Document:

Amendment No. 2 to the Disbursement Agreement

 Exhibit 10.3 
 AMENDMENT NO. 2 TO DISBURSEMENT AGREEMENT 
 AMENDMENT NO. 2, dated as of December 11, 2006, among
Scrubgrass Generating Company, L.P., a limited partnership duly organized and validly existing under the laws of the State of Delaware, as Lessor (the “Lessor”), Buzzard Power Corporation, a Delaware corporation, as Lessee (the
“Lessee”), Deutsche Bank Trust Company Americas (formerly known as Bankers Trust Company), a banking corporation organized and existing under the laws of the State of New York, as Disbursement Agent (the “Disbursement
Agent”), and Calyon New York Branch as successor to Credit Lyonnais, New York Branch in its capacity as agent for the Banks and the Bond LOC Issuer as described more specifically in the Amended and Restated Reimbursement Agreement referred
to below (the “Agent”). (All capitalized terms used herein shall, unless the context otherwise requires or unless they are otherwise defined herein, have the meanings assigned to such terms in the Amended and Restated Disbursement
Agreement, as hereinafter defined.) 
 WHEREAS, the Borrower, the Banks, the Agent, the Bond LOC Issuer (as defined in the Amended and
Restated Reimbursement Agreement referred to below) and the Contract LOC Issuer (as so defined), are parties to an Amended and Restated Reimbursement and Loan Agreement dated December 22, 1995 (as heretofore modified and supplemented and in
effect on the date hereof, the “Amended and Restated Reimbursement Agreement”); 
 WHEREAS, the Lessor, the Lessee, the
Disbursement Agent and the Agent have entered into an Amended and Restated Disbursement and Security Agreement, dated as of December 22, 1995 (as amended and supplemented and in effect on the date hereof, the “Amended and Restated
Disbursement Agreement”); 
 WHEREAS, the Lessor, the Lessee, the Agent, the Disbursement Agent, Deutsche Bank Trust Company
Americas (formerly known as Bankers Trust Company) in its capacity as bond trustee (in such capacity, the “Bond Trustee”) and Environmental Power Corporation, a Delaware corporation (“EPC”) have entered into an
Amended and Restated Participation Agreement dated as of December 22, 1995 (as amended and supplemented and in effect on the date hereof, the “Amended and Restated Participation Agreement”); and 
 WHEREAS, the Borrower has requested that the Banks agree, among other things, to extend the LOC Expiration Date, extend the maturity date of certain
loans and increase the Working Capital Loan Commitment (as such terms are defined in the Amended and Restated Reimbursement Agreement), and the Banks are willing to do so as set forth in Amendment No. 6 dated as of December 11, 2006 to the
Amended and Restated Reimbursement Agreement (“Amendment No. 6”); and 
 WHEREAS, it is a condition precedent to the
effectiveness of Amendment No. 6 that the Lessor, the Lessee, the Agent and the Disbursement Agent amend the Amended and Restated Disbursement Agreement as hereinafter provided. 
 NOW, THEREFORE, in consideration of the premises and of the agreements contained herein, the parties hereto agree as follows: 
 Section 1. Definitions. Capitalized terms used herein shall, unless the context otherwise requires or they are otherwise defined herein, have the
meanings set forth in the Amended and Restated Participation Agreement. 
  

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 In addition, the following term shall have the following meaning when used in this Amendment No. 2:

 “Amendment No. 6 Effective Date” shall mean the date upon which each of the conditions precedent set forth in
Section 3 of Amendment No. 6 shall have been satisfied as notified by the Agent to the Disbursement Agent. 
 Section 2.
Amendments. Effective on and as of the Amendment No. 6 Effective Date: 
 (a) The heading of Section 2.02(b) of the Amended
and Restated Disbursement Agreement is hereby deleted in its entirety and replaced with the words “Amortization Account,” and the last two sentences of Section 2.02(b) of the Amended and Restated Disbursement Agreement are
hereby deleted in their entirety. 
 (b) Clauses “Fifth” through “Tenth” of Section 5.02(a)(Y) of the
Amended and Restated Disbursement Agreement are hereby deleted and replaced in their entirety with the following: 
 “Fifth to the
Remarketing Agent, remarketing fees, if any, in respect of the Bonds; 
 Sixth, (a) to the payment of any Debt Service (Tranche
A) Loan, if necessary, to reduce such loan balance to the Required Maximum Debt Service (Tranche A) Loan Amount for such Payment Date, and (b) then to the payment of any outstanding Debt Service (Tranche B) Loan; provided,
however, that in the event that the Required Maximum Debt Service (Tranche A) Loan Amount has been reduced to zero (0) under clauses (a)(ii) or (a)(iii) of the definition thereof, then amounts under this clause Sixth shall be
applied to the payment of outstanding Debt Service (Tranche A) Loans and outstanding Debt Service (Tranche B) Loans, pro rata based on the proportions that the principal amount of Debt Service (Tranche A) Loans and principal amount of Debt Service
(Tranche B) Loans, respectively, bear to the aggregate outstanding principal amount of Debt Service (Tranche A) Loans and Debt Service (Tranche B) Loans; 
 Seventh, in the following order of priority: 
 (i) to the Maintenance Reserve Account, the amount
required or permitted by Section 13.01(e) of the Amended and Restated Reimbursement Agreement to be deposited in the Maintenance Reserve Account, as described in Schedule 1 to such Disbursement Certificate and then 
 (ii) if required by Section 13.01(i) of the Amended and Restated Reimbursement Agreement, then 100% of the balance remaining in the Operating
Account shall be deposited into the Hedge Account; 
 Eighth to Agent on behalf of Lessor, an amount, as determined by Lessee and
communicated to Lessor, up to the outstanding principal, if any, of any Lessee Working Capital Loans, as described in Schedule 1 to such Disbursement Certificate (to be applied by Agent to the payment of outstanding Working Capital Loans and by
Lessor to the payment of outstanding Lessee Working Capital Loans); 
  

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 Ninth to Lessor, an amount equal to the installment of Basic Rent (Equity) due on such Payment
Date, as set forth in Schedule IV hereto (as such schedule may be amended from time to time) and as described in Schedule 1 to such Disbursement Certificate, unless the restrictions set forth in Section 11.08 of the Amended and Restated
Reimbursement Agreement shall apply, then such amount shall be deposited in the Rent Suspense Account, in either case as set forth in paragraph 4 of such Disbursement Certificate; 
 Tenth if the restrictions set forth in Section 11.08 of the Amended and Restated Reimbursement Agreement shall apply, then 100% of the
balance remaining in the Operating Account shall be deposited into the Available Cash Flow Account;” 
 (c) Section 5.02(b) of the
Amended and Restated Disbursement Agreement is hereby amended by deleting the reference to “clause ‘Sixth’” and inserting in lieu thereof the words “clause ‘Ninth’”. 
 (d) Section 5.02(d) of the Amended and Restated Disbursement Agreement is hereby amended by deleting the words “and 5.02(a)(Y) clauses
‘Fifth’, ‘Sixth’, ‘Ninth’ and ‘Eleventh’ through ‘Seventeenth’ (without any application as provided in any other clause of Section 5.02)” and inserting in
lieu thereof the words “and 5.02(a)(Y) clauses ‘Fifth’, ‘Seventh’, ‘Ninth’, and ‘Eleventh’ through ‘Seventeenth’ (without any application as provided in any
other clause of Section 5.02).” 
 (e) Section 6.01 of the Amended and Restated Disbursement Agreement is hereby amended by
deleting the words “clauses ‘Sixth’ and ‘Eighth’, respectively” and inserting in lieu thereof the words “clauses ‘Ninth’ and ‘Tenth’, respectively”. 

(f) Sections 8.01 and 8.02(c) of the Amended and Restated Disbursement Agreement are hereby amended by deleting the words “clause
‘Ninth’” and inserting in lieu thereof the words “clause ‘Seventh’.” 
 (g)
Section 20.01 of the Amended and Restated Disbursement Agreement is hereby amended by deleting the words “clause ‘Ninth’” and inserting in lieu thereof the words “clause ‘Seventh’”.

 (h) Section 20.02 of the Amended and Restated Disbursement Agreement is hereby amended by deleting the words “clauses
Tenth through Seventeenth of Section 5.02(a)(Y)” and inserting in lieu thereof the words “clauses ‘Eighth’ and ‘Eleventh’ through ‘Seventeenth’ of
Section 5.02(a)(Y)”. 
 (i) Article XXI of the Amended and Restated Disbursement Agreement is hereby deleted in its entirety and
replaced with the words “ARTICLE XXI [intentionally deleted].” 
 (j) Exhibit 5.02(a)(1) of the Amended and Restated Disbursement
Agreement is hereby amended by deleting the words “clauses Tenth through Seventeenth of Section 5.02(a)(Y)” in the bracketed paragraph concerning the Hedge Account and inserting in lieu thereof the words “clauses
‘Eighth’ and ‘Eleventh’ through ‘Seventeenth’ of Section 5.02(a)(Y)”. 
  

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 (k) Schedule I to the Amended and Restated Disbursement Agreement is hereby deleted and replaced in its
entirety with Schedule I attached hereto. 
 Section 3. Reference to and Effect on the Loan Documents. (a) Upon the effectiveness
of this Amendment No. 2, each reference in the Amended and Restated Disbursement Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import, and each reference in the Notes
and the other Loan Documents to the Amended and Restated Disbursement Agreement, shall mean and be a reference to the Amended and Restated Disbursement Agreement as amended hereby and as the same may be further amended, supplemented and otherwise
modified and in effect from time to time. 
 (b) Except as expressly provided herein, the Amended and Restated Disbursement Agreement shall
remain unchanged and in full force and effect. 
 (c) The execution, delivery and effectiveness of this Amendment No. 2 shall not,
except as expressly provided herein, operate as a waiver of any right, power or remedy of any Bank or the Agent under any of the Loan Documents nor constitute a waiver of any provision of any of the Loan Documents. 
 Section 4. Execution in Counterparts. This Amendment No. 2 may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same instrument. 
 Section 5. Expenses. Without limiting its obligations under Article XV of the Amended and Restated Reimbursement Agreement, the Borrower agrees to
pay, on demand, all reasonable out-of-pocket costs and expenses of the Agent, the Disbursement Agent and the Banks (including, without limitation, the reasonable fees and disbursements of Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Agent) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment No. 2. 
 Section 6. Headings. Section headings in this Amendment No. 2 are included herein for convenience of reference only and shall not constitute a part of this Amendment No. 2 for any other purpose. 
 Section 7. Binding Effect. This Amendment No. 2 shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. 
 Section 8. GOVERNING LAW. THIS AMENDMENT NO. 2 SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO THE CONFLICTS OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND ANY SUCCESSOR STATUTE THERETO). 
 The next page is the signature page. 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be executed by their
respective duly authorized officers as of the date first above written. 
  

			
	 LESSOR

	
	 SCRUBGRASS GENERATING COMPANY, L.P.

		
	 By:
	 	 /s/ John W. O’Connor

	 Name:
	 	John W. O’Connor
	 Title:
	 	President
	
	 AGENT

	
	 CALYON NEW YORK BRANCH

		
	 By:
	 	 /s/ Robert G. Colvin

	 Name:
	 	Robert G. Colvin
	 Title:
	 	Director
	
	 DISBURSEMENT AGENT

	
	 DEUTSCHE BANK TRUST COMPANY AMERICAS

		
	 By:
	 	 /s/ Michele L. Russo

	 Name:
	 	Michele L. Russo
	 Title:
	 	Assistant Vice President
		
	 By:
	 	 /s/ Evangelos Ntavos

	 Name:
	 	Evangelos Ntavos
	 Title:
	 	Assistant Vice President
	
	 LESSEE

	
	 BUZZARD POWER CORPORATION

		
	 By:
	 	 /s/ Jimmy Chow

	 Name:
	 	Jimmy Chow
	 Title:
	 	Controller

  

 5Forbearance Agreement

 Exhibit 10.4 
 FORBEARANCE AGREEMENT (LEASE) 
 THIS FORBEARANCE AGREEMENT (LEASE) (this
“Agreement”) is dated as of December 11, 2006 and is entered into by and between Buzzard Power Corporation, a Delaware corporation (the “Lessee”) and Scrubgrass Generating Company, L.P., a Delaware
limited partnership (“Lessor”), with respect to the Amended and Restated Lease Agreement dated December 22, 1995 (as amended through the date hereof, the “Lease”) by and between Lessee and Lessor. Capitalized
terms used herein without definition shall have the same meanings herein as set forth in the Lease. 
 RECITALS 
 WHEREAS, the parties hereto acknowledge that the current economic projections and Operating Budget for the Project indicate that Lessee will be
unable to pay in full Basic Rent (Equity) coming due during one or more periods prior to July 1, 2007; and 
 WHEREAS, subject to
the terms and conditions set forth herein, Lessor is willing to forbear for a period commencing on the Agreement Effective Date (as defined below), and ending on the Forbearance Termination Date (as defined below), in the exercise of remedies with
respect to any Event of Default under the Lease arising solely out of the failure to pay Basic Rent (Equity) under the Lease due to a shortfall in Project Revenues available to make such payment of Basic Rent (Equity), while reserving to Lessor (and
the Agent, the Banks and other financing parties under the Amended and Restated Reimbursement Agreement) all rights and remedies with respect to any other default under the Lease and the other Transaction Documents. 
 NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as
follows: 
 SECTION I. AGREEMENT 
 Subject
to the terms of this Agreement, at the request of Lessee, Lessor hereby agrees to forbear from exercising its rights and remedies under the Lease with respect to any Event of Default under the Lease arising solely out of the failure to pay Basic
Rent (Equity) under Section 13.01(a)(ii) of the Lease due to a shortfall in Project Revenues available to make such payment of Basic Rent (Equity) (any such default, a “Specified Default”). Such forbearance shall terminate on
the “Forbearance Termination Date”, which shall be the earlier to occur of (i) July 1, 2007, or (ii) the occurrence of an Event of Default under the Lease, other than a Specified Default (such period of forbearance,
the “Forbearance Period”). On and after the Forbearance Termination Date, Lessor (and, to the extent provided in the Transaction Documents, the Agent, the Banks and other financing parties) shall be entitled to exercise all rights
and remedies with respect to the Specified Default as if such forbearance had never been granted, and during the Forbearance Period, all Basic Rent (Equity) that is not paid will continue to accrue, together with interest on any such overdue amounts
at the Default Rate. 

 SECTION II. CONDITIONS TO EFFECTIVENESS 
 This Agreement shall become effective only upon the satisfaction of all of the following conditions precedent (the date of satisfaction of such conditions being referred to herein as the “Agreement Effective
Date”): 
 A. Execution. Lessor shall have received a counterpart signature page of this Agreement duly executed by Lessee.

 B. Necessary Consents. Lessor shall have obtained the consent of the Banks to the execution, delivery and performance by Lessor of
this Agreement. 
 SECTION III. REPRESENTATIONS AND WARRANTIES 
 In order to induce Lessor to enter into this Agreement, Lessee represents and warrants to Lessor that the following statements are true and correct in all material respects: 
 A. Corporate Power and Authority. Lessee has all requisite power and authority to execute and deliver this Agreement and to carry out the
transactions contemplated by, and perform its obligations, hereunder. 
 B. Authorization of Agreements. The execution and delivery of
this Agreement and the performance of this Agreement have been duly authorized by all necessary action on the part of Lessee. 
 C. No
Conflict. The execution and delivery by Lessee of this Agreement and the performance by Lessee of this Agreement do not and will not (i) violate or require a consent, approval or filing under (A) any provision of any law, statute, rule
or regulation, or of the certificate or articles of incorporation or partnership agreement, other constitutive documents or by-laws of Lessee or (B) any applicable order of any court or any rule, regulation or order of any governmental
authority, (ii) be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any agreement of Lessee, (iii) except as permitted under the Transaction Documents, result in or
require the creation or imposition of any lien upon any of the properties or assets of Lessee (other than any Liens created under any of the Transaction Documents), or (iv) be subject to any subsequent approval of stockholders or partners or
any approval or consent of any Person under any agreement of Lessee. 
 D. Binding Obligation. This Agreement has been duly executed
and delivered by Lessee and constitutes a legal, valid and binding obligation of Lessee, enforceable against such Lessee in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or
other similar laws affecting creditors’ rights generally and except as enforceability may be limited by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
 E. Absence of Default. No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this
Agreement that would constitute an Event of Default or a Default other than the Specified Default. 
  

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 SECTION IV. MISCELLANEOUS 
 A. Effect on the Transaction Documents. Except for the forbearance by the Lessor pursuant to the terms of this Agreement, the Lease and all other Transaction Documents shall remain in full force and effect, and the
execution, delivery and performance of this Agreement shall not constitute an amendment, modification or waiver of any provision of, or operate as an amendment, modification or waiver of any right, power or remedy of Lessor (or, as assignee, Agent
or any Bank) under, the Transaction Documents. 
 B. Headings. Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. 
 C. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. 
 D.
Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. 
 [Remainder of this page intentionally left blank.] 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first written above. 
  

					
	LESSEE:	 	BUZZARD POWER CORPORATION
			
		 	By:	 	 /s/ Thomas J. Bonner

		 	Name:	 	Thomas J. Bonner
		 	Title:	 	President

  

					
	LESSOR:	 	SCRUBGRASS GENERATING COMPANY L.P.
			
		 	By:	 	 /s/ Jimmy Chow

		 	Name:	 	Jimmy Chow
		 	Title:	 	Controller

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