of the Common Agreement shall be determined as
of both (i) the first day of the then current calendar quarter and
(ii) the applicable Distribution Date, except that satisfaction or
nonsatisfaction of the condition precedent set forth in clause (iv) of
the definition of “Distribution Preconditions” shall be determined only
as of the last day of the preceding calendar quarter.  Unless all of the conditions precedent set
forth in Section 7.10(a) of the Common Agreement are satisfied
on all such applicable dates, all monies then on deposit in the Distribution
Suspense Account shall be transferred to the Project Revenue Account on the
applicable Distribution Date.

 

Section A.15         Closing of Project Accounts

 

If
a Project Account is no longer intended to be utilized pursuant to this Common
Agreement, the Borrower may deliver a written request to the Collateral Agent
to close such Project Account and transfer any funds on deposit therein to the
Project Revenue Account.  If the Loan
Servicer acknowledges to the Collateral Agent in writing that such Project
Account will no longer be utilized pursuant to this Common Agreement, the
Collateral Agent shall close such Project Account, transfer any funds on
deposit therein to the Project Revenue Account and deliver notice of such
actions to the Borrower and the Loan Servicer.

 

Section A.16         Reserve Letters of Credit

 

(a)           Reductions in Amount

 

At
any time when one or more Reserve Letters of Credit are outstanding in relation
to the Debt Service Reserve Account and the balance of the Debt Service Reserve
Account exceeds the Debt Service Reserve Requirement (the amount of the excess
being the “Reduction Amount”) as the result of (a) funds being
deposited into the Debt Service Reserve Account in accordance with 

 

7

 

this
Common Agreement or (b) a reduction in the Debt Service Reserve
Requirement, then the aggregate undrawn amount of the Reserve Letters of Credit
shall, upon the written request of the Borrower be reduced.  Such reduction shall be confirmed by the Loan
Servicer to the Collateral Agent in writing. 
The Collateral Agent shall effect any such reduction by promptly
delivering to the issuer of each affected Reserve Letter of Credit a
certificate in the form attached to such Reserve Letter of Credit requesting
that the available amount of such Reserve Letter of Credit be reduced as
provided in this Section A.16(a).

 

(b)           Drawings of Full Amount

 

The
Collateral Agent shall draw the full amount of a Reserve Letter of Credit on
the first Business Day to occur after the earlier of (a) the date that is
thirty (30) days prior to the scheduled expiration date of such Reserve Letter
of Credit if the Collateral Agent may otherwise do so in compliance with the
definition of Reserve Letter of Credit and (b) as instructed in writing by
the Loan Servicer if the issuer of such Reserve Letter of Credit ceases to
satisfy the requirements established by the DOE or such Reserve Letter of
Credit is otherwise eligible to be drawn in accordance with its terms.  Any amounts so drawn by the Collateral Agent
under a Reserve Letter of Credit shall be deposited by the Collateral Agent in
the Debt Service Reserve Account.

 

(c)           Partial Drawings

 

(i)     If pursuant to this Common
Agreement the Collateral Agent is directed to disburse, transfer or withdraw an
amount (a “Required Amount”) from the Debt Service Reserve Account, the
Collateral Agent shall transfer cash and/or draw on any Reserve Letter of
Credit as follows:

 

(A)           if no Reserve Letter of
Credit has been provided, or if and to the extent the Borrower so specifies by
written notice to the Collateral Agent, the Collateral Agent shall transfer
cash from the Debt Service Reserve Account;

 

(B)           if the balance on the Debt
Service Reserve Account comprises one or more Reserve Letters of Credit, and any
cash to be transferred in accordance with paragraph (A) is less
than the Required Amount, the Collateral Agent shall draw on a Reserve Letter
of Credit in an aggregate amount equal to such shortfall.

 

(ii)    Any draws upon any Reserve
Letter of Credit will be made at least two (2) Business Days prior to the
date on which the relevant disbursement, transfer or withdrawal is to be made.

 

Section A.17         Permitted Investments

 

(a)           All amounts deposited in the
Project Accounts and not disbursed on the same day deposited shall be invested,
on the same day as deposited or, with respect to amounts deposited with the
Collateral Agent after 11:00 a.m. (New York time), the Collateral Agent
shall use 

 

8

 

commercially reasonable efforts to invest on the
same day as deposited, or otherwise on the next Business Day, in Permitted
Investments specified in writing by the Borrower.  The Borrower shall use commercially
reasonable efforts to assure that the final maturity of any such investment
does not extend beyond the time when the amounts used to acquire such
investments would be required for any other application under this Common
Agreement.  If the Borrower does not
specify in writing to the Collateral Agent in which Permitted Investments
amounts deposited shall be invested, the Collateral Agent shall deposit such
amounts in the Overnight Investment, until such written specification is
received.  Interest or any other income
arising out of the investment of monies on deposit in any of the Project
Accounts shall be deposited when paid in the Project Revenue Account.

 

(b)           Liquidation to Make
Disbursements.  If and when
cash is required for any disbursement, transfer or withdrawal from a Project
Account in accordance with this Common Agreement, the Collateral Agent shall
cause Permitted Investments to be sold or otherwise liquidated into cash
(without regard to maturity) in order to make such disbursement, transfer or
withdrawal.

 

(c)           Liability of Collateral
Agent and DOE.  All investments
in Permitted Investments shall be made at the sole risk of the Borrower.  Neither the Collateral Agent nor DOE shall be
liable for any loss, fee, tax or other charge resulting from any investment or
reinvestment in any Permitted Investment or the sale, disposition, redemption
or liquidation of such investment or by reason of the fact that the proceeds
realized in respect of such sale, disposition, redemption or liquidation were
less than that which might otherwise have been obtained.

 

Section A.18         Disbursements by Collateral Agent

 

The
Collateral Agent shall make disbursements, transfers and withdrawals from the
Project Accounts (except for the Operating Disbursement Account and the
Maintenance Reserve Account) pursuant to and in accordance with written
instructions from the Loan Servicer to disburse, transfer or withdraw funds in
accordance with the terms of this Common Agreement.  The Collateral Agent shall have no obligation
(express, implied or otherwise) to investigate whether any such written instructions
from the Loan Servicer comply with this Appendix A or any other
provision of this Common Agreement.

 

Section A.19         Collateral Agent’s Notice

 

At
least two (2) Business Days prior to the date of any requested
disbursement, transfer or withdrawal from the Project Revenue Account pursuant
to Section A.7 hereof (each, a “Disbursement Date”), the
Collateral Agent shall transmit to the Borrower and the Loan Servicer a notice
(each, a “Disbursement Notice”) specifying:

 

(a)           Any Agent fees, costs and
expenses to be paid in accordance with Section 9.7 of this Common
Agreement on the immediately succeeding Disbursement Date;

 

(b)           The balances in each of the
Project Accounts and the undrawn amount of any Reserve Letter of Credit as of
the opening of business in New York on the date of such Disbursement Notice;
and

 

9

 

(c)           The amount and source of
funds received in accordance with this Common Agreement and the disbursements,
transfers and withdrawals of funds from each Project Account for the period of
time that transpired since the date of immediately preceding Disbursement
Notice (all as set forth in the records and accounts maintained by the
Collateral Agent).

 

Section A.20         Loan Servicer Notices.

 

On
or before the twentieth (20th) day of each month, the Loan Servicer shall deliver to the Collateral
Agent and the Borrower a notice specifying the following amounts:

 

(a)           The amount of all fees,
expenses and unscheduled payments to be paid to each Credit Party under the
Loan Documents during the next succeeding month, broken down, for each such
Person, on an item-by-item basis;

 

(b)           The amount of Debt Service
due to each Credit Party in respect of the Credit Facilities and all other
amounts due to each Credit Party under the Loan Documents on or before the
immediately succeeding Quarterly Payment Date, broken down for each Credit
Party on an item-by-item basis; and

 

(c)           The amount of the Debt
Service Reserve Requirement.

 

10

 

Exhibits to Common Agreement

 

	
  A

  	
   

  	
  Definitions

  
	
  A1

  	
   

  	
  Financial Plan

  
	
  A2

  	
   

  	
  Definition of Physical Completion and
  Project Completion

  
	
  A3

  	
   

  	
  Definition of DOE Requirements

  
	
  A4

  	
   

  	
  Davis-Bacon
  Provisions for Davis-Bacon Act Covered Contracts

  
	
  A5

  	
   

  	
  Disclosure
  Letter

  
	
  B

  	
   

  	
  Rules of
  Interpretation

  
	
  C1

  	
   

  	
  Form of
  Borrower Certificate (Initial Closing)

  
	
  C2

  	
   

  	
  Form of
  Borrower Certificate (Periodic Closing)

  
	
  D1

  	
   

  	
  Form of
  Lender’s Engineer Certificate (Initial Closing)

  
	
  D2

  	
   

  	
  Form of
  Lender’s Engineer Certificate (Periodic Closing)

  
	
  E1

  	
   

  	
  Form of
  Sponsor’s Certificate (Initial Closing)

  
	
  E2

  	
   

  	
  [Intentionally
  Omitted]

  
	
  E3

  	
   

  	
  Form of
  Certificate of Holdings (Initial Closing)

  
	
  F1

  	
   

  	
  Form of
  Insurance Consultant Certificate (Initial Closing)

  
	
  F2

  	
   

  	
  Form of
  Insurance Consultant Certificate (Periodic Closing)

  
	
  G

  	
   

  	
  Form of
  Collateral Agent Certificate
  (Initial Closing)

  
	
  H

  	
   

  	
  Form of
  Major Project Participant Certificate (Initial Closing)

  
	
  I

  	
   

  	
  Form of
  Financial Officer Certificate (Initial Closing)

  
	
  J

  	
   

  	
  [Intentionally
  Omitted]

  
	
  K

  	
   

  	
  [Intentionally
  Omitted]

  
	
  L

  	
   

  	
  [Intentionally
  Omitted]

  
	
  M

  	
   

  	
  Form of
  Master Advance Notice

  
	
  N

  	
   

  	
  Form of
  Drawstop Notice

  
	
  O

  	
   

  	
  Form of
  Quarterly Reporting Certificate

  
	
  P

  	
   

  	
  Form of
  Physical Completion Certificate

  
	
  Q

  	
   

  	
  Form of
  Project Completion Certificate

  

 

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

 

 

Exhibit A

to Common Agreement

 

DEFINITIONS

 

“Account Control Agreement” 
Any and all agreements pursuant to which a Secured Party obtains control
of a deposit account or a securities account within the meaning of Section 9-104
or Section 8-106, respectively, of the Uniform Commercial Code of any
applicable jurisdiction, to secure the Secured Obligations, including without
limitation that certain Account Control Agreement by and among the Depository
Bank, as that bank at which the deposit account is maintained, the
Administrative Agent in its capacity as the Collateral Agent, as Secured Party,
and Borrower.

 

“Actual Knowledge”  With
respect to any Person, the actual knowledge of the Principal Persons of such
Person.

 

“Additional
Project Construction Purchase Order” 
A purchase order from Sponsor or Borrower to Project Construction
Contractor, in form and substance satisfactory to the Loan Servicer and
approved by the Lender’s Engineer, in addition to Purchase Order Number 1550,
dated November 20, 2009, constituting a part of the Project Construction
Contract.

 

“Additional
Project Documents”  All of the
contracts necessary for and material to the construction or operation of the
Project entered into by the Borrower subsequent to the Common Agreement Date.

 

“Administrative
Agent”  Midland Loan Services, Inc.,
a Delaware corporation.

 

“Administrative
Agent Fee Agreement”  The fee letter
agreement between the Administrative Agent and the Borrower, in form and
substance acceptable to DOE.

 

“Administrative
Services Agreement” The Agreement obligating the Administrator to provide
ongoing administrative and management support to the Borrower with respect to
the Project.

 

“Administrator”  The Sponsor, or any replacement administrator
of the Project Facility, as permitted under the Administrative Services
Agreement and approved by the Loan Servicer.

 

“Advance”  An advance or a borrowing under the DOE
Credit Facility made pursuant to the Common Agreement, the Building Loan
Agreement and the DOE Credit Facility Documents.

 

“Advance
Conditions Precedent”  As defined in Section 4.2(a) of
the Common Agreement.

 

“Advance
Date”  A Business Day on which FFB
makes an Advance in accordance with Article 2 of the Common
Agreement.

 

“Advance
Notice Date” As defined in Section 4.2(a) of the Common
Agreement.

 

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

 

 

“Advance
Schedule”  A schedule detailing the
expected dates and amounts of proposed Advances and Equity Advances to fund
Project Costs, prepared by the Borrower and certified by the Lender’s Engineer,
as amended from time to time in accordance with Section 6.8(c) of
the Common Agreement.

 

“Affiliate”  As to any
Person, any other Person that directly or indirectly controls, or is under
common control with, or is controlled by, such Person.  As used in this definition, “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) as used with respect to any Person means possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies of such Person (whether through ownership of voting securities or
partnership or other ownership interests, by contract or otherwise); provided,
however, that, in any event and for all purposes of the Loan Documents:
(i) the Sponsor or any Affiliate of the Sponsor shall be deemed an “Affiliate”
of the Borrower; and (ii) any Person that owns directly or indirectly 10%
or more of the securities having ordinary voting powers for the election of
directors or other applicable governing body of another Person (but excluding
limited partnership interests) shall be deemed to control such other Person.

 

“Agents”  Collectively, the Loan Servicer and the
Administrative Agent in all of its capacities (other than the Administrative
Agent (or its designee) in its capacity as the Insurance Advisor), including,
without limitation, any subcontractors of the Loan Servicer or the
Administrative Agent.

 

“ALTA
Survey” The ALTA survey prepared by [*****], with respect to the Project
Site.

 

“Anticipated
Physical Completion Date”  The date
eighteen (18) months after the Financial Closing Date.

 

“Anticipated
Project Completion Date”  The date
six (6) months after the Anticipated Physical Completion Date.

 

“Applicable
Loan Guarantee Requirements”  The
provisions with respect to Title XVII, at 10 CFR Part 609, as amended
from time to time, and any Applicable Loan Guarantee Requirements from time to
time promulgated to implement Section 1705 of Title XVII.

 

“Applicable Margin”  As
defined in the DOE Credit Facility Documents.

 

“Application”  The Loan Guarantee Application of the Sponsor
for a DOE Guarantee under Title XVII.

 

“Application
Supplement”  The supplement to the
Application required under Section 4.1.46 of the Common Agreement, which
shall include all items required to be submitted under (i) Section 1705
of Title XVII and (ii) all applicable requirements under the Recovery Act,
including, without limitation, the items numbered (1) through (4) as
set forth on pages A3-5 and A3-6 of Exhibit A3 to the Common
Agreement.

 

“Approved
Advance Schedule”  With respect to
Advances under the DOE Credit Facility, an updated Advance Schedule submitted
by the Borrower from time to time and deemed approved upon satisfaction of all
corresponding Advance Conditions Precedent.

 

A-2

 

“Approved Pre-Closing Equity Credit”  The sum of (i) the appraised value of
the Project Site land, as indicated in the appraisal delivered pursuant to Section 4.1.33,
and (ii) an amount designated in the Development Costs Statement as
contributed to the Borrower and approved by the Loan Servicer for application
to the Base Equity Commitment in accordance with Section 2.4.2 of
the Common Agreement.

 

“Approved
Pre-Closing Equity Credit Balance” 
As of any date, the amount of the Approved Pre-Closing Equity Credit less
the aggregate amount of Equity Contributions allocated from the Approved
Pre-Closing Equity Credit.

 

“Approved
Project Changes”  As defined in Section 6.8(b) of
the Common Agreement.

 

“Asset
Pledge Documents”  As defined in Section 4.1.1
of the Common Agreement.

 

“Authorized
Official”  With respect to any
Person, (i) the President, the Vice President, the Assistant Vice
President, the Treasurer, the Assistant Treasurer, or any other Financial
Officer of such Person, and (ii) with respect to the Borrower, and the Sponsor,
only those individuals holding any of the foregoing positions whose name
appears on a certificate of incumbency delivered concurrently with the
execution of the Common Agreement, as such certificate of incumbency may be
amended or supplemented from time to time to identify names of the individuals
then holding such offices and the capacity in which they are acting.

 

“Availability Period”  The
period from the date of the FFB Promissory Note to the “Last Day for an Advance”
specified in the FFB Promissory Note.

 

“Bankruptcy Law”  Any
insolvency, reorganization, moratorium or similar law for the general relief of
debtors in any relevant jurisdiction.

 

“Base Case Projections”  A
projection of operating results for the Project over a period ending no sooner
than twelve fiscal months after the Maturity Date, showing on a basis
consistent with the Operating Plan, the Operating Forecast, and the Transaction
Documents at a minimum the Borrower’s good faith projections based on
assumptions that were believed by the Borrower to be reasonable as of the date
made, as of the Initial Advance Date or such later date as of which such Base
Case Projections have been revised, of revenues, expenses, cash flow, Debt
Service Coverage Ratios and sources and uses of revenues over the forecast
period, as updated from time to time in accordance with Section 6.1(j)(ii) of
the Common Agreement.

 

“Base Equity”  The base
equity to be contributed by the Sponsor to the Borrower and applied to Base
Project Costs, as shown on the Financial Plan.

 

“Base Equity Account”  The
Project Account created under clause (i) of Section A.1(a) of
Appendix A to the Common Agreement.

 

“Base Equity Commitment” 
The obligation of the Borrower and the Sponsor to fund (i) 37.5% of
all Eligible Base Project Costs, and (ii) 100% of all Ineligible Base
Project Costs.

 

“Base Fees”  The Base Fees
payable to Operator pursuant to the O&M Agreement and the Base Fees payable
to Administrator pursuant to the Administrative Services Agreement.

 

A-3

 

“Base
Project Costs”  The Borrower’s estimate as of the Common Agreement Date of Total
Project Costs, in the aggregate amount of $69,019,230 (which, for avoidance of
doubt, includes [*****] of budgeted Overrun Contingencies).

 

“Borrower”  Stephentown
Regulation Services LLC, a limited liability company organized and existing
under the laws of the State of Delaware.

 

“Borrower
Certificate”  A certificate executed
by an Authorized Official of the Borrower that is (i) with respect to any
certificate delivered pursuant to Section 4.1 of the Common
Agreement, dated as of the Financial Closing Date and substantially in the form
attached as Exhibit C to the Common Agreement, (ii) a Master
Advance Notice delivered pursuant to Section 4.2 of the Common
Agreement, substantially in the form attached as Exhibit M to the
Common Agreement, (iii) delivered as a condition precedent to Physical
Completion or Project Completion, or (iv) with respect to any other
certification to be made by the Borrower pursuant to any Loan Document,
addressing such matters as are specified in such Loan Document.

 

“Borrower
Reimbursement Obligations”  As
defined in Section 12.2.1 of the Common Agreement.

 

“Borrower
Reimbursement Payment”  As defined in
Section 12.2.2of the Common Agreement.

 

“Borrower’s
Accountant”  Miller Wachman LLP or
such other firm of independent public accountants of recognized standing as may
be appointed by the Borrower as Borrower’s Accountant from time to time with
the approval of the Loan Servicer; provided, however, that any of Deliotte &
Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers
LLP, if appointed by the Borrower as Borrower’s Accountant, shall not require
the approval of the Loan Servicer.

 

“Building
Loan” The portion of the DOE Credit Facility to be advanced pursuant to the
terms of the Building Loan Agreement.

 

“Building
Loan Agreement” The Building Loan Agreement among the Borrower, DOE and the
Collateral Agent providing the terms and conditions of Advances of the Building
Loan.

 

“Building
Loan Mortgage”  The Building Loan
Mortgage and Security Agreement made by the Borrower, as mortgagor, in favor of
the Administrative Agent in its capacity as the Collateral Agent, as mortgagee,
to secure the principal amount of $5,760,620 pursuant to which the Borrower
grants for the benefit of DOE a mortgage encumbering all of its rights to the
Project Site and the Improvements.

 

“Business Day”  Any day
other than a Saturday, Sunday or any other day on which either FFB or the Federal
Reserve Bank of New York are not open for business.

 

“Buy
American Provisions” means Section 1605 of Title XVI of Division A of
the Recovery Act, 2 C.F.R. Sections 176.140 and 176.160, Office of Management
and Budget’s Initial Implementing Guidance for the Recovery Act, M-09-10 (February 18,
2009) and Updated Implementing Guidance for the Recovery Act, M-09-15 (April 3,
2009) and, in each case, any 

 

A-4

 

amendment,
supplement or successor thereto, including any relevant regulation or guidance
which may be issued by DOE.

 

“Capital
Account”  The Project Account created
under clause (ix) of Section A.1(a) of Appendix A
to the Common Agreement.

 

“Capital
Account Requirement”  An amount equal
to $1,000,000.

 

“Capital
Expenditures”  All expenditures that
should be capitalized in accordance with GAAP.

 

“Capital Lease”  Any lease
of (or other agreement conveying the right to use) property, real or personal,
which would be required, in accordance with GAAP, to be capitalized and
accounted for as a capital lease on a balance sheet of the lessee.

 

“Cash
Available for Debt Service”  means,
for any period, Net Income plus
depreciation and amortization and other non-cash charges plus/minus
changes in Working Capital plus interest
and fees paid, minus capital expenditures;
except that (a) in calculating the rolling 12-month Debt Service Coverage
Ratio for purposes of clause (iv) of the definition of “Distribution
Preconditions”, “Cash Available for Debt Service” means, for any
12-month period, (A) the revenues, receipts and earnings of the Borrower
from the sources described in clauses (i) and (ii) of the definition
of “Operating Revenues” for such twelve-month period plus (B) the
revenues and receipts of the Borrower from the source described in clause (iii) of
the definition of “Operating Revenues” for a period of no more than
three (3) months during such 12-month period, minus (C) the Operating
Costs of the Borrower for such twelve-month period, and (b) for purposes
of Section 2(b)(ii) of Exhibit A2 to the Common
Agreement, “Cash Available for Debt Service” means, for any period, the
revenues, receipts and earnings of the Borrower from the sources described in
clauses (i) and (ii) of the definition of “Operating Revenues”
for such period minus the Operating Costs of the Borrower for such period.

 

“CCR”  As defined in Section 4.1.49 of
the Common Agreement.

 

“Change
of Control”  At any time, either:

 

(a) the
Sponsor ceases to hold a majority of the voting power of the issued and
outstanding Voting Stock of Holdings (or, if the Sponsor shall hold its Equity
Interests in Holdings through a Parent Holdco, a majority of the voting power
of the outstanding Voting Stock of such Parent Holdco), provided that if
the members of the board of managers or equivalent body of Holdings are
selected in a manner other than by vote of Voting Stock, a Change of Control
shall occur if, and only if, the Sponsor ceases to have the power, by contract
or otherwise, to appoint a majority of the members of the board of managers or
equivalent body of Holdings or such Parent Holdco, as applicable; or

 

(b) if
the Sponsor holds its Equity Interests in Holdings through a Parent Holdco,
such Parent Holdco shall cease to hold [*****] of the issued and outstanding
Equity Interests in Holdings.

 

“Change of Law”  Any
change in any Governmental Rule or the application or requirements
thereof, or compliance by any Person with any request or directive (whether or
not

 

A-5

 

having the force of law but if not having the force of law, being of a
type with which they customarily comply) of any Governmental Authority issued
after the Common Agreement Date.

 

“Change Orders”  With
respect to any Construction Contract, as defined in such Construction Contract.

 

“Claims”  As defined in
the Environmental Indemnity Agreement.

 

“Collateral”  The Collateral Security granted to the
Administrative Agent in its capacity as the Collateral Agent under the Security
Documents.

 

“Collateral
Account”  The Project Account created
under clause (I) of Section A.1(a) of Appendix A to the Common
Agreement.

 

“Collateral
Agent”  The Administrative Agent in
its capacity as collateral agent, as appointed in the Common Agreement.

 

“Collateral
Assignment”  The Collateral
Assignment of Permits and Contracts by and between the Borrower and the
Collateral Agent.

 

“Collateral
Security”  All real or personal
property, assets, revenues, and equity interests, whether now existing or
hereinafter acquired, that are subject to or are intended to be or become
subject to the security interest or lien granted by any of the Security
Documents.

 

“Commencement
of Construction”  The occurrence of
the following: (i) the Borrower has completed all pre-construction
engineering and design, has received all necessary licenses, permits and local
and national environmental clearances, has engaged all contractors and ordered
all essential equipment and supplies as, in each case, can reasonably be
considered necessary so that physical construction of the Project may begin
[*****].

 

“Common
Agreement”  The Common Agreement,
dated as of August 6, 2010, among the Borrower, DOE and the Administrative
Agent in its capacity as the Collateral Agent, to which this Exhibit A
is appended.  The Common Agreement,
together with the DOE Guarantee, constitutes the “Loan Guarantee Agreement”
referred to in the Applicable Loan Guarantee Requirements.

 

“Common
Agreement Date”  The date of the
Common Agreement.

 

“Completion
Guaranty” The Completion Guaranty from the Sponsor to DOE guaranteeing all
obligations of the Borrower through the Project Completion Date, including
causing the Project Completion Date to occur on the date specified in the Loan
Documents and all obligations to correct any deficiencies in the Project that
arise through the warranty period.

 

“Comptroller
General”  The Comptroller General of
the United States.

 

“Construction Contractor” 
Each of (i) the Sponsor, (ii) the Project Construction
Contractor and (iii) any material subcontractor under any Construction
Contract.

 

A-6

 

“Construction Contracts” 
Each of (i) the EPC Agreement, (ii) the Project Construction
Contract and (iii) any material subcontract of any tier under the EPC
Agreement or the Project Construction Contract.

 

“Construction Period”  The
period prior to the Physical Completion Date.

 

“Construction
Work”  All work pursuant to each of
the Construction Contracts.

 

“Contingent
Obligation”  As to any Person, any
obligation of such Person with respect to any Indebtedness (“primary
obligations”) of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, including without limitation any obligation of
such Person, whether or not contingent, as a guarantee or otherwise;
(i) for the purchase, payment or discharge of any such primary obligation;
(ii) to purchase, repurchase or otherwise acquire such primary obligations
or any property constituting direct or indirect security therefor, including
the obligation to make take-or-pay or similar payments; (iii) to advance
or supply funds; (iv) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor; (v) to purchase property, securities or services primarily for
the purpose of assuring the holder of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation;
(vi) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof, including without limitation with
respect to letter of credit obligations, swap agreements, foreign exchange
contracts and other similar agreements (including agreements relating to
derivative instruments); provided, however, that the term “Contingent
Obligation” shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. 
The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made or, if not stated or determinable,
the maximum anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

 

“Control”  The ability to
direct or cause the direction (whether through the ownership of voting
securities, by contract, or otherwise) of the management and policies of a
Person or to control (whether affirmatively or negatively and whether through
the ownership of voting securities, by contract, or otherwise) the decision of
such Person to engage in the particular conduct at issue.  A Person shall be rebuttably presumed to
Control another Person if such Person owns, directly or indirectly through one
or more intermediaries, (a) sufficient shares of stock or other equity
interests to allow the Person, under ordinary circumstances, to elect or direct
the election of a majority of the members of the board of directors or other
governing body of another Person, or (b) shares of stock or other equity
interests of such other Person representing, in the aggregate, more than 50% of
the aggregate outstanding economic interests of such Person.  The term “Controlled” has a meaning
correlative to that of Control.

 

“Corporate Guaranty” The Guaranty from the Sponsor to DOE in the
amount of $2,397,000 to be used only to replenish the amount in the Debt
Service Reserve Account to the Debt Service Reserve Requirement.

 

“Corrupt
Practices Laws”  (i) the Foreign
Corrupt Practices Act of 1977 (Pub. L. No. 95-213, §§101-104),
as amended, and (ii) any equivalent U.S. or foreign Governmental Rule.

 

A-7

 

“Cost
Overrun” Any Project Cost in excess of the Base Project Cost (excluding the
Overrun Contingencies) amount budgeted therefor in the relevant line item of
the Project Budget as in effect on the Common Agreement Date (after taking into
account any reallocations (other than from Overrun Contingencies) among line
items permitted pursuant to Section 6.8(b) of the Common
Agreement.)

 

“Covered
Taxes”  As defined in Section 3.1.2
of the Common Agreement.

 

“Credit
Parties”  DOE, the Administrative
Agent in its capacity as the Collateral Agent, and the Loan Servicer.

 

“Credit
Subsidy Cost”  As defined in §609.2
of the Applicable Loan Guarantee Requirements.

 

“Current
Assets” means assets treated as current assets under GAAP.

 

“Current
Liabilities” means all Indebtedness and liabilities due on demand or to
become due within one year, and other liabilities treated as current
liabilities under GAAP.

 

“Current
Ratio” With respect to any computation period, the ratio of
(i) Current Assets for such period, to (ii) Current Liabilities for
such period.

 

“Davis-Bacon
Act”  Subchapter IV of Chapter 31 of Part A
of Subtitle II of Title 40 of the United States Code, including and as
implemented by the regulations set forth in Parts 1, 3 and 5 of title 29 of the
Code of Federal Regulations.

 

“Debarment
Regulations”  (i) The
Government-wide Debarment and Suspension (Non-procurement) regulations (Common
Rule), 53 Fed. Reg. 19204 (May 26, 1988), (ii) Subpart 9.4
(Debarment, Suspension, and Ineligibility) of the Federal Acquisition
Regulations, 48 C.F.R. 9.400 - 9.409, and (iii) the revised
Government-wide Debarment and Suspension (Non-procurement) regulations (Common
Rule), 60 Fed. Reg. 33037 (June 26, 1995).

 

“Debt Collection Improvement Act”  The Debt Collection Improvement Act of 1996,
as amended from time to time.

 

“Debt Service”  With
respect to any computation period, all principal, interest and fees which came
due under all Indebtedness for such period.

 

“Debt
Service Coverage Ratio”  With respect
to any computation period, the ratio of (i) Cash Available for Debt
Service for such period, to (ii) Debt Service for such period.

 

“Debt Service Payment Account” The Project Account created under
clause (vi) of Section A.1(a) of Appendix A to the
Common Agreement.

 

“Debt
Service Reserve”  As defined in Section 6.17
of the Common Agreement.

 

“Debt Service Reserve Account” 
The Project Account created under clause (vii) of Section A.1(a) of
Appendix A to the Common Agreement.

 

A-8

 

“Debt
Service Reserve Requirement”  An
amount equal to the amount of Debt Service due on the immediately succeeding
two Quarterly Payment Dates; provided, however, that if at any time a
DSRA Deficiency exists, then such DSRA Deficiency will be funded (A) by
transfer immediately to the Debt Service Reserve Account from the Distribution
Suspense Account of all amounts therein, up to the amount of such DSRA
Deficiency, and (B) by deposit within 30 days thereafter into the Debt
Service Reserve Account of additional amounts necessary to fund any remaining
DSRA Deficiency.

 

“Depository
Bank”  As defined in Section A.1(a) of
Appendix A to the Common Agreement.

 

“Design
Contractor”  [*****], in its capacity
as design contractor under the Engineering and Architectural Services
Agreement, or its successors approved by the Loan Servicer in consultation with
the Lender’s Engineer.

 

“Development
Costs”  All reasonable out-of pocket
expenses related to the Project that have been incurred prior to the date
specified in the Development Costs Statement by the Borrower, the Sponsor or
any Affiliate of the Sponsor in the development of the Project, but not
including technology development costs, general administrative and overhead
costs or other Ineligible Project Costs.

 

“Development
Costs Statement”  The statement, in
form and substance satisfactory to DOE, summarizing the amount of Development
Costs incurred prior to the Initial Advance Date that, subject to the
requirements of Section 4.1.4(v) of the Common Agreement, and
together with the appraised value of the Project Site land, will comprise the
Approved Pre-Closing Equity Credit.

 

“Direct
Agreements”  As defined in Section 4.1.1
of the Common Agreement.

 

“Disclosure Letter”  The
disclosure letter dated as of the Financial Closing Date delivered by the
Borrower to the Loan Servicer, containing certain schedules of information
required pursuant to the Common Agreement and the Security Agreement and
attached as Exhibit A5 to the Common Agreement.

 

“Distribution
Preconditions”

 

Each
of the following conditions is satisfied:

 

(i)            the date six (6) months
after the Project Completion Date has occurred;

 

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

 

(iii)          the Debt Service
Reserve Account is funded to the Debt Service Reserve Requirement and the
Maintenance Reserve Account is funded to the MRA Required Amount;

 

(iv)          the rolling 12-month
Debt Service Coverage Ratio is at least 1.40 to 1 (as evidenced by a
certificate of the Borrower, reviewed and approved by Borrower’s Accountant and
Lender’s Engineer);

 

A-9

 

(v)           the Borrower at
substantially the same time as the related Restricted Payment applies the Prepayment
Amount to the voluntary prepayment of the DOE-Guaranteed Loan, with such
Prepayment Amount allocated to the prepayment of principal in the maximum
possible amount when taken together with any associated make-whole premiums or
discounts (it being understood that (x) if there is an associated premium,
the principal amount prepaid would be less than the Prepayment Amount, and (y) if
there is an associated discount, the principal amount prepaid would be greater
than the Prepayment Amount); and

 

(vi)          an appropriate
requisition and supporting documentation is provided to DOE at least 10
Business Days in advance of any request for a Restricted Payment.

 

“Distribution
Suspense Account”  The Project
Account created under clause (xi) of Section A.1(a) of Appendix
A to the Common Agreement.

 

“DOE”  The U.S. Department of Energy, an agency of
the United States of America.

 

“DOE
Credit Facility”  The loan facility
available to the Borrower under the DOE Credit Facility Documents in the
principal amount of up to the lesser of (i) $43,137,019 and
(ii) 62.5% of Eligible Base Project Costs.

 

“DOE
Credit Facility Agent”  The Loan
Servicer, acting in its capacity as agent for FFB, as lender under the DOE
Credit Facility Documents.

 

“DOE Credit Facility Commitment” 
The commitment of FFB to make Advances to the Borrower pursuant to the
terms of the FFB Note Purchase Agreement in an aggregate principal amount not
to exceed the “Maximum Principal Amount” specified in the FFB Promissory Note,
which must be an amount not greater than the “Loan Commitment Amount” set forth
in the FFB Note Purchase Agreement, that is the aggregate principal amount of
all Advances that may be made by FFB under the DOE Credit Facility.

 

“DOE
Credit Facility Commitment Termination Date”  In accordance with the DOE Credit Facility
Documents the earliest of (i) the first date on which the aggregate amount
of the DOE-Guaranteed Loans disbursed thereunder equals the amount of the DOE
Credit Facility Commitment, (ii) the Final Advance Date, and (iii) the
date of termination in whole of DOE Credit Facility Commitment.

 

“DOE
Credit Facility Documents”  As
defined in Section 4.1.1 of the Common Agreement.

 

“DOE Credit Facility Fees” 
All facility fees payable to DOE, the DOE Maintenance Fee, and any DOE
Modification Fee, as specified in the DOE Credit Facility Documents and related
side letters.

 

“DOE
Guarantee”  The guarantee provided by
DOE for the benefit of FFB pursuant to the DOE Credit Facility Documents.

 

“DOE Guarantee Payment”  As
defined in Section 12.1 of the Common Agreement.

 

A-10

 

“DOE
Guarantee Payment Amount”  As defined
in Section 12.1 of the Common Agreement.

 

“DOE-Guaranteed
Loans”  The Advances made by FFB
pursuant to the DOE Credit Facility Documents.

 

“DOE Maintenance Fee”  A
maintenance fee payable to DOE in the amount of $25,000 per year over the term
of the DOE-Guaranteed Loan.

 

[*****]

 

“DOE Requirements”  The requirements and conditions of the
Applicable Loan Guarantee Requirements set forth on Exhibit A3 to
the Common Agreement.

 

“Dollars”
or “ $”  The lawful currency of
the United States of America.

 

“Drawstop
Notice” as defined in Section 2.4.3(a) of the Common
Agreement.

 

“DSRA Deficiency” 
(i) prior to the date on which the Debt Service Reserve Account is
first required to be fully funded up to the amount of the Debt Service Reserve
Requirement, zero, and (ii) thereafter, the excess of the then-applicable
Debt Service Reserve Requirement over the amount then funded in Debt Service
Reserve Account.

 

“Eligible Base Project Costs” 
The portion of Base Project Costs that are Eligible Project Costs,
estimated as of the Common Agreement Date to be in the aggregate amount of
$69,019,230 (which for avoidance of doubt, includes [*****] of budgeted Overrun
Contingencies).

 

“Eligible
Project Costs”  Those portions of
Project Costs that are eligible for funding as “Project Costs” as defined in
the Applicable Loan Guarantee Requirements.

 

“Employee Benefit Plan”  (i) All
“employee benefit plans” (as defined in Section 3(3) of ERISA) other
than any Multiemployer Plans which are or at any time have been maintained or
sponsored by the Borrower or any ERISA Affiliate or to which the Borrower or
any ERISA Affiliate has ever made, or been obligated to make, contributions or
with respect to which the Borrower or any ERISA Affiliate has incurred any
material liability or obligation, (ii) all Pension Plans, and (iii) all
Qualified Plans.

 

“Engineering
and Architectural Services Agreement” 
The Architectural/Engineering Services Agreement between Sponsor and
Design Contractor, dated November 15, 2007, including any subcontracts
thereunder.

 

“Environmental
Claim”  Any and all obligations,
liabilities, losses, administrative, regulatory or judicial actions, suits,
demands, decrees, claims, liens, judgments, notices of noncompliance or
violation, investigations (excluding routine inspections), proceedings,
clean-up, removal or remedial actions or orders, or damages (foreseeable and
unforeseeable, including consequential and punitive damages), penalties, fees,
out-of-pocket costs, expenses, disbursements, attorneys’ or consultants’ fees,
relating in any way to any violation of Environmental Law or any violation of
any Governmental Approval issued under any such 

 

A-11

 

Environmental
Law including (a) any and all Indemnity Claims by any Governmental
Authority for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and
(b) any and all Indemnity Claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Substances, the violation or alleged violation of any
Environmental Law or Governmental Approval issued thereunder, or arising from
alleged injury or threat of injury to health, safety or the environment.

 

“Environmental
Indemnity Agreement”  The
Environmental Indemnity Agreement to be made by the Borrower and the Sponsor in
favor of the Administrative Agent in its capacity as the Collateral Agent and
other Indemnified Parties (as defined therein).

 

“Environmental
Laws”  Any Governmental Rule in
effect as of the Common Agreement Date or thereafter, including, without
limitation, the National Environmental Policy Act of 1969, and in each case as
amended, regulating, relating to or imposing obligations, liability or
standards of conduct concerning (A) the use of the Project Site or the
condition thereof; or (B) pollution, protection of human or animal health
or the environment or Releases or threatened Releases of pollutants,
contaminants, chemicals, radiation or industrial, toxic or hazardous substances
or wastes, including without limitation Hazardous Substances, or otherwise
relating to the generation, manufacture, processing, distribution, use, treatment,
storage, recycling, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or
wastes, including without limitation Hazardous Substances.

 

“EPC
Agreement”  The Engineering,
Procurement and Construction Agreement between the Borrower and the Sponsor.

 

“Equipment”  The equipment constituting a part of the
Project to be installed on the Project Site in accordance with the terms of the
Project Documents.

 

“Equity
Advance”  Any disbursement of Base
Equity or Overrun Equity from the Base Equity Account or the Overrun Equity
Account pursuant to the terms of the Common Agreement.

 

“Equity
Commitments”  The Base Equity
Commitment and the Overrun Equity Commitment.

 

“Equity
Contributions”  The aggregate equity
contributed as Base Equity and Overrun Equity.

 

“Equity
Contributor”  The Sponsor.

 

“Equity Interests”  Any
and all shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) the
common or preferred equity or equity or preference share capital of a Person,
including, without limitation, partnership interests and limited liability
company interests.

 

“Equity
Owner”  With respect to any Person,
another Person holding Equity Interests in such first Person.

 

A-12

 

“Equity Pledge Agreement” 
The Equity Pledge Agreement to be entered into by Holdings and the
Administrative Agent in its capacity as the Collateral Agent by which Holdings
pledges all of the Equity Interests in the Borrower.

 

“ERISA”  The Employee Retirement Income Security Act
of 1974 of the United States, as amended from time to time, and the regulations
promulgated, and any publicly available rulings issued, thereunder.

 

“ERISA Affiliate” 
As applied to any person (as defined in Section 3(9) of
ERISA), means (i) any corporation that is a member of a controlled group
of corporations within the meaning of Section 414(b) of the Internal
Revenue Code of which that person is a member, (ii) any trade or business
(whether or not incorporated) that is a member of a group of trades or business
under common control within the meaning of Section 414(c) of the
Internal Revenue Code or Section 4001(b) of ERISA of which that
person is a member, (iii) any member of an affiliated service group within
the meaning of Section 414(m) and (o) of the Internal Revenue
Code of which that person, any corporation described in clause (i) above
or any trade or business described in clause (ii) above is a member.

 

“ERISA
Event” means (a) a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such Section with respect to a
Pension Plan, excluding, however, such events as to which the PBGC by
regulation has waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such event; (b) the
applicability of the requirements of Section 4043(b) of ERISA with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA,
to any Pension Plan where an event described in paragraph (9), (10), (11), (12)
or (13) of Section 4043(c) of ERISA is reasonably expected to occur
with respect to such plan within the following 30 days; (c) a withdrawal
by the Borrower or an ERISA Affiliate from a Pension Plan or the termination of
any Pension Plan resulting in liability under Sections 4063 or 4064 of
ERISA; (d) the withdrawal of the Borrower or an ERISA Affiliate in a
complete or partial withdrawal (within the meaning of Sections 4203 and
4205 of ERISA) from any Multiemployer Plan if there is any potential liability
therefore, or the receipt by the Borrower or an ERISA Affiliate of notice from
any Multiemployer Plan that it is in reorganization or insolvency pursuant to
Sections 4241 or 4245 of ERISA, (e) the filing of a notice of intent
to terminate, the treatment of a plan amendment as a termination under
Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the
PBGC to terminate a Pension Plan or Multiemployer Plan; (f) the imposition
of liability on the Borrower or an ERISA Affiliate pursuant to Sections 4062(e) or
4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA; (g) the failure by the Borrower or an ERISA Affiliate to make any
required contribution to a Pension Plan, or the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect
to any Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (h) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; (i) the imposition of any material liability under
Title I or Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon the Borrower or an ERISA
Affiliate; (j) an application for a funding waiver under Section 303
of ERISA or an extension of any amortization period pursuant 

 

A-13

 

to
Section 412 of the Internal Revenue Code with respect to any Pension
Plan;  (k) the imposition of any
lien on any of the rights, properties or assets of the Borrower or an ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to
Sections 401(a)(29) or 412 of the Internal Revenue Code; (l) the
making of any amendment to any Pension Plan that could directly result in the
imposition of a lien or the posting of a bond or other security; (m) the
occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975
of the IRC or Section 406 of ERISA) involving the assets of a Pension
Plan; or (n) the final determination that a Qualified Plan’s qualification
or tax exempt status should be revoked.

 

“Event
of Default”  Any of the events
described in Section 8.1 of the Common
Agreement.

 

“Event
of Default Notice”  A written notice
to the Collateral Agent from the Loan Servicer stating that an Event of Default
has occurred.

 

“Event
of Force Majeure”  Any event,
circumstance or condition in the nature of force majeure that would entitle any Project Participant
to any abatement, postponement, or other relief from any of its contractual
obligations under any Project Document to which such Person is party, including
with respect to FFB an “Uncontrollable Cause” as defined in the FFB Note
Purchase Agreement.

 

“Event of Loss”  Any event
that causes any portion of the Project or any other property of the Borrower to
be damaged, destroyed or rendered unfit for normal use for any reason
whatsoever, including without limitation through a failure of title or any loss
of such property.

 

“FERC”  The Federal Energy
Regulatory Commission.

 

“FFB” 
The Federal Financing Bank, a body corporate and
instrumentality of the United States of America.

 

“FFB
Advance Request”  A request for an
Advance delivered to FFB pursuant to the FFB Note Purchase Agreement.

 

“FFB
Advance Request Approval Notice”  An “Advance
Request Approval Notice” as defined in the FFB Note Purchase Agreement, signed
by DOE.

 

“FFB
Funding Documents”  The FFB Program
Financing Agreement, the FFB Note Purchase Agreement, the FFB Promissory Note,
the DOE Guarantee, and all other documents, certificates and instruments
required to be delivered in connection with any of the foregoing documents.

 

“FFB
Loans”  The loans made by FFB
pursuant to the FFB Funding Documents.

 

“FFB
Loan Transfer”  Any transfer pursuant
to the FFB Note Purchase Agreement of all or any part of the promissory note
evidencing the FFB Loans.

 

“FFB
Note Purchase Agreement”  The Note
Purchase Agreement dated as of the Common Agreement Date, among the Borrower,
FFB, and DOE.

 

A-14

 

“FFB
Program Financing Agreement”  The
Program Financing Agreement, dated as of September 2, 2009, between FFB
and DOE.

 

“FFB
Promissory Note”  The Promissory Note
to be entered into by the Borrower in favor of FFB and guaranteed by DOE.

 

“Final
Advance Date”  The “Last Day for an
Advance” as set forth in the DOE Credit Facility Documents.

 

“Financial
Closing Date”  August 6, 2010.

 

“Financial
Officer”  With respect to any Person,
General Manager, any director, the chief financial officer, the Controller, the
Treasurer or any Assistant Treasurer, any Vice President-Finance or any
Assistant Vice President-Finance or any other Vice President or Assistant Vice
President with significant responsibility for the financial affairs of such
Person.

 

“Financial
Officer Certificate”  A certificate
executed by an Financial Officer of the Borrower or the Sponsor, as the case may be, that is
(i) with respect to any certificate delivered pursuant to Section 4.1
of the Common Agreement, dated as of the Financial Closing Date and
substantially in the form attached as Exhibit I to the Common Agreement,
(ii) delivered as a condition precedent to Project Completion, or
(iii) with respect to any other certification to be made by a Financial
Officer pursuant to any Loan Document, addressing such matters as are specified
in such Loan Document.

 

“Financial
Plan”  The Financial Plan attached as
Exhibit A1 to the Common Agreement, as amended from time to time
with the written consent of the Loan Servicer, setting forth all sources of
funds needed to pay Total Project Costs, including DOE-Guaranteed Loans, Base
Equity and Overrun Equity, contingent liabilities and letters of credit.

 

“Financial
Statements”  With respect to any
Person, such Person’s quarterly or annual balance sheet and statements of
income, retained earnings, and sources and application of funds for such fiscal
period, together with all notes thereto and with comparable figures for the
corresponding period of its previous fiscal period, each prepared in Dollars
and in accordance with GAAP (except for the absence of footnotes and normal year-end
adjustments in the case of unaudited financial statements), it being agreed
that for purposes of the Loan Documents (i) the Financial Statements of
the Sponsor shall be prepared on a consolidated basis (including the Borrower
and Holdings), (ii) separate Financial Statements of the Borrower shall be
prepared and delivered, and (iii) separate Financial Statements of
Holdings shall not be prepared.

 

“First
Principal Payment Date”  September 15,
2012.

 

“Fiscal
Year”  The accounting year of the
Borrower beginning on and including the Sunday nearest December 31 and
ending on and including the Saturday nearest to the following December 31.

 

“Flywheel
Repair Agreement”  The Agreement for
Repair and/or Replacement of Flywheel Installation Assemblies dated as of the
Common Agreement Date between the Sponsor and the Borrower.

 

A-15

 

“Foreign
Asset Control Regulations”  The
United States Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 C.F.R.
Subtitle B, Chapter V, as amended), or any ruling issued thereunder or any
enabling legislation or Presidential Executive Order granting authority
therefore.

 

“GAAP”  Generally accepted accounting principles in
the United States of America in effect from time to time including, where
appropriate, generally accepted auditing standards, including without
limitation the pronouncements and interpretations of appropriate accountancy
administrative bodies (including without limitation the Financial Accounting
Standards Board and any predecessor and successor thereto), applied on a
consistent basis both as to classification of item and amounts, it being
understood that unaudited financial statements will not include footnotes and
will be subject to normal year-end adjustments.

 

“Governmental
Approval”  Any approval, consent,
authorization, license, permit, order, certificate, qualification, waiver,
exemption, or variance, or any other action of a similar nature, of or by a
Governmental Authority, including without limitation any of the foregoing that
are or may be deemed given or withheld by failure to act within a specified
time period.

 

“Governmental
Authority”  Any federal, state,
county, municipal, or regional authority, or any other entity of a similar
nature, including, without limitation, NYISO, exercising any executive,
legislative, judicial, regulatory, or administrative function of government.

 

“Governmental
Judgment”  With respect to any
Person, any judgment, order, decision, or decree, or any action of a similar
nature, of or by a Governmental Authority having jurisdiction over such Person
or any of its properties.

 

“Governmental
Registration”  Any registration,
filing, declaration or notice, or any other action of a similar nature, with or
to a Governmental Authority having jurisdiction over the Borrower or any of its
properties.

 

“Governmental
Rule”  With respect to any Person,
any statute, law, rule, regulation, code, or ordinance of a Governmental
Authority having jurisdiction over such Person or any of its properties,
including any requirement related to any Governmental Registration.

 

“Hazardous
Substance”  Any hazardous or toxic
substances, chemicals, materials, pollutants or wastes defined, listed,
classified or regulated as such in or under any Environmental Laws, including
without limitation (i) any petroleum or petroleum products (including
without limitation gasoline, crude oil or any fraction thereof), flammable
explosives, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and polychlorinated biphenyls;
(ii) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances,” “hazardous wastes,” “extremely hazardous
wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,”
“contaminants” or “pollutants,” or words of similar import, under any
applicable Environmental Law; and (iii) any other chemical, material or
substance, import, storage, transport, use or disposal of, or exposure to or
Release of which is prohibited, limited or otherwise regulated under any
Environmental Law.

 

A-16

 

“Hedging
Agreement”  Any agreement or instrument
(including without limitation a cap, swap, collar, option, forward purchase
agreement or other similar derivative instrument) relating to the hedging of
any interest under any Indebtedness.

 

“Holdings”  Stephentown Holding LLC, a Delaware limited liability
company.

 

“Improvements”  The buildings, fixtures and other
improvements to be situated on the Project Site.

 

“Indebtedness”  At any date, all or any liabilities,
obligations and reserves, contingent or otherwise, which, in accordance with
GAAP, would be reflected as a liability on a balance sheet, including without
limitation:

 

(i)                                     any obligation
of the Borrower for borrowed money or arising out of any credit facility;

 

(ii)                                  any obligation
of the Borrower evidenced by bonds, debentures, notes or other similar
instruments;

 

(iii)                               any obligation
of the Borrower to pay the deferred purchase price of property or services
(other than amounts due to trade creditors and accrued expenses, in each case
arising in the ordinary course of business and on terms reasonable and
customary for the industry, unless such amounts and expense are accrued and
unpaid for more than ninety days);

 

(iv)                              any obligation
of the Borrower under conditional sales or other title retention agreements;

 

(v)                                 the net
aggregate rentals under any lease by the Borrower as lessee that under GAAP
would be capitalized on the books of the lessee or is the substantial
equivalent of the financing of the property so leased;

 

(vi)                              any obligation
of the Borrower to purchase securities or other property which arises out of or
in connection with the sale of the same or substantially similar securities or
property;

 

(vii)                           any obligation
of the Borrower secured by any lien upon property of the Borrower;

 

(viii)                        any
Indebtedness of others secured by a lien on any assets of the Borrower; and

 

(ix)                                any
Indebtedness of others guaranteed, directly or indirectly by the Borrower.

 

“Indebtedness
for Borrowed Money”  As to any
Person, without duplication, (i) all indebtedness (including principal,
interest, fees, and charges) of such Person for borrowed money or for the
deferred purchase price of property or services (other than any deferral
(x) in connection with the provision of credit in the ordinary course of
business by any trade creditor or utility or (y) of any amounts payable
under the Project Documents) or (ii) the aggregate amount required to be
capitalized under any Capital Lease under which such Person is the lessee.

 

“Indemnified
Person”  As defined in Section 13.17
of the Common Agreement.

 

“Indemnity Claims”  As
defined in Section 13.17 of the Common Agreement.

 

A-17

 

“Independent
Consultants”  Collectively the Lender’s
Engineer, Nixon Peabody LLP as legal counsel to DOE, the Insurance Advisor and
any other advisor or consultant retained by the Credit Parties with the consent
of the Borrower, not to be unreasonably withheld.

 

“Ineligible
Base Project Costs”  The portion of
Base Project Costs that are Ineligible Project Costs, estimated as of the
Common Agreement Date to be zero.

 

“Ineligible
Project Costs”  Those portions of
Project Costs that are not Eligible Project Costs, including Ineligible Base
Project Costs and Overrun Project Costs.

 

“Initial
Advance” means the initial Advance under the DOE Credit Facility.

 

“Initial
Advance Date”  The date on which the
Initial Advance is made following confirmation by each applicable Credit Party
that the conditions precedent to the initial Advance under the Common Agreement
have been satisfied.

 

“Initial
Conditions Precedent”  As defined in Section 4.1
of the Common Agreement.

 

“Insolvency
Proceedings”  Any bankruptcy,
insolvency, liquidation, company reorganization, restructuring, controlled
management, suspension of payments, scheme of arrangement, appointment of
provisional liquidator, receiver or administrative receiver, notification,
resolution, or petition for winding up or similar proceeding, under any
applicable law, in any jurisdiction and whether voluntary or involuntary.

 

“Insurance
Advisor”  Marsh USA Inc., acting as
insurance advisor for the Loan Servicer, or any successor insurance advisor or
expert appointed by the Loan Servicer.

 

“Insurance
Advisor Certificate”  A certificate
executed by an Authorized Official of the Insurance Advisor that is
(i) with respect to any certificate delivered pursuant to Section 4.1
of the Common Agreement, dated as of the Financial Closing Date, or
(ii) delivered as a condition precedent to Physical Completion or Project
Completion, or (iii) with respect to any other certification to be made by
the Insurance Advisor pursuant to any Loan Document, addressing such matters as
are specified in such Loan Document.

 

“Insurance
Consultant”  Risk Solutions, Inc.,
acting as insurance consultant for the Borrower, or any successor insurance
consultant or expert appointed by the Borrower with the consent of the Loan
Servicer.

 

“Insurance
Consultant Certificate”  A
certificate executed by an Authorized Official of the Insurance Consultant that
is (i) with respect to any certificate delivered pursuant to Section 4.1
of the Common Agreement, dated as of the Financial Closing Date and
substantially in the form attached as Exhibit F1 to the Common
Agreement, (ii) with respect to any certificate delivered pursuant to Section 4.2
of the Common Agreement, dated as of the Advance Notice Date and substantially
in the form attached as Exhibit F2 to the Common Agreement, or
(iii) delivered as a condition precedent to Physical Completion or Project
Completion, or (iv) with respect to any other certification to be made by
the Insurance Consultant pursuant to any Loan Document, addressing such matters
as are specified in such Loan Document.

 

A-18

 

“Intellectual Property Rights” 
Any and all rights in, arising out of, or associated with the following,
whether now or hereafter existing, created, acquired or held: (i) all
U.S., international and foreign patents and patent applications and all
reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all trade secret rights;
(iii) all copyrights or other rights associated with works of authorship,
including all copyright registrations and applications for copyright
registration, renewals and extensions thereof, and all other rights
corresponding thereto throughout the world; (iv) all mask work rights,
mask work registrations and applications therefor, and any equivalent or
similar rights in semiconductor masks, layouts, architectures or topology; (v) all
rights in industrial designs and any registrations and applications therefor
throughout the world; (vi) all rights to trade names, logos, trademarks
and service marks, including registered trademarks and service marks and all
applications to register trademarks and service marks throughout the world;
(vii) all rights to any databases and data collections throughout the
world; (viii) all moral and economic rights of authors and inventors,
however denominated, throughout the world; and (ix) any similar or
equivalent rights to any of the foregoing anywhere in the world.

 

“Intended Prepayment Date” 
The date specified in a Prepayment Election Notice on which the Borrower
intends to prepay all or part of a DOE-Guaranteed Loan in accordance with the
terms of the Common Agreement and the DOE Credit Facility Documents.

 

“Intercompany
Project Documents”  Each agreement
between the Borrower and the Sponsor or any Sponsor Affiliate, including
without limitation the EPC Agreement, the Technology License Agreement, the
Technology Escrow Agreement, the O&M Agreement, the Administrative Services
Agreement, the Permitting and Engineering Management Agreement and the Flywheel
Repair Agreement.

 

“Interconnection
Agreement” The Agreement providing for interconnection of the Project to
the electric transmission system.

 

“Interest
During Construction”  Interest
accruing under the DOE Credit Facility, for the period from the Initial Advance
Date to the end of the final Availability Period under the DOE Credit Facility
Documents.

 

“Internal
Revenue Code”  The United States
Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.  Section references to the Internal
Revenue Code are to the Internal Revenue Code as in effect at the Common
Agreement Date and any subsequent provisions of the Internal Revenue Code,
amendatory thereof, supplemental thereto or substituted therefor.

 

“Investment”  For any Person: (i) the acquisition
(whether for cash, property, services or securities or otherwise) or holding of
Equity Interests, bonds, notes, debentures, partnership or other ownership
interests or other securities of or in any other Person; (ii) the making
of any deposit with, or advance, loan or other extension of credit to, any
other Person or any guarantee of, or other Contingent Obligation with respect
to, any Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to any other
Person; and (iii) the acquisition of any similar property, right or
interest of or in any other Person.

 

A-19

 

“Investment
Company Act”  The United States
Investment Company Act of 1940, as amended from time to time.

 

“Know”
or “Known”  To have or having
Knowledge.

 

“Knowledge”  With respect to any Person, the actual
knowledge of the Principal Persons or any knowledge which should have been
obtained by any of the Principal Persons upon reasonable investigation and
inquiry.

 

“Land Documents”  As
defined in Section 4.1.2(a) of the Common Agreement.

 

“Late
Charge”  Interest on any Overdue
Amount calculated at the Late Charge Rate in accordance with the DOE Credit
Facility Documents.

 

“Late
Charge Rate”  As defined in the FFB
Promissory Note.

 

“Lease”  Any agreement that would be characterized
under GAAP as an operating lease.

 

“Lender’s
Engineer”  [*****], or any replacement
engineering advisor designated by DOE.

 

“Lender’s
Engineer Advisory Agreement”  The
matching order between DOE and Lender’s Engineer.

 

“Lender’s
Engineer Certificate”  A certificate
executed by an Authorized Official of the Lender’s Engineer that is
(i) with respect to any certificate delivered pursuant to Section 4.1
of the Common Agreement, dated as of the Financial Closing Date and
substantially in the form attached as Exhibit D1 to the Common
Agreement, (ii) with respect to any certificate delivered pursuant to Section 4.2
of the Common Agreement, dated as of the Advance Notice Date and substantially
in the form attached as Exhibit D2 to the Common Agreement,
(iii) delivered as a condition precedent to Project Completion, or
(iv) with respect to any other certification to be made by the Lender’s
Engineer pursuant to any Loan Document, addressing such matters as are
specified in such Loan Document.

 

“Lender’s
Engineer Report”  A report or reports
of the Lender’s Engineer delivered (i) on or before the Initial Advance
Date, as to matters set forth in Section 4.1.14 of the Common Agreement, and
(ii) on or before the Project Completion Date as to matters set forth in
the definition of Project Completion.

 

“Leverage
Ratio” means total Indebtedness divided by Total Capitalization.

 

“Lien”  Any lien (statutory or other), pledge,
mortgage, charge, security interest, deed of trust, assignment, hypothecation,
title retention, fiduciary transfer, deposit arrangement, easement, encumbrance
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever in respect of an asset, whether or not filed,
recorded or otherwise perfected or effective under applicable law, as well as
the interest of a vendor or lessor under any conditional sale agreement,
Capital Lease or other title retention agreement relating to such asset,
(including without limitation any conditional sale or other title retention
agreement, any Capital Lease having substantially the same economic effect as
any of 

 

A-20

 

the
foregoing, or any preferential arrangement having the practical effect of
constituting a security interest with respect to the payment of any obligation
with, or from the proceeds of, any asset or revenue of any kind).

 

“Loan
Documents”  The Common Agreement, the
DOE Credit Facility Documents, the Sponsor Loan Documents, the Security
Documents, and any documents and agreements delivered in connection therewith that are agreed in writing by the Loan
Servicer and the Borrower to be Loan Documents, but in all cases excluding any
Project Documents.

 

“Loan Servicer”  DOE,
acting through its Loan Guarantee Program Office as Loan Servicer in accordance
with the terms of the Common Agreement.

 

“Loss Proceeds”  All
proceeds (other than any proceeds of business interruption insurance, advance
loss of profit insurance, and proceeds covering liability of the Borrower to
third parties) resulting from a Event of Loss, as remain after payment of all costs
and expenses (including reasonable attorneys’ fees) incurred in collecting such
proceeds.

 

“Loss Proceeds Account” 
The Project Account created under clause (iii) of Section A.1(a) of
Appendix A to the Common Agreement.

 

“Maintenance Reserve Account”  The Project Account created under clause (viii) of
Section A.1(a) of Appendix A to the Common Agreement.

 

“Major
Project Participant”  The Borrower,
the Sponsor and the Operator.

 

“Major
Project Participant Certificate”  A
certificate executed by an Authorized Official of the applicable Major Project
Participant that is (i) with respect to any certificate delivered pursuant
to Section 4.1 of the Common Agreement, dated as of the Financial
Closing Date and substantially in the form attached as Exhibit H to
the Common Agreement, or (ii) delivered as a condition precedent to
Physical Completion or Project Completion, or (iii) with respect to any
other certification to be made by a Major Project Participant pursuant to any
Loan Document, addressing such matters as are specified in such Loan Document.

 

“Master
Advance Notice”  A request for an
Advance and/or an Equity Advance delivered by the Borrower pursuant to Section 2.3.1 of the Common Agreement, substantially in the form attached as Exhibit M
to the Common Agreement.

 

“Material
Adverse Effect”  As of any date of
determination, a material and adverse effect on (i) the Project,
(ii) the ability of the Borrower or any other Major Project Participant,
to observe and perform its material obligations in a timely manner under any
Transaction Documents to which it is a party; (iii) the business,
financial condition or results of operations of the Borrower or any other Major
Project Participant; (iv) the validity or enforceability of any material
provision of any Transaction Document; (v) any material right or remedy of
DOE under the Transaction Documents; or (vi) except to the extent caused
by any act or omission of any Credit Party, the security or Lien of the Secured
Parties on any of the Collateral Security under any Security Document.

 

“Maturity
Date”  June 15, 2030.

 

A-21

 

“Mortgage”
The Building Loan Mortgage and the Project Loan Mortgage, collectively.

 

“Moody’s”  Moody’s Investors Service, Inc., so long
as it is a Rating Agency.

 

“MRA
Required Amount” An amount projected to be equal to six months of plant
maintenance and fixed operating costs, to be verified by DOE in consultation
with the Lender’s Engineer.  The initial
MRA Required Amount is currently anticipated to be $559,362 for the initial
year of Project operation and shall be recalculated by the Borrower (subject to
verification by DOE in consultation with the Lender’s Engineer) prior to the
beginning of each Fiscal Year.

 

“Multiemployer
Plan” means a “multiemployer plan” (within the meaning of
Section 3(37) of ERISA) which the Borrower or any ERISA Affiliate
contributes to or participates in, or with respect to which the Borrower or any
ERISA Affiliate has any material liability or other obligation (whether accrued,
absolute, contingent or
otherwise).

 

“Net
Income” means for any period, the net income (or loss) of the Borrower for
such period, as determined in accordance with GAAP, provided, that there shall
be excluded in such determination.

 

(i)                                     any aggregate
net gain or net loss during such period arising from the sale, conversion,
exchange, or other disposition of capital assets;

 

(ii)                                  any gain or
losses resulting from the write-up of any assets;

 

(iii)                               any net gain or
net loss arising from the extinguishment, under GAAP, of any Indebtedness of
the Borrower; and

 

(iv)                              any net income,
gain or loss during such period resulting from (A) any extraordinary
items, or (B) any discontinued operations or the disposition thereof.

 

“NYISO”
means The New York Independent System Operator.

 

“NYISO
Membership Agreement” The agreement between the Borrower and NYISO for
membership of the Borrower in NYISO.

 

“O&M
Agreement”  The Operations and
Maintenance Agreement dated as of the Common Agreement Date between the
Operator and the Borrower.

 

“OFAC”  means the Office of Foreign Assets Control of
the United States Department of the Treasury.

 

“OMB”  The Office of Management and Budget of the
Executive Office of the President of the U.S.

 

“Operating
Budget”  As defined in Section 6.1(m) of
the Common Agreement.

 

“Operating Costs”  For any
period with respect to which such Operating Costs are being calculated, all
amounts paid (or projected to be paid) for the administration, management, and
operation and maintenance of the Project, including without limitation:  (i) amounts payable under 

 

A-22

 

the
O&M Agreement and the Administrative Services Agreement (excluding Base
Fees); (ii) premiums and other costs related to the maintenance of
Required Insurance; and (iii) taxes. 
Operating Costs shall be limited to actual third party costs incurred
and shall not include any payments to Borrower, Sponsor or any Affiliate
thereof, other than to reimburse such entities for costs paid to third parties
pursuant to the terms of any of the Project Documents.

 

“Operating Disbursement Account” 
The Project Account created under clause (v) of Section A.1(a) of
Appendix A to the Common Agreement.

 

“Operating
Documents”  As defined in Section 4.1.2(c) of
the Common Agreement.

 

“Operating Forecast”  The
periodic forecast prepared by the Borrower (on an aggregate and month-by-month
basis) in connection with the operation of the Project, and delivered from time
to time pursuant to Section 6.1(j)(ii) of the Common
Agreement, which (i) shall be the Borrower’s good faith projections at
such time taking into account all facts and circumstances then existing and
assumptions believed by the Borrower to be reasonable on the date made,
reasonable estimates of all Operating Revenues reasonably expected to be
received and all Operating Costs (by category) and Capital Expenditures
reasonably expected to be incurred, (ii) shall reflect Debt Service due
during each period, and pro forma Cash Available for Debt Service projections
for each period, (iii) shall include such other information as may be
reasonably requested by the Loan Servicer or the Lender’s Engineer, and
(iv) shall be prepared on a basis consistent from period to period, and
consistent with the Operating Plan, in sufficient detail to permit meaningful
comparisons, and shall include a statement of the assumptions on which it is
based.

 

“Operating
Period”  The period from the Physical
Completion Date to the date on which the Secured Obligations are repaid in full.

 

“Operating
Plan”  The periodic operating plan
for the Project prepared by the Borrower in connection with the operation of
the Project, and delivered from time to time pursuant to Section 6.1(j)(ii) of
the Common Agreement which (i) shall describe the Project’s operating plan
for the relevant period, (ii) shall summarize changes in the Project’s
maintenance plan in accordance with the Reference Database and the O&M
Agreement, including the Project’s program for spare parts, inventory
management, supply management, (iii) shall include such other information
as may be reasonably requested by the Loan Servicer or the Lender’s Engineer,
and (iv) shall be prepared on a basis consistent from period to period,
and consistent with the Operating Forecast, in sufficient detail to permit
meaningful comparisons, and include a statement of the assumptions on which it
is based.

 

“Operating
Revenues”  All revenues, receipts and
earnings of the Borrower from all sources, including, without limitation,
revenues from:  (i) sales of any
goods or services provided at or by the Project or from other locations,
including payments for energy, capacity and frequency regulation services;
(ii) renewable energy credits; (iii)  proceeds from business
interruption insurance policies; (iv) proceeds from delay in start-up
insurance policies; and (v) delay liquidated damages payable under any
Construction Contract; provided, however, that Operating Revenues shall
not include proceeds (x) from casualty and event of loss insurance;
(y) that are subject to a mandatory prepayment pursuant to Section 3.4.3
of the Common Agreement; and (z) from any Permitted Subordinated Loans.

 

A-23

 

“Operator”
The Sponsor, or any replacement operator of the Project Facility as permitted
under the O&M Agreement and approved by the Loan Servicer and the Lender’s
Engineer.

 

“Organizational
Documents”  With respect to any
Person, its charter, articles of incorporation and by-laws, memorandum and
articles of association, statute, partnership agreement, limited liability
company agreement or similar instruments that are required to be registered or
lodged in the place of organization of such Person and that establish the legal personality of such Person.

 

“Overdue
Amount”  Any amount owing under the
FFB Promissory Note that is not paid when and as due.

 

“Overnight
Investment”  A U.S. bank money market
deposit account.

 

“Overrun Contingencies” 
The line item for “Overrun Contingency” included in the Financial Plan,
in the amount of [*****].

 

“Overrun Equity”  The
equity required to be contributed by the Sponsor to the Borrower in excess of
the Base Equity and applied to Total Project Costs.

 

“Overrun
Equity Account”  The Project Account
created under clause (ii) of Section A.1(a) of Appendix
A to the Common Agreement.

 

“Overrun
Equity Commitment”  The obligation of
the Borrower and the Sponsor to fund all Overrun Project Costs and costs of
design, engineering, startup, commissioning and shakedown, until the Project
Completion Date, funded as set forth in the Common Agreement.

 

“Overrun Project Costs” 
All Total Project Costs in excess of Base Project Costs , whether Eligible Project Costs or Ineligible
Project Costs, and including (i) costs associated with the design,
engineering, financing, construction, startup, commissioning and shakedown of
the Project, (ii) shortfalls from anticipated revenues, increases from
anticipated costs, changes in intercompany payment amounts, and other working
capital needs of the Borrower prior to Project Completion, (iii) amounts
arising from timing differences in disbursement of cash to pay expenses and
receipt of cash associated with revenues prior to Project Completion, and
(iv) any other amounts required to achieve Project Completion or otherwise
incurred prior to the Project Completion Date, to be funded
(x) first, from Overrun Contingencies, and (y) thereafter, with
respect to all Cost Overruns in excess of the amount of Overrun Contingencies,
from Overrun Equity.

 

“Parent Holdco”  A holding
company owned by the Sponsor and one or more Equity Owners and owning 100% of
the issued and outstanding Equity Interests of Holdings.

 

“Patriot Act”  The Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (Pub. L. 107-56), as amended, and all
regulations promulgated thereunder.

 

“Payment
Date”  Each Principal Payment Date
and each Quarterly Payment Date.

 

A-24

 

“PBGC”
means the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA.

 

“Pension
Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) other than a Multiemployer Plan (i) that is or was at any time
maintained or sponsored by the Borrower or any ERISA Affiliate or to which the
Borrower or any ERISA Affiliate has ever made, or was obligated to make,
contributions, and (ii) that is or was subject to Section 412 of the
Internal Revenue Code, Section 302 of ERISA or Title IV of ERISA

 

“Periodic
Expenses”  All of the following
amounts from time to time due under or in connection with the Loan
Documents:  (i) all recordation and
other costs, fees and charges payable to third parties in connection with the
execution, delivery, filing, registration, or performance of the Transaction
Documents or the perfection of the security interests in the Collateral
Security, (ii) all fees charges, and expenses of any Independent
Consultants, legal counsel, accountants, and other advisors to the Credit
Parties, (iii) all fees, charges and expenses of the Administrative Agent
in all of its capacities, and (iv) all other fees, charges, expenses and
other amounts from time to time due under or in connection with the Loan
Documents.

 

“Permitted
Investments”  (i) Direct
obligations of the United States of America (including obligations issued or
held in book-entry form on the books of the Department of the Treasury of the
United States of America) or obligations, the timely payment of principal and
interest of which is fully guaranteed by the United States of America maturing
not more than 180 days from the date of the creation thereof;
(ii) obligations, debentures, notes or other evidence of Indebtedness
issued or guaranteed by any agency or instrumentality of the United States
maturing not more then 180 days from the date of the creation thereof;
(iii) interest-bearing demand or time deposits (including certificates of
deposit) that are held in banks with
a general obligation rating of not less than BBB- by S&P or the equivalent
rating by Moody’s, or if not so rated, secured at all times, in the manner and
to the extent provided by law, by collateral security described in clauses (i) or
(ii) of this definition, of a market value of no less than the amount of
moneys so invested maturing not more than 180 days from the date of the
creation thereof; (iv) commercial paper rated (on the date of acquisition
thereof) at least A-1 or P-1 or equivalent by S&P or Moody’s, respectively
(or an equivalent rating by another nationally recognized credit rating agency
of similar standing if neither of such corporations is then in the business of
rating commercial paper), maturing not more than 90 days from the date of
creation thereof; (v) money market funds, so long as such funds are rated
Aaa by Moody’s and AAA by S&P, and (vi) any advances, loans or
extensions of credit or any stock, bonds, notes, debentures or other securities
as the Loan Servicer, acting pursuant to the Common Agreement, may from time to
time approve.

 

“Permitted
Liens”  (i) The rights and
interests of the Secured Parties as provided in the Transaction Documents;
(ii) Liens for any tax, assessment or other governmental charge not yet
due, or being diligently contested in good faith and by appropriate proceedings
timely instituted, so long as (A) such proceedings shall not involve any
danger of the sale, forfeiture or loss of the Project, or any easements, as the
case may be, title thereto or any interest therein and shall not interfere with
the use or disposition of the Project or any easements; (B) such tax,
assessment or other governmental charge is not more than 60 days delinquent;
and (C) a bond, adequate reserves or other security acceptable to the Loan
Servicer has been posted or provided in such manner and amount as to assure DOE
that any taxes, assessments or other charges determined to

 

A-25

 

be
due will promptly be paid in full when such contest is determined;
(iii) Liens in favor of materialmen, workers or repairmen, or other like
Liens arising in the ordinary course of business or in connection with the
construction of the Project, either for amounts not yet due or for amounts
being diligently contested in good faith and by appropriate proceedings timely
instituted so long as (x) such proceedings shall not involve any danger of
the sale, forfeiture or loss of any part of the Project, or any easements, as
the case may be, title thereto or any interest therein and shall not interfere
with the use or disposition of the Project, or any easements, and (y) a
bond or other security acceptable to the Loan Servicer has been posted or
provided in such manner and amount as to assure DOE that any amounts determined
to be due will promptly be paid in full when such contest is determined;
(iv) Liens identified in the ALTA Survey; (v) zoning, entitlement,
building and other land use regulations imposed by Governmental Authorities
having jurisdiction over the Project Site which do not and will not materially
impair the use, development or operation by Borrower of the Project Site for
its intended purpose; (vi) covenants, conditions, restrictions, easements
and other similar matters of record as of the Financial Closing Date affecting
title to the Project Site, which do not and would not reasonably be expected to
materially impair the use, development or operation by the Borrower of the
Project Site for its intended purpose; (vii) any other Lien affecting the
Project Site the existence of which does not and would not reasonably be
expected to materially impair the use, development or operation by the Borrower
of the Project Site for its intended purpose; (viii) Liens (not securing
Indebtedness) of depository institutions and securities intermediaries (including
rights of set-off or similar rights) with respect to deposit accounts or
securities accounts; (ix) Liens securing judgments for the payment of
money not constituting an Event of Default under Section 8.1(l) or
securing appeal or other surety bonds related to such judgments;
(x) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than
bonds related to judgments or litigation), performance bonds and other obligations
of a like nature incurred in the ordinary course of business; and, (xi) only
if approved in writing by DOE in accordance with Section 7.2, Liens
on equipment or personal property to secure Indebtedness (including capital
leases) incurred or assumed by the Borrower for the acquisition of such
equipment or personal property; provided, however, that,
notwithstanding the foregoing, Permitted Liens shall not include any Lien on
any Pledged Equity Interests.

 

“Permitted
Subordinated Loans”  Any subordinated
loans made by the Equity Contributors to the Borrower, on terms and conditions
satisfactory to the Loan Servicer in its sole discretion.

 

“Permitting
and Engineering Management Agreement” 
The Permitting and Engineering Management Agreement between the Borrower
and the Sponsor.

 

“Person”  Any individual,
firm, corporation, company, voluntary association, partnership, limited
liability company, joint venture, trust, unincorporated organization,
Governmental Authority, committee, department, authority or any other body,
incorporated or unincorporated, whether having distinct legal personality or
not.

 

“Physical Completion”  As
set forth in Section 1 of Exhibit A2 to the Common
Agreement.

 

A-26

 

“Physical Completion Certificate”  A Borrower Certificate delivered
as a condition precedent to Physical Completion, as required pursuant to Section 1(d) of
Exhibit A2 to the Common Agreement.

 

“Physical Completion Date” 
The date on which all the conditions for Physical Completion have been
met.

 

“Pledged Equity Interests” 
The Equity Interests of the Borrower, which are subject to the security
interests created by the Equity Pledge Agreement.

 

“Post Reserve Account” 
The Project Account created under clause (x) of Section A.1(a) of
Appendix A to the Common Agreement.

 

“Potential Default”  An
event that, with the giving of
notice or passage of time or both, would become an Event of Default.

 

“Prepayment
Election Notice”  Written
notification delivered by the Borrower of any intended prepayment of all or
part of the DOE-Guaranteed Loans, as specified in the FFB Promissory Note.

 

“Prepayment
Amount” An amount equal to [*****] of any Restricted Payment.

 

“Prepayment
Price”  With respect to any Advance,
the price paid by the Borrower to the Holder for the prepayment of such Advance
as specified in the FFB Promissory Note.

 

“Principal
Payment Date”  The First Principal
Payment Date and each Quarterly Payment Date occurring after the First
Principal Payment Date, or in each case if not a Business Day, the next
Business Day.

 

“Principal
Persons”  Any officer, director,
owner, key employee or other Person, in each case, with management or
supervisory responsibilities with respect to the Borrower or the Operator, or
any other Person (whether or not an employee), who, in each case, has critical
influence on or substantive control over the Project.

 

“Principal
Project Documents”  The Land
Documents, the Construction Contracts, and the Operating Documents.

 

“Program
Requirements”  (i) the provisions
of Title XVII and the Applicable Loan
Guarantee Requirements, and
(ii) all DOE and FFB legal and financial requirements, policies,
and procedures applicable to the Title XVII program from time to time.

 

“Prohibited Jurisdiction”  Any county or jurisdiction, from time to
time, that is subject to sanctions or similar restrictions promulgated or
administered by any Federal Governmental Authority of the United States.

 

“Prohibited
Person” means any Person:

 

(i) that
is named, or is owned or controlled by, or, where applicable, acting for or on
behalf of, any person or entity that is named on, the most current list of “Specially
Designated 

 

A-27

 

Nationals
and Blocked Persons” (Appendix A to 31CFR chapter V) as published by OFAC at
its official website, http://www.treas.gov/offices/enforcement/ofac/sdn/, or at
any replacement website or other replacement official publication of such list
(the “SDN List”); or

 

(ii) who
is an Affiliate of or affiliated with a Person listed above. Solely for the
purposes of the definition of “Prohibited Person,” “Affiliate” means, with
respect to any Person, any other Person which, directly or indirectly,
controls, is controlled by, or is under common control with, such Person.  Solely for the purposes of this definition of
“Affiliate,” “control” (together with the correlative meanings of “controlled
by” and “under common control with”) means possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by contract,
or otherwise.

 

“Project”  The development, design, construction,
ownership and operation of a twenty (20) megawatt (MW) flywheel-based frequency
regulation plant designed to enhance grid stabilization and optimization, to be
located in Stephentown, New York.

 

“Project
Accounts”  As defined in Section A.1(a) of
Appendix A to the Common Agreement.

 

“Project
Budget”  The Project Budget delivered
by the Borrower to each Credit Party pursuant to Section 4.1.4(iv) of
the Common Agreement, as amended from time to time in accordance with Section 6.8
of the Common Agreement, setting forth Total Project Costs and a detailed
budget (each by category on an aggregate basis) to design, develop, construct,
equip and start up the Project through the Project Completion Date (inclusive
of the cost of all Punch List Items) under the Project Documents.

 

“Project
Change”  As defined in Section 6.8
of the Common Agreement.

 

“Project
Completion”  As set forth in Section 2
of Exhibit A2 to the Common Agreement.

 

“Project
Completion Certificate”  A Borrower
Certificate delivered as a condition precedent to Project Completion, as
required pursuant to Section 2(d) of Exhibit A2 to
the Common Agreement.

 

“Project
Completion Date”  The date on which
all the conditions for Project Completion have been met, as certified by DOE in
writing.

 

“Project
Construction Contract”  The Statement
of Work  20MW Beacon Power Smart Energy
Matrix Stephentown Construction, bearing initial release date of
November 16, 2009, together with (a) Purchase Order Number 15500,
dated November 20, 2009, from Sponsor to Project Construction Contractor
and (b) a certain Standard Form of Agreement between Owner and Contractor
for a Project of Limited Scope to be entered into between Sponsor and Project
Construction Contractor as a condition to the Initial Advance.

 

“Project Construction Contractor” [*****], or its successors
approved by the Loan Servicer in consultation with the Lender’s Engineer.

 

A-28

 

“Project
Costs”  All costs incurred by the
Borrower to acquire title or use rights to the Project Site and to develop,
design, finance, construct, install and equip the Project, including without
limitation, (i) amounts payable under the Project Documents;
(ii) interest, fees and expenses payable under the DOE Credit Facility
prior to the end of the relevant Availability Period; (iii) principal
payments on the DOE Credit Facility occurring prior to the Project Completion
Date; (iv) costs to acquire title or use rights to the Project Site,
necessary easements and other real property interests; (v) costs and
expenses of legal, engineering, accounting, construction management and other
advisors or Independent Consultants incurred in connection with the Project;
(vi) fees, commissions and expenses payable to the Credit Parties at or
prior to the Initial Advance Date; (vii) Development Costs to the extent
permitted to be paid under the Loan Documents; (viii)  insurance premiums
for coverage obtained prior to the Project Completion Date; (ix) the
Borrower’s labor costs and general and administration costs; (x) costs
incurred under the O&M Agreement and mobilization costs included in the
Base Case Projections; and (xi) such other costs or expenses approved by
the Credit Parties after consultation with the Lender’s Engineer and such other
Independent Consultants as they may deem necessary.

 

“Project
Documents”  The Principal Project
Documents and the Additional Project Documents.

 

“Project
Facility”  The Project Site, the
Improvements and the Equipment.

 

“Project Facility Performance Targets”  Those Project attributes that are
(a) the ability to absorb and discharge at least 20MW of power; and
(b) the ability to absorb and discharge at least 5,000 kWh of energy.

 

“Project
Loan Mortgage” The Project Loan Mortgage and Security Agreement made by the
Borrower, as mortgagor, in favor of the Administrative Agent in its capacity as
the Collateral Agent, as mortgagee, to secure the principal amount of
$3,239,380 pursuant to which the Borrower grants for the benefit of DOE a
mortgage encumbering all of its rights to the Project Site and the
Improvements.

 

“Project
Milestone Schedule”  The schedule of
significant development and construction milestones delivered in accordance
with Section 4.1.4(iii), as amended from time to time by Approved
Project Changes.

 

“Project
Participant”  Any party to a Project
Document and any party to a Loan Document other than the Credit Parties.

 

“Project Plans” Detailed project plans in form and substance
satisfactory to each Relevant Credit Party, consisting of the Project Budget
and the Project Milestone Schedule, as well as the Construction Prints
referenced in Part 5 of Exhibit A of the Technology Escrow Agreement
and the Sponsor Technology Escrow Agreement, including, without limitation,
updates and supplements to information submitted by the Sponsor or the Borrower
in accordance with Section 4.1.13 of the Common Agreement; provided that
the review of any portion of the Project Plans, or updates or supplements
thereto, that are held in escrow pursuant to the Technology Escrow Agreement or
the Sponsor Technology Escrow Agreement (the “Escrow Agreements”) 

 

A-29

 

shall be limited to review by the Consultant (as
defined in the Escrow Agreements) or as otherwise permitted by the Escrow
Agreements.

 

“Project
Progress Report”  A progress report
regarding the construction and installation of the Project prepared monthly by
the Borrower, in form reasonably satisfactory to the Loan Servicer, addressing
the progress of construction and installation of the Project to date and the
expected progress of construction and installation, including Overrun
Contingencies incurred or reasonably expected to be incurred, any events that
have occurred or are reasonably expected to occur that would materially and
adversely affect the Project schedule, along with an explanation of material
delays from the then existing Project schedule.

 

“Project
Revenue Account”  The Project Account
created under clause (iv) of Section A.1(a) of Appendix
A to the Common Agreement.

 

“Project
Site”  The real property owned by the
Borrower located in Stephentown, New York and any other land necessary for the
Project Facility.

 

“Projected
Debt Service Coverage Ratio”  As of
any date of determination for any period, the quotient of: (i) Cash
Available for Debt Service for such period; divided by (ii) the aggregate
amount of Debt Service scheduled for such period, in each case based on amounts
projected in the Base Case Projections.

 

“Prudent
Utility Practice” shall mean, as to the Project, those practices, methods,
equipment, specifications and standards of safety and performance, as the same
may change from time to time, as are commonly used by electric utility
facilities in the United States of America of a type and size similar to the
Project, including similar electrical and mechanical equipment, as good, safe
and prudent engineering practices in connection with commissioning, startup,
testing, operation, maintenance, repair, improvement and use of electrical and
other equipment, facilities and improvements of such electric utility
facilities, with commensurate standards of safety, performance, dependability,
efficiency and economy.  Prudent Utility
Practices does not necessarily mean one particular practice, method, equipment
specification or standard in all cases, but is instead intended to encompass a
broad range of acceptable practices, methods, equipment specifications and
standards.

 

“Public
Utility Holding Company Act” or “PUHCA”  The United States Public Utility Holding
Company Act of 2005, as amended from time to time.

 

“Punch
List Items”  Items listed on the
construction punchlist that are approved by the Lender’s Engineer.

 

“Qualified
Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) other than a Multiemployer Plan (i) that is or was at any time
maintained or sponsored by the Borrower or any ERISA Affiliate or to which the
Borrower or any ERISA Affiliate has ever made, or was ever obligated to make,
contributions, and (ii) that is intended to be tax-qualified under
Section 401(a) of the Internal Revenue Code.

 

“Quarterly
Payment Date”  Each March 15, June 15, September 15 and December 15, or if not a Business Day, the next
Business Day.

 

A-30

 

“Quarterly
Reporting Certificate”  A certificate
executed by an Authorized Official of the Borrower delivered pursuant to Section 6.1(b) of
the Common Agreement, substantially in the form attached as Exhibit O
to the Common Agreement.

 

“Quarterly
Reporting Package”  The items
specified in Section 6.1(b) of the Common Agreement as being
delivered quarterly under cover of a Quarterly Reporting Certificate.

 

“Rating
Agency”  Moody’s or Standard &
Poor’s.

 

“Recovery
Act”  The American Recovery and
Reinvestment Act of 2009, P.L. No. 111-5.

 

“Reference
Database”  As defined in the
Technology License Agreement.

 

“Register”  As defined in Section 13.13
of the Common Agreement.

 

“Release”  Disposing, discharging, injecting, spilling,
leaking, leaching, dumping, pumping, pouring, emitting, escaping, emptying,
seeping, placing and the like, into or upon any land or water or air, or
otherwise entering into the environment.

 

“Relevant
Credit Party”  As defined in Section 4.1 of the Common
Agreement.

 

“Remedies
Instructions”  Written instructions
to the Collateral Agent from the Loan Servicer directing the Collateral Agent
to exercise or refrain from exercising any rights, remedies, powers or privileges
with respect to the Collateral or otherwise under this Common Agreement or any
other Loan Document to which it is a party.

 

“Requested
Advance Date”  As defined in the FFB
Note Purchase Agreement.

 

“Required
Consents”  As defined in Section 5.10 of the Common Agreement.

 

“Required
Insurance”  Insurance coverage for
the Project satisfying the requirements set forth in Schedule 6.3(b) of
the Common Agreement.

 

“Required
Credit Parties”  DOE, acting alone.

 

“Reserve
Letter of Credit”  An unconditional,
irrevocable, direct-pay, letter of credit that is denominated in Dollars, that
is issued in favor of the Administrative Agent in its capacity as the
Collateral Agent by a bank or other financial institution acceptable to DOE
(any bank or financial institution the long-term senior unsecured indebtedness
of which is rated at least “A” or its equivalent by any nationally recognized
statistical rating organization being deemed acceptable to DOE), and that meets
each of the following requirements and is otherwise in form and substance
reasonably satisfactory to each Credit Party:

 

(i)            the initial expiration date thereof
shall be at least 12 months beyond the date of issuance, and shall
automatically renew upon its expiration (which renewal period shall be for at
least 12 months) unless, at least 45 days prior to any such expiration,
the issuer shall provide the Administrative Agent in its capacity as the
Collateral Agent with a notice of non-renewal of such letter of credit;

 

A-31

 

(ii)           upon any failure to renew such
Reserve Letter of Credit at least 30 days prior to such expiration date, or if
the issuer of such Reserve Letter of Credit shall fail to meet the requirements
with respect thereto the entire face amount thereof shall be drawable by the
Administrative Agent in its capacity as the Collateral Agent (unless the
Administrative Agent in its capacity as the Collateral Agent shall have
received a replacement letter of credit meeting the conditions herein imposed
or amounts shall have been deposited in the applicable Project Account such
that the amount on deposit therein, when aggregated with the face amount
available to be drawn under any applicable Reserve Letter of Credit then
outstanding (other than such Reserve Letter of Credit that is not to be renewed
or that no longer meets the
criteria) is equal to the amount required to be on deposit in such Project
Account);

 

(iii)          such Reserve Letter of Credit shall
additionally be drawable in all cases in which the Common Agreement provides
for a transfer of funds from the applicable Project Account and there shall be
no conditions to any drawing thereunder other than the submission of a drawing
request substantially in the form attached to such Reserve Letter of Credit;
and

 

(iv)          no agreement, instrument or document
executed in connection with such Reserve Letter of Credit shall provide the
issuer thereof or any other Person with any claim against the Borrower, the
Administrative Agent in its capacity as the Collateral Agent, the Loan Servicer
or any other Secured Party, or against any Collateral Security, whether for
costs of maintenance, reimbursement of amounts drawn under such letter of
credit or otherwise.

 

“Restricted
Payments”  As defined in Section 7.10 of the Common Agreement.

 

“Secured
Obligations”  All amounts owing to
the Secured Parties under the Loan Documents, including (i) All loans,
advances, debts, liabilities, and obligations, howsoever arising, owed by the
Borrower under the DOE Credit Facility or otherwise to the Credit Parties
(whether or not evidenced by any note or instrument and whether or not for the
payment of money), direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, pursuant to any of the Transaction
Documents, including without limitation all interest, fees and Periodic
Expenses chargeable to the Borrower and payable by the Borrower hereunder or
thereunder; (ii) any and all sums advanced by any Agent or any other
Secured Party in order to preserve the Collateral Security or preserve the
Secured Parties’ security interest in the Collateral Security; and
(iii) in the event of any proceeding for the collection or enforcement of
the obligations after an Event of Default shall have occurred and be continuing,
the expenses of retaking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral Security, or of any
exercise by any Credit Party of its rights under the Security Documents,
together with any Periodic Expenses, including reasonable attorney’s fees and
court costs.

 

“Secured
Parties”  DOE and the Administrative
Agent in its capacity as the Collateral Agent, as their respective interests
may appear.

 

“Security
Agreement”  The Security Agreement
dated as of the Common Agreement Date, between the Borrower and the
Administrative Agent in its capacity as the Collateral Agent.

 

“Security
Documents”  As defined in Section 4.1.1(e) of
the Common Agreement.

 

A-32

 

“Sponsor”
Beacon Power Corporation, a corporation organized and existing under the laws
of the State of Delaware.

 

“Sponsor
Certificate”  A certificate executed
by an Authorized Official of the Sponsor that is (i) with respect to any
certificate delivered pursuant to Section 4.1 of the Common
Agreement, dated as of the Financial Closing Date and substantially in the form
attached as Exhibit E1 to the Common Agreement, (ii) with
respect to any certificate delivered pursuant to Section 4.2 of the
Common Agreement, dated as of the Advance Notice Date and substantially in the
form attached as Exhibit E2 to the Common Agreement,
(iii) delivered as a condition precedent to Physical Completion or Project
Completion, or (iv) with respect to any other certification to be made by
the Sponsor pursuant to any Loan Document, addressing such matters as are
specified in such Loan Document.

 

“Sponsor
IPO”  The closing of the initial
public offering of the common stock of the Sponsor.

 

“Sponsor
Loan Documents”  As defined in Section 4.1.1(d) of
the Common Agreement.

 

“Sponsor
Sublicense”  The sublicense, to be
entered into pursuant to the [*****] and Section 4.2.1 of the Common
Agreement, between the Sponsor and the Collateral Agent with respect to the
Sponsor’s rights to the [*****] under the [*****].

 

“Sponsor
Technology Escrow Agreement”  The
Sponsor Technology Escrow Agreement dated as of the Common Agreement Date among
the Sponsor, the Collateral Agent and Escrow Associates, Inc.

 

“Sponsor
Technology License Agreement”  The
Sponsor Technology License Agreement dated as of the Common Agreement Date
between the Sponsor, as licensor, and the Collateral Agent, as licensee.

 

“Sponsor’s
Accountant”  The firm of independent
public accountants acting as Borrower’s Accountant, in its capacity as
accountant to the Sponsor.

 

“Standard &
Poor’s” or “S&P”  Standard &
Poor’s Ratings’ Group, a division of McGraw-Hill Inc., a New York corporation,
so long as it is a Rating Agency.

 

“Stockholders’
Equity” as defined under GAAP.

 

“Subordination
Agreement”  One or more subordination agreements, if
any, pursuant to which all Indebtedness and certain other payment obligations
from the Borrower to the Sponsor are subordinated to the Secured Obligations,
and in form and substance satisfactory to each Credit Party.

 

“System Impact
Study”  The system impact study
evaluating the impact of the proposed interconnection of the Project to the
electric transmission system on the reliability of the electric transmission
system.

 

“Technology”  Regardless of form, any invention (whether or
not patentable or reduced to practice), discovery, information, work of
authorship, articles of manufacture, machines, 

 

A-33

 

methods,
processes, models, procedures, protocols, designs, diagrams, drawings,
documentation, flow charts, network configurations and architectures,
schematics, specifications, concepts, data, databases and data collections,
algorithms, formulas, know-how, and techniques, software code, including all source
code, object code, firmware, development tools and application programming
interfaces (APIs), tools, materials, marketing and development plans, and other
forms of technology and all media on which any of the foregoing is recorded.

 

“Technology
Escrow Agreement”  The Technology
Escrow Agreement dated as of the Common Agreement Date among the Sponsor,
Escrow Associates, Inc. and the Borrower.

 

“Technology
License Agreement”  The Technology
License Agreement dated as of the Common Agreement Date between the Sponsor, as
licensor, and the Borrower, as licensee.

 

“Title
Company”  [*****]

 

“Title
XVII”  Title XVII of the Energy
Policy Act of 2005, Pub. L. 109-58, as amended by Section 406 of Div A of
Title IV of Pub. L. 111-5, as may be amended from time to time.

 

[*****]

 

[*****]

 

[*****]

 

[*****]

 

[*****]

 

“Total
Capitalization” Indebtedness plus Stockholders’ Equity.

 

“Total
Funding Available”  The aggregate of
all funds that are (i) undrawn but committed, or reasonably expected to be
available, under the DOE Credit Facility and the Base Equity Commitments,
(ii) received or receivable delay payments and Loss Proceeds,
(iii) amounts standing to the credit of the Project Revenue Account, and
(iv) all unused Overrun Equity Commitments and any other unused equity
funding that is committed or reasonably expected to be available.

 

“Total
Project Costs”  The total amount of
Project Costs required for completion of the Project.

 

“Transaction
Documents”  The Project Documents and
the Loan Documents.

 

“Uniform
Commercial Code”  The Uniform
Commercial Code of the jurisdiction, the law of which governs the document in
which such term is used.

 

“U.S.”  The United States of America.

 

“USA
PATRIOT Act”  means the Patriot Act.

 

A-34

 

“Voting
Stock” means capital stock issued by a corporation, or equivalent interests
in any other Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.

 

“Working
Capital”  Current Assets minus
Current Liabilities.

 

A-35

 

Exhibit A1

to Common Agreement

 

FINANCIAL PLAN

 

	
  Sources

  	
   

  	
  Amount

  	
   

  
	
  DOE Guaranteed Loan (Debt)

  	
   

  	
  $

  	
  43,137,019

  	
   

  
	
  Base Equity

  	
   

  	
  $

  	
  25,882,211

  	
   

  
	
  Overrun Equity

  	
   

  	
  $

  	
  0

  	
   

  
	
  TOTAL SOURCES

  	
   

  	
  $

  	
  69,019,230

  	
   

  

 

	
  Uses

  	
   

  	
  Cost

  	
   

  
	
  Cost of Land

  	
   

  	
  $

  	
  192,487

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  [*****]

  	
   

  	
   

  	
  [*****]

  	
   

  
	
  TOTAL USES (Base Project Costs)

  	
   

  	
  $

  	
  69,019,230

  	
   

  

 

A1-1

 

Exhibit A2

to Common Agreement

 

DEFINITION OF PHYSICAL COMPLETION
AND PROJECT COMPLETION

 

1.             “Physical Completion” The
satisfaction of the following conditions, as evidenced by the written
notification from DOE to the Borrower in accordance with clause (d)(iii)
of this definition:

 

(a)           Physical Completion Tests:

 

(i)            General. 
The Project Facility and
all other buildings, equipment, facilities, and infrastructure necessary to
operate the Project in accordance with the Operating Plan (including, without
limitation, the [*****] for the Project to be used as replacements for
flywheels which become defective or inoperable, such spare flywheels to be
delivered either (x) to the Project Site or (y)  to a site in
Tyngsboro, Massachusetts that is leased or licensed by Sponsor to Borrower)
(A) have been completely constructed, completed, and installed in
accordance with the terms of the applicable Project Documents, (B) all
essential elements thereof have been tested and commissioned in accordance with
Prudent Utility Practice; (C) are operating in accordance with applicable
manufacturers’ specifications, the terms of the Project Documents, and all
environmental permits and licenses, Environmental Laws, and other applicable
guidelines; (D) have been accepted and paid for (except for amounts not
yet due and payable), as evidenced by the Borrower having issued final
acceptance certificates relating to each of the material Project Documents; and
(E) have been and are being properly operated and maintained in all
respects.

 

(ii)           Construction Work. 
All Construction Work under the Construction Contracts shall have been
completed, including without limitation all Punch List Items, except for
warranty issues that do not affect performance of the Project Facility and do not have a material impact on environmental
or occupational health and safety matters.

 

(iii)          [*****]

 

(iv)          O&M
Activities.  The
Operator shall have performed all obligations then required to be performed by
it in accordance with the O&M Agreement.

 

(b)           Operational Completion Tests:

 

(i)            Performance Testing.  The Project Facility shall have successfully completed all tests
demonstrating satisfaction of all
required performance standards under the applicable Project Documents, including without limitation verification that
the Project Facility Performance Targets have been met.

 

A2-1

 

(ii)           Construction Contracts.  (A) Final completion under
each of the Construction Contracts shall have occurred, and
(B) no further payments shall be due and owing from Borrower to any
Construction Contractor.

 

(iii)          Insurance Program
for Operating Period.  The Loan Servicer shall have received,
in form and substance satisfactory to DOE, (x) an Insurance Advisor’s
Certificate, and (y) an Insurance Consultant’s Certificate (A) describing
in reasonable detail the Borrower’s insurance program with respect to the
Operating Period (including without limitation with respect to any new
insurance since the date of the final Advance, copies of certificates or
policies with respect thereto, designating the Administrative Agent in its capacity as the Collateral Agent as loss payee,
as appropriate, all certified by the Borrower as being true and complete), and
(B) certifying that it has reviewed and analyzed such insurance program
and that in its opinion such insurance program satisfies all the requirements
of Schedule 6.3(b).

 

(c)           Legal Conditions:

 

(i)            Title to Assets. 
The Borrower shall have good and marketable fee title to, or valid
leasehold interests in, free and clear of all Liens and encumbrances (except
for Permitted Liens), the Project
Facility and all of the land and all buildings, equipment, and
facilities referred to above, and to all other facilities known to be required
for the Project.

 

(ii)           Liens Under Security Documents.  The Borrower shall have granted Liens in
favor of the Administrative Agent in its capacity as the Collateral Agent for
the benefit of the Secured Parties with respect to all of the assets required
to be subject to the Security Documents.

 

(iii)          Representations and Warranties.  All representations and warranties in the
Loan Documents shall be true and correct in all material respects as of the
Physical Completion Date (except to the extent relating to an earlier date).

 

(iv)          Approvals,
Permits and Licenses.  All
Governmental Approvals required to have been obtained as of the Physical
Completion Date (including any Governmental Approvals disclosed in writing by
the Borrower and required to have been obtained as of that date) shall have
been obtained and shall be in full force and effect and shall not then be under
appeal or subject to other proceedings or unsatisfied conditions that could
reasonably be expected to result in a material modification or cancellation as
of such date.  The Borrower shall be in
compliance with all such Governmental Approvals, the non-compliance with which
could reasonably be expected to have a Material Adverse Effect.

 

(v)           No Event of Default or Default.  No Event of Default or Potential Default
shall exist.

 

(d)           Physical Completion Certificate Delivery:

 

(i)            Delivery of Physical Completion Certificate.  The Borrower shall have furnished DOE with a
Physical Completion Certificate certifying that each of the requirements set
forth in clauses (a) through (c) above has been satisfied as of the date of the
Physical Completion Certificate.

 

A2-2

 

(ii)           Lender’s Engineer Report.  DOE shall have received a Lender’s Engineer
Report addressing such matters as DOE shall reasonably request, including
without limitation the satisfaction of the requirements set forth in clauses
(a) and (b), as appropriate.

 

(iii)          Notice of Physical Completion.  Following receipt of the Physical Completion
Certificate and the Lender’s Engineer’s Report, DOE shall have determined that
each of the requirements set forth in clauses (a) through (c) above has been
satisfied and shall have so notified the Borrower in writing; provided,
however, that:

 

(A)          DOE may require confirmation, at the
Borrower’s expense, of any of the requirements set forth in clause (c) above,
including by requesting delivery to DOE of an independent consultant’s report
or an opinion of counsel satisfactory to DOE; and

 

(B)           DOE shall have the right to make
requests for additional information or documents from the Borrower to
substantiate the accuracy or completeness of the Physical Completion
Certificate with respect to any of the requirements set forth in clause (c)
above.

 

(C)           DOE shall notify the Borrower within
thirty (30) days following receipt of the Physical Completion Certificate
either (i) that Physical Completion has been achieved, in which case the
Physical Completion Date shall be deemed to be the date of such notice, or
(ii) that DOE objects to the Physical Completion Certificate or such
Certificate is inaccurate or incomplete, which notice shall set forth the basis
for such objection or determination, as the case may be.  The failure of DOE to notify the Borrower
within such thirty (30) day period either that DOE objects to the Physical
Completion Certificate, or that such Certificate is inaccurate or incomplete
shall be deemed to constitute notice that Physical Completion has been
achieved.

 

2.             “Project
Completion”  The
satisfaction of the following conditions, as evidenced by the written
notification from DOE to the Borrower in accordance with clause (d)(iii) of
this definition:

 

(a)           Physical Completion:

 

Physical Completion shall have occurred.

 

(b)           Financial Completion:

 

(i)            Two Principal and Interest Payments.  The Borrower shall have paid in full two
consecutive scheduled principal and interest payments due under the DOE Credit
Facility on, or at any time before, the date such payments were due.

 

(ii)           Cash Available For Debt Service.  The Borrower shall have generated Cash
Available for Debt Service for each of the preceding two consecutive fiscal
quarters in an amount sufficient to pay in full the scheduled principal and
interest payments next becoming due under the DOE Credit Facility.

 

(iii)          Debt Service Reserve.  The Debt Service Reserve Account shall have
been fully funded (or Reserve Letters of Credit shall have been posted in lieu
thereof).

 

A2-3

 

(c)           Legal Conditions:

 

(i)            Representation and Warranties.  All representations and warranties in the
Loan Documents shall be true and correct in all material respects as of the
Project Completion Date (except to the extent relating to an earlier date).

 

(ii)           Approvals, Permits and Licenses.  All Governmental Approvals required to have
been obtained as of the Project Completion Date (including any Governmental
Approvals disclosed in writing by the Borrower and required to have been
obtained as of that date) shall have been obtained and shall be in full force
and effect and shall not then be under appeal or subject to other proceedings
or unsatisfied conditions that could reasonably be expected to result in a
material modification or cancellation as of such date.  The Borrower shall be in compliance with all
such Governmental Approvals, the non-compliance with which could reasonably be
expected to have a Material Adverse Effect.

 

(iii)          No Event of Default or Default.  No Event of Default or Potential Default
shall exist.

 

(d)           Project Completion Certificate Delivery:

 

(i)            Delivery of Project Completion Certificate.  The Borrower shall have furnished DOE with a
Project Completion Certificate certifying that each of the requirements set
forth in clauses (a) through (c) above has been satisfied as of the date of the
Project Completion Certificate.

 

(ii)           Notice of Project Completion.  Following receipt of the Project Completion
Certificate, DOE shall have determined that each of the requirements set forth
in clauses (b) and (c) above has been satisfied and shall have so notified the
Borrower in writing; provided, however, that:

 

(A)          DOE may require confirmation, at the
Borrower’s expense, of any of the requirements set forth in clauses (b) and (c)
above, including by requesting delivery to DOE of an independent consultant’s
report or an opinion of counsel satisfactory to DOE; and

 

(B)           DOE shall have the right to make
requests for additional information or documents from the Borrower to
substantiate the accuracy or completeness of the Project Completion Certificate
with respect to any of the requirements set forth in clauses (b) and (c) above.

 

(C)           DOE shall notify the Borrower within
thirty (30) days following receipt of the Project Completion Certificate either
(i) that Project Completion has been achieved, in which case the Project
Completion Date shall be deemed to be the date of such notice, or (ii) that DOE
objects to the Project Completion Certificate or such Certificate is inaccurate
or incomplete, which notice shall set forth the basis for such objection or
determination, as the case may be.  The
failure of DOE to notify the Borrower within such thirty (30) day period either
that DOE objects to the Project Completion Certificate or that such Certificate
is inaccurate or incomplete shall be deemed to constitute notice that Project
Completion has been achieved.

 

A2-4

 

Exhibit A3

to Common Agreement

 

DEFINITION OF DOE REQUIREMENTS

 

(from Applicable Loan Guarantee Requirements)

 

[Capitalized terms in this Exhibit A3 have the meanings 

given to such terms in the Applicable Loan Guarantee Requirements]

 

The
following requirements and conditions are hereby incorporated into the Common
Agreement:

 

(a)  Pursuant to Section 6.09.10(d) of the
Applicable Loan Guarantee Requirements, prior to the execution by DOE of a Loan
Guarantee Agreement, DOE must ensure that the following requirements and
conditions, which must be specified in the Loan Guarantee Agreement, are
satisfied:

 

(1)
The Project qualifies as an “Eligible Project” under the Act and is not a
research, development, or demonstration project or a project that employs
Commercial Technologies in service in the United States;

 

(2)
The Project will be constructed and operated in the United States, the
employment of the new or significantly improved technology in the Project has
the potential to be replicated in other commercial projects in the United
States, and this technology is or is likely to be available in the United
States for further commercial application;

 

(3)
The face value of the debt guaranteed by DOE is limited to no more than 80
percent of total Project Costs;

 

(4)
(i) Where DOE guarantees 100 percent of the Guaranteed Obligation, the
DOE-Guaranteed Loan shall be funded by FFB;

 

(ii)  Where DOE guarantees more than 90 percent of
the Guaranteed Obligation, the guaranteed portion cannot be separated from or “stripped”
from the non-guaranteed portion of the Guaranteed Obligation if the loan is
participated, syndicated or otherwise resold in the secondary market;

 

(iii)  Where DOE guarantees 90 percent or less of
the Guaranteed Obligation, the guaranteed portion may be separated from or “stripped”
from the non-guaranteed portion of the Guaranteed Obligation, if the
DOE-Guaranteed Loan is participated, syndicated or otherwise resold in the
secondary debt market;

 

(5)  The Borrower and other principals involved in
the Project have made or will make a significant equity investment in the
Project;

 

(6)  The Borrower is obligated to make full
repayment of the principal and interest on the Guaranteed Obligations and other
Project debt over a period of up to the lesser of 30 years or 90 percent of the
projected useful life of the Project’s major physical assets, as calculated in 

 

A3-1

 

accordance
with generally accepted accounting principles and practices. The non-guaranteed
portion of any Guaranteed Obligation must be repaid on a pro-rata basis, and
may not be repaid on a shorter amortization schedule than the guaranteed
portion;

 

(7
) The loan guarantee does not finance, either directly or indirectly,
tax-exempt debt obligations, consistent with the requirements of section 149(b)
of the Internal Revenue Code;

 

(8)  The amount of the DOE Guarantee, when
combined with other funds committed to the Project, will be sufficient to carry
out the Project, including adequate contingency funds;

 

(9)  There is a reasonable prospect of repayment
by Borrower of the principal of and interest on the Guaranteed Obligations and
other Project debt;

 

(10)  The Borrower has pledged Project assets and
other collateral or surety, including non project-related assets, determined by
DOE to be necessary to secure the repayment of the Guaranteed Obligations;

 

(11)  The DOE Loan Guarantee Agreement and related
documents include detailed terms and conditions necessary and appropriate to
protect the interest of the United States in the case of default, including
ensuring availability of all the intellectual property rights, technical data
including software, and physical assets necessary for any person or entity,
including DOE, to complete, operate, convey, and dispose of the defaulted
project;

 

(12)  The interest rate on any Guaranteed
Obligation is determined by DOE, after consultation with the Treasury
Department, to be reasonable, taking into account the range of interest rates
prevailing in the private sector for similar obligations of comparable risk
guaranteed by the Federal government;

 

(13)  Any Guaranteed Obligation is not subordinate
to any loan or other debt obligation and is in a first lien position on all
assets of the Project and all additional collateral pledged as security for the
Guaranteed Obligations and other Project debt;

 

(14)  There is satisfactory evidence that Borrower
and FFB or other Holders are willing, competent, and capable of performing the
terms and conditions of the Guaranteed Obligations and other debt obligation
and the DOE Loan Guarantee Agreement, and will diligently pursue the Project;

 

(15)  The Borrower has made the initial (or total)
payment of fees for the Administrative Cost of Issuing a Loan Guarantee with
respect to the DOE Guarantee for the construction and operational phases of the
Project (Third Fee);

 

(16)  FFB, other Holder or servicer has taken and
is obligated to continue to take those actions necessary to perfect and
maintain liens on assets which are pledged as collateral for the Guaranteed
Obligation;

 

(17)  If Borrower is to make payment in full for
the Credit Subsidy Cost of the loan guarantee pursuant to Section 1702(b)(2) of
the Act, such payment must be received by DOE prior to, or at the time of,
closing;

 

A3-2

 

(18)  DOE or its representatives have access to the
Project site at all reasonable times in order to monitor the performance of the
Project;

 

(19)  DOE, FFB, or other Holder and Borrower have
reached an agreement as to the information that will be made available to DOE
and the information that will be made publicly available;

 

(20)  The prospective Borrower has filed
applications for or obtained any required regulatory approvals for the Project
and is in compliance, or promptly will be in compliance, where appropriate,
with all Federal, state, and local regulatory requirements;

 

(21)  Borrower has no delinquent Federal debt,
including tax liabilities, unless the delinquency has been resolved with the
appropriate Federal agency in accordance with the standards of the Debt
Collection Improvement Act of 1996;

 

(22)  The DOE Loan Guarantee Agreement contains
such other terms and conditions as DOE deems reasonable and necessary to
protect the interest of the United States; and

 

(23)(i)
FFB is an “Eligible Lender”, as defined in §609.2 of the Applicable Loan
Guarantee Requirements, and meets DOE’s lender eligibility and performance
requirement contained in §§609.11 (a) and (b) of the Applicable Loan Guarantee
Requirements; and

 

(ii)
The servicer meets the servicing performance requirements of §609.11(c) of the
Applicable Loan Guarantee Requirements.

 

(b)  Pursuant to Section 6.09.10(e) of the
Applicable Loan Guarantee Requirements, the DOE Loan Guarantee Agreement must
provide that, in the event of a default by the Borrower:

 

(1)  Interest accrues on the Guaranteed
Obligations at the rate stated in the DOE Loan Guarantee Agreement or Loan
Agreement, until DOE makes full payment of the defaulted Guaranteed Obligations
and, except when debt is funded through the Federal Financing Bank, DOE is not
required to pay any premium, default penalties, or prepayment penalties;

 

(2)  Upon payment of the Guaranteed Obligations by
DOE, DOE is subrogated to the rights of the Holders of the debt, including all
related liens, security, and collateral rights and has superior rights in and
to the property acquired from the recipient of the payment as provided in
§609.15 of the Applicable Loan Guarantee Requirements;

 

(3)  FFB or any other servicer acting on DOE’s
behalf is obligated to take those actions necessary to perfect and maintain
liens on assets which are pledged as collateral for the Guaranteed Obligations;
and

 

(4)  The holder of pledged collateral is obligated
to take such actions as DOE may reasonably require to provide for the care,
preservation, protection, and maintenance of such collateral so as to enable
the United States to achieve maximum recovery upon default by Borrower on the
Guaranteed Obligations.

 

(c)  Pursuant to Section 6.09.10(f) of the
Applicable Loan Guarantee Requirements, the DOE Loan Guarantee Agreement must
contain audit provisions which provide, in substance, as follows:

 

A3-3

 

(1)  FFB or any other Holder or other party
servicing the Guaranteed Obligations, as applicable, and the Borrower, must
keep such records concerning the project as are necessary to facilitate an
effective and accurate audit and performance evaluation of the project as
required in §609.17 of the Applicable Loan Guarantee Requirements; and

 

(2)  DOE and the Comptroller General, or their
duly authorized representatives, must have access, for the purpose of audit and
examination, to any pertinent books, documents, papers, and records of the
Borrower, FFB or other Holder, or other party servicing the Guaranteed
Obligations, as applicable.  Examination
of records may be made during the regular business hours of the Borrower, FFB
or other Holder, or other party servicing the Guaranteed Obligations, or at any
other time mutually convenient as required in §609.17 of the Applicable Loan
Guarantee Requirements.

 

(d)  Pursuant to Section 6.09.10(g) of the
Applicable Loan Guarantee Requirements, the DOE Loan Guarantee Agreement must contain
provisions providing that:

 

(1)
FFB or other Holder may sell, assign or transfer a Guaranteed Obligation to
another Eligible Lender that meets the requirements of §609.11 of the
Applicable Loan Guarantee Requirements. Such Eligible Lender to which a
Guaranteed Obligation is assigned or transferred, is required to fulfill all
servicing, monitoring, and reporting requirements contained in the DOE Loan
Guarantee Agreement and these regulations if the transferring Eligible Lender
was performing these functions and transfer such functions to the new Eligible
Lender. Any assignment or transfer, however, of the servicing, monitoring, and
reporting functions must be approved by DOE in writing in advance of such
assignment; and

 

(2)
The Secretary of Energy, or the Secretary’s designee or contractual agent, for
the purpose of identifying Holders with the right to receive payment under the
guarantees shall include in the DOE Loan Guarantee Agreement or related
documents a procedure for tracking and identifying Holders of Guarantee
Obligations. These duties usually will be performed by the servicer. Any
contractual agent approved by the Secretary to perform this function cannot
transfer or assign this responsibility without the prior written consent of the
Secretary.

 

The Credit Subsidy Cost for the Project
may be covered by funds made available under the American Recovery and
Reinvestment Act of 2009, Pub. L. No. 111-5, to pay for the Credit Subsidy Cost
of guarantees made under Section 1705 of Title XVII of the Energy Policy Act of
2005, as amended, if the Project satisfies all of the applicable requirements
of Title XVII, including Section 1705, and of the Recovery Act, including, but
not limited to the following below, and the provisions set forth in the Term Sheet
and this Exhibit A3 and subject to the availability of funds.  The Sponsor and Borrower each agrees to
subject the Project to all Program Requirements and Applicable Loan Guarantee
Requirements implementing Title XVII (including Section 1705), as amended from
time to time.

 

(e) As soon as practicable, but in no
event later than 30 days after the effective date of the Conditional
Commitment, the Sponsor and/or Borrower shall supplement its application
submitted in response to the August 8, 2006 solicitation with the following:

 

(1) A statement from the Sponsor that it
believes that there is “reasonable prospect” that the DOE-Guaranteed Loan will
be fully paid from Project revenue;

 

A3-4

 

(2) A brief description of the types of
jobs expected to be created or retained in the United States.  The term “jobs expected to be created” means
those new positions reasonably expected to be created and filled, or previously
existing unfilled positions that are reasonably expected to be filled, as a
result of Recovery Act funding, and “jobs or positions expected to be retained”
means those previously existing filled positions that are reasonably expected
to be retained as a result of Recovery Act funding.  Such descriptions may rely on job titles,
broader labor categories, or the borrowers’ existing practice for describing
jobs as long as the terms used are widely understood and explain the general
nature of the work. Note that a job cannot be reported as both created and retained;

 

(3) An estimate of the number of jobs
expected to be created and retained in the United States.  At a minimum, this estimate shall include any
new positions reasonably expected to be created and any existing filled positions
that are reasonably expected to be retained to support or carry out Recovery
Act projects or activities managed directly by the borrower, and if known, by
sub-recipients. The number shall be expressed as “full-time equivalent” (FTE),
calculated cumulatively as all hours worked divided by the total number of
hours in a full-time schedule, as defined by the borrower. For instance, two
full-time employees and one part-time employee working half days would be
reported as 2.5 FTE in each calendar quarter. Because FTE is calculated based
on aggregate hours worked, temporary or part-time labor is not overstated.
Applicants are encouraged to include information in their narrative used to
calculate the FTE figure;

 

(4) A description of the viability of the
Project without guarantees, whether from DOE or otherwise;

 

(5) A list of other Federal and
non-Federal governmental (including State) incentives or other assistance on
which the Project relies, including grants, tax credits, or other loan
guarantees to support the financing, construction and operation of the Project;

 

(6) A description evidencing the
importance of the Project in meeting reliability needs of the national or local
electric grid;

 

(7) A description substantiating the
effect of the Project in meeting the environment (including climate change) and
energy goals of the State or region of the United States in which the Project
is involved or located or of the two or more States of the United States that
the Project exists between or connects;

 

(8) A statement from the Sponsor substantiating
that commercial financing suitable to fully meet the needs of the Project, or
to allow commercial completion of the Project, is not available from the
private financial markets on commercially reasonable terms.

 

(f) The Project must commence construction
not later than September 30, 2011.

 

The term “Commencement of Construction” is
defined in Exhibit A to the Common Agreement.

 

(g) As soon as practicable, but in no
event later than 30 days after the effective date of the Conditional
Commitment, the Sponsor and/or Borrower shall submit to DOE an updated
financial model, financial projections or any other application item for the
Project that, in each case, takes into account the cost of complying with (i)
the Buy American Provisions, to the 

 

A3-5

 

extent applicable, (ii) the
Davis-Bacon Act and all applicable Davis-Bacon Act regulations as such
compliance is required by Section 1705(c) of Title XVII and (iii) all
applicable provisions of the Recovery Act.

 

(h)
The Borrower must consult their own legal counsel to determine whether the Buy
American requirements of Section 1605(a) of the Recovery Act apply to their
proposed projects. If the Borrower believes that its proposed project is not
subject to such Buy American requirements, it must set forth in its Part I
submission an explanation justifying such rationale. As required by Section
1605(d) of the Recovery Act, Section 1605 is to be applied in a manner
consistent with U.S. obligations under international agreements. If the
Borrower determines that the Buy American requirements of Section 1605 are not
applicable to its project by virtue of U.S. obligations under international
agreements, the Borrower must set forth in its Part I submission an explanation
justifying its position. If the Borrower determines that its project would be
subject to the Buy American requirements, but that its project may be eligible
for a waiver under Section 1605(b) of the Recovery Act, the Borrower must set
forth in its Part I submission an explanation justifying the basis for its
request for a waiver.

 

A3-6

Exhibit A4

to Common Agreement

 

DAVIS-BACON PROVISIONS FOR DAVIS-BACON ACT COVERED CONTRACTS

 

(a)                Definitions.  For purposes of this Exhibit A4, and
as required by subparagraph (b)(8) below of this Exhibit, the definitions set
forth in Section 5.2 of title 29 of the Code of Federal Regulations (CFR) are
incorporated by reference herein, some of which are set forth below, except to
the extent modified below, in addition to certain newly defined terms set forth
below for purposes of Davis-Bacon Act compliance under Section 1705 of Title
XVII:

 

(1)                                             “Davis-Bacon
Act Covered Contract” means any contract, agreement or other arrangement
for the “construction, prosecution, completion or repair” (as such term is
defined below) of the Project (including the Common Agreement) in connection
with Section 1705(c), as enacted by the American Recovery and Reinvestment Act
of 2009.

 

(2)                                             “Contract
Party” means any contractor, subcontractor (including any lower tier
subcontractor) or other entity (other than the Borrower but including, if
applicable, the project sponsor or affiliate) that is party to a Davis-Bacon
Act Covered Contract; it being understood that the foregoing exclusion of
Borrower from the definition of Contract Party in no way affects the Borrower’s
Davis Bacon Act obligations as set forth in this Exhibit.

 

(3)                                             “Construction,
prosecution, completion, or repair” or “performance of the Project”
means the following:

 

(1) All types of work done on a particular building or work at the site
thereof, including work at a facility which is deemed a part of the site of the
work within the meaning of (paragraph (l) of 29 CFR 5.2) by laborers and
mechanics employed by a construction contractor or construction subcontractor,
including without limitation—

 

(i)                 Altering,
remodeling, installation (where appropriate) on the site of the work of items
fabricated off-site;

 

(ii)                Painting and
decorating;

 

(iii)               Manufacturing
or furnishing of materials, articles, supplies or equipment on the site of the
building or work (or, under the United States Housing Act of 1937; the Housing
Act of 1949; and the Native American Housing Assistance and Self-Determination
Act of 1996 in the construction or development of the project);

 

A4-1

 

(iv)(A) Transportation between the site of the work within the meaning
of paragraph (l)(1) of 29 CFR 5.2 and a facility which is dedicated to the
construction of the building or work and deemed a part of the site of the work
within the meaning of paragraph (l)(2) of 29 CFR 5.2; and

 

(B) Transportation of portion(s) of the building or work between a site
where a significant portion of such building or work is constructed, which is a
part of the site of the work within the meaning of paragraph (l)(1) of 29 CFR
5.2, and the physical place or places where the building or work will remain.

 

(2) Except as provided in paragraph (j)(1)(iv)(A) of 29 CFR 5.2, the
transportation of materials or supplies to or from the site of the work by
employees of the construction contractor or a construction subcontractor is not
``construction, prosecution, completion, or repair’’.

 

(4)                                             “Contracting
officer” means the individual, a duly appointed successor, or authorized
representative who is designated and authorized to enter into contracts on
behalf of the Federal agency or any representative designated by DOE to the
Borrower from time to time for purposes of Davis-Bacon Act compliance.

 

(5)                                             “Laborer or
mechanic” includes at least those workers whose duties are manual or
physical in nature (including those workers who use tools or who are performing
the work of a trade), as distinguished from mental or managerial. The term
laborer or mechanic includes apprentices, trainees, and helpers. The term does
not apply to workers whose duties are primarily administrative, executive, or
clerical, rather than manual. Persons employed in a bona fide executive,
administrative, or professional capacity as defined in part 541 of title 29 of
the Code of Federal Regulations are not deemed to be laborers or mechanics.
Working foremen who devote more than 20 percent of their time during a workweek
to mechanic or laborer duties, and who do not meet the criteria of part 541,
are laborers and mechanics for the time so spent.

 

(6)                                             “Site of the
work” is defined as follows:

 

(i)  The site of the work is the
physical place or places where the building or work called for in the
Davis-Bacon Act Covered Contract will remain; and any other site where a
significant portion of the building or work is constructed, provided that such
site is established specifically for the performance of such contract or
project;

 

(ii) Except as provided in subparagraph (a)(6)(iii) of this Exhibit,
job headquarters, tool yards, batch plants, borrow pits, etc., are part of the 

 

A4-2

 

site of the work, provided they are dedicated exclusively, or nearly
so, to performance of the Davis Bacon Act Covered Contract or project, and
provided they are adjacent or virtually adjacent to the site of the work as
defined in subparagraph (a)(6)(i) of this Exhibit;

 

(iii) Not included in the site of the work are permanent home offices,
branch plant establishments, fabrication plants, tool yards, etc., of the
Borrower or a Contract Party whose location and continuance in operation are
determined wholly without regard to a particular Federal or federally assisted
contract, such as the Common Agreement, or project. In addition, fabrication
plants, batch plants, borrow pits, job headquarters, tool yards, etc., of a commercial
or material supplier, which are established by a supplier of materials for the
project before opening of bids and not on the site of the work as stated in
subparagraph (a)(6)(i) of this Exhibit, are not included in the site of the
work. Such permanent, previously established facilities are not part of the
site of the work, even where the operations for a period of time may be
dedicated exclusively, or nearly so, to the performance of a Davis-Bacon Act
Covered Contract.

 

(7)                                             “Wage
determination” includes the original decision and any subsequent decisions
modifying, superseding, correcting, or otherwise changing the provisions of the
original decision. The application of the wage determination shall be in
accordance with the provisions of Sec. 1.6 of title 29 of the Code of Federal
Regulations.

 

(b)(1)                              Minimum
wages.

 

(i) All laborers and mechanics employed or working on the site of the
work, will be paid unconditionally and not less often than once a week, and
without subsequent deduction or rebate on any account (except such payroll
deductions as are permitted by regulations issued by the Secretary of Labor
under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide
fringe benefits (or cash equivalents thereof) due at time of payment computed
at rates not less than those contained in the wage determination of the
Secretary of Labor which is attached to the Common Agreement as Schedule
6.30(d) and made a part hereof, regardless of any contractual relationship
which may be alleged to exist between the Borrower and such laborers and
mechanics, or between any Contract Party and such laborers and mechanics.

 

Contributions made or costs reasonably anticipated for bona fide fringe
benefits under section 1(b)(2) of the Davis-Bacon Act on behalf of laborers or
mechanics are considered wages paid to such laborers or mechanics, subject to
the provisions of subparagraph (b)(1)(iv) of this Exhibit; also, regular
contributions made or costs incurred for more

 

than a weekly period (but not less often than quarterly) under plans,
funds, or programs which cover the particular weekly period, are deemed to be
constructively made or incurred during such weekly period. Such laborers and
mechanics shall be paid the 

 

A4-3

 

appropriate wage rate and fringe benefits on the wage determination for
the classification of work actually performed, without regard to skill, except
as provided in paragraph (b)(4) below. Laborers or mechanics performing work in
more than one classification may be compensated at the rate specified for each
classification for the time actually worked therein: Provided, that the
employer’s payroll records accurately set forth the time spent in each
classification in which work is performed. The wage determination (including
any additional classification and wage rates conformed under subparagraph
(b)(1)(ii) of this Exhibit) as attached to the Common Agreement as Schedule
6.30(d) and the Davis-Bacon poster (WH-1321) shall be posted at all times
by the Borrower and each Contract Party at the site of the work in a prominent
and accessible place where it can be easily seen by the workers.

 

(ii)(A) The contracting officer shall require that any class of
laborers or mechanics, including helpers, which is not listed in the wage
determination and which is to be employed under the Davis-Bacon Act Covered
Contract shall be classified in conformance with the wage determination. The
contracting officer shall approve an additional classification and wage rate and
fringe benefits therefore only when the following criteria have been met:

 

(1) The work to be performed by the classification requested is not
performed by a classification in the wage determination; and

 

(2) The classification is utilized in the area by the construction
industry; and

 

(3) The proposed wage rate, including any bona fide fringe benefits,
bears a reasonable relationship to the wage rates contained in the wage
determination.

 

(B) If the Borrower or any Contract Party, as the case may be, and the
respective laborers and mechanics to be employed in the classification (if
known), or their representatives, and the contracting officer agree on the
classification and wage rate (including the amount designated for fringe
benefits where appropriate), a report of the action taken shall be sent by the
contracting officer to the Administrator of the Wage and Hour Division,
Employment Standards Administration, U.S. Department of Labor, Washington, DC
20210. The Administrator, or an authorized representative, will approve,
modify, or disapprove every additional classification action within 30 days of
receipt and so advise the contracting officer or will notify the contracting
officer within the 30-day period that additional time is necessary.

 

(C) In the event the Borrower or any Contract Party, as the case may
be, the laborers or mechanics to be employed in the classification or their
representatives, and the contracting officer do not agree on the proposed
classification and wage rate (including the amount designated for fringe
benefits, where appropriate), the contracting officer shall refer the
questions, including the views of all interested parties and the recommendation
of the contracting officer, to the Administrator for determination. The
Administrator, or an authorized representative, will issue a determination
within 30 days 

 

A4-4

 

of receipt and so advise the contracting officer or will notify the
contracting officer within the 30-day period that additional time is necessary.

 

(D) The wage rate (including fringe benefits where appropriate)
determined pursuant to subparagraphs (b)(1)(ii) (B) or (C) of this Exhibit,
shall be paid to all workers performing work in the classification under any
Davis-Bacon Act Covered Contract from the first day on which work is performed
in the classification.

 

(iii) Whenever the minimum wage rate prescribed in any Davis-Bacon Act
Covered Contract for a class of laborers or mechanics includes a fringe benefit
which is not expressed as an hourly rate, the Borrower or any Contract Party
shall either pay the benefit as stated in the wage determination or shall pay
another bona fide fringe benefit or an hourly cash equivalent thereof.

 

(iv) If the Borrower or any Contract Party does not make payments to a
trustee or other third person, the Borrower or any Contract Party may consider
as part of the wages of any laborer or mechanic the amount of any costs
reasonably anticipated in providing bona fide fringe benefits under a plan or
program; provided, that the Secretary of Labor has found, upon the written
request of the Borrower or any Contract Party, that the applicable standards of
the Davis-Bacon Act have been met. The Secretary of Labor may require the
Borrower or any Contract Party to set aside in a separate account assets for
the meeting of obligations under the plan or program.

 

(2) Withholding.  The DOE contracting officer shall upon its
own action or upon written request of an authorized representative of the
Department of Labor withhold or cause to be withheld from the Borrower or a
Contract Party, as the case may be, under this Contract or any other Federal
contract with the same Borrower or Contract Party, or any other
federally-assisted contract subject to Davis-Bacon prevailing wage
requirements, which is held by the same Borrower or Contract Party, so much of
the accrued payments or advances as may be considered necessary to pay laborers
and mechanics, including apprentices, trainees, and helpers, employed or
working on the site of the work the full amount of wages required by the
Contract. In the event of failure to pay any laborer or mechanic, including any
apprentice, trainee, or helper, employed or working on the site of the work,
all or part of the wages required by the Davis-Bacon Act Covered Contract, DOE
may, after written notice to the Borrower take such action as may be necessary
to cause the suspension of any further disbursement under the DOE-Guaranteed
Loan until such violations have ceased, it being understood that any such
suspension shall not affect the validity of the DOE Guarantee on the portions
of the DOE-Guaranteed Loan that have been disbursed prior to the date of such
suspension and remain outstanding as of such date.

 

(3) Payrolls and basic records.

 

(i) Payrolls and basic records relating thereto shall be maintained by
the Borrower and each Contract Party during the course of the work and
preserved for a period of three years thereafter for all of their respective
laborers and mechanics employed or working at the site of the work.  Such records shall contain the name, 

 

A4-5

 

address, and social security number of each such worker, his or her
correct classification, hourly rates of wages paid (including rates of
contributions or costs anticipated for bona fide fringe benefits or cash
equivalents thereof of the types described in section 1(b)(2)(B) of the
Davis-Bacon Act), daily and weekly number of hours worked, deductions made and
actual wages paid. Whenever the Secretary of Labor has found under 29 CFR
5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of
any costs reasonably anticipated in providing benefits under a plan or program
described in section 1(b)(2)(B) of the Davis-Bacon Act, the Borrower and each
Contract Party shall maintain records which show that the commitment to provide
such benefits is enforceable, that the plan or program is financially
responsible, and that the plan or program has been communicated in writing to
the laborers or mechanics affected, and records which show the costs
anticipated or the actual cost incurred in providing such benefits. The
Borrower and any Contract Party employing apprentices or trainees under
approved programs shall maintain written evidence of the registration of
apprenticeship programs and certification of trainee programs, the registration
of the apprentices and trainees, and the ratios and wage rates prescribed in
the applicable programs.

 

(ii)(A)  The Contract Party shall submit weekly for
each week in which any Davis-Bacon Act Covered Contract work is performed a
copy of all payrolls to the Borrower. 
The highest tier Contract Party is responsible for the submission of
copies of payrolls by all subcontractors and lower tier subcontractors.  Unless otherwise directed by DOE, the
Borrower shall submit weekly for each week in which any Contract work is
performed a copy of all of its payrolls, as well as all payrolls of each
Contract Party, to the DOE contracting officer. The payrolls submitted shall
set out accurately and completely all of the information required to be
maintained under subparagraph (b)(3)(i) of this Exhibit, except that full
social security numbers and home addresses shall not be included on weekly
transmittals. Instead the payrolls shall only need to include an individually
identifying number for each employee (e.g., the last four digits of the
employee’s social security number). The required weekly payroll information may
be submitted in any form desired. Optional Form WH-347 is available for this
purpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htm
or its successor site. The Borrower is responsible for the submission of copies
of its own payrolls and the payrolls of each Contract Party, in each case,
to the extent each employs laborers and mechanics in the performance of the
Project.  Each Contract Party is
responsible for the submission of copies of payrolls by all subcontract or
lower-tier Contract Parties.  The Borrower
and each Contract Party shall maintain the full social security number and
current address of each of its own covered workers, and shall provide them upon
request, in the case of the Contract Party, to the Borrower, for transmission
to the DOE or the Wage and Hour Division of the Department of Labor for
purposes of an investigation or audit of compliance with prevailing wage
requirements. It is not a violation of this subparagraph (b)(3)(ii)(A) of this
Exhibit for a higher-tiered Contract Party to require a lower-tiered Contract
Party to provide addresses and social security numbers to such Contract Party
for its own records, without weekly submission to the DOE or the Borrower.

 

(B) Each payroll submitted shall be accompanied by a ``Statement of
Compliance,’’ signed by the Borrower or Contract Party or his or her agent who
pays or 

 

A4-6

 

supervises the payment of the laborer or mechanic employed under the
Davis-Bacon Act Covered Contract and shall certify the following:

 

(1) That the payroll for the payroll period contains the information
required to be provided under subparagraph (b)(3)(ii) of this Exhibit, the
appropriate information is being maintained under subparagraph (b)(3)(i) of
this Exhibit, and that such information is correct and complete;

 

(2) That each laborer or mechanic (including each helper, apprentice,
and trainee) employed under the Davis-Bacon Act Covered Contract during the
payroll period has been paid the full weekly wages earned, without rebate,
either directly or indirectly, and that no deductions have been made either
directly or indirectly from the full wages earned, other than permissible
deductions as set forth in Regulations, 29 CFR part 3;

 

(3) That each laborer or mechanic has been paid not less than the
applicable wage rates and fringe benefits or cash equivalents for the
classification of work performed, as specified in the applicable wage
determination incorporated into the Common Agreement and any other Davis-Bacon
Act Covered Contract.

 

(C) The weekly submission of a properly executed certification set
forth on the reverse side of Optional Form WH-347 shall satisfy the requirement
for submission of the ``Statement of Compliance’’ required by subparagraph
(b)(3)(ii)(B) of this Exhibit.

 

(D) The falsification of any of the above certifications may subject
the Borrower or any Contract Party to civil or criminal prosecution under
section 1001 of title 18 and section 3729 of title 31 of the United States
Code.

 

(iii) The Borrower and each Contract Party shall make the records
required under subparagraph (b)(3)(i) of this Exhibit available for inspection,
copying, or transcription by authorized representatives of the DOE or the
Department of Labor, and shall permit such representatives to interview
employees during working hours on the job. If the Borrower or any Contract
Party fails to submit the required records or to make them available, the DOE
may, after written notice to the Borrower take such action as may be necessary
to cause the suspension of any further disbursement under the DOE-Guaranteed
Loan, it being understood that any such suspension shall not affect the
validity of the DOE Guarantee on the portions of the DOE-Guaranteed Loan that
have been disbursed prior to the date of such suspension and remain outstanding
as of such date.  Furthermore, failure to
submit the required records upon request or to make such records available may
be grounds for debarment action pursuant to 29 CFR 5.12.

 

(4) Apprentices and trainees.

 

(i) Apprentices. Apprentices will be permitted to work at less
than the predetermined rate for the work they performed when they are employed
pursuant to and individually registered in a bona fide apprenticeship program
registered with the U.S. Department of Labor, Employment and Training
Administration, Office of Apprenticeship Training, Employer and Labor Services,
or with a State Apprenticeship 

 

A4-7

 

Agency recognized by the Office, or if a person is employed in his or
her first 90 days of probationary employment as an apprentice in such an
apprenticeship program, who is not individually registered in the program, but
who has been certified by the Office of Apprenticeship Training, Employer and
Labor Services or a State Apprenticeship Agency (where appropriate) to be
eligible for probationary employment as an apprentice. The allowable ratio of
apprentices to journeymen on the job site in any craft classification shall not
be greater than the ratio permitted to the Borrower or Contract Party as to the
entire work force under the registered program. Any worker listed on a payroll
at an apprentice wage rate, who is not registered or otherwise employed as
stated above, shall be paid not less than the applicable wage rate on the wage
determination for the classification of work actually performed. In addition,
any apprentice performing work on the job site in excess of the ratio permitted
under the registered program shall be paid not less than the applicable wage rate
on the wage determination for the work actually performed. Where a Borrower or
Contract Party is performing construction on a project in a locality other than
that in which its program is registered, the ratios and wage rates (expressed
in percentages of the journeyman’s hourly rate) specified in the Borrower or
Contract Party’s registered program shall be observed. Every apprentice must be
paid at not less than the rate specified in the registered program for the
apprentice’s level of progress, expressed as a percentage of the journeymen
hourly rate specified in the applicable wage determination. Apprentices shall
be paid fringe benefits in accordance with the provisions of the apprenticeship
program. If the apprenticeship program does not specify fringe benefits,
apprentices must be paid the full amount of fringe benefits listed on the wage
determination for the applicable classification. If the Administrator
determines that a different practice prevails for the applicable apprentice
classification, fringes shall be paid in accordance with that determination. In
the event the Office of Apprenticeship Training, Employer and Labor Services,
or a State Apprenticeship Agency recognized by the Office, withdraws approval
of an apprenticeship program, the Borrower or the Contract Party will no longer
be permitted to utilize apprentices at less than the applicable predetermined
rate for the work performed until an acceptable program is approved.

 

(ii) Trainees. Except as provided in 29 CFR 5.16, trainees will
not be permitted to work at less than the predetermined rate for the work
performed unless they are employed pursuant to and individually registered in a
program which has received prior approval, evidenced by formal certification by
the U.S. Department of Labor, Employment and Training Administration. The ratio
of trainees to journeymen on the job site shall not be greater than permitted
under the plan approved by the Employment and Training Administration. Every
trainee must be paid at not less than the rate specified in the approved
program for the trainee’s level of progress, expressed as a percentage of the
journeyman hourly rate specified in the applicable wage determination. Trainees
shall be paid fringe benefits in accordance with the provisions of the trainee
program. If the trainee program does not mention fringe benefits, trainees
shall be paid the full amount of fringe benefits listed on the wage
determination unless the Administrator of the Wage and Hour Division determines
that there is an apprenticeship program associated with the corresponding
journeyman wage rate on the wage determination which provides for less than
full fringe benefits for apprentices. Any employee listed on the payroll at a
trainee rate who is not registered and participating in a training plan
approved by the 

 

A4-8

 

Employment and Training Administration shall be paid not less than the
applicable wage rate on the wage determination for the classification of work
actually performed. In addition, any trainee performing work on the job site in
excess of the ratio permitted under the registered program shall be paid not
less than the applicable wage rate on the wage determination for the work
actually performed. In the event the Employment and Training Administration
withdraws approval of a training program, the Borrower or the Contract Party
will no longer be permitted to utilize trainees at less than the applicable
predetermined rate for the work performed until an acceptable program is
approved.

 

(iii) Equal employment opportunity. The utilization of
apprentices, trainees and journeymen under this part shall be in conformity
with the equal employment opportunity requirements of Executive Order 11246, as
amended, and 29 CFR part 30.

 

(5) Compliance with Copeland Act requirements. The Borrower
and any Contract Party shall comply with the requirements of 29 CFR part 3,
which are incorporated by reference in this Common Agreement and any other
Davis-Bacon Act Covered Contract.

 

(6) Subcontracts. The Borrower and any higher
or lower tier Contract Party shall insert in any Davis-Bacon Act Covered
Contract the clauses contained in subparagraphs (b)(1) through (10) of this
Exhibit and such other clauses as the DOE may by appropriate instructions
require, and also a clause requiring the higher tier Contract Party to include
these clauses in any lower tier Davis-Bacon Act Covered Contract. The Borrower
shall be responsible for the compliance by any Contract Party with all the
contract clauses in (1) through (10) of this Exhibit.

 

(7) Contract termination: debarment.  A breach of any of the contract clauses in
(1) through (10) of subparagraph (b) in this Exhibit will constitute an Event
of Default by the Borrower under Article 8 of the Common Agreement and may be
grounds for termination of any Davis-Bacon Act Covered Contract, and for
debarment as a contractor, a subcontractor or other entity as provided in 29
CFR 5.12; provided, however, that the termination provision in
this subparagraph (b)(7) shall not apply to the Common Agreement but that, in
lieu of the application of such termination provision of subparagraph (b)(7),
the remedies available to DOE under Section 8.2 of the Common Agreement
shall apply upon such an Event of Default.

 

(8) Compliance with Davis-Bacon and Related Act requirements.  All rulings and interpretations of the
Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 (other than
Section 5.5(b) of 29 CFR part 5) are herein incorporated by reference in this
Common Agreement and any other Davis-Bacon Act Covered Contract.

 

(9) Disputes concerning labor standards. Disputes
arising out of the labor standards provisions of this Common Agreement or any
other Davis-Bacon Act Covered Contract shall not be subject to the general
disputes clause of such contract. Such disputes shall be resolved in accordance
with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6,
and 7. Disputes within the meaning of this clause include 

 

A4-9

 

disputes between the Borrower or any Contract Party and DOE, the U.S.
Department of Labor, or the employees or their representatives.

 

(10) Certification of eligibility.

 

(i) By entering into this Common Agreement and any other Davis-Bacon
Act Covered Contract, the Borrower and the Contract Party each certifies that
neither it (nor he or she) nor any person or firm who has an interest in the
Borrower or the Contract Party’s firm is a person or firm ineligible to be
awarded Government contracts by virtue of section 3(a) of the Davis-Bacon Act
or 29 CFR 5.12(a)(1).

 

(ii) No part of this Common Agreement or any other Davis-Bacon Act
Covered Contract shall be assigned or subcontracted, as the case may be, to any
person or firm ineligible for award of a Government contract by virtue of
section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).

 

(iii) The penalty for making false statements is prescribed in the U.S.
Criminal Code, 18 U.S.C. 1001.

 

A4-10

 

Exhibit A5

to Common Agreement

 

DISCLOSURE LETTER

 

See
attached.

 

A5-1

 

LOAN GUARANTEE OF THE U.S.
DEPARTMENT OF ENERGY

 

WITH RESPECT TO A LOAN FROM THE
FEDERAL FINANCING BANK

 

TO

 

STEPHENTOWN REGULATION SERVICES
LLC

 

COMPANY DISCLOSURE LETTER

 

A5-1

 

Schedule 1

 

Security Agreement

 

Commercial
Tort Claims

 

None.

 

Intellectual
Property Collateral

 

[*****]

 

Location of Chief Executive Office and Collateral.

 

Chief
Executive Office and Principal Place of Business:  99 Grange Hall Road, Stephentown, NY 12168

 

Collateral
is kept: (i) c/o Beacon Power Corporation, 65 Middlesex Road, Tyngsboro, MA
01879; (ii) 99 Grange Hall Road, Stephentown, NY 12168; and (iii) with certain
suppliers, prior to delivery at the Site, including without limitation, D&W
Contractors, D&W Contractors, 95 Park Street, Unit #2, Northfield, NH
03276.

 

Locations
of Books.

 

c/o
Beacon Power Corporation, 65 Middlesex Road, Tyngsboro, MA 01879

 

Certain
books maybe kept with the Escrow Agent in connection with the Transaction
Documents.

 

Jurisdiction
of Organization and Names.

 

Jurisdiction
of Organization:  Delaware

 

Inventory.

 

As
contemplated by the Waiver and Agreement, certain assets are located (i) c/o
Beacon Power Corporation, 65 Middlesex Road, Tyngsboro, MA 01879; (ii) 99
Grange Hall Road, Stephentown, NY 12168; and (iii) with certain suppliers,
prior to delivery at the Site, including without limitation, [*****]

 

A5-2

 

Equipment.

 

None.

 

Investment
Property; Instruments; and Chattel Paper.

 

Accounts
subject to the Account Control Agreement.

 

Letter-of-Credit Rights.

 

None.

 

Location
of Collateral.

 

Collateral
is kept: (i) c/o Beacon Power Corporation, 65 Middlesex Road, Tyngsboro, MA
01879; (ii) 99 Grange Hall Road, Stephentown, NY 12168; and (iii) with certain
suppliers, prior to delivery at the Site, including without limitation, [*****]

 

A5-3

 

Schedule 5.10

 

Permits; Other Required Consents

 

[*****]

 

Borrower
has obtained and will be required to obtain permits in the ordinary course as
well.

 

A5-4

 

Schedule 5.11

 

Litigation, Labor Disputes

 

None.

 

A5-5

 

Schedule 5.12

 

Tax

 

None.

 

A5-6

 

Schedule 5.14

 

Transactions with Affiliates

 

Transaction
Documents entered into from time to time in accordance with the Common
Agreement.

 

A5-7

 

Schedule 5.16

 

Environmental Laws

 

No
other matters, other than any matters that are disclosed in the environmental
report attached to the Environmental Indemnity Agreement

 

A5-8

 

Exhibit B

to Common Agreement

 

RULES OF INTERPRETATION

 

For
all purposes of this Common Agreement, including Exhibits, Schedules, Annexes
and Appendices hereto, unless otherwise indicated or required by the context:

 

1.               Plurals and
Gender.  Defined terms in the singular
shall include the plural and vice versa, and the masculine, feminine or neuter
gender shall include all genders.

 

2.               Use of Or.  The word “or” is not exclusive.

 

3.               Change of Law.  Each reference to a Governmental Rule or
Environmental Law includes any amendment, supplement or modification of such
Governmental Rule or Environmental Law, as the case may be, and all
regulations, rulings and other Governmental Rules or Environmental Laws
promulgated thereunder.

 

4.               Successor and
Assigns.  A reference to a Person
includes its successors and permitted assigns.

 

5.               Including.  The words “include,” “includes” and “including”
are not limiting and mean include, includes and including “without limitation”
and “without limitation by specification”.

 

6.               Hereof, Herein,
Hereunder.  The words “hereof,”
“herein” and “hereunder” and words of similar import when used in any document
shall refer to such document as a whole and not to any particular provision of
such document.

 

7.               Articles,
Sections, Exhibits.  A reference
in a document to an Article, Section, Exhibit, Schedule, Annex or Appendix is
to the Article, Section, Exhibit, Schedule, Annex or Appendix of such document
unless otherwise indicated.

 

8.               Attachments, Replacements,
Amendments.  References
to any document, instrument or agreement (a) shall include all exhibits,
schedules, annexes and appendices thereto, and all exhibits, schedules, annexes
or appendices to any document shall be deemed incorporated by reference in such
document, (b) shall include all documents, instruments or agreements
issued or executed in replacement thereof, and (c) shall mean such
document, instrument or agreement, or replacement thereto, as amended, modified
and supplemented from time to time and in effect at any given time.

 

9.               Periods and
Time.  References to “days”, “weeks”,
“months” and “years” shall mean calendar days, weeks, months and years,
respectively.  References to a time of
day shall mean such time in Washington,
D.C.

 

10.         Ambiguities.  The Loan Documents are the result of
negotiations among, and have been reviewed by each party to the Loan Documents
and their respective counsel. 
Accordingly, 

 

B-1

 

the
Loan Documents shall be deemed to be the product of all parties thereto, and no
ambiguity shall be construed in favor of or against any Person.

 

11.         Continuing
Definitions.  With
respect to any term that is defined by reference to any document, for purposes
hereof, such term shall continue to have the original definition
notwithstanding any termination, expiration or modification of such document.

 

12.         Terms Defined
Elsewhere.  Terms that
are defined in the preamble, the recitals, or the Sections of this Agreement
have the meanings ascribed to them therein.

 

13.         Headings.  The table of contents and article and section
headings and other captions have been inserted as a matter of convenience for
the purpose of reference only and do not limit or affect the meaning of the
terms and provisions thereof.

 

14.         Accounting Terms.  All accounting terms not specifically defined
shall be construed in accordance with GAAP.

 

15.         Forward-Looking Statements.  With respect to preparation or update by any
Person of budgets, projections or other forward-looking plans and forecasts,
such Person shall be deemed to represent only that such budgets, projections
and forward-looking plans and forecasts were prepared in good faith based upon
assumptions believed by such Person to be reasonable at the time of their
preparation or update.

 

B-2

 

Exhibit C1

to Common Agreement

 

FORM OF BORROWER
CERTIFICATE

(For Financial Closing Date)

 

(Delivered pursuant to Section 4.1.23
of the Common Agreement)

 

 

Date of this Certificate: August 6, 2010

 

U.S.
Department of Energy

 

Ladies and Gentlemen:

 

This Borrower Certificate is delivered to you
pursuant to Sections 4.1.23 of the Common Agreement, dated
as of August 6, 2010 (the “Common Agreement”), by and among
(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.
Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Certificate
shall have their respective meanings specified in the Common Agreement.

 

The Borrower HEREBY CERTIFIES for the benefit
of each Credit Party that, as of the date hereof:

 

1.             Pursuant to Section 4.1.2 of the Common
Agreement, the following Project Documents were delivered on the Financial Closing
Date and are attached hereto, (a) each of which is (i) a true,
correct and complete copy of such document (including all schedules, exhibits,
attachments, supplements and amendments thereto and any related protocols or
side letters), and (ii) has been duly executed and delivered by the
parties thereto and is in full force and effect (A) against the Borrower
and (B) against each other party thereto except, in the case of this
clause (B), for instances that would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect; and
(b) to the Borrower’s Actual Knowledge, no party to any such document is,
or but for the passage of time or giving of notice or both will be, in breach
of any obligation thereunder:

 

a)     the Land Documents;

 

b)    the EPC Agreement;

 

c)     the Engineering and Architectural Services Agreement;

 

d)    the Permitting and Engineering Management Agreement;

 

e)     the NYISO Membership Agreement;

 

f)     the O&M Agreement;

 

C1-1

 

 

g)    the Technology License Agreement;

 

h)    the Technology Escrow Agreement;

 

i)      the Administrative Services Agreement; and

 

j)      the Flywheel Repair Agreement.

 

2.             Pursuant to Section 4.1.3
of the Common Agreement, the Advance Schedule attached hereto is the Borrower’s reasonable estimate in all
material respects, based on all facts and circumstances existing and Known to
the Borrower, of the timing and amount of proposed Advances and Equity
Contributions for the Project (showing the total Advances expected in each
calendar month);

 

3.             Pursuant to Section 4.1.4(i) of the
Common Agreement, the Financial Plan submitted to the Lender’s
Engineer and the Loan Servicer on May 7,
2010 and May 11, 2010 respectively, and attached as
Exhibit A1 to the Common Agreement, accurately reflects the Borrower’s
Financial Plan as of the date hereof and demonstrates that the DOE Credit
Facility Commitment, when combined with other funds committed to the Project,
including the Base Equity, will be available and sufficient to carry out the
Project and based on the Borrower’s reasonable estimates of the information
contained therein;

 

4.             Pursuant to Section 4.1.4(ii) of the
Common Agreement, the Base Case Projections, including a computer file
containing the Base Case Projections and the underlying models and assumptions
and explanations thereto, submitted to the Lender’s Engineer and the Loan
Servicer on May 3, 2010 and
attached hereto, represent the Borrower’s reasonable estimates of
the information contained therein as of the date submitted and as of the date
hereof;

 

5.             Pursuant to Section 4.1.4(iii) of the
Common Agreement, the Project Milestone Schedule, submitted to the
Lender’s Engineer and the Loan Servicer on July 23, 2010 and attached hereto, represents the Borrower’s
reasonable estimates of the information contained therein as of the date
submitted and as of the date hereof;

 

6.             Pursuant to Section 4.1.4(iv) of the
Common Agreement, the Project Budget, submitted to the Lender’s
Engineer and the Loan Servicer on May 11,
2010 and May 28, 2010 respectively and attached hereto, represents
the Borrower’s reasonable estimates of the information contained therein as of
the date submitted and as of the date hereof;

 

7.             Pursuant to Section 4.1.4(v) of the
Common Agreement, a detailed description, with supporting documents, as
have been reasonably requested on or prior to the date hereof, of Development
Costs incurred to date and a Development Costs Statement summarizing those
costs that the Borrower seeks credit as Approved Pre-Closing Equity Credit to
be applied toward Base Equity and that are to be reviewed by the Lender’s
Engineer, was submitted to the Lender’s Engineer and the Loan Servicer prior to
the date hereof, is attached hereto and remains now true and complete in all
material respects and represents the Borrower’s reasonable estimates of the
information contained therein;

 

C1-2

 

8.             Pursuant to Section 4.1.8
of the Common Agreement, the attached Base Case Projections delivered pursuant
to Section 4.1.4 of the Common Agreement include calculations
indicating that throughout the term of the DOE Credit Facility a minimum annual
Debt Service Coverage Ratio of 1.30 to 1 for the period after the Project
Completion Date is expected to be achieved;

 

9.             Pursuant to Section 4.1.9(ii) of the
Common Agreement, the amounts reflected in the Approved Pre-Closing
Equity Credit (a) are in an
amount not greater than $18,882,211, and (b) have been applied in accordance
with the Project Budget only for Eligible Base Project Costs; and no amounts in
the Project Budget have been applied to Ineligible Base Project Costs;

 

10.           Pursuant to Section 4.1.9(iii) of
the Common Agreement, no charges have been made to the line item for Overrun
Contingencies in the Project Budget;

 

11.           Pursuant to Section 4.1.10
of the Common Agreement, (a) the Borrower has no existing Indebtedness,
other than Indebtedness permitted under the Common Agreement and (b) no
Liens encumber any Collateral, other than Permitted Liens.

 

12.           Pursuant to Section 4.1.12 of the Common
Agreement, (a) all Governmental Approvals and other Required
Consents listed on Schedule 5.10 to the Disclosure Letter (except those
identified on Schedule 5.10 to the Disclosure Letter as to be obtained at a
later date) have been duly obtained and are not subject to any waiting period
or appeal, and (b) a copy of each such Governmental Approval or other
Required Consent, has been submitted to the Lender’s Engineer and the Loan Servicer
on or prior to the date hereof, and each of which is true and complete in all
material respects as of the date hereof;

 

13.           Pursuant to Section 4.1.16
of the Common Agreement, the Periodic Expenses of any Independent Consultants
incurred and invoiced prior to the Financial Closing Date (other than Periodic
Expenses not then due) have been paid in full;

 

14.           Pursuant to Section 4.1.17 of the Common
Agreement, the price set forth in each Project Document has not been increased
from the price as of the Common Agreement Date;

 

15.           Pursuant to Section 4.1.19 of the Common
Agreement, the Project Facility Performance Targets are achievable;

 

16.           Pursuant to Section 4.1.22 of the Common
Agreement, attached hereto are true and complete copies of
the Borrower’s organizational documents (as amended to date), good standing
certificates and incumbency certificates;

 

17.           Pursuant to Section 4.1.22 of the Common
Agreement, attached hereto are true and complete copies of
the Borrower’s resolutions duly adopted by the sole Member of the Borrower to
authorize (a) the Borrower’s participation in the Project, (b) the
financing therefor and the granting of Liens, and (c) the execution,
delivery and performance by the Borrower of the Transaction Documents
(including a Direct Agreement) to which it is party;

 

C1-3

 

18.           Pursuant to Section 4.1.26 of the Common
Agreement, all required taxes, all Periodic Expenses, and all recordation and
other costs, fees and Periodic Expenses invoiced and due in connection with the
execution, delivery, filing, registration, or performance of the Transaction
Documents or the perfection of the security interests in the Collateral
Security have been paid in full;

 

19.           Pursuant to Section 4.1.27 of the Common
Agreement, (a) insurance coverage for the Project satisfies the requirements
for Required Insurance as set forth on Schedule 6.3(b) of the
Common Agreement and certificates or policies for such insurance coverage are
attached hereto, (b) such insurance coverage is reasonable for the
Project, and (c) the applicable insurance policies are in full force and effect;

 

20.           Pursuant to Section 4.1.32
of the Common Agreement, pursuant to the Technology License Agreement, the
Borrower has received one or more licenses covering all intellectual property
rights necessary for the design, construction and operation of the Project;

 

21.           Pursuant to Section 4.1.35 of the Common
Agreement, any recommendations for mitigation of earthquake risk set forth in
the Seismic Risk Analysis, dated September 14, 2009, prepared by Dente
Engineering, P.C. (the “Earthquake Risk Report”), a copy of which is attached
hereto, have been adequately addressed in the Project Plans;

 

22.           Pursuant to Section 4.1.36 of the Common
Agreement, (i) except for the receipt of a fully executed original of the
Interconnection Agreement in accordance with Section 4.2.1 of the
Common Agreement, arrangements reflected in the Project Milestone Schedule and
the Project Budget have been made under the Project Documents or are otherwise
available to the extent required in Section 5.25 of the Common
Agreement for the provision of all services, materials and utilities necessary
for the construction, startup, commissioning and shakedown of the Project, and (ii) arrangements
reflected in the Base Case Projections have been made or can be made under the
Operating Documents to the extent then appropriate or are otherwise available
to the extent required in Section 5.25 of the Common Agreement for
the provision of all services, materials and utilities necessary for the
operation and maintenance of the Project as contemplated by the Principal
Project Documents;

 

23.           Pursuant to Section 4.1.38 of the Common
Agreement, all conditions precedent required to be satisfied by any Major
Project Participant under any Transaction Document as of the Financial Closing
Date have been satisfied;

 

24.           Pursuant to Section 4.1.40
of the Common Agreement, all employees of the Borrower have entered into valid
and binding non-disclosure and assignment of invention agreements;

 

25.           Pursuant to Section 4.1.44 of the Common
Agreement, the Borrower does not have a judgement Lien against any of its
property for a debt owed to the United States of America or any other creditor;

 

C1-4

 

26.           Pursuant to Section 4.1.45 of the Common
Agreement, the Borrower is in compliance with, and has taken all necessary
steps to be able to timely comply in all material respects with (a) its
reporting obligations under Section 6.29(a) of the Common
Agreement with respect to Recovery Act and (b) the requirements set forth
in Section 6.30 and Exhibit A4 of the Common Agreement;

 

27.           Attached hereto is a copy of the Application
Supplement;

 

28.           Pursuant to Section 4.1.47 of the Common
Agreement, Commencement of Construction has occurred on or before the date
hereof;

 

29.           Pursuant to Section 4.1.48
of the Common Agreement, since June 29, 2009 (a) no event has
occurred with respect to the Project or any Major Project Participant that
would reasonably be expected to have a Material Adverse Effect and (b) no
event has occurred that would reasonably be expected to have a Material Adverse
Effect;

 

30.           Pursuant to Section 4.1.49
of the Common Agreement, the Borrower has registered in the United States
federal government Central Contractor Registration database; and

 

31.           Pursuant to Section 4.1.52 of the Common
Agreement, there is no pending or threatened (in writing) action, suit, or
proceeding, or investigation by a Governmental Authority, of any kind,
including any action or proceeding of or before any Governmental Authority,
that (i) relates to the Project or to any transactions contemplated by any
of the Transaction Documents or (ii) to which the Borrower, or, to the
Borrower’s Actual Knowledge, the Sponsor or any other Major Project Participant
is a party, that, in each case, either singly or in the aggregate, has, or
could reasonably be expected to
have, a Material Adverse Effect.

 

C1-5

 

IN WITNESS WHEREOF, the undersigned has
executed this Borrower Certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  

 

 

List of Attachments to Borrower Certificate

 

	
  1.

  	
  Advance
  Schedule (Paragraph 2)

  
	
   

  	
   

  
	
  2.

  	
  Base
  Case Projections (Paragraph 4)

  
	
   

  	
   

  
	
  3.

  	
  Project
  Milestone Schedule (Paragraph 5)

  
	
   

  	
   

  
	
  4.

  	
  Project
  Budget (Paragraph 6)

  
	
   

  	
   

  
	
  5.

  	
  Development
  Costs Statement (Paragraph 7)

  
	
   

  	
   

  
	
  6.

  	
  Borrower’s
  Organizational Documents, Good Standing Certificates and Incumbency
  Certificates (Paragraph 16)

  
	
   

  	
   

  
	
  7.

  	
  Borrower’s
  Authorizing Resolutions (Paragraph 17)

  
	
   

  	
   

  
	
  8.

  	
  Certificates
  of Insurance (Paragraph 19)

  
	
   

  	
   

  
	
  9.

  	
  Earthquake
  Risk Report (Paragraph 21)

  
	
   

  	
   

  
	
  10.

  	
  Application
  Supplement (Paragraph 27)

  

 

 

Exhibit C2

to Common Agreement

 

FORM OF BORROWER
CERTIFICATE 

(For Periodic Closing)

 

(Delivered pursuant to Section 4.2.11(i) of
the Common Agreement)

 

Date of this Certificate:            ,
20   

 

U.S.
Department of Energy

 

Ladies and Gentlemen:

 

This Borrower Certificate is delivered to you
pursuant to Section 4.2.11(i) of the Common Agreement, dated
as of August 6, 2010 (the “Common Agreement”), by and among
(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.
Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Borrower
Certificate shall have their respective meanings specified in the Common
Agreement.

 

The Borrower HEREBY CERTIFIES for the benefit
of each Relevant Credit Party that, as of the date hereof:

 

1.             Pursuant to Section 4.2.2(i) of
the Common Agreement, the updated Advance Schedule attached hereto as Exhibit 4.2.2(i),
including the estimates set forth therein, of the timing and amount of Advances
required in connection with the construction and financing of the Project is
consistent with the Project Budget, consistent with the achievement of Physical
Completion within the time period specified in the Project Milestone Schedule
and consistent with the limitations set forth in Section 2.1(c) of
the Common Agreement;

 

2.             Pursuant to Section 4.2.2(ii) of
the Common Agreement, (i) the proceeds of all Advances to be made with
respect to the updated Advance Schedule will be needed for Eligible Project
Costs that have been incurred or by the Requested Advance Date will be
incurred, and (ii) attached hereto as Exhibit 4.2.2 is a
description in reasonable detail of such Eligible Project Costs;

 

3.             Pursuant to Section 4.2.3(a) of
the Common Agreement, the Project Progress Report delivered on        ,
20   , is accurate and complete in all material respects based
upon Borrower’s good faith estimates of the information contained therein,
including with respect to the following:

 

C2-1

 

(i)            [Construction and
installation of the Project are proceeding in accordance with the Project
Milestone Schedule and the Project Budget] OR [The Project Progress Report (i) describes
any variances from the Project Milestone Schedule and Project Budget and (ii) states
that the variances described in the Project Progress Report would not
reasonably be expected to have a Material Adverse Effect];

 

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

 

(iii)          Total Funding Available is
sufficient to pay all remaining Total Project Costs (including Interest During
Construction, DOE Credit Facility Fees, Periodic Expenses, and identified Cost
Overruns); and

 

(iv)          evidence that as of the date
of such Project Progress Report (A) each Construction Contractor and the
Operator shall have irrevocably waived and released all Liens, statutory or
otherwise, that any of them may have or acquire on the Collateral Security with
respect to the work completed prior to the last submission for payment, except
for Liens in favor of any Person in an aggregate amount for such Person not [*****]; and (B) all unpaid balances that
are due or unsettled claims with any Construction Contractor, if any, have been
adequately paid and that those being contested or negotiated in good faith are
provisioned to the reasonable satisfaction of the Loan Servicer;

 

4.             Pursuant to Section 4.2.3(b) of
the Common Agreement:

 

(i)            there is no reason to
believe that anything is incorrect or misleading in any material respect in the
Project Progress Report delivered on          ,
20   ; and

 

(ii)           nothing has occurred since
the date of such Project Progress Report or the date of the Lender’s Engineer’s
most recent site visit, whichever is later, that could reasonably be expected
to prevent construction and installation of the Project within the Project
Milestone Schedule and the Project Budget;

 

5.             Pursuant to Section 4.2.5
of the Common Agreement, (i) all consents and approvals of third Persons
as may be required in connection with the proposed Advances and all
Governmental Approvals required as of the Advance Notice Date have been duly
obtained and are in full force and effect and are not under appeal or subject
to other proceedings or unsatisfied conditions that could reasonably be
expected to result in a material modification or cancellation thereof, and
(ii) attached hereto as Exhibit 4.2.5 are copies of all
material Governmental Approvals not previously delivered, which are true and
complete in all material respects;

 

6.             Pursuant to Section 4.2.6
of the Common Agreement, (i) all Required Insurance is in place, in good
standing and in full force and all premiums due and payable thereon as of the
date hereof (x) have been paid in full, (y) are to be paid with the
proceeds of the requested Advance, or (z) are to be paid by other
arrangements satisfactory to the Borrower, and (ii) attached hereto as Exhibit 4.2.6
are true and complete copies of all certificates or policies with respect to
any additional renewal or substitute insurance 

 

C2-2

 

obtained by the Borrower since the previous Advance Notice Date,
designating (or evidencing the designation of) the Administrative Agent in its
capacity as Collateral Agent as loss payee, where appropriate;

 

7.             Pursuant to Section 4.2.7
of the Common Agreement, (i) all corporate and similar proceedings
concluded since the last Advance Notice Date are in proper form and substance,
and (ii) attached hereto as Exhibit 4.2.7 are true and
complete original counterparts or copies of all Additional Project Documents
entered into since the last Advance Notice Date;

 

8.             Pursuant to Section 4.2.8 of the Common
Agreement, the representations and warranties in the Loan Documents
(other than those that speak only as
to an earlier date) are true and correct in all material respects and no Event
of Default or Potential Default has occurred and is continuing;

 

9.             Pursuant to Section 4.2.9
of the Common Agreement, no changes to the technical requirements of the
existing Governmental Approvals has occurred, that has had or could reasonably
be expected to have a Material Adverse Effect;

 

10.           Pursuant to Section 4.2.10
of the Common Agreement, the Borrower has achieved the Project Facility
Performance Targets applicable to this Advance Notice Date;

 

11.           Pursuant to Section 4.2.12
of the Common Agreement, (i) there have been no changes to the Project
Budget since the previous Advance Notice Date, except for Approved Project
Changes, (ii) the aggregate amounts expended for each type of Project Cost
does not exceed the aggregate amount budgeted for such cost in the Project
Budget, including budgeted Overrun Contingencies, except for Approved Project
Changes, and (iii) the sum of (A) the unadvanced proceeds of the DOE
Credit Facility and (B) the amount on deposit in the Base Equity Account
and Overrun Equity Account is sufficient to pay all remaining Total Project
Costs;

 

12.           Pursuant to Section 4.2.14
of the Common Agreement, the Advance will not result in a violation of any law,
any Transaction Document, any governmental approval, or any other agreement or
consent to which the Borrower is a party or any judgment or approval to which
it is subject;

 

13.           Pursuant to Section 4.2.15
of the Common Agreement, since June 29, 2009 no event has occurred with
respect to the Project or any Major Project Participant that would reasonably
be expected to have a Material Adverse Effect;

 

14.           Pursuant to Section 4.2.17
of the Common Agreement, since the Common Agreement Date, no change in law or
any other event has occurred that would reasonably be expected to have a
Material Adverse Effect; and

 

15.           Pursuant to Section 4.2.18
of the Common Agreement, the Borrower is in compliance with its obligations
under the Loan Documents, including all affirmative covenants and 

 

C2-3

 

negative covenants, and has furnished all information requested under
the Loan Documents.

 

C2-4

 

IN WITNESS WHEREOF, the undersigned has
executed this Borrower Certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

C2-5

 

Exhibit D1

to Common Agreement

 

FORM OF LENDER’S ENGINEER CERTIFICATE 

(For Financial Closing Date)

 

(Delivered pursuant to Section 4.1.15(i) of the Common
Agreement)

 

[On Letterhead of the Lender’s Engineer]

 

Date of this Certificate: August 6, 2010

 

U.S.
Department of Energy

 

Ladies
and Gentlemen:

 

This
Certificate of the Lender’s Engineer is delivered to you [*****] as Lender’s Engineer pursuant to the
Common Agreement, dated as of August 6, 2010 (the “Common Agreement”),
by and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) the
U.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the
Collateral Agent.

 

All
capitalized terms used in this Certificate of the Lender’s Engineer shall have
the respective meanings specified in the Common Agreement.

 

We
have reviewed the Borrower’s Certificate (For Financial Closing Date) dated August 6,
2010.

 

To
the extent that this Certificate of the Lender’s Engineer evidences, attests or
confirms compliance with any covenants, conditions, procedures or requirements,
we have made such examination or investigation as was, in our opinion,
necessary to enable us to express an opinion as to whether such covenants,
conditions, procedures or requirements have been complied with.

 

Our
review and observations were performed in accordance with the Matching Order
DE-MO01-09CF02002 and the Sponsor Payment Letter dated February 23, 2009
and with generally accepted engineering practice and in accordance with the
standards of care practiced by independent and consulting engineers performing
similar tasks on like projects.  This
Certificate is addressed to DOE in its capacity as Loan Servicer and may not be
relied upon by any other party.

 

The
opinions that support our certifications contained herein were developed with
the understanding and assumption, after appropriate due diligence, that we have
been provided true, correct, and complete information satisfactory in form and
scope from the Borrower as to the matters covered by this Certificate of the
Lender’s Engineer.

 

D1-1

 

Pursuant
to Section 4.1.15(i) of the Common Agreement, the undersigned DOES
HEREBY CERTIFY that, as of the date hereof:

 

1.             Pursuant to Section 4.1.3
of the Common Agreement, the Advance Schedule provided by the Borrower and
attached hereto showing the timing and amount of proposed Advances and Equity
Contributions for the Project (the total Advances expected in each calendar
month) is consistent with the Financial Plan and Project Budget and consistent
with the achievement of Physical Completion within the time period specified in
the Project Milestone Schedule, based on all facts and circumstances then
existing and Known to us;

 

2.             Pursuant to Section 4.1.4(i) of
the Common Agreement, the Financial Plan provided by the Borrower on
May 7, 2010 and attached as Exhibit A1 to the Common
Agreement, demonstrates that the DOE Credit Facility Commitment, when combined
with other funds committed to the Project, including the Base Equity, will be
sufficient to carry out the Project, based upon the Borrower’s estimates of the
information contained therein;

 

3.             Pursuant to Section 4.1.4(ii) of
the Common Agreement, and based on our independent review of the technical
inputs to and the information presented in the Base Case Projections, including
a computer file containing the Base Case Projections and the underlying models
and assumptions and explanations thereto, provided by the Borrower on
April 30, 2010 and attached hereto, as documented in our Independent
Engineer’s Report submitted to DOE on May 27, 2010, we are of the opinion [*****];

 

4.             Pursuant to Section 4.1.4(iii) of
the Common Agreement, the Project Milestone Schedule provided by the Borrower
on July 23, 2010 and attached hereto is achievable for the Project;

 

5.             Pursuant to Section 4.1.4(iv) of
the Common Agreement, the Project Budget provided by the Borrower on
May 11, 2010 and attached hereto is consistent with the Advance Schedule
and Financial Plan for the Project; and, based on our review, as documented in
our Independent Engineer’s Report submitted to DOE on May 27, 2010, the
estimated total Project construction cost and Overrun Contingency appear to be
within the range of estimated construction costs and contingency allowances for
reasonably similar projects, considering the Project size and complexity and
type of equipment, with which we are familiar;

 

6.             Pursuant to Section 4.1.9(i) of
the Common Agreement, we have reviewed the Borrower’s description, and
supporting documents, of Development Costs provided by the Borrower in the
Development Costs Statement dated July 14, 2010, submitted by the Borrower
on July 15, 2010, pursuant to Section 4.1.4(v) of the
Common Agreement and attached hereto; the amount of Development Costs of
$18,882,140.72 certified by the Borrower in such description can be included in
the Approved Pre-Closing Equity Credit;

 

D1-2

 

7.             Pursuant to Section 4.1.9(ii) of
the Common Agreement, (a) the amounts reflected in the Approved
Pre-Closing Equity Credit are in an amount not greater than $18,882,211 and
have been applied in accordance with the Project Budget only for Eligible Base
Project Costs, and (b) the Borrower has not allocated any amounts in the
Project Budget to Ineligible Base Project Costs.  For the avoidance of doubt, the Borrower has
indicated that there are no Ineligible Base Project Costs;

 

8.             Pursuant to Section 4.1.9(iii) of
the Common Agreement, and certified by the Borrower, no changes have been made
to the line item for Overrun Contingencies in the Project Budget;

 

9.             Pursuant to Section 4.1.13
of the Common Agreement, and, provided that the Borrower provides the updates
required under the provisions of the Technology Escrow Agreement, the Project
Plans are satisfactory and sufficient for the construction of the Improvements
on the Project Site;

 

10.           Pursuant to Section 4.1.17
of the Common Agreement, the price set forth in each Project Document and
certified by the Borrower has not been increased from the price as of the
Common Agreement Date;

 

11.           Pursuant to Section 4.1.19 of the Common
Agreement, the Project Facility Performance Targets are achievable;

 

12.           Pursuant to Section 4.1.32
of the Common Agreement, pursuant to the Technology License Agreement, the
Borrower has received one or more licenses covering all intellectual property
rights necessary for the design, construction and operation of the Project;

 

13.           Pursuant to Section 4.1.35 of the Common Agreement, any
recommendations for mitigation of earthquake risk set forth in the Seismic Risk
Analysis, dated September 14, 2009 prepared by Dente Engineering, P.C.
(the “Earthquake Risk Report”), a copy of which is attached hereto, have been
adequately addressed in the Project Plans;

 

14.           Pursuant to Section 4.1.36(i) of
the Common Agreement, except for the receipt of a fully executed original of
the Interconnection Agreement in accordance with Section 4.2.1 of the
Common Agreement, arrangements reflected in the Project Milestone Schedule and
the Project Budget have been made under the Project Documents or are otherwise
available to the extent required in Section 5.25 of the Common
Agreement for the provision of all services, materials and utilities necessary
for the construction, startup, commissioning and shakedown of the Project;

 

15.           Pursuant to Section 4.1.36(ii) of
the Common Agreement, and certified by the Borrower, arrangements reflected in
the Base Case Projections have been made or can be made under the Operating
Documents, or are otherwise available to the extent required in Section 5.25
of the Common Agreement, for the provision 

 

D1-3

 

of all services, materials and utilities necessary for the operation
and maintenance of the Project as contemplated by the Principal Project
Documents.

 

IN
WITNESS WHEREOF, the undersigned have executed this Certificate of Lender’s
Engineer as of the date hereof.

 

	
   

  	
  [*****], AS LENDER’S ENGINEER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  

 

D1-4

 

List of Attachments to Lender’s Engineer Certificate

 

	
  1.

  	
  Advance
  Schedule (Paragraph 1)

  
	
   

  	
   

  
	
  2.

  	
  Base
  Case Projections (Paragraph 3)

  
	
   

  	
   

  
	
  3.

  	
  Project
  Milestone Schedule (Paragraph 4)

  
	
   

  	
   

  
	
  4.

  	
  Project
  Budget (Paragraph 5)

  
	
   

  	
   

  
	
  5.

  	
  Development
  Costs Statement (Paragraph 6)

  
	
   

  	
   

  
	
  6.

  	
  Earthquake
  Risk Report (Paragraph 13)

  

 

 

Exhibit D2

to Common Agreement

 

FORM OF LENDER’S ENGINEER CERTIFICATE

(For Periodic Closing)

 

(Delivered pursuant to Section 4.2.11(iii) of the
Common Agreement)

 

[On Letterhead of the Lender’s Engineer]

 

Date of this Certificate:                 ,
20   

 

Requested Advance Date:                 ,
20   

 

U.S.
Department of Energy

 

Ladies
and Gentlemen:

 

This
Certificate of the Lender’s Engineer is delivered to you by [*****] as Lender’s Engineer pursuant to the
Common Agreement, dated as of August 6, 2010 (the “Common Agreement”),
by and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) the
U.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the
Collateral Agent.

 

All
capitalized terms used in this Certificate of the Lender’s Engineer shall have
the respective meanings specified in the Common Agreement.

 

We
reviewed the Borrower’s Master Advance Notice dated as of               ,
2010 and supporting information requesting an [Equity] Advance on                 ,
2010, the Borrower Certificate (for Periodic Closing) dated as of             ,
2010, and other information identified herein. 
We have visited the Project on a periodic basis and observed the status
of construction progress [and start-up activities] at the Project.  We last visited the Project on             ,
201  .

 

To
the extent that this Certificate of the Lender’s Engineer evidences, attests or
confirms compliance with any covenants, conditions, procedures or requirements,
we have made such examination or investigation as was, in our opinion,
necessary to enable us to express an opinion as to whether such covenants,
conditions, procedures or requirements have been complied with.

 

Our
review and observations were performed in accordance with the Matching Order
DE-MO01-09CF02002 and the Sponsor Payment Letter dated February 23, 2009
and with generally accepted engineering practice and in accordance with the
standards of care practiced by independent and consulting engineers performing
similar tasks on like projects.  This
Certificate is addressed to DOE in its capacity as Loan Servicer and may not be
relied upon by any other party.

 

D2-1

 

The
opinions that support our certifications contained herein were developed with
the understanding and assumption, after appropriate due diligence, that we have
been provided true, correct, and complete information satisfactory in form and
scope from the Borrower as to the matters covered by this Certificate of the
Lender’s Engineer.

 

Pursuant
to Section 4.2.11(ii) of the Common Agreement, the undersigned
DOES HEREBY CERTIFY that, as of the date hereof:

 

1.             Pursuant to Section 4.2.2(i) of
the Common Agreement, the updated Advance Schedule provided by the Borrower on           , 20   ,
including the estimates set forth therein, of the timing and amount of Advances
required in connection with the construction and financing of the Project
is consistent with the Project Budget, consistent with the achievement of
Physical Completion within the time period specified in the Project Milestone
Schedule and consistent with the limitations set forth in Section 2.1(c) of
the Common Agreement;

 

2.             Pursuant to Section 4.2.3(a) of
the Common Agreement, the Project Progress Report delivered on           ,
20   , is accurate and complete in all material respects based
upon Borrower’s good faith estimates of the information contained therein,
including with respect to the following:

 

(i)            [Construction and
installation of the Project are proceeding in accordance with the Project
Milestone Schedule and the Project Budget] OR [The Project Progress Report (i) describes
any variances from the Project Milestone Schedule and Project Budget and (ii) the
variances stated in the Project Progress Report would not reasonably be
expected to have a Material Adverse Effect];

 

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

 

(iii)          Total Funding Available is
sufficient to pay all remaining Total Project Costs (including Interest During
Construction, DOE Credit Facility Fees, Periodic Expenses, and identified Cost
Overruns); and

 

(iv)          evidence that as of the date
of such Project Progress Report (A) each Construction Contractor and the
Operator shall have irrevocably waived and released all Liens, statutory or
otherwise, that any of them may have or acquire on the Collateral Security with
respect to the work completed prior to the last submission for payment, except
for Liens in favor of any Person in an aggregate amount for such Person not [*****]; and (B) all unpaid balances that
are due or unsettled claims with any Construction Contractor, if any, have been
adequately paid and that those being contested or negotiated in good faith are
provisioned to the reasonable satisfaction of the Loan Servicer;

 

3.             [If
applicable:]  [Pursuant to Section 4.2.3(b) of
the Common Agreement:

 

(i)            we have no reason to believe
that anything is incorrect or misleading in any material respect in the Project
Progress Report delivered on              ,
20   ; and

 

D2-2

 

(ii)           during the normal course of
our review, nothing has come to our attention that has occurred since the date
of such Project Progress Report or the date of the Lender’s Engineer’s most
recent site visit, whichever is later, that could reasonably be expected to
prevent construction and installation of the Project within the Project
Milestone Schedule and the Project Budget;]

 

4.             Pursuant to Section 4.2.9
of the Common Agreement, no changes to the technical requirements of the
existing Governmental Approvals listed in Schedule 5.10 to the Disclosure
Letter has occurred, that has had or could reasonably be expected to have a
Material Adverse Effect;

 

5.             [Pursuant to Section 4.2.10
of the Common Agreement, the Borrower has achieved the Project Facility
Performance Targets applicable to this Advance Notice Date]; and

 

6.             Pursuant to Section 4.2.12
of the Common Agreement, (i) there have been no changes to the Project
Budget since the previous Advance Notice Date, except for Approved Project
Changes, (ii) the aggregate amounts expended for each type of Project Cost
does not exceed the aggregate amounts budgeted for such cost in the Project
Budget, including budgeted Overrun Contingencies, except for Approved Project
Changes, and (iii) the sum of (A) the unadvanced proceeds of the DOE
Credit Facility and (B) the amount on deposit in the Base Equity Account
and Overrun Equity Account is sufficient to pay all remaining Total Project
Costs.

 

D2-3

 

IN
WITNESS WHEREOF, the undersigned have executed this Certificate of Lender’s
Engineer as of the date hereof.

 

 

	
   

  	
  [*****], AS LENDER’S ENGINEER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
  Vice
  President

  

 

D2-4

 

Exhibit E1

to Common Agreement

 

FORM OF SPONSOR’S
CERTIFICATE 

(For Initial Closing)

 

(Delivered pursuant to Section 4.1.23
of the Common Agreement)

 

Date of this Certificate: August 6, 2010

 

U.S.
Department of Energy

 

Ladies and Gentlemen:

 

This Sponsor’s Certificate is delivered to you
pursuant to Section 4.1.23 of the Common Agreement, dated
as of August 6, 2010 (the “Common Agreement”), by and among
(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.
Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Certificate
shall have their respective meanings specified in the Common Agreement.

 

The Sponsor HEREBY CERTIFIES for the benefit of
each Relevant Credit Party that, as of the date hereof:

 

1.             Pursuant to Section 4.1.3
of the Common Agreement, the Advance Schedule attached hereto is the Borrower’s best estimate, based on all facts
and circumstances existing and Known to the Borrower, of the timing and amount
of proposed Advances and Equity Contributions for the Project (showing the
total Advances expected in each calendar month);

 

2.             Pursuant to Section 4.1.4(i) of the
Common Agreement, the Financial Plan submitted to the Lender’s
Engineer and the Loan Servicer and shown as Exhibit 1 to the Common
Agreement accurately reflects the Borrower’s Financial Plan as of the date
hereof and demonstrates that the DOE Credit Facility Commitment, when combined
with other funds committed to the Project, including the Base Equity, will be
available and sufficient to carry out the Project based on the Borrower’s
reasonable estimates of the information contained therein;

 

3.             Pursuant to Section 4.1.4(ii) of the
Common Agreement, the Base Case Projections, including a computer file
containing the Base Case Projections and the underlying models and assumptions
and explanations thereto, submitted to the Lender’s Engineer and the Loan
Servicer on May 3, 2010 and attached hereto, represent the Borrower’s 

 

E1-1

 

reasonable estimates of the information contained therein as of the
date submitted and as of the date hereof;

 

4.             Pursuant to Section 4.1.4(iii) of the
Common Agreement, the Project Milestone Schedule, submitted to the
Lender’s Engineer and the Loan Servicer on June 1, 2010 and June 2,
2010 respectively and attached hereto, represents the Borrower’s reasonable
estimates of the information contained therein as of the date submitted and as
of the date hereof;

 

5.             Pursuant to Section 4.1.4(iv) of the
Common Agreement, the Project Budget, submitted to the Lender’s
Engineer and the Loan Servicer on May 11, 2010 and May 28, 2010
respectively and attached hereto, represents the Borrower’s reasonable
estimates of the information contained therein as of the date submitted and as
of the date hereof;

 

6.             Pursuant to Section 4.1.4(v) of the
Common Agreement, a detailed description, with supporting documents, as
have been reasonably requested on or before the date hereof, of Development
Costs incurred to date and a Development Costs Statement summarizing those
costs that the Borrower seeks credit as Approved Pre-Closing Equity Credit to
be applied toward Base Equity and that are to be reviewed by the Lender’s
Engineer, was submitted to the Lender’s Engineer and the Loan Servicer prior to
the date hereof, is attached hereto and remains now true and complete in all
material respects and represents the Borrower’s reasonable estimate of the
information contained therein;

 

7.             Pursuant to Section 4.1.22 of the Common
Agreement, attached hereto are true and complete copies of the Sponsor’s
organizational documents (as amended to date), good standing certificates and
incumbency certificates;

 

8.             Pursuant to Section 4.1.22 of the Common Agreement,
attached hereto are true and complete copies of the Sponsor’s
resolutions duly adopted by its board of directors to authorize (a) the
Sponsor’s participation in the Project, (b) the financing therefor and the
granting of Liens, and (c) the execution, delivery and performance by the
Sponsor of the Transaction Documents (including a Direct Agreement) to which it
is party;

 

9.             Pursuant to Section 4.1.32
of the Common Agreement, pursuant to the Technology License Agreement, the
Borrower has received one or more licenses covering all intellectual property
rights necessary for the design, construction and operation of the Project; and

 

10.           Pursuant to Section 4.1.40
of the Common Agreement, all employees of the Borrower have entered into valid
and binding non-disclosure and assignment of invention agreements.

 

IN WITNESS WHEREOF, the undersigned has
executed this Sponsor’s Certificate as of the date first written above.

 

E1-2

 

	
   

  	
  BEACON
  POWER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

 

cc:           Stephentown Regulation
Services LLC

 

E1-3

 

List of Attachments to Sponsor’s Certificate

 

	
  1.

  	
  Advance
  Schedule (Paragraph 1)

  
	
   

  	
   

  
	
  2.

  	
  Base
  Case Projections (Paragraph 3)

  
	
   

  	
   

  
	
  3.

  	
  Project
  Milestone Schedule (Paragraph 4)

  
	
   

  	
   

  
	
  4.

  	
  Project
  Budget (Paragraph 5)

  
	
   

  	
   

  
	
  5.

  	
  Development
  Costs Statement (Paragraph 6)

  
	
   

  	
   

  
	
  6.

  	
  Sponsor’s
  Organizational Documents, Good Standing Certificates and Incumbency
  Certificates (Paragraph 7)

  
	
   

  	
   

  
	
  7.

  	
  Sponsor’s
  Authorizing Resolutions (Paragraph 8)

  

 

E1-4

 

Exhibit E2

to Common Agreement

 

Intentionally Omitted

 

E2-1

Exhibit E3

to Common Agreement

 

FORM OF CERTIFICATE OF
HOLDINGS 

(For Initial Closing)

 

(Delivered pursuant to Section 4.1.23
of the Common Agreement)

 

 

Date of this Certificate: August 6, 2010

 

U.S.
Department of Energy

 

Ladies and Gentlemen:

 

This Certificate of Holdings is delivered to
you pursuant to Section 4.1.23 of the Common Agreement, dated
as of August 6, 2010 (the “Common Agreement”), by and among
(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.
Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Certificate
shall have their respective meanings specified in the Common Agreement.

 

Holdings HEREBY CERTIFIES for the benefit of
each Relevant Credit Party that, as of the date hereof:

 

1.             Pursuant to Section 4.1.22 of the Common
Agreement, attached hereto are true and complete copies of Holdings’
organizational documents (as amended to date), good standing certificates and
incumbency certificates; and

 

2.             Pursuant to Section 4.1.22 of the Common
Agreement, attached hereto are true and complete copies of Holdings’ resolutions
duly adopted by its board of directors to authorize (a) Holdings’ participation
in the Project, (b) the financing therefor and the granting of Liens, and
(c) the execution, delivery and performance by Holdings of the Transaction
Documents to which it is party.

 

E3-1

 

IN WITNESS WHEREOF, the undersigned has
executed this Certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  HOLDING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

 

cc:           Stephentown Regulation
Services LLC

 

E3-2

 

List of Attachments to Holdings’ Certificate

 

	
  1.

  	
  Holdings’
  Organizational Documents, Good Standing Certificates and Incumbency
  Certificates (Paragraph 1)

  
	
   

  	
   

  
	
  2.

  	
  Holdings’
  Authorizing Resolutions (Paragraph 2)

  

 

E3-3

 

Exhibit F1

to Common Agreement

 

[FORM OF CERTIFICATE OF THE INSURANCE CONSULTANT]

(For Initial Closing)

 

(Delivered pursuant to Section 4.1.15(ii) of the Common Agreement)

 

U.S.
Department of Energy

 

Ladies and Gentlemen:

 

This Insurance Consultant’s Certificate is
delivered to you pursuant to Section 4.1.15(ii) of the Common
Agreement, dated as of August 6, 2010 (the “Common Agreement”), by
and among (i) Stephentown Regulation Services LLC, as Borrower,
(ii) the U.S. Department of Energy, as Credit Party and Loan Servicer, and
(iii) Midland Loan Services, Inc., as Administrative Agent in its
capacity as the Collateral Agent.

 

All capitalized terms used in this Certificate
shall have their respective meanings specified in the Common Agreement.

 

This
Certificate or memorandum of insurance does not affirmatively or negatively
amend, extend, or alter the coverage afforded by the insurance policies.

 

The Insurance Consultant HEREBY CERTIFIES for
the benefit of each Relevant Credit Party that, as of the date hereof:

 

Pursuant to Section 4.1.27 of the
Common Agreement, (i) insurance coverage for the Project
satisfies the requirements
for Required Insurance as set forth on Schedule 6.3(b) of the
Common Agreement and certificates or policies for such insurance coverage are attached
hereto, (ii) such insurance coverage is reasonable for the Project, and (iii) the
applicable insurance policies are in full force and effect.

 

F1-1

 

IN WITNESS WHEREOF, the undersigned has executed
this Insurance Consultant’s Certificate as of the date first written above.

 

	
   

  	
  [INSURANCE
  CONSULTANT]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

 

cc:           Stephentown Regulation
Services LLC

 

F1-2

 

Exhibit F2

to Common Agreement

 

[FORM OF INSURANCE CONSULTANT CERTIFICATE]

(For Periodic Closing)

 

(Delivered pursuant to Section 4.2.11(iv) of the Common Agreement)

 

Date
of this Certificate:                  

 

U.S.
Department of Energy

 

Ladies and Gentlemen:

 

This Insurance Consultant’s Certificate is
delivered to you pursuant to Section 4.2.11(iv) of the Common Agreement, dated as of
August 6, 2010 (the “Common Agreement”), by and among
(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.
Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Certificate
shall have their respective meanings specified in the Common Agreement.

 

This
Certificate or memorandum of insurance does not affirmatively or negatively
amend, extend, or alter the coverage afforded by the insurance policies.

 

The Insurance Consultant HEREBY CERTIFIES for
the benefit of each Relevant Credit Party that, as of the date hereof:

 

Pursuant
to Section 4.2.6 of the Common Agreement, (i) all Required
Insurance is in place, in good standing and in full force and all premiums due
and payable thereon as of the date hereof (x) have been paid in full, (y) are
to be paid with the proceeds of the requested Advance, or (z) are to be
paid by other satisfactory arrangements, and (ii) attached hereto are true
and complete copies of all certificates or policies with respect to any
additional renewal or substitute insurance obtained by the Borrower since the
previous Advance Notice Date, designating (or evidencing the designation of)
the Administrative Agent in its capacity as Collateral Agent as loss payee,
where appropriate.

 

IN WITNESS WHEREOF, the undersigned has
executed this Insurance Consultant’s Certificate as of the date first written
above.

 

	
   

  	
  [INSURANCE
  CONSULTANT]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

F2-1

 

cc:           Stephentown Regulation
Services LLC

 

F2-2

 

Exhibit G

to Common Agreement

 

FORM OF CERTIFICATE OF COLLATERAL AGENT 

(For Initial Closing)

 

(Delivered pursuant to Section 4.1.21(c) of the Common
Agreement)

 

Date of this Certificate: August 6, 2010

 

U.S.
Department of Energy

 

Ladies
and Gentlemen:

 

This
Certificate of the Administrative Agent in its capacity as the Collateral Agent
is delivered to you pursuant to the Common Agreement, dated as of
August 6, 2010 (the “Common Agreement”), by and among
(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.
Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All
capitalized terms used in this Certificate of the Administrative Agent in its
capacity as the Collateral Agent shall have their respective meanings specified
in the Common Agreement.

 

To
the extent that this Certificate of the Administrative Agent in its capacity as
the Collateral Agent evidences, attests or confirms compliance with any
covenants, conditions, procedures or requirements, we have made such
examination or investigation as was, in our opinion, necessary to enable us to
express an opinion as to whether such covenants, conditions, procedures or
requirements have been complied with.

 

Pursuant
to Section 4.1.21(c) of the Common Agreement, the undersigned
DOES HEREBY CERTIFY that, as of the date hereof, pursuant to Section 4.1.28
of the Common Agreement, each of the Project Accounts has been established in
accordance with the provisions of Appendix A of the Common Agreement.

 

The
Collateral Agent does HEREBY FURTHER CERTIFY that it has received $7,000,070.28
from the Borrower and deposited such amount in the Base Equity Account.

 

G-1

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIDLAND
  LOAN SERVICES, INC.,

  
	
   

  	
  as
  Administrative Agent in its capacity as the Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  

 

 

cc:           Stephentown Regulation
Services LLC

 

G-2

 

Exhibit H

to Common Agreement

 

FORM OF MAJOR PROJECT PARTICIPANT CERTIFICATE

 

(Delivered pursuant to Section 4.1.24 of the Common
Agreement)

 

Date of this Certificate: August 6, 2010

 

U.S.
Department of Energy

 

Ladies
and Gentlemen:

 

Beacon
Power Corporation, a corporation duly organized and validly existing under the
laws of Delaware (the “Major Project Participant”), certifies that:

 

A.            Reference is
made to the Common Agreement, dated as of August 6, 2010 (the “Common
Agreement”), by and among (i) Stephentown Regulation Services LLC, as
borrower (the “Borrower”), (ii) the U.S. Department of Energy, as
Credit Party and Loan Servicer, and (iii) Midland Loan Services, Inc.,
as Administrative Agent in its capacity as the Collateral Agent (the “Collateral Agent”).  All capitalized terms used in this
Certificate shall have their respective meanings specified in the Common
Agreement unless otherwise defined in this Certificate.

 

B.            I have read the
covenants, representations, warranties and agreements of Beacon Power
Corporation (the “Major Project Participant”) contained in the following
agreements (collectively, the “Transaction Documents”): (i) the
Intercompany Project Documents, (ii) the Sponsor Loan Documents and
(iii) the Direct Agreement; and, in each case, the Major Project
Participant has been represented by counsel in connection with the Transaction
Documents.

 

C.            I have made or
caused to be made such examination or investigation as is necessary to enable
me to express an informed opinion as to the matters set forth below.

 

Pursuant
to Section 4.1.24 of the Common Agreement the undersigned DOES
HEREBY CERTIFY that:

 

1.             The Major
Project Participant has duly authorized, executed and delivered each
Transaction Document to which it is a party;

 

2.             Each Transaction
Document to which the Major Project Participant is a party is a legal, valid
and binding obligation of the Major Project Participant enforceable against it
in accordance with its terms, subject to all applicable bankruptcy laws and
general principles of equity regardless of whether enforcement is considered in
a proceeding at law or in equity;

 

H-1

 

3.             The
representations and warranties relating to the Major Project Participant set
forth in each Transaction Document to which the Borrower, Holdings or the
Sponsor is a party are true and correct in all material respects on the date
hereof as if made on the date hereof (or, if stated to have been made solely as
of an earlier date, were true and correct as of such earlier date);

 

4.             There is no
fact known to the Major Project Participant the existence of which could
reasonably be expected to have a material adverse effect upon (i) the
Major Project Participant’s ability to observe and perform its material obligations
in a timely manner under any of the Transaction Documents, (ii) the
business, operations, condition (financial or otherwise) or property of the
Major Project Participant, (iii) the validity or enforceability of any
material provision of any Transaction Document or (iv) any material right
or remedy of the U.S. Department of Energy under any Transaction Document
(collectively, a “Material Adverse Effect”);

 

5.             (a) All
government approvals and all other consents and approvals that are required as
of the date hereof to have been obtained by the Major Project Participant in
connection with the transactions contemplated by the Transaction Documents have
been obtained and are in full force and effect; and (b) the Major Project
Participant is in compliance with all government approvals, the non-compliance
with which could have a Material Adverse Effect;

 

6.             The Major
Project Participant is in compliance with all applicable statutes, laws, rules and
regulations, including, environmental laws, the Government-wide Debarment and
Suspension (Non-procurement) regulations (Common Rule), 53 Fed. Reg. 19204 (May 26,
1988), (ii) Subpart 9.4 (Debarment, Suspension, and Ineligibility) of the
Federal Acquisition Regulations, 48 C.F.R. 9.400 - 9.409, and (iii) the
revised Government-wide Debarment and Suspension (Non-procurement) regulations
(Common Rule), 60 Fed. Reg. 33037 (June 26, 1995)(the “Debarment
Regulations”) and the final regulations with respect to Title XVII, at
10 CFR Part 609, and any other applicable regulations from time to time
promulgated to implement Title XVII, the non-compliance with which could have a
Material Adverse Effect;

 

7.             The Major
Project Participant is not delinquent on any amounts due and owing to the U.S.
Government or its agencies or instrumentalities;

 

8.             No event has
occurred and no condition exists that is likely to result in the debarment or
suspension of the Major Project Participant from contracting with the U.S.
Government or any agency or instrumentality thereof, and the Major Project
Participant is not now and has not been subject to any such debarment or
suspension.  On the date hereof neither
the Major Project Participant nor its principals are (a) debarred,
suspended, proposed for debarment with a final determination still pending,
declared ineligible or voluntarily excluded (as such terms are defined in any
of the Debarment Regulations) from participating in procurement or
nonprocurement transactions with any U.S. Government department or agency
pursuant to any of the Debarment Regulations, or (b) indicted, convicted
or had a civil judgment rendered against the Major Project Participant or any
of its principals for any of the 

 

H-2

 

offenses
listed in any of the Debarment Regulations and no event has occurred and no
condition exists that is likely to result in the debarment or suspension of the
Major Project Participant from contracting with the U.S. Government or any
agency or instrumentality thereof.  The
Major Project Participant will provide immediate notice to the U.S. Department
of Energy if at any time it learns that the representations made under this Section 8
were erroneous when made or have become erroneous by reason of changed
circumstances; and

 

9.             To the Major
Project Participant’s Actual Knowledge, (a) there is no breach of any
material obligation under any of the applicable Transaction Documents and no
notices of breach of any of the applicable Transaction Documents have been
issued, entered or received by the Major Project Participant and (b) no
Event of Default has occurred and is continuing.

 

 

	
   

  	
  BEACON
  POWER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

 

cc:           Stephentown Regulation
Services LLC

 

H-3

 

Exhibit I

to Common Agreement

 

FORM OF FINANCIAL
OFFICER CERTIFICATE

 

(Delivered pursuant to Section 4.1.5
of the Common Agreement)

 

Date of this Certificate: August 6, 2010

 

U.S.
Department of Energy

 

Ladies and Gentlemen:

 

This Certificate is delivered to you pursuant
to Section 4.1.5 of the Common Agreement, dated
as of August 6, 2010 (the “Common Agreement”), by and among
(i) Stephentown Regulation Services LLC, as Borrower, (ii) the U.S.
Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this officer’s
Certificate shall have their respective meanings specified in the Common
Agreement.

 

The undersigned, a Financial Officer of the
[Borrower/Sponsor] HEREBY CERTIFIES for the benefit of each Relevant Credit
Party that, as of the date hereof:

 

1.             [attached hereto are the most recent audited and
unaudited Financial Statements of the Sponsor, dated       ,
20  and      , 20  ,
respectively, and the Sponsor has delivered such Financial Statements to the
Loan Servicer and each Relevant Credit Party;] [OR]

 

[attached hereto is the [initial balance sheet]
[unaudited Financial Statements] dated              ,
20   of the Borrower, and the Borrower has delivered such [initial
balance sheet] [unaudited Financial Statements] to the Loan Servicer and each
Relevant Credit Party;

 

2.             the information contained in such Financial Statements
fairly present in all material respects the financial condition of the
[Borrower/Sponsor] for the periods specified therein; and

 

3.             [For Financial
Officer of Borrower Only] Pursuant to Section 4.1.29 of
the Common Agreement, the report attached hereto describing the
Borrower’s accounting systems, controls, and management information systems
reasonably demonstrates that they are satisfactory for purposes of providing
information necessary for financial reporting in accordance with GAAP and is
true and complete;

 

I-1

 

IN WITNESS WHEREOF, the undersigned has
executed this Financial Officer’s Certificate as of the date first written
above.

 

	
   

  	
  [BEACON POWER CORPORATION]

  
	
   

  	
  [STEPHENTOWN REGULATION SERVICES
  LLC]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:
  

  	
   

  

 

I-2

 

List of Attachments to Financial Officer Certificate

 

	
  1.

  	
  Financial
  Statements (Paragraph 1)

  
	
   

  	
   

  
	
  2.

  	
  Report
  Describing Accounting Systems [Borrower only] (Paragraph 3)

  

 

I-3

 

Exhibit J

to Common Agreement

 

Intentionally Omitted

 

J-1

 

Exhibit K

to Common Agreement

 

Intentionally Omitted

 

K-1

 

Exhibit L

to Common Agreement

 

Intentionally Omitted

 

L-1

 

Exhibit M

to Common Agreement

 

FORM OF MASTER ADVANCE NOTICE

 

(Delivered pursuant to Sections 2.3.1(a) and 4.2.23 of the 

Common Agreement and the DOE Credit Facility Agreement)

 

Date
of this Notice:               ,
20   

 

Requested
Advance Date:                 ,
20   

 

U.S.
Department of Energy

 

Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent

Attn:       Brad Hauger and General
Counsel

Re:          DOE Loan
Guarantee, [                                 ]

 

[*****]

[*****]

Re:          DOE Loan
Guarantee, [                                 ]

 

Ladies
and Gentlemen:

 

This Master Advance Notice is delivered to you pursuant to the Common
Agreement, dated as of August 6, 2010 (the “Common Agreement”), by
and among (i) Stephentown Regulation Services LLC, as Borrower,
(ii) the U.S. Department of Energy, as Credit Party and Loan Servicer, and
(iii) Midland Loan Services, Inc., as Administrative Agent in its
capacity as the Collateral Agent.

 

All capitalized terms used in this Master Advance Notice shall have
their respective meanings specified in the Common Agreement.

 

The undersigned has read the provisions of the Common Agreement and the
Loan Documents which are relevant to the furnishing of this Master Advance
Notice.  To the extent that this Master
Advance Notice evidences, attests or confirms compliance with any covenants or
conditions precedent provided for in the Common Agreement or any other Loan
Documents, the Borrower has made such examination or investigation as was, in
its opinion, necessary to enable it to express an opinion as to whether such
covenants or conditions have been complied with.

 

The Borrower HEREBY CERTIFIES for the benefit
of each Relevant Credit Party that, as of the date hereof:

 

M-1

 

1.         This Master
Advance Notice constitutes [a request for an Advance of [US$                              ],
under the DOE Credit Facility] [and a request for an Equity Advance of [US $                ]].

 

2.         [The Requested
Advance Date for the Advance is                ,
20   .] [The requested date for the Equity Advance is             ,
20   .]

 

3.         A draft of the
FFB Advance Request with respect to the requested Advance is attached hereto.

 

4.         All statements
made by the Borrower in the Borrower Certificate delivered on the Advance
Notice Date remain true and complete in all material respects on the date
hereof as if made on the date hereof (other than to the extent such
representations and warranties relate solely to an earlier date).

 

5.         The proceeds of
the [Advance] [and the Equity Advance] shall be applied only to Eligible Base
Project Costs.

 

6.         Schedule 1 attached
hereto sets forth, with respect to [the requested Advance] [and the requested
Equity Advance], the amount of Base Equity and Overrun Equity to be disbursed
from the Base Equity Account and the Overrun Equity Account, as applicable, [on
the Requested Advance Date] [or the requested date for the Equity Advance]:

 

7.         Schedule 2A attached
hereto sets forth the aggregate amount, on a prospective basis after giving
effect to [the requested Advance] [and the requested Equity Advance], of

 

·      all Advances outstanding under the DOE Credit
Facility;

 

·      the amount of the Approved Pre-Closing Equity
Credit; and

 

·      all Base Equity and Overrun Equity (if any)
disbursed from the Base Equity Account and the Overrun Equity Account or in
cash.

 

8.         Schedule 2B attached
hereto sets forth the Project Costs being financed using the proceeds of the
requested [Advance] [and/or Equity Advance], which are all Eligible Base
Project Costs.

 

9.         The Borrower
certifies for the benefit of each Relevant Credit Party that as of the date of
this Master Advance Notice:

 

(A)          The representations and
warranties of the Borrower contained in the Loan Documents to which it is party
are true, correct and complete in all material respects on and as of the date
hereof (other than to the extent such representations and warranties relate
solely to an earlier date);

 

(B)           No Event of Default or
Potential Default has occurred and is continuing;

 

M-2

 

(C)           To the Borrower’s Actual
Knowledge, there is no reason to believe that anything is incorrect or
misleading in any material respect in the most recent Project Progress Report;
and

 

(D)          To the Borrower’s Actual
Knowledge, nothing has occurred since the date of the most recent Project
Progress Report or the date of the Lender’s Engineer’s most recent site visit,
whichever is later, that could reasonably be expected to prevent construction
and installation of the Project within the Project Milestone Schedule and the
Project Budget.

 

10.       The Borrower has timely complied in all material respects with (A) its
reporting obligations under Section 6.29(a) of the Common
Agreement with respect to the Recovery Act, and (B) the requirements set
forth in Section 6.30 of the Common Agreement and Schedule 6.30(d) to
the Common Agreement with respect to the Davis-Bacon Act.

 

11.       All applicable conditions
precedent described in Section 4.2 of the Common Agreement have
been satisfied or waived by DOE in accordance with the terms of the Common
Agreement.

 

12.       The Borrower has paid (or
has made arrangements to pay) all DOE Credit Facility Fees and Periodic
Expenses on or before the Requested Advance Date, except to the extent that
such amounts are to be paid with proceeds of the requested Advance.

 

13.       All proceeds of all
Advances, and all Equity Contributions made prior to the date hereof which have
been expended as of the date hereof, have been applied to Project Costs in
accordance with the applicable Transaction Documents.  Each payment of Project Costs to be made from
the requested Advance has not been the subject of any previous FFB Advance
Request.

 

14.       The Borrower has delivered
to the Loan Servicer, the Collateral Agent, and DOE the most recent Project
Progress Report, if any, required to be provided pursuant to Section 6.1(a) of
the Common Agreement.

 

15.       The Borrower has otherwise
complied with the procedures, conditions and requirements specified in the
Common Agreement and the other Loan Documents in connection with the Advance
requested hereunder.

 

IN
WITNESS WHEREOF, the undersigned has executed this Master Advance Notice as of
the date hereof.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

M-3

 

Attachments

 

	
  1.

  	
  Schedule 1

  
	
   

  	
   

  
	
  2.

  	
  Schedule 2A

  
	
   

  	
   

  
	
  3.

  	
  Schedule 2B

  
	
   

  	
   

  
	
  4.

  	
  Draft
  of FFB Advance Request

  

 

M-4

 

Exhibit N

to Common Agreement

 

FORM OF DRAWSTOP
NOTICE

 

(Delivered pursuant to Section 2.4.3
of the Common Agreement)

 

Date of this Notice:                 ,
20   

 

Requested
Advance Date:                  ,
20   

 

Stephentown
Regulation Services LLC

Attn:       General Counsel

Re:          DOE Loan
Guarantee

 

Midland
Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent

Attn:       Brad Hauger and General
Counsel

Re:          DOE Loan
Guarantee, [                           ]

 

Ladies and Gentlemen:

 

The undersigned refers to Section 2.4.3
of the Common Agreement, dated as of August 6, 2010 (the “Common
Agreement”), by and among (i) Stephentown Regulation Services LLC, as
Borrower, (ii) the U.S. Department of Energy, as Credit Party and Loan
Servicer, and (iii) Midland Loan Services, Inc., as Administrative
Agent in its capacity as the Collateral Agent.

 

All capitalized terms used in this Drawstop
Notice shall have their respective meanings specified in the Common Agreement.

 

The undersigned hereby confirms that it will
not [guarantee the requested Advance] [approve the requested Equity Advance] on
the [Requested Advance Date] [requested date for the Equity Advance], despite
the issuance of the Advance Request Approval Notice dated                 ,
20    by DOE, because, as of the date hereof, for purposes of
such Section 2.4.3, the following conditions to the requested
[Advance] [Equity Advance] required by [the Credit Party or DOE, as applicable]
as set forth in the Common Agreement and/or the DOE Credit Facility Agreement
to which [the Credit Party or DOE, as applicable] is a party are not met, or
having been met, are no longer met:

 

[Specify the unmet
condition, the relevant provision of the Common Agreement and/or the DOE Credit
Facility Agreement, as applicable, and the reasons therefor.]

 

N-1

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [NAME
  OF CREDIT PARTY]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
  cc:

  	
  [Include Fax numbers]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  Department of Energy

  	
   

  
	
   

  	
  Attn:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Midland
  Loan Services, Inc., as Administrative Agent in its capacity as the Collateral Agent

  
	
   

  	
  Attn: Brad Hauger and General Counsel

  	
   

  
	
   

  	
  Re:

  	
  DOE
  Loan Guarantee, [                                ]

  
					

 

N-2

 

Exhibit O

to Common Agreement

 

[FORM OF QUARTERLY REPORTING CERTIFICATE]

 

(Delivered pursuant to Section 6.1 of the Common Agreement)

 

Date
of this Certificate:                      ,
20   

 

U.S.
Department of Energy

 

Ladies and Gentlemen:

 

This Quarterly Reporting Certificate is
delivered to you pursuant to Section 6.1 of the Common
Agreement, dated as of August 6, 2010 (the “Common Agreement”), by
and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) the
U.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the
Collateral Agent.

 

All capitalized terms used in this Certificate
shall have their respective meanings specified in the Common Agreement.

 

The undersigned, an Authorized Official of the
Borrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,
as of the date hereof:

 

1.             Pursuant to Section 6.1(b)(i) of the
Common Agreement, attached hereto as Exhibit 6.1(b)(i) are  unaudited
Financial Statements of the Borrower as of                ,
20   .

 

2.             Pursuant to Section 6.1(b)(ii) of the
Common Agreement, attached hereto as Exhibit 6.1(b)(ii) is a certificate of a Financial Officer of the
Borrower with respect to the quarter ending               ,
20   , setting forth (A) a statement of all material
financial transactions (other than any transactions contemplated under the
Transaction Documents), and a report of all transactions involving the
Borrower, on the one hand, and on the other hand Holdings and the Sponsor or any Affiliate of Holdings or the
Sponsor (other than any such transaction under the Intercompany Project
Documents); (B) [For each quarter that
includes all or a portion of the Construction Period] calculations
showing the amount of Equity Contributions and the amount of Advances applied
to pay Project Costs; and (C) [For each quarter that
includes all or a portion of the Operating Period], calculations
showing compliance with the requirements of Section 6.33 and
certification of such compliance [or if such certification
cannot be made, an explanation therefor and what corrective action the Borrower
has taken or proposes to take with respect thereto].

 

O-1

 

3.             Pursuant to Section 6.1(d) of the Common
Agreement, attached hereto as Exhibit 6.1(d) is a
certification by a Financial Officer of the Borrower regarding the Financial
Statements attached hereto as Exhibit 6.1(b)(i) and other issues required to be addressed.

 

4.             [For
each quarter that includes all or a portion of the Construction Period]  Pursuant to Section 6.1(e)(i) of the Common Agreement,
attached hereto as Exhibit 6.1(e)(i) are the monthly
Project Progress Reports for the period ending             , 20   .

 

5.             [For
each quarter that includes all or a portion of the Operating Period]  Pursuant to Section 6.1(e)(ii) of the Common Agreement,
attached hereto as Exhibit 6.1(e)(ii) is a summary
operating report for the period ending               ,
20   .

 

6.             [At any time during which
the Sponsor is not subject to the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended] Pursuant to Section 6.1(f) of
the Common Agreement, attached hereto as Exhibit 6.1(f) are  unaudited Financial Statements of the Sponsor as of                ,
20   , together with a certification by a Financial Officer of
the Sponsor regarding such unaudited Financial Statements of the Sponsor and
other issues required to be addressed.

 

7.             [For
each quarter that includes all or a portion of the Construction Period]  Pursuant to Section 6.1(j)(i) of the Common Agreement,
attached hereto as Exhibit 6.1(j)(i) are an updated
Project Milestone Schedule, updated Project Plans and an updated Project
Budget, reflecting any Approved Project Changes, and projections regarding
Borrower’s bidding strategies.

 

8.             [For
each quarter that includes all or a portion of the Operating Period]  Pursuant to Section 6.1(j)(ii) of the Common Agreement,
attached hereto as Exhibit 6.1(j)(ii) are an updated
Operating Plan for the next four fiscal quarters, an updated Operating Forecast
for the next four fiscal quarters and for the remainder of the Operating
Period, an updated Financial Plan, and, if requested by the Loan Servicer,
updated Base Case Projections.

 

9.             No Event of Default or Potential Default has
occurred and is continuing [except as follows:].

 

10.           No circumstance
exists, and no change of law or regulation of any Governmental Authority has
occurred, that has had or could reasonably be expected to have a Material Adverse
Effect [except as follows:].

 

O-2

 

IN WITNESS WHEREOF, the undersigned has
executed this Quarterly Reporting Certificate as of the date first written
above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

O-3

 

Exhibit 6.1(b)(i)

to Quarterly Reporting Certificate

 

Unaudited Financial Statements of the Borrower as of             ,
20   

 

[attach Financial Statements]

 

O-4

 

Exhibit 6.1(b)(ii)

to Quarterly Reporting Certificate

 

Certification by Financial Officer of Borrower Regarding

Quarterly Financial Statements

 

Date
of this Certificate:                ,
20   

 

Pursuant to Section 6.1(b)(ii) of the Common Agreement, the undersigned, a Financial
Officer of the Borrower, HEREBY
CERTIFIES as follows:

 

The following is a summary of all material financial
transactions (other than transactions contemplated under the Transaction
Documents):

 

1.             The following
lists all transactions involving the Borrower, on the one hand, and on the
other hand Holdings and the Sponsor or
any Affiliate of Holdings or the Sponsor (other than any such
transaction under the Intercompany Project Documents):

 

[Describe transactions]

 

2.             [For
each quarter that includes all or a portion of the Construction Period]  The undersigned certifies that the following
calculations show the amount of Equity Contributions and the amount of Advances
applied to pay Project Costs as of            ,
20   :

 

[Show or attach calculations]

 

3.             [For
each such quarter that includes all or a portion of the Operating Period]  The undersigned certifies
that the following calculations show compliance with the requirements of Section 6.33
(Financial Covenants) of the Common Agreement as of              ,
20   .

 

[Show or attach calculations]

 

[or if such certification cannot be made, provide explanation therefor
and what corrective action the Borrower has taken or proposes to take with
respect thereto]

 

O-5

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

O-6

 

Exhibit 6.1(d)

to Quarterly Reporting Certificate

 

Certification by Financial Officer of Borrower Regarding

Quarterly Financial Statements

 

Date
of this Certificate:                ,
20   

 

Pursuant to Section 6.1(d) of
the Common Agreement, the undersigned, a Financial Officer of the
Borrower, HEREBY CERTIFIES for the
benefit of each Relevant Credit Party that, as of the date hereof:

 

1.            The unaudited Financial Statements of the Borrower
as of             ,
20   , attached hereto have been prepared in accordance with
GAAP (other than the absence of footnotes and any year-end adjustments) on a
consistent basis and as fairly presenting in all material respects the
financial condition of the Borrower as of the date thereof and the results of
operations of the Borrower for the periods presented;

 

2.            The undersigned has made or caused to be made a
review of the transactions and financial condition of the Borrower during the
relevant fiscal period and

 

(i)            other than as set out in
such Financial Statements, there are no liabilities or obligations of the
Borrower that are required to be
presented in such Financial Statements in accordance with GAAP and

 

(ii)           no Event of Default or
Potential Default exists.

 

[or if such certification cannot
be made, explain the nature and period of existence of such Event of Default or
Potential Default and what corrective action the Borrower has taken or proposes
to take with respect thereto]

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

O-7

 

Exhibit 6.1(e)(i)

to Quarterly Reporting Certificate

 

[Project Progress Reports]

 

[For each quarter that includes all or a portion of the Construction
Period]

 

Date
of this Certificate:                    ,
20   

 

The undersigned, an Authorized Official of the
Borrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,
as of the date hereof:

 

Pursuant to Section 6.1(e)(i) of
the Common Agreement, attached are the most recent monthly
Project Progress Reports for the period ending                ,
20   , which include the following:

 

(i)            an assessment of the Project’s
performance in comparison with the Project Budget and the Project Milestone
Schedule then in effect for such period,

 

(ii)           basic data relating to
construction and installation of the Project in comparison with the Anticipated
Physical Completion Date,

 

(iii)          Total Funding Available is
sufficient to pay all remaining Total Project Costs (including Interest During
Construction, DOE Credit Facility Fees, Periodic Expenses, and identified Cost
Overruns), and

 

(iv)          evidence that as of the date
of such Project Progress Report (A) each Construction Contractor and the
Operator has irrevocably waived and released all Liens, statutory or otherwise,
that any of them may have or acquire on the Collateral Security with respect to
work completed prior to the last submission for payment, except for Liens in
favor of any Person in an aggregate amount for such Person [*****]; and (B) all unpaid balances that
are due or unsettled claims with any Construction Contractor, if any, have been
adequately paid and that those being contested or negotiated in good faith are
provisioned to the reasonable satisfaction of the Loan Servicer.

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

O-8

 

Exhibit 6.1(e)(ii)

to Quarterly Reporting Certificate

 

 

[Summary Operating Report]

 

[For each quarter that includes all or a portion of the Operating
Period]

 

Date
of this Certificate:                  ,
20   

 

The undersigned, an Authorized Official of the
Borrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,
as of the date hereof:

 

Pursuant
to Section 6.1(e)(ii) of the Common Agreement, the attached is a summary
operating report for the period ending                  ,
20   , which includes the following;

 

(v)           a detailed
assessment of the Project’s performance in comparison with the Operating
Forecast and Operating Plan then in effect for such period,

 

(vi)          basic data
relating to operation of the Project,

 

(vii)         pricing
information,

 

(viii)        a description and
explanation of any unusual maintenance activity,

 

(ix)           a description and
explanation of any material casualty losses,

 

(x)            a description and
explanation of any material disputes between the Borrower and any Person, and

 

(xi)           a description and
explanation of any material non-compliance with any with Governmental
Approvals.

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

O-9

 

Exhibit 6.1(f)

to Quarterly Reporting Certificate

 

Certification by Financial Officer of Sponsor Regarding

Quarterly Financial Statements

 

[attach Financial Statements]

 

Date
of this Certificate:                 ,
20   

 

Pursuant to Section 6.1(f) of
the Common Agreement, the undersigned, a Financial Officer of the
Sponsor, HEREBY CERTIFIES that:

 

The unaudited Financial Statements of the Sponsor as
of                 ,
20   , attached hereto have been prepared in accordance with
GAAP (other than the absence of footnotes and any year-end adjustments) on a
consistent basis and as fairly presenting in all material respects the
financial condition of the Sponsor as of the date thereof and the results of
operations and cash flows of the Sponsor for the periods presented;

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate as of the date first written above.

 

	
   

  	
  BEACON
  POWER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

O-10

 

Exhibit 6.1(j)(i) Borrower

to Quarterly Reporting Certificate

 

Updated Project Milestone Schedule, Project Plans and Project Budget

 

[For each quarter that includes all or a portion of the Construction
Period, attach Project

Milestone Schedule, Project Plans and Project Budget]

 

Date
of this Certificate:                   ,
20   

 

The undersigned, an Authorized Official of the
Borrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,
as of the date hereof:

 

Pursuant to Section 6.1(j)(i) of
the Common Agreement, attached hereto are an updated Project Milestone
Schedule, updated Project Plans and an updated Project Budget, reflecting any
Approved Project Changes, and projections regarding Borrower’s bidding strategies.

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

O-11

 

Exhibit 6.1(j)(i)-LE

to Quarterly Reporting Certificate

 

FORM OF LENDER’S ENGINEER CERTIFICATE

(in Connection with Borrower’s Quarterly Reporting Certificate -
Construction)

 

(Delivered pursuant to Section 6.1(j)(i) of the Common
Agreement)

 

[For each quarter that includes all or a portion of the Construction
Period,

regarding Updated Project Milestone Schedule, Project Plans and Project Budget,
as

applicable]

 

[On Letterhead of the Lender’s Engineer]

 

Date of this Certificate:                 ,
20   

 

U.S.
Department of Energy

 

Ladies
and Gentlemen:

 

This
Certificate of the Lender’s Engineer is delivered to you by [*****] as Lender’s Engineer pursuant to the
Common Agreement, dated as of August 6, 2010 (the “Common Agreement”),
by and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) the
U.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the
Collateral Agent.

 

All
capitalized terms used in this Certificate of the Lender’s Engineer shall have
the respective meanings specified in the Common Agreement.

 

We
have reviewed the Borrower’s Certificate Exhibit 6.1(j)(i), to Quarterly
Reporting Certificate dated                     ,
201  , and the attached updated [Project Milestone Schedule], [Project
Plans], [and Project Budget].

 

To
the extent that this Certificate of the Lender’s Engineer evidences, attests or
confirms compliance with any covenants, conditions, procedures or requirements,
we have made such examination or investigation as was, in our opinion,
necessary to enable us to express an opinion as to whether such covenants,
conditions, procedures or requirements have been complied with.

 

O-12

 

Our
review and observations were performed in accordance with the Matching Order
DE-MO01-09CF02002 and the Sponsor Payment Letter dated February 23, 2009
and with generally accepted engineering practice and in accordance with the
standards of care practiced by independent and consulting engineers performing
similar tasks on like projects. This Certificate is addressed to DOE in its
capacity as Loan Servicer and may not be relied upon by any other party.

 

The
opinions that support our certifications contained herein were developed with
the understanding and assumption, after appropriate due diligence, that we have
been provided true, correct, and complete information satisfactory in form and
scope from the Borrower as to the matters covered by this Certificate of the
Lender’s Engineer.

 

Pursuant
to Section 6.1(j)(i) of the Common Agreement, the undersigned DOES
HEREBY CERTIFY as of the date hereof that:

 

1.             We have
reviewed the proposed changes included in the updated [Project Milestone
Schedule], [Project Plans], [and Project Budget] provided by the Borrower.  [We have provided a recommendation to DOE,
via letter dated ___________, 201_, that the proposed changes to the [Project
Milestone Schedule], [Project Plans], [and Project Budget] be approved.]

 

2.             The updated
[Project Milestone Schedule], [Project Plans], [and Project Budget] reflect
only Approved Project Changes.

 

3.             [Certification
regarding updated review of materials pursuant to Technology Escrow Agreement
and Sponsor Technology Escrow Agreement.]

 

IN
WITNESS WHEREOF, the undersigned has executed this Certificate of Lender’s
Engineer as of the date hereof.

 

	
   

  	
  [*****], AS LENDER’S ENGINEER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:
  Vice President

  

 

O-13

 

Exhibit 6.1(j)(ii) Borrower

to Quarterly Reporting Certificate

 

Updated Operating Plan and Operating Forecast, Financial Plan and Base
Case Projections

 

[For each quarter that includes all or a portion of the Operating
Period, 

attach Operating Plan, Operating Forecast, Financial Plan and Base Case
Projections]

 

Date
of this Certificate:                ,
20   

 

The undersigned, an Authorized Official of the
Borrower, HEREBY CERTIFIES for the benefit of each Relevant Credit Party that,
as of the date hereof:

 

Pursuant to Section 6.1(j)(ii) of
the Common Agreement, attached hereto are an updated Operating
Plan for the four fiscal quarters ending on              ,
20   , an updated Operating Forecast for the four fiscal
quarters ending on                ,
20    and for the remainder of the Operating Period, an updated
Financial Plan and, if requested by the Loan Servicer, updated Base Case
Projections.

 

IN WITNESS WHEREOF, the undersigned has
executed this certificate as of the date first written above.

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

O-14

 

Exhibit 6.1(j)(ii)-LE

to Quarterly Reporting Certificate

 

FORM OF LENDER’S ENGINEER CERTIFICATE

(in Connection with Borrower’s Quarterly Reporting Certificate - Operations)

 

(Delivered pursuant to Section 6.1(j)(ii) of the Common
Agreement)

 

[For each quarter that includes all or a portion of the Operating
Period,

regarding Updated Operating Plan, Operating Forecast, Financial Plan and Base
Case

Projections, as applicable]

 

[On Letterhead of the Lender’s Engineer]

 

Date of this Certificate:                    ,
20   

 

U.S.
Department of Energy

 

Ladies
and Gentlemen:

 

This
Certificate of the Lender’s Engineer is delivered to you by [*****] as Lender’s Engineer pursuant to the
Common Agreement, dated as of August 6, 2010 (the “Common Agreement”),
by and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) the
U.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the
Collateral Agent.

 

All
capitalized terms used in this Certificate of the Lender’s Engineer shall have
the respective meanings specified in the Common Agreement.

 

We
have reviewed the Borrower’s Certificate Exhibit 6.1(j)(ii), to Quarterly
Reporting Certificate dated                   ,
201  , and the attached updated [Operating Plan], [Operating
Forecast], [Financial Plan], [and the Technical Inputs to the Base Case
Projections].

 

To
the extent that this Certificate of the Lender’s Engineer evidences, attests or
confirms compliance with any covenants, conditions, procedures or requirements,
we have made such examination or investigation as was, in our opinion,
necessary to enable us to express an opinion as to whether such covenants, conditions,
procedures or requirements have been complied with.

 

O-15

 

Our
review and observations were performed in accordance with the Matching Order
DE-MO01-09CF02002 and the Sponsor Payment Letter dated February 23, 2009
and with generally accepted engineering practice and in accordance with the
standards of care practiced by independent and consulting engineers performing
similar tasks on like projects. This Certificate is addressed to DOE in its
capacity as Loan Servicer and may not be relied upon by any other party.

 

The
opinions that support our certifications contained herein were developed with
the understanding and assumption, after appropriate due diligence, that we have
been provided true, correct, and complete information satisfactory in form and
scope from the Borrower as to the matters covered by this Certificate of the
Lender’s Engineer.

 

Pursuant
to Section 6.1(j)(ii) of the Common Agreement, the undersigned DOES
HEREBY CERTIFY as of the date hereof that:

 

1.             We have
reviewed the proposed changes included in the updated [Operating Plan],
[Operating Forecast], [Financial Plan], [and the Base Case Projections]
provided by the Borrower.  [We have
provided a recommendation to DOE, via letter dated [             ,
201  ], that the proposed changes to the [Operating Plan], [Operating
Forecast], [Financial Plan], [and the Base Case Projections] be approved.]

 

2.             The updated
[Operating Plan], [Operating Forecast], [Financial Plan], [and the Technical
Inputs to the Base Case Projections] are [as discussed with the DOE] [reflect
only Approved Project Changes].

 

3.             [Certification
regarding updated review of materials pursuant to Technology Escrow Agreement
and Sponsor Technology Escrow Agreement.]

 

IN
WITNESS WHEREOF, the undersigned has executed this Certificate of Lender’s
Engineer as of the date hereof.

 

	
   

  	
  [*****], AS LENDER’S ENGINEER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Its:
  Vice President

  

 

O-16

 

Exhibit P

to Common Agreement

 

FORM OF PHYSICAL COMPLETION CERTIFICATE

 

[Letterhead of the Borrower]

 

(Delivered pursuant to the definition of Physical Completion

in Exhibit A2 to the Common Agreement)

 

Date of this Certificate:              ,
20   

 

U.S.
Department of Energy

 

Midland Loan Services, Inc., as Collateral Agent

Attn:       Brad Hauger and General
Counsel

Re:          DOE Loan
Guarantee, [                      ]

 

Ladies
and Gentlemen:

 

This
Physical Completion Certificate is delivered to you pursuant to the Common
Agreement, dated as of August 6, 2010 (the “Common Agreement”), by
and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) the
U.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the
Collateral Agent.

 

All
capitalized terms used in this Physical Completion Certificate shall have the
respective meanings specified in the Common Agreement.

 

To
the extent that this Physical Completion Certificate evidences, attests, or
confirms compliance with any covenants, conditions, procedures, or
requirements, we have made such examination or investigation as was, in our
opinion, necessary to enable us to express an opinion as to whether such
covenants, conditions, procedures, or requirements have been complied with.

 

THE
UNDERSIGNED HEREBY CERTIFIES FOR THE BENEFIT OF THE LOAN SERVICER THAT, each of
the requirements set forth in clauses (a) through (c) below has been
satisfied as of the date hereof:

 

(a)           Physical Completion Tests:

 

(i)            General.  The Project
Facility and all other buildings, equipment, facilities, and infrastructure
necessary to operate the Project in accordance with the Operating Plan
(including, without limitation, the [*****] for
the Project, to be used as replacements for flywheels which become defective or
inoperable, such spare flywheels to be delivered (x) to the Project Site
or (y) to a site in Tyngsboro, Massachusetts that is leased or licensed by
Sponsor to

 

P-1

 

the
Borrower)(A) have been completely constructed, completed, and installed in
accordance with the terms of the applicable Project Documents, (B) all
essential elements thereof have been tested and commissioned in accordance with
Prudent Utility Practice; (C) are operating in accordance with applicable
manufacturers’ specifications, the terms of the Project Documents, and all
environmental permits and licenses, Environmental Laws, and other applicable
guidelines; (D) have been accepted and paid for (except for amounts not
yet due and payable), as evidenced by the Borrower having issued final
acceptance certificates relating to each of the material Project Documents; and
(E) have been and are being properly operated and maintained in all respects.

 

(ii)           Construction Work.  All Construction Work under the Construction
Contracts has been completed, including without limitation all Punch List
Items, except for warranty issues that do not affect performance of the Project Facility and do not have a
material impact on environmental or occupational health and safety matters.

 

(iii)          [*****]

 

(iv)          O&M
Activities.  The Operator has performed all obligations
then required to be performed by it in accordance with the O&M Agreement.

 

(b)           Operational Completion Tests:

 

(i)            Performance Testing.  The Project Facility has successfully completed all tests
demonstrating satisfaction of all
required performance standards under the applicable Project Documents, including without limitation verification that
the Project Facility Performance Targets have been met.

 

(ii)           Construction Contracts.  (A) Final completion under each of the Construction
Contracts has occurred, and (B) no further payments are due and owing from
Borrower to any Construction Contractor.

 

(iii)          Insurance
Program for Operating Period.  The Loan Servicer has received,
in form and substance satisfactory to DOE, (x) an Insurance Advisor’s
Certificate, and (y) an Insurance Consultant’s Certificate
(A) describing in reasonable detail the Borrower’s insurance program with
respect to the Operating Period (including without limitation with respect to
any new insurance since the date of the final Advance, copies of certificates
or policies with respect thereto, designating the Administrative Agent in its
capacity as the Collateral Agent as loss payee, as appropriate, all certified
by the Borrower as being true and complete), and (B) certifying that it
has reviewed and analyzed such insurance program and that in its opinion such
insurance program satisfies all the requirements of Schedule 6.3(b).

 

(c)           Legal Conditions:

 

(i)            Title to Assets.  The Borrower has good and marketable fee
title to, or valid leasehold interests in, free and clear of all Liens and
encumbrances (except for Permitted

 

P-2

 

Liens),
the Project Facility and all of
the land and all buildings, equipment, and facilities referred to above, and to
all other facilities known to be required for the Project.

 

(ii)           Liens Under Security
Documents.  The
Borrower has granted Liens in favor of the Administrative Agent in its capacity
as the Collateral Agent for the benefit of the Secured Parties with respect to
all of the assets required to be subject to the Security Documents.

 

(iii)          Representations and
Warranties.  All
representations and warranties in the Loan Documents are true and correct in
all material respects as of the Physical Completion Date (except to the extent
relating to an earlier date).

 

(iv)          Approvals, Permits and
Licenses.  All such
Governmental Approvals required to have been obtained as of the Physical
Completion Date (including any Governmental Approvals disclosed in writing by
the Borrower and required to have been obtained as of that date) have been
obtained and are in full force and effect and are not under appeal or subject
to other proceedings or unsatisfied conditions that could reasonably be
expected to result in a material modification or cancellation as of the date
hereof.  The Borrower is in compliance
with all such Governmental Approvals, the non-compliance with which could
reasonably be expected to have a Material Adverse Effect.

 

(v)           No Event of Default or
Default.  No Event of Default or
Potential Default exists.

 

P-3

 

IN WITNESS WHEREOF, the undersigned has
executed this Physical Completion Certificate as of the date first written
above.

 

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

P-4

 

Exhibit Q

to Common Agreement

 

FORM OF PROJECT COMPLETION CERTIFICATE

 

[Letterhead of the Borrower]

 

(Delivered pursuant to the definition of Project Completion

in Exhibit A2 to the Common Agreement)

 

Date of this Certificate:                ,
20   

 

U.S.
Department of Energy

 

Midland
Loan Services, Inc., as Collateral
Agent

Attn:       Brad Haugerand, General
Counsel

Re:          DOE Loan Guarantee, [                             ]

 

Ladies
and Gentlemen:

 

This
Project Completion Certificate is delivered to you pursuant to the Common
Agreement, dated as of August 6, 2010 (the “Common Agreement”), by
and among (i) Stephentown Regulation Services LLC, as Borrower, (ii) the
U.S. Department of Energy, as Credit Party and Loan Servicer, and (iii) Midland
Loan Services, Inc., as Administrative Agent in its capacity as the
Collateral Agent.

 

All
capitalized terms used in this Project Completion Certificate shall have the
respective meanings specified in the Common Agreement.

 

To
the extent that this Project Completion Certificate evidences, attests, or
confirms compliance with any covenants, conditions, procedures, or
requirements, we have made such examination or investigation as was, in our
opinion, necessary to enable us to express an opinion as to whether such
covenants, conditions, procedures, or requirements have been complied with.

 

THE
UNDERSIGNED HEREBY CERTIFIES FOR THE BENEFIT OF THE LOAN SERVICER THAT, each of
the requirements set forth in clauses (a) through (c) below has been
satisfied as of the date hereof:

 

(a)           Physical Completion:

 

(i)            Physical Completion has occurred.

 

Q-1

 

(b)           Financial Completion:

 

(i)            First Two Principal Payments.  The Borrower has paid in full the first two
consecutive scheduled principal and interest payments due under the DOE Credit
Facility on, or at any time before, the date such payments were due.

 

(ii)           Cash Available For Debt Service.  The Borrower has generated Cash Available for
Debt Service for each of the preceding two consecutive fiscal quarters in an
amount sufficient to pay in full the scheduled principal and interest payments
next becoming due under the DOE Credit Facility.

 

(iii)          Debt Service Reserve.  The Debt Service Reserve Account has been
fully funded (or Reserve Letters of Credit have been posted in lieu thereof).

 

(c)           Legal Conditions:

 

(i)            Representation and Warranties.  All representations and warranties in the
Loan Documents are true and correct in all material respects as of the Project
Completion Date (except to the extent relating to an earlier date).

 

(ii)           Approvals, Permits and Licenses.  All Governmental Approvals required to have
been obtained as of the Project Completion Date (including any Governmental
Approvals disclosed in writing by the Borrower and required to have been
obtained as of that date) have been obtained and are in full force and effect
and are not under appeal or subject to other proceedings or unsatisfied
conditions that could reasonably be expected to result in a material
modification or cancellation as of the date hereof.  The Borrower is in compliance with all such
Governmental Approvals, the non-compliance with which could reasonably be
expected to have a Material Adverse Effect.

 

(iii)          No Event of Default or Default.  No Event of Default or Potential Default
exists.

 

Q-2

 

 

IN WITNESS WHEREOF, the undersigned has
executed this Project Completion Certificate as of the date first written
above.

 

 

	
   

  	
  STEPHENTOWN
  REGULATION SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  

  	
   

  

 

Q-3

 

Schedules to Common Agreement

 

	
  2.1(b)

  	
   

  	
  Advance
  Schedule

  
	
   

  	
   

  	
   

  
	
  6.3(b)

  	
   

  	
  Insurance
  Requirements

  
	
   

  	
   

  	
   

  
	
  6.30(d)

  	
   

  	
  Davis-Bacon
  Act Wage Determination

  
	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Notice
  Addresses

  

 

 

Schedule 2.1(b)

to Common Agreement

 

Advance Schedule

 

[*****]

 

 

Schedule 6.3(b)

to Common Agreement

 

Insurance Requirements

 

[*****]

 

 

Schedule 6.30(d)

to Common Agreement

 

Davis-Bacon Act Wage Determination

 

See attached, as shown at
http://www.wdol.gov/wdol/scafiles/archive/davisbacon/2008/ny2.r29

 

 

Schedule 13.1

to Common Agreement

 

Notice Addresses

 

[*****]

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