Document:

Exhibit 10.7

 

Execution Version

 

	
 
    

 

 

CREDIT AGREEMENT

 

among

 

NRG WEST HOLDINGS LLC,

as Borrower,

 

ING CAPITAL LLC,

as Mandated Lead Arranger

 

UNION BANK, N.A.,

as Mandated Lead Arranger

 

MIZUHO CORPORATE BANK, LTD.,

as Mandated Lead Arranger and Joint Bookrunner,

 

RBS SECURITIES INC.,

as Mandated Lead Arranger and Joint Bookrunner,

 

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

as Mandated Lead Arranger, Joint Bookrunner and

Administrative Agent

 

and

 

THE LENDERS PARTY HERETO

 

 

in respect of

THE EL SEGUNDO ENERGY CENTER

 

 

	
 
    

 

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I DEFINITIONS AND RULES OF INTERPRETATION
    	
1
    
	
 
    	
 
    
	
1.1
    	
Defined   Terms 
    	
1
    
	
1.2
    	
Rules   of Interpretation
    	
1
    
	
1.3
    	
Accounting   Principles
    	
1
    
	
 
    	
 
    
	
ARTICLE   II THE CREDIT FACILITIES
    	
2
    
	
 
    	
 
    
	
2.1
    	
Construction   Facilities
    	
2
    
	
2.2
    	
Term   Facilities
    	
3
    
	
2.3
    	
Revolving   Facility
    	
4
    
	
2.4
    	
TALC   Facility
    	
5
    
	
2.5
    	
DSR   LC Facility 
    	
5
    
	
 
    	
 
    
	
ARTICLE   III TERMS OF THE CREDIT FACILITIES 
    	
6
    
	
 
    	
 
    
	
3.1
    	
Borrowings   Generally
    	
6
    
	
3.2
    	
Borrowing   Request
    	
6
    
	
3.3
    	
Disbursement   of Funds
    	
7
    
	
3.4
    	
Evidence   of Secured Obligations and Notes
    	
7
    
	
3.5
    	
Conversions
    	
8
    
	
3.6
    	
Interest   
    	
9
    
	
3.7
    	
Interest   Periods for LIBOR Loans
    	
9
    
	
3.8
    	
Inability   to Determine Rates
    	
10
    
	
3.9
    	
LIBO   Rate Dislocation
    	
11
    
	
3.10
    	
Illegality
    	
11
    
	
3.11
    	
Increased   Costs and Reduction of Return
    	
12
    
	
3.12
    	
Liquidation   Costs
    	
13
    
	
3.13
    	
Fees
    	
13
    
	
3.14
    	
Tranche   A Loan Amount; Etc.
    	
15
    
	
3.15
    	
Amortization   Schedules; Repayment of Principal
    	
16
    
	
3.16
    	
Voluntary   Prepayment of Principal 
    	
17
    
	
3.17
    	
Mandatory   Prepayments of Principal 
    	
18
    
	
3.18
    	
Mandatory   Reduction of Rate Swap Transactions 
    	
19
    
	
3.19
    	
Cancellation   of Commitments
    	
19
    
	
3.20
    	
Method   and Place of Payment
    	
20
    
	
3.21
    	
Computations
    	
21
    
	
3.22
    	
Application   of Payments; Sharing
    	
21
    
	
3.23
    	
Late   Payments
    	
22
    
	
3.24
    	
Net   Payments
    	
22
    
	
3.25
    	
Specified   Letter of Credit Mechanics
    	
25
    
	
3.26
    	
Replacement   of Lenders
    	
28
    
	
3.27
    	
Defaulting   Lender Adjustments
    	
29
    

 

 

	
3.28
    	
Cash   Collateralization
    	
32
    
	
 
    	
 
    
	
ARTICLE   IV CONDITIONS PRECEDENT
    	
33
    
	
 
    	
 
    
	
4.1
    	
Conditions   to Closing
    	
33
    
	
4.2
    	
Conditions   to the Disbursement of Construction Loans
    	
37
    
	
4.3
    	
Conditions   to the Issuance of LGIA Letters of Credit or Disbursement of
    	
 
    
	
 
    	
Revolving   Loans
    	
40
    
	
4.4
    	
Conditions   to the Issuance of the TA Letter of Credit
    	
41
    
	
4.5
    	
Conditions   to the Issuance of the DSR Letter of Credit
    	
42
    
	
4.6
    	
Conditions   to the Term Conversion Date
    	
42
    
	
 
    	
 
    
	
ARTICLE   V REPRESENTATIONS, WARRANTIES AND AGREEMENTS 
    	
45
    
	
 
    	
 
    
	
5.1
    	
Organization
    	
45
    
	
5.2
    	
Authority   and Consents
    	
46
    
	
5.3
    	
Capitalization;   Indebtedness; Investments
    	
46
    
	
5.4
    	
Financial   Condition
    	
47
    
	
5.5
    	
Litigation;   Labor Disputes
    	
47
    
	
5.6
    	
Material   Permits
    	
48
    
	
5.7
    	
Material   Project Documents
    	
49
    
	
5.8
    	
Use   of Proceeds
    	
50
    
	
5.9
    	
ERISA
    	
50
    
	
5.10
    	
Taxes
    	
51
    
	
5.11
    	
Investment   Company Act
    	
52
    
	
5.12
    	
Regulation
    	
52
    
	
5.13
    	
Title;   Security Documents
    	
53
    
	
5.14
    	
Environmental   Matters
    	
54
    
	
5.15
    	
Subsidiaries
    	
56
    
	
5.16
    	
Intellectual   Property
    	
56
    
	
5.17
    	
No   Default
    	
56
    
	
5.18
    	
Compliance   with Laws
    	
56
    
	
5.19
    	
Disclosure
    	
57
    
	
5.20
    	
Utilities,   etc.
    	
57
    
	
5.21
    	
Transactions   with Affiliates
    	
58
    
	
5.22
    	
Project   Completion Date; Project Costs
    	
58
    
	
5.23
    	
Single-Purpose   Entity
    	
58
    
	
5.24
    	
Ranking
    	
58
    
	
5.25
    	
Anti-Terrorism   Laws
    	
58
    
	
5.26
    	
Collateral   Not in Flood Zone
    	
58
    
	
5.27
    	
Accounts
    	
58
    
	
5.28
    	
Taking;   Event of Loss
    	
58
    
	
 
    	
 
    
	
ARTICLE   VI COMPLIANCE COVENANTS 
    	
59
    
	
 
    	
 
    
	
6.1
    	
Annual   and Quarterly Information Covenants; Financial Statements
    	
59
    
	
6.2
    	
Monthly   Construction Reporting
    	
61
    

 

ii

 

	
6.3
    	
Further   Distribution of Operational Notices
    	
61
    
	
6.4
    	
Notice   of Certain Events and Circumstances
    	
62
    
	
6.5
    	
Further   Information
    	
64
    
	
6.6
    	
Operating   Budget
    	
64
    
	
6.7
    	
Inspection
    	
66
    
	
 
    	
 
    
	
ARTICLE   VII RESTRICTIVE COVENANTS
    	
66
    
	
 
    	
 
    
	
7.1
    	
Maintenance   of Existence; Conduct of Business
    	
67
    
	
7.2
    	
Compliance   with Laws
    	
67
    
	
7.3
    	
Accounting   and Financial Management
    	
67
    
	
7.4
    	
Tax   Elections, Payment of Taxes, etc.
    	
67
    
	
7.5
    	
Borrower’s   Equity Interests
    	
68
    
	
7.6
    	
Merger;   Etc.
    	
68
    
	
7.7
    	
Investments;   Subsidiaries
    	
68
    
	
7.8
    	
Transactions   with Affiliates
    	
68
    
	
7.9
    	
Distributions;   Restricted Payments
    	
68
    
	
7.10
    	
Separateness
    	
69
    
	
7.11
    	
Chief   Place of Business; etc.
    	
70
    
	
7.12
    	
Permits
    	
70
    
	
7.13
    	
Security   Documents
    	
71
    
	
7.14
    	
Material   Project Documents
    	
71
    
	
7.15
    	
Change   Orders
    	
73
    
	
7.16
    	
Certain   Agreements
    	
73
    
	
7.17
    	
Insurance   Requirements
    	
73
    
	
7.18
    	
Events   of Loss
    	
73
    
	
7.19
    	
Asset   Acquisitions
    	
73
    
	
7.20
    	
Asset   Dispositions
    	
74
    
	
7.21
    	
Indebtedness
    	
74
    
	
7.22
    	
Leases
    	
74
    
	
7.23
    	
Limitation   on Liens
    	
75
    
	
7.24
    	
Operation   and Maintenance
    	
75
    
	
7.25
    	
O&M   Expenses
    	
75
    
	
7.26
    	
Rate   Swap Transactions
    	
76
    
	
7.27
    	
Use   of Proceeds
    	
76
    
	
7.28
    	
Construction   Budget
    	
76
    
	
7.29
    	
Engineering,   Procurement and Construction
    	
76
    
	
7.30
    	
Completion;   Completion Tests
    	
77
    
	
7.31
    	
Payment   of Project Costs; Project Revenues
    	
77
    
	
7.32
    	
EWG   Status, etc.
    	
78
    
	
7.33
    	
Merger
    	
78
    
	
7.34
    	
Equipment
    	
78
    
	
7.35
    	
Further   Assurances
    	
78
    
	
 
    	
 
    
	
ARTICLE   VIII EVENTS OF DEFAULT
    	
79
    
	
 
    	
 
    
	
8.1
    	
Failure   to Make Payments
    	
79
    

 

iii

 

	
8.2
    	
Certain   Other Fundamental Breaches
    	
79
    
	
8.3
    	
Breach   of Covenant
    	
79
    
	
8.4
    	
Breach   of Representation or Warranty
    	
80
    
	
8.5
    	
Breach   of Financing Documents by Borrower Affiliates
    	
80
    
	
8.6
    	
Loss   of Financing Documents
    	
80
    
	
8.7
    	
Actual   or Prospective Failure of Security
    	
81
    
	
8.8
    	
Breach   or Loss of Material Project Documents
    	
81
    
	
8.9
    	
Voluntary   Bankruptcy Events
    	
82
    
	
8.10
    	
Involuntary   Bankruptcy Events
    	
82
    
	
8.11
    	
Judgments
    	
83
    
	
8.12
    	
Loss   of Material Permits
    	
83
    
	
8.13
    	
Loss   of Collateral
    	
83
    
	
8.14
    	
Abandonment   of Project
    	
83
    
	
8.15
    	
Environmental   Claim
    	
83
    
	
8.16
    	
Change   in Control
    	
84
    
	
8.17
    	
Term   Conversion
    	
84
    
	
8.18
    	
Cross-Default
    	
84
    
	
8.19
    	
ERISA
    	
84
    
	
 
    	
 
    
	
ARTICLE   IX REMEDIES
    	
85
    
	
 
    	
 
    
	
9.1
    	
Acceleration
    	
85
    
	
9.2
    	
Letters   of Credit
    	
85
    
	
9.3
    	
Other   Remedies
    	
85
    
	
 
    	
 
    
	
ARTICLE   X THE AGENTS; VOTING 
    	
86
    
	
 
    	
 
    
	
10.1
    	
Appointment   and Authorization 
    	
86
    
	
10.2
    	
Delegation   of Duties
    	
87
    
	
10.3
    	
Liability   of the Administrative Agent
    	
87
    
	
10.4
    	
Reliance   by the Administrative Agent
    	
87
    
	
10.5
    	
Notice   of Default
    	
88
    
	
10.6
    	
Credit   Decision
    	
88
    
	
10.7
    	
Indemnification   of Administrative Agent
    	
89
    
	
10.8
    	
Individual   Capacity
    	
89
    
	
10.9
    	
Successor   Agent
    	
90
    
	
10.10
    	
Registry
    	
90
    
	
10.11
    	
Voting
    	
91
    
	
10.12
    	
Acknowledgement   of Collateral Agreement
    	
92
    
	
 
    	
 
    
	
ARTICLE   XI MISCELLANEOUS
    	
92
    
	
 
    	
 
    
	
11.1
    	
Costs,   Expenses and Attorneys’ Fees
    	
92
    
	
11.2
    	
Indemnity
    	
93
    
	
11.3
    	
Notices
    	
95
    
	
11.4
    	
Benefit   of Agreement
    	
97
    
	
11.5
    	
No   Waiver; Remedies Cumulative
    	
97
    

 

iv

 

	
11.6
    	
Third   Party Beneficiaries
    	
97
    
	
11.7
    	
Reinstatement
    	
98
    
	
11.8
    	
No   Immunity
    	
98
    
	
11.9
    	
Counterparts
    	
98
    
	
11.10
    	
Amendment   or Waiver
    	
98
    
	
11.11
    	
Assignments,   Participations, etc.
    	
98
    
	
11.12
    	
Survival
    	
102
    
	
11.13
    	
WAIVER   OF JURY TRIAL
    	
103
    
	
11.14
    	
Right   of Set-off
    	
103
    
	
11.15
    	
Severability
    	
103
    
	
11.16
    	
Domicile   of Loans
    	
103
    
	
11.17
    	
Limitation   of Recourse
    	
104
    
	
11.18
    	
Governing   Law; Submission to Jurisdiction
    	
104
    
	
11.19
    	
Complete   Agreement
    	
105
    

 

v

 

	
APPENDICES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Appendix   A
    	
 
    	
Defined   Terms and Rules of Interpretation
    
	
Appendix   B
    	
 
    	
Key   Terms of the Financing
    
	
Appendix   C
    	
 
    	
Projected   Amortization Schedule
    
	
Appendix   D
    	
 
    	
Specified   Letters of Credit
    
	
Appendix   E
    	
 
    	
CB/OB   Approval Thresholds
    
	
Appendix   F
    	
 
    	
Commitments
    
	
Appendix   G
    	
 
    	
Notices
    
	
Appendix   H
    	
 
    	
Separateness   Provisions
    
	
Appendix   I
    	
 
    	
Independent   Consultants’ Reports
    
	
Appendix   J
    	
 
    	
Major   Milestone Date Extensions
    
	
Appendix   K
    	
 
    	
Term   Conversion Legal Opinion Matters
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit   1
    	
 
    	
Form   of Borrowing Request
    
	
Exhibit   2
    	
 
    	
Form   of Conversion Request
    
	
Exhibit   3
    	
 
    	
Form   of Applicable Tax Certificate
    
	
Exhibit   4
    	
 
    	
Form   of Tranche A Construction Loan Promissory Note
    
	
Exhibit   5
    	
 
    	
Form   of Tranche B Construction Loan Promissory Note
    
	
Exhibit   6
    	
 
    	
Form   of Tranche A Term Loan Promissory Note
    
	
Exhibit   7
    	
 
    	
Form   of Tranche B Term Loan Promissory Note
    
	
Exhibit   8
    	
 
    	
Form   of Revolving Loan Promissory Note
    
	
Exhibit   9
    	
 
    	
Form   of LC Loan Promissory Note
    
	
Exhibit   10
    	
 
    	
Form   of LC Request
    
	
Exhibit   11
    	
 
    	
Form   of Borrower Closing Certificate
    
	
Exhibit   12
    	
 
    	
Form   of Pledgor Closing Certificate
    
	
Exhibit   13
    	
 
    	
Form   of Assignment and Acceptance
    
	
Exhibit   14
    	
 
    	
Form   of Borrower Completion Certificate
    
	
Exhibit   15
    	
 
    	
Form   of Independent Engineer Completion Certificate
    
	
Exhibit   16
    	
 
    	
Form   of DSCR Certificate
    
	
Exhibit   17
    	
 
    	
Form   of Operating Report
    
	
Exhibit   18
    	
 
    	
Form   of LGIA Letter of Credit
    
	
Exhibit   19
    	
 
    	
Form   of IE Construction Report
    
	
Exhibit   20
    	
 
    	
Form   of Lien Waiver Report
    
	
 
    	
 
    	
 
    
	
SCHEDULES
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Schedule   4.6(i)
    	
 
    	
Exceptions   to Lien Waivers
    
	
Schedule   5.2
    	
 
    	
Financing   Document Approvals
    
	
Schedule   5.3
    	
 
    	
Borrower   Equity Interests
    
	
Schedule   5.5
    	
 
    	
Litigation
    
	
Schedule   5.6
    	
 
    	
Material   Permits
    

 

 

	
Schedule   5.7
    	
 
    	
Material   Project Documents
    
	
Schedule   5.12
    	
 
    	
Foreign   Properties of Borrower
    
	
Schedule   5.14
    	
 
    	
Environmental   Matters
    
	
Schedule   5.22
    	
 
    	
Proposed   Change Orders
    

 

2

 

This CREDIT AGREEMENT is dated as of August 23, 2011 among NRG West Holdings LLC, as Borrower, ING Capital LLC, as Mandated Lead Arranger, Union Bank, N.A., as Mandated Lead Arranger, Mizuho Corporate Bank, Ltd., as Mandated Lead Arranger and Joint Bookrunner, RBS Securities Inc., as Mandated Lead Arranger and Joint Bookrunner, Credit Agricole Corporate and Investment Bank, as Mandated Lead Arranger, Joint Bookrunner and Administrative Agent, and each of the financial institutions from time-to-time party hereto as Lenders and Issuing Banks.

 

W I T N E S S E T H :

 

WHEREAS, the Borrower has requested that the Lenders and Issuing Banks provide the credit facilities described herein upon the terms and subject to the conditions set forth herein in order to finance a portion of the Project Costs and other costs and expenses incurred in developing, constructing, owning, operating and managing a combined cycle power plant consisting of two fast start, highly efficient units totalling approximately 550 megawatts, to be located on a site in El Segundo, Los Angeles County, California, in the United States (as further defined below, the “Project”); and

 

WHEREAS, the Lenders and Issuing Banks are willing to provide such credit facilities upon such terms and subject to such conditions;

 

NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter contained, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS AND RULES OF INTERPRETATION

 

1.1          Defined Terms. Except as otherwise expressly provided herein, capitalized terms used in this Credit Agreement and its appendices, schedules and exhibits shall have the respective meanings assigned to such terms in Appendix A hereto.

 

1.2          Rules of Interpretation. Except as otherwise expressly provided herein, the rules of interpretation set forth in Appendix A hereto shall apply to this Credit Agreement.

 

1.3          Accounting Principles. Except as otherwise expressly provided in this Credit Agreement, all computations and determinations as to financial matters, and all financial statements to be delivered under this Credit Agreement shall be made or prepared in accordance with U.S. GAAP (including principles of consolidation where appropriate) applied on a consistent basis.

 

 

ARTICLE II

 

THE CREDIT FACILITIES

 

2.1          Construction Facilities.

 

(a)           The Tranche A Lenders hereby establish for the benefit of the Borrower a construction loan facility (the “Tranche A Construction Facility”) having an initial committed principal amount equal to the Tranche A Loan Amount.

 

(b)           The Tranche B Lenders hereby establish for the benefit of the Borrower a construction loan facility (the “Tranche B Construction Facility”, and, together with the Tranche A Construction Facility, the “Construction Facilities”) having an initial aggregate committed principal amount set forth opposite the heading “Tranche B Loan Amount” on Appendix B (the “Tranche B Loan Amount”).

 

(c)           Subject to and upon the terms and conditions set forth herein:

 

(i)            each Tranche A Lender severally agrees to make, from time-to-time during the Tranche A Construction Loan Availability Period, loans under the Tranche A Construction Facility (the “Tranche A Construction Loans”) to the Borrower in an aggregate principal amount that will not result in (x) such Tranche A Lender’s Tranche A Construction Loans exceeding the Tranche A Construction Loan Commitment of such Tranche A Lender or (y) the aggregate amount of all Tranche A Construction Loans exceeding the Tranche A Loan Amount; and

 

(ii)           each Tranche B Lender severally agrees to make, from time-to-time during the Tranche B Construction Loan Availability Period, loans under the Tranche B Construction Facility (the “Tranche B Construction Loans” and, together with the Tranche A Construction Loans, the “Construction Loans”) to the Borrower in an aggregate principal amount that will not result in (x) such Tranche B Lender’s Tranche B Construction Loans exceeding the Tranche B Construction Loan Commitment of such Tranche B Lender or (y) the aggregate amount of all Tranche B Construction Loans exceeding the Tranche B Loan Amount.

 

(d)           The Construction Loans are available only on the terms and subject to the conditions specified hereunder, and once repaid, in whole or in part, at maturity (in accordance with Sections 2.1(f), 2.2(e) and 3.15(a)) or by prepayment, may not be re-borrowed in whole or in part.

 

(e)           The proceeds of the Construction Loans shall be used solely (x) to pay Project Costs in accordance with the Construction Budget and (y) to make no more than three True-Up Distributions in accordance with the next sentence and Section 7.9(c). Subject to the satisfaction of the conditions set forth in Section 4.2, on each of (i) the date of the initial Borrowing of the Construction Loans, (ii) a Business Day selected by the Borrower during the Tranche A Construction Loan Availability Period or the Tranche B Construction Loan Availability Period on which the Borrower has delivered a Borrowing Request (the “Optional True-Up Date”) and (iii) the Term Conversion Date, the Borrower may draw Construction Loans

 

2

 

equal to the positive difference between (x) the aggregate amount of Equity Contributions made (or, if less, deemed made in accordance with the definition thereof) prior to the date of such Disbursement and (y) the Required Equity Contribution (each such drawing, a “True-Up Drawing” and together, the “True-Up Drawings”) and make a True-Up Distribution in accordance with Section 7.9(c).

 

(f)            The Construction Loans shall, if the Term Conversion Date has not theretofore occurred, mature and be immediately payable on the Date Certain.

 

2.2          Term Facilities.

 

(a)           The Tranche A Lenders hereby establish for the benefit of the Borrower a term loan facility (the “Tranche A Term Facility”) in an aggregate principal amount equal to the Tranche A Loan Amount (or, if less on the Term Conversion Date, an amount equal to the principal amount of the Tranche A Construction Loans outstanding as of the Term Conversion Date (after giving effect to any Borrowing of Tranche A Construction Loans on such date and any prepayment of Tranche A Construction Loans on such date in accordance herewith)).

 

(b)           The Tranche B Lenders hereby establish for the benefit of the Borrower a term loan facility (the “Tranche B Term Facility”, and together with the Tranche A Term Facility, the “Term Facility”) in an aggregate principal amount equal to the Tranche B Loan Amount (or, if less on the Term Conversion Date, an amount equal to the principal amount of the Tranche B Construction Loans outstanding as of the Term Conversion Date (after giving effect to any Borrowing of Tranche B Construction Loans on such date and any prepayment of Tranche B Construction Loans on such date in accordance herewith)).

 

(c)           Subject to and upon the terms and conditions set forth herein:

 

(i)            each Tranche A Lender agrees that on the Term Conversion Date, all Tranche A Construction Loans of such Tranche A Lender outstanding on such date (after giving effect to any Borrowing of Tranche A Construction Loans on such date and any prepayment of Tranche A Construction Loans on such date in accordance herewith) shall automatically convert into term loans under the Tranche A Term Facility (each, a “Tranche A Term Loan”); and

 

(ii)           each Tranche B Lender agrees that on the Term Conversion Date, all Tranche B Construction Loans of such Tranche B Lender outstanding on such date (after giving effect to any Borrowing of Tranche B Construction Loans on such date and any prepayment of Tranche B Construction Loans on such date in accordance herewith) shall automatically convert into term loans under the Tranche B Term Facility (each, a “Tranche B Term Loan”, and together with Tranche A Term Loans, the “Term Loans”).

 

For the avoidance of doubt, the Tranche A Construction Loans and the Tranche B Construction Loans shall convert to Tranche A Term Loans and Tranche B Term Loans (respectively) on the same date.

 

3

 

(d)           Construction Loans shall be deemed to be continued as and converted to Term Loans as provided hereby. The Term Loans are available only on the terms and conditions specified herein and, once repaid, in whole or in part, at maturity or by prepayment, may not be reborrowed in whole or in part.

 

(e)           The Term Loans shall mature and be immediately payable on the earlier of (i) the tenth anniversary of the Term Conversion Date and (ii) August 31, 2023 (the “Term Maturity Date”).

 

2.3          Revolving Facility.

 

(a)           The Revolver Lenders hereby establish for the benefit of the Borrower a revolving facility (the “Revolving Facility”) having an initial aggregate committed amount set forth opposite the heading “Revolving Amount” on Appendix B (the “Revolving Amount”).

 

(b)           Subject to and upon the terms and conditions set forth herein, each Revolver Lender agrees to:

 

(i)            prior to the Term Conversion Date, issue one or more irrevocable standby letters of credit (collectively, the “LGIA Letter of Credit”) for the account of the Borrower in respect of the Project Owner’s obligation to provide performance guarantees under the Large Generator Interconnection Agreement for the benefit of the Offtaker and CAISO, pursuant to the Large Generator Interconnection Agreement, and in the form set forth below the heading identifying such LGIA Letter of Credit on Appendix D; and

 

(ii)           make, from time-to-time during the period from the Term Conversion Date until the last day of the Revolver Availability Period, revolving loans under the Revolving Facility (together with any LC Loan resulting from a drawing on any LGIA Letter of Credit, the “Revolving Loans”) to the Borrower in an aggregate principal amount that will not result in the aggregate amount of all Revolving Loans (including any LC Loans resulting from a drawing under any LGIA Letter of Credit) exceeding the Revolving Amount.

 

(c)           Each LGIA Letter of Credit shall expire on the date set forth therein, which shall be determined in accordance with Section 3.25 and Appendix D and shall not in any event be later than the last day of the LGIA Availability Period.

 

(d)           The Revolving Loans may be prepaid in accordance with Section 3.16 and re-borrowed, subject to the terms and conditions set forth in this Credit Agreement, including the satisfaction or waiver of the conditions precedent set forth in Section 4.3 in accordance therewith.

 

(e)           The proceeds of the Revolving Loans shall be applied solely to O&M Expenses.

 

4

 

(f)            The Revolving Loans shall mature and be immediately payable on the last day of the Revolver Availability Period (or, if the Term Conversion Date does not occur on or prior to the Date Certain, the Date Certain) (the “Revolver Maturity Date”).

 

2.4          TALC Facility.

 

(a)           The TALC Issuing Bank and TALC Participating Banks hereby establish for the account of the Borrower a participating letter of credit facility (the “TALC Facility”) having an initial aggregate committed amount set forth opposite the heading “TALC Facility Amount” on Appendix B (the “TALC Facility Amount”).

 

(b)           Subject to and upon the terms and conditions set forth herein, the TALC Issuing Bank agrees to issue, one or more irrevocable standby letters of credit (collectively, the “TA Letters of Credit”) for the account of the Borrower and the benefit of the Offtaker pursuant to the Tolling Agreement, in the form set forth below the heading identifying such TA Letters of Credit on Appendix D.

 

(c)           The TALC Participating Banks shall participate in each TA Letter of Credit issued under the TALC Facility in accordance with Section 3.25.

 

(d)           Each TA Letter of Credit shall expire on the date set forth therein, which shall be determined in accordance with Section 3.25 and Appendix D and shall not in any event be later than the fifth Business Day after the last day of the TALC Availability Period.

 

(e)           Any LC Loans resulting from drawings under the TA Letters of Credit shall mature and be immediately payable on the day that is five Business Days after the last day of the TALC Availability Period (or, if the Term Conversion Date does not occur on or prior to the Date Certain, the Date Certain) (the “TALC Maturity Date”).

 

2.5          DSR LC Facility

 

(a)           The DSR Issuing Banks hereby establish for the account of the Borrower a non-participating letter of credit facility (the “DSR LC Facility”) having an initial aggregate committed amount set forth opposite the heading “DSR Facility Amount” on Appendix B (the “DSR Facility Amount”).

 

(b)           Subject to and upon the terms and conditions set forth herein, each DSR Issuing Bank agrees to issue one or more irrevocable standby letters of credit (collectively, the “DSR Letters of Credit”) for the account of the Borrower and for the benefit of the Collateral Agent in accordance with the Accounts Agreement in the form set forth below the heading identifying such DSR Letters of Credit on Appendix D.

 

(c)           Each DSR Letter of Credit shall expire on the date set forth therein, which shall be determined in accordance with Section 3.25 and Appendix D and shall not in any event be later than the last day of the DSR Availability Period.

 

(d)           Any LC Loans resulting from drawings under the DSR Letters of Credit shall mature and be immediately payable on the last day of the DSR Availability Period (or, if

 

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the Term Conversion Date does not occur on or prior to the Date Certain, the Date Certain) (the “DSR Maturity Date”).

 

ARTICLE III

 

TERMS OF THE CREDIT FACILITIES

 

3.1          Borrowings Generally.

 

(a)           Each Borrowing shall consist of Loans of the same Tranche and shall be made by the relevant Lenders ratably in accordance with their respective Commitments under the relevant Tranche as of the date such Loans are made hereunder. Subject to Section 3.8, each Borrowing shall be comprised entirely of Base Rate Loans or LIBOR Loans as the Borrower may request in accordance herewith. The Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required hereunder. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder.

 

(b)           Each Borrowing shall be in an aggregate amount that is not less than the Borrowing Minimum and, if more than the Borrowing Minimum, is an integral multiple of the Borrowing Multiple in excess thereof; provided, that a Borrowing may be in an aggregate amount that is equal to the entire unused balance of the aggregate applicable Commitments or, with respect to any LC Loan deemed made in accordance with Section 3.25(f), the amount of the relevant drawing under the relevant Specified Letters of Credit.

 

(c)           Borrowings of more than one Type may be outstanding at the same time. There shall not at any time be more than a total of twelve Interest Periods of LIBOR Loans outstanding hereunder at any one time. If two or more Borrowings of the same Tranche and having the same Interest Period are outstanding hereunder at any one time, then the Administrative Agent may in its sole discretion combine the Loans comprising such Borrowings into one Loan.

 

(d)           Notwithstanding any other provision of this Credit Agreement, the Borrower shall not be entitled to request, or to elect to Convert or continue, any Borrowing of any Loan if the Interest Period requested with respect thereto would end after the Maturity Date of such Loan.

 

3.2          Borrowing Request. To request a Borrowing of a Construction Loan or a Revolving Loan, the Borrower shall deliver a Borrowing Request to the Administrative Agent at its Notice Office not later than 11:00 a.m. (New York City time) on (x) the third Business Day prior to the proposed date of Borrowing set forth therein in the case of LIBOR Loans or (y) the first Business Day prior to the proposed date of Borrowing set forth therein in the case of Base Rate Loans. Each Borrowing Request shall be appropriately completed to specify (i) the Tranches of Loans being requested, (ii) the aggregate principal amount of each such Tranche of Loans, (iii) the date of such Borrowing (which shall be a Business Day), (iv) the Type of Loans being requested and (v) in the case of LIBOR Loans, the initial Interest Period to be applicable

 

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thereto. The Administrative Agent shall promptly give each Lender notice of the proposed Borrowing, of such Lender’s proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Borrowing Request. If the Borrowing Request does not elect a Type of Borrowing, then the requested Borrowing shall be a Base Rate Loan. If the Borrowing Request elects a Borrowing of LIBOR Loans but does not specify an Interest Period, then the requested Borrowing shall have an initial Interest Period of one month. This Section 3.2 shall not apply to Borrowings of Term Loans or LC Loans.

 

3.3          Disbursement of Funds. Subject to the terms and conditions hereof, on the date specified in each Borrowing Request, each Lender will make available through such Lender’s Applicable Lending Office its pro rata portion (if any) of the aggregate amount of each Tranche of Construction Loans or Revolving Loans requested on such date, in each case, by wire transfer in Dollars and in immediately available funds to the AA Disbursement Account, and the Administrative Agent will deposit the aggregate of the amounts so made available by the Lenders in accordance with the Borrowing Request and the Accounts Agreement. Unless the Administrative Agent has been notified by any Lender prior to the applicable date of the Borrowing that such Lender does not intend to make available to the Administrative Agent such Lender’s pro rata portion of the Borrowing of any Tranche of Construction Loans or Revolving Loans on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date, and the Administrative Agent may (but shall have no obligation to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender on demand. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower, and the Borrower shall be required to pay such corresponding amount to the Administrative Agent forthwith upon the Administrative Agent’s demand therefor. The Administrative Agent shall also be entitled to recover on demand from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (a) if such amount is recovered from such Lender, the cost to the Administrative Agent of acquiring overnight federal funds at the then applicable rate and (b) if such amount is recovered from the Borrower, the then applicable rate of interest for the relevant Loans provided for herein. If such Lender shall repay to the Administrative Agent such corresponding amount, such amount shall constitute such Lender’s Loan as part of such Borrowing for purposes of this Credit Agreement, and the Borrower’s obligation to repay the Administrative Agent such corresponding amount pursuant to this Section 3.3 shall cease. Nothing in this Section 3.3 shall be deemed to relieve any Lender from its obligation to make any Loan hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any failure by such Lender to make Loans hereunder. This Section 3.3 shall not apply to Borrowings of Term Loans or LC Loans.

 

3.4          Evidence of Secured Obligations and Notes.

 

(a)           Each Lender will maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender as a result of the Loans

 

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of such Lender made hereunder, including the amounts of principal, interest and other Secured Obligations payable and paid to such Lender from time-to-time under this Credit Agreement and (if issued) the Notes. The entries made by each Lender in such account or accounts pursuant to the foregoing sentence shall constitute prima facie evidence of the existence and amounts of the Loans and other Secured Obligations therein recorded; provided, that the failure of any Lender to maintain such account or accounts, or any error therein, shall not in any manner affect the obligations of the Borrower to repay or pay the Loans made by such Lender, accrued interest thereon and the other Secured Obligations of the Borrower to such Lender hereunder in accordance with the terms of this Credit Agreement and the other Financing Documents. Each Lender will advise the Borrower of the outstanding Indebtedness hereunder to such Lender upon written request therefor.

 

(b)           At the request of any Lender, the Borrower’s obligation to pay the principal of, and interest on, any Tranche of Loans made by such Lender shall be evidenced by a Note in respect of such Tranche duly executed and delivered by the Borrower with blanks appropriately completed in conformity herewith.

 

(c)           Each Lender will note on its internal records the amount of each Loan made by it and each payment made in respect thereof and will prior to any transfer of any of its Notes endorse on the reverse side thereof the outstanding principal amount of Loans evidenced thereby. Failure to make such notation shall not affect the Borrower’s obligations in respect of such Loans.

 

3.5          Conversions. The Borrower shall have the option to Convert on any Business Day the principal amount of the Loans made pursuant to one or more Borrowings from one Type of Loan into another Type of Loan; provided, that (a) Loans may not be so Converted into another Type unless the aggregate principal amount of Loans to be so Converted is not less than the Borrowing Minimum and, if more than the Borrowing Minimum, is an integral multiple of the applicable Borrowing Multiple in excess thereof, (b) no Conversion of all or any portion of any LIBOR Loan into a Base Rate Loan may be effected on any day other than the last day of an Interest Period applicable to such LIBOR Loan, unless the Borrower pays all amounts owing under Section 3.12 as a result of such Conversion, (c) no partial Conversion of LIBOR Loans shall reduce the outstanding principal amount of such LIBOR Loans made pursuant to a single Borrowing to less than the applicable Borrowing Minimum, (d) Base Rate Loans may only be Converted into LIBOR Loans if no Default or Event of Default is in existence on the date of Conversion and (e) no Conversion pursuant to this Section 3.5 shall result in a greater number of Interest Periods of LIBOR Loans being outstanding at any one time than is permitted under Section 3.1(c) hereof. Each such Conversion shall be effected by the Borrower by delivering a Conversion Request to the Administrative Agent at its Notice Office prior to 11:00 a.m. (New York City time) on the third Business Day prior to the proposed date of Conversion. Each Conversion Request shall be appropriately completed to specify (i) the principal amount of each Tranche of Loans to be so Converted, (ii) the date of such Conversion (which shall be a Business Day), (iii) the Type of Loans from which each such Tranche of Loans is being Converted and the Type of Loans into which each such Tranche of Loans is being Converted and (iv) if any Loans are being Converted into LIBOR Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall give each Lender prompt notice of any such proposed Conversion affecting any of its Loans.

 

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3.6          Interest.

 

(a)           The Borrower agrees to pay interest in respect of the unpaid principal amount of each Base Rate Loan from the date of Borrowing thereof or Conversion thereof into a Base Rate Loan, until the earlier of (i) the maturity of such Base Rate Loan (whether by acceleration or otherwise) and (ii) the Conversion of such Base Rate Loan to a LIBOR Loan pursuant hereto, at a rate per annum which shall be equal to the sum of (A) the Base Rate in effect from time-to-time plus (B) the Applicable Margin.

 

(b)           The Borrower agrees to pay interest in respect of the unpaid principal amount of each LIBOR Loan from the date of Borrowing thereof or Conversion thereof into a LIBOR Loan until the earlier of (i) the maturity of such LIBOR Loan (whether by acceleration or otherwise) and (ii) the Conversion of such LIBOR Loan to a Base Rate Loan pursuant hereto, at a rate per annum which shall, during each Interest Period applicable thereto, be equal to the sum of (x) the Adjusted LIBO Rate in effect for such Interest Period plus (y) the Applicable Margin.

 

(c)           Accrued (and theretofore unpaid) interest shall be payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last Business Day of each February, May, August and November, (ii) in respect of each LIBOR Loan, on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of six months, on each date occurring at six-month intervals after the first day of such Interest Period, and (iii) in respect of each Loan, upon any repayment or prepayment (on the amount repaid or prepaid), Conversion (on the amount Converted), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. Notwithstanding the foregoing, interest payable in accordance with Section 3.23 shall be payable as provided therein.

 

(d)           On each Interest Determination Date in respect of any LIBOR Loan, the Administrative Agent shall determine the Adjusted LIBO Rate for the applicable Interest Period to be applicable to the Loans or to any portion thereof and shall promptly notify the Borrower and the Lenders thereof. Each such determination shall, absent manifest error, be final, conclusive and binding on all parties hereto.

 

3.7          Interest Periods for LIBOR Loans.

 

(a)           The Borrower shall have the right to elect (i) in the case of the initial Interest Period applicable to any LIBOR Loan, in the Borrowing Request or, in respect of any LIBOR Loan being Converted from a Base Rate Loan, in the Conversion Request and (ii) in the case of any subsequent Interest Period applicable to any LIBOR Loan, in a written notice delivered to the Administrative Agent on the third Business Day prior to the expiration of the current Interest Period applicable to such Loan, the interest period (the “Interest Period”) applicable to such LIBOR Loan, which Interest Period shall, at the option of the Borrower, be one, two, three or six months or (if available to all Lenders) nine or twelve months; provided, that:

 

(i)            the aggregate principal amount of Term Loans having an Interest Period of three months as of any date following the Term Conversion Date shall

 

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be not less than the aggregate notional amount of the Rate Swap Transactions as of the next succeeding Principal Payment Date to occur after such date;

 

(ii)           all LIBOR Loans comprising the same Borrowing shall have the same Interest Period;

 

(iii)          the initial Interest Period for any LIBOR Loan shall commence on the date of Borrowing of such LIBOR Loan (or the date of Conversion thereof from a Base Rate Loan) and each Interest Period occurring thereafter in respect of such LIBOR Loan shall commence on the last day of the immediately preceding Interest Period;

 

(iv)          if any Interest Period begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month;

 

(v)           if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;

 

(vi)          any Interest Period that would otherwise extend beyond the relevant Maturity Date shall end on such Maturity Date; and

 

(vii)         if the Term Conversion Date shall occur on a date that is not the last day of an Interest Period for any Construction Loans being converted to Term Loans on such date, then, notwithstanding any other provision herein to the contrary, the Interest Period applicable to such Construction Loans need not end on the Term Conversion Date but instead may be continued until the last day of such Interest Period (it being understood that the Applicable Margin relating to Term Loans shall apply to such Loans from and after the Term Conversion Date).

 

(b)           If, upon the expiration of any Interest Period, the Borrower has failed to elect a new Interest Period to be applicable to any LIBOR Loan as provided above, the Borrower shall be deemed to have elected an Interest Period of three months effective as of the expiration date of such current Interest Period.

 

3.8          Inability to Determine Rates. If before the commencement of any Interest Period for any LIBOR Loan Borrowing the Administrative Agent determines that for any reason adequate and reasonable means do not exist for determining the Adjusted LIBO Rate for any Interest Period with respect to any LIBOR Loans, the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the Lenders to make or continue LIBOR Loans hereunder shall be suspended until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exists. Upon the delivery of such notice, (a) the Borrower may revoke any pending Borrowing Request or Conversion Request or notice of continuation and (b) if the Borrower does not revoke such

 

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Borrowing Request, Conversion Request or notice, then the Lenders shall make, Convert or continue the Loans, as proposed by the Borrower, in the amount specified in the applicable notice submitted by the Borrower, but such Loans shall be made, Converted or continued as Base Rate Loans instead of LIBOR Loans.

 

3.9          LIBO Rate Dislocation. If the Majority Lenders notify the Administrative Agent in writing that their respective cost of obtaining matching deposits in the interbank market would be in excess of the Adjusted LIBO Rate in respect of any Interest Period, then the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter, the obligation of the affected Lenders to maintain, make or continue LIBOR Loans hereunder shall be suspended until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exists. Upon the delivery of such notice, (a) each affected Lender may (by notice to the Administrative Agent and the Borrower) elect to convert all outstanding LIBOR Loans owed to such Lender and having such Interest Period to Base Rate Loans and the Borrower shall pay all Liquidation Costs incurred in connection therewith in accordance with Section 3.12, (b) the Borrower may revoke any pending Borrowing Request or Conversion Request or notice of continuation of any LIBOR Loans specifying such Interest Period and (c) if the Borrower does not revoke such Borrowing Request, Conversion Request or notice, then the Lenders shall make, Convert or continue the Loans, as proposed by the Borrower, in the amount specified in the applicable notice submitted by the Borrower, but such Loans shall be made, Converted or continued as Base Rate Loans instead of LIBOR Loans.

 

3.10        Illegality

 

(a)           If any Lender determines that the introduction of any Law, or any change in any Law, or in the interpretation or administration of any Law, has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for any Lender or its Applicable Lending Office to make or maintain a LIBOR Loan, then, on notice thereof by the Lender to the Borrower through the Administrative Agent, any obligation of that Lender to make such Loan as a LIBOR Loan shall be suspended until the Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.

 

(b)           If, pursuant to Section 3.10(a), any Lender determines that it is unlawful for such Lender or its Applicable Lending Office to maintain a LIBOR Loan, then, on notice thereof by the Lender to the Borrower through the Administrative Agent, any obligation of that Lender to maintain Loans as LIBOR Loans shall be suspended until such Lender notifies the Borrower through the Administrative Agent that the circumstances giving rise to such determination no longer exist. The Borrower shall, upon its receipt of such notice and demand to do so from such Lender, Convert the LIBOR Loans of such Lender then outstanding into Base Rate Loans, either on the last day of the Interest Period in respect of such LIBOR Loans, if the Lender may lawfully continue to maintain such LIBOR Loans until such day, or immediately, if the Lender may not lawfully continue to maintain such LIBOR Loans until such day.

 

(c)           If the obligation of any Lender to make or maintain LIBOR Loans has been suspended in accordance with this Section 3.10, then the Borrower may elect, by giving notice to such Lender through the Administrative Agent, that all Loans which would otherwise

 

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be made by such Lender as LIBOR Loans shall instead be made or maintained as Base Rate Loans.

 

(d)           Before giving notice to the Borrower through the Administrative Agent under this Section 3.10, the affected Lender shall designate a different Applicable Lending Office with respect to its LIBOR Loans if such designation (i) will avoid the need for giving such notice or making any demand for Conversion and (ii) will not, in the judgment of such Lender, be illegal or otherwise disadvantageous to such Lender.

 

3.11        Increased Costs and Reduction of Return

 

(a)           If any Lender in good faith determines (which determination shall, absent manifest error, be final, conclusive and binding upon all parties hereto) at any time that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any LIBOR Loan (other than any increased cost or reduction in the amount received or receivable resulting from the imposition of or a change in the rate of net income taxes or similar charges or otherwise duplicative of the provisions of Section 3.24) because of any Change in Law, then the Borrower shall pay to such Lender, upon written demand therefor by such Lender to the Borrower through the Administrative Agent, (such written demand notice to include a statement from the Lender certifying the Lender’s good faith determination of increased costs or reduction of return under this Section 3.11(a), such additional amounts as shall be required to compensate such Lender for such increased costs or reductions in amounts received or receivable hereunder; provided, that the Borrower shall be under no obligation to compensate such Lender with respect to any period before the date that is 270 days prior to the date on which such Lender makes a claim hereunder if such Lender prior to such date knew or would reasonably be expected to know of the circumstances giving rise to the claim hereunder and the fact that such circumstances would result in the claim hereunder. A written notice as to the additional amounts owed to any Lender, showing in reasonable detail the basis for the calculation thereof, submitted to the Borrower by such Lender (through the Administrative Agent) shall, absent clearly demonstrable error, be final, conclusive and binding on all parties hereto.

 

(b)           If any Lender shall have determined in good faith that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by such Lender (or its Applicable Lending Office) or any corporation controlling such Lender with any Capital Adequacy Regulation, affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy and such Lender’s desired return on capital) determines that the amount of such capital is increased as a consequence of its Commitment, Loans, credits or other obligations under this Credit Agreement, then, upon demand of such Lender to the Borrower through the Administrative Agent, the Borrower shall pay to such Lender, from time-to-time as specified by such Lender, upon written demand therefor by such Lender to the Borrower through the Administrative Agent (such written demand notice to include a statement from the Lender certifying such Lender’s determination of increased costs under this Section

 

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3.11(b), which shall be conclusive and binding absent clearly demonstrable error), such additional amounts sufficient to compensate such Lender for such increase; provided, that the Borrower shall be under no obligation to compensate such Lender with respect to any period before the date that is 270 days prior to the date on which such Lender makes a claim hereunder if such Lender prior to such date knew or would reasonably be expected to know of the circumstances giving rise to the claim hereunder and the fact that such circumstances would result in the claim hereunder.

 

(c)           Before giving notice to the Borrower through the Administrative Agent under Section 3.11(a) or 3.11(b), the affected Lender shall designate a different Applicable Lending Office with respect to its Loans if such designation (i) will avoid the need for giving such notice or making any demand for compensation under such section and (ii) will not, in the judgment of such Lender, be illegal or otherwise disadvantageous to such Lender.

 

(d)           Any determination made by Lender in accordance with Sections 3.10(a), 3.10(b), 3.11(a) or 3.11(b) shall be set forth in a certificate of an authorized signatory of such Lender and shall be delivered to the Borrower and the Administrative Agent.

 

3.12        Liquidation Costs. The Borrower shall reimburse each Lender and hold such Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of:

 

(a)           the failure of the Borrower to make on a timely basis any scheduled payment of principal of any Loan;

 

(b)           the failure of the Borrower to borrow or Convert a Loan after the Borrower has given (or is deemed to have given) a Borrowing Request or a Conversion Request;

 

(c)           the failure of the Borrower to make any prepayment in accordance with any notice delivered under Section 3.16;

 

(d)           the prepayment or repayment or other payment (including after acceleration thereof) of a LIBOR Loan on a day that is not the last day of the relevant Interest Period; or

 

(e)           the Conversion of any LIBOR Loan to a Base Rate Loan on a day that is not the last day of an Interest Period;

 

including any such loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Lender’s Loans or from fees payable to terminate the deposits from which such funds were obtained (as applicable, “Liquidation Costs”).

 

3.13        Fees.

 

(a)           Commitment Fees. The Borrower agrees to pay to the Administrative Agent the following commitment commission (each a “Commitment Fee”):

 

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(i)            for the account of each Tranche A Lender, a commitment fee for the Tranche A Construction Loan Availability Period, computed at a rate equal to 0.75% per annum on the daily average amount of the Unutilized Commitment of such Lender in respect of the Tranche A Construction Facility during such period, commencing on the date hereof and payable in arrears on (A) each Semi-Annual Date and (B) the last day of the Tranche A Construction Loan Availability Period;

 

(ii)           for the account of each Tranche B Lender, a commitment fee for the Tranche B Construction Loan Availability Period, computed at a rate equal to 0.75% per annum on the daily average amount of the Unutilized Commitment of such Lender in respect of the Tranche B Construction Facility during such period, commencing on the date hereof and payable in arrears on (A) each Semi-Annual Date and (B) the last day of the Tranche B Construction Loan Availability Period; and

 

(iii)          for the account of the Revolver Lenders, a commitment fee for the Revolving Loan Availability Period equal to the sum of (x) 0.75% per annum on the daily average Unutilized Commitment of such Lender in respect of the Revolving Facility plus (y) prior to the Term Conversion Date, 0.50% per annum on daily average Unavailable Commitment of such Lender in respect of the Revolving Facility, in each case, commencing on the date hereof and payable in arrears on (A) each Semi-Annual Date and (B) the last day of the Revolver Availability Period.

 

(b)           Administrative Agency Fee. The Borrower agrees to pay to the Administrative Agent for its own account an administrative agency fee equal to (x) on or prior to the Term Conversion Date, $100,000 per annum and (y) after the Term Conversion Date, $80,000 per annum, in each case multiplied by the Inflation Factor (pro rated for the first and last years of the term hereof) and payable annually in advance.

 

(c)           Letter of Credit Fees. The Borrower shall pay the following fees in respect of the LC Facilities (collectively, the “Letters of Credit Fees”):

 

(i)            a commitment fee equal to the sum of (x) 0.75% per annum on the daily average Unutilized Commitment of each TALC Participating Bank plus (y) prior to the Term Conversion Date, 0.50% per annum on the daily average Unavailable Commitment of each TALC Participating Bank, commencing on the date hereof and payable semi-annually in arrears to the TALC Participating Banks on (A) each Semi-Annual Date and (B) the last Business Day of the TALC Availability Period;

 

(ii)           a commitment fee equal to (x) prior to the Term Conversion Date, 0.50% per annum on the daily average Unavailable Commitment of each DSR Issuing Bank and (y) on and after the Term Conversion Date, 0.75% per annum on the daily average Unutilized Commitment of each DSR Issuing Bank, commencing on the date hereof and payable semi-annually in arrears to the DSR

 

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Issuing Banks on (A) each Semi-Annual Date and (B) the last Business Day of the DSR Availability Period;

 

(iii)          a letter of credit fee in respect of the aggregate average daily maximum available amount of all TA Letters of Credit equal to the then-Applicable Margin on Tranche A Construction Loans or Tranche A Term Loans (as applicable as of the time of determination) bearing interest at the Adjusted LIBO Rate, payable semi-annually in arrears ratably to the TALC Participating Banks on (A) each Semi-Annual Date and (B) the last Business Day of the TALC Availability Period;

 

(iv)         a letter of credit fee in respect of the aggregate average daily maximum available amount of all LGIA Letters of Credit equal to the then-Applicable Margin on Revolving Loans bearing interest at the Adjusted LIBO Rate, payable semi-annually in arrears to the LGIA Issuing Bank on (A) each Semi-Annual Date and (B) the last Business Day of the Revolver Availability Period;

 

(v)          a letter of credit fee in respect of the aggregate average daily maximum available amount of each DSR Letters of Credit equal to the then-Applicable Margin on the Tranche B Term Loans bearing interest at the Adjusted LIBO Rate, payable semi-annually in arrears to the relevant DSR Issuing Bank on (A) each Semi-Annual Date and (B) the last Business Day of the DSR Availability Period; and

 

(vi)          a fronting fee in respect of each issued TA Letter of Credit equal to 0.20% of the undrawn stated amount of such TA Letter of Credit held by the TALC Participating Banks in accordance with Section 3.25(g) (other than the TALC Issuing Bank), payable semi-annually in arrears to the TALC Issuing Bank on (A) each Semi-Annual Date and (B) the last Business Day of the TALC Availability Period.

 

(e)           Other Fees. The Borrower agrees to, and shall cause each other Borrower Party to, pay to the Agents, the Joint Bookrunners and the Mandated Lead Arrangers, for their respective accounts, such other fees as have been agreed to in writing by the Borrower Parties and such other Person.

 

3.14        Tranche A Loan Amount; Etc.

 

(a)           The updated Base Case Model delivered in accordance with Section 4.2(m) shall set forth (i) the notional amortization for the Tranche A Term Loans constructed from the Contracted Amortization Amounts in respect of each Semi-Annual Date set forth on Appendix C (the “Tranche A Notional Amortization”) and (ii) the aggregate sum of the projected Contracted Amortization Amounts in respect of each such Semi-Annual Date (such aggregate sum being the “Tranche A Loan Amount”). For purposes of the foregoing, the “Contracted Amortization Amounts” shall mean, with respect to each Semi-Annual Date, the principal payment amount that causes the Base Case Model delivered and updated in accordance with

 

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Section 4.2(m) to yield a 1.40:1.00 Projected DSCR as determined on a rolling twelve-month basis for the period ending on such Semi-Annual Date (for the avoidance of doubt, taking into account solely those Project Revenues projected to be payable to the Project Owner under the Tolling Agreement assuming that the Initial Delivery Date thereunder in respect of each Generating Unit occurs on the Projected Completion Date and any reimbursed or other amounts projected to be received by the Borrower pursuant to the Large Generator Interconnection Agreement).

 

(b)           The updated Base Case Model delivered in accordance with Section 4.2(m) shall set forth the dates and the amounts (in Dollars) of the projected Disbursements under the Construction Facilities (which shall equal the Tranche A Loan Amount plus the Tranche B Loan Amount) (the “Notional Disbursement Schedule”).

 

(c)           The updated Base Case Model delivered in accordance with Section 4.2(m) shall set forth a percentage amortization for the Tranche A Term Loans for each date set out on Appendix C constructed by (i) dividing (x) the Contracted Amortization Amount in respect of each Semi-Annual Date set out on Appendix C by (y) the Tranche A Term Loan Amount and (ii) with respect solely to the first Semi-Annual Date set out on Appendix C and each date prior to such first Semi-Annual Date, further dividing the percentage for such first Semi-Annual Date derived by application of subpart (i) of this Section 3.14(c) by six (the “Tranche A Percentage Amortization”).

 

3.15        Amortization Schedules; Repayment of Principal.

 

(a)           Upon the conversion of the Construction Loans to Term Loans on the Term Conversion Date in accordance with Section 2.2(c), such Construction Loans will no longer be outstanding as Loans hereunder. If the Term Conversion Date does not occur on or prior to January 28, 2014 (the “Date Certain”), then the Borrower shall repay the aggregate principal amount of the Construction Loans on the Date Certain.

 

(b)           On the Term Conversion Date, the Borrower shall deliver to the Administrative Agent an amortization schedule for each Tranche of the Term Loans (the “Amortization Schedules”) which shall be constructed by multiplying the aggregate amount of the relevant Tranche of Term Loans on the Term Conversion Date after giving effect to Section 3.15(a) by:

 

(i)            in respect of the Semi-Annual Date occurring on or about February 28, 2014, the aggregate sum of the respective percentages set forth on the Projected Amortization Schedule under the relevant heading for such Tranche and opposite each month (if any) beginning on or after the last day of the full calendar month to occur after the Term Conversion Date and prior to February 28, 2014; and

 

(ii)           in respect of each Semi-Annual Date set forth on the Projected Amortization Schedule that is after February 28, 2014, the respective percentages set forth on the Projected Amortization Schedule under the relevant heading for such Tranche and opposite such Semi-Annual Date.

 

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The Amortization Schedules shall be effective solely upon the written confirmation by the Administrative Agent that such Amortization Schedules were constructed in accordance with this Section 3.15(b). The principal of the Term Loans shall be due and payable on each Semi-Annual Date in accordance with the Amortization Schedules constructed and confirmed in accordance with this Section 3.15(b).

 

(c)           The difference between the aggregate sum of the percentages set out under the heading of each Tranche and opposite all months beginning on or prior to the second Semi-Annual Date set forth on Appendix C and the aggregate percentage of such months applied in accordance with Section 3.15(b) shall be multiplied by the aggregate amount of the relevant Tranche of Term Loans on the Term Conversion Date after giving effect to Section 3.15(a). The principal amount of the Tranche A Term Loans resulting from such calculation is the “Tranche A Deferred Principal Amount”. The principal amount of the Tranche B Term Loans resulting from such calculation is the “Tranche B Deferred Principal Amount” and, together with the Tranche A Deferred Principal Amount, the “Deferred Principal Amount”. The Deferred Principal amount shall be payable in accordance with Sections 3.16 and 3.17.

 

(d)           The Borrower shall repay the aggregate outstanding principal amount of each Tranche of Loans on the respective Maturity Date of such Tranche of Loans.

 

3.16        Voluntary Prepayment of Principal. The Borrower shall have the right to prepay the Loans, without premium or penalty, in whole or in part at any time and from time-to-time after the Closing Date on the following terms and conditions: (i) the Borrower shall give the Administrative Agent at the Notice Office at least five Business Days’ prior written notice of its intent to prepay the Loans, the aggregate principal amount of the prepayment, the Types of Loans to be prepaid and, in the case of LIBOR Loans, the specific Borrowing or Borrowings pursuant to which such LIBOR Loans were made (which notice the Administrative Agent shall promptly transmit to each of the Lenders); (ii) such prepayment shall be in an aggregate principal amount not less than the Borrowing Minimum and, if more than the Borrowing Minimum, in an integral multiple of the Borrowing Multiple (unless the entire Tranche of Loans is being prepaid); (iii) prepayments of a LIBOR Loan may only be made pursuant to this Section 3.16 on the last day of an Interest Period applicable thereto (unless the Borrower pays all Liquidation Costs resulting from the prepayment of such LIBOR Loan on a day other than the last day of the Interest Period applicable thereto); and (iv) each prepayment of Loans pursuant to this Section 3.16 shall be applied first, to reduce the Deferred Principal Amount pro rata between the Tranches and among the Term Lenders within each such Tranche to $0.00, second, to reduce the LC Loans resulting from a draw on the DSR Letters of Credit to $0.00, third, to reduce Revolving Loans to $0.00, fourth, to the scheduled principal payments of Tranche B Term Loans in inverse chronological order of their due dates to $0.00, fifth, to reduce the scheduled principal payments of Tranche A Term Loans on a pro rata basis to $0.00 and finally, to reduce any LC Loans resulting from a draw on the TA Letters of Credit on a pro rata basis. In no event shall any voluntary prepayment be funded from the proceeds of any Loan.

 

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3.17        Mandatory Prepayments of Principal

 

(a)           The Borrower shall prepay the Loans, without premium or penalty (except for any Liquidation Costs), with the Mandatory Prepayment Portion of the following Collateral Proceeds:

 

(i)            all Loss Proceeds received by any Borrower Party that are not applied, or are not permitted to be applied, to the Restoration of the Project in accordance with the Collateral Agreement or are not allowed to be retained or re-invested by the Borrower Parties in accordance with the Collateral Agreement;

 

(ii)           all Disposition Proceeds received by any Borrower Party that are not applied, or are not permitted to be applied, to the purchase of replacement assets in accordance with the Collateral Agreement or are not allowed to be retained or re-invested by the Borrower Parties in accordance with the Collateral Agreement;

 

(iii)          all proceeds of any Delay Liquidated Damages in accordance with the Collateral Agreement;

 

(iv)          all Buy-down Proceeds in accordance with the Collateral Agreement; and

 

(v)           all Distribution Sweep Proceeds in accordance with the Collateral Agreement.

 

(b)           On the Term Conversion Date, all proceeds of any Delay Liquidated Damages shall be applied: first to repay any LC Loans resulting from a draw on the TA Letters of Credit; second, to reduce the Deferred Principal Amount pro rata between the Tranches and among the Term Lenders within each such Tranche to $0.00; third, to reduce remaining scheduled principal payments of the Term Loans pro rata between the Tranches and among the Term Lenders within each such Tranche in inverse chronological order of the due dates thereof to $0.00; fourth, LC Loans resulting from a draw on the DSR Letters of Credit on a pro rata basis to $0.00; and finally, Revolving Loans on a pro rata basis to $0.00.

 

(c)           Loss Proceeds, Disposition Proceeds and Buy-down Proceeds received prior to the Term Conversion Date shall reduce the amount of the Construction Loans converted to Term Loans in accordance with Section 3.15(a) and used to construct the Amortization Schedule in accordance with Section 3.15(b) pro rata.

 

(d)           Loss Proceeds, Disposition Proceeds, Buy-down Proceeds and Distribution Sweep Proceeds received on and after the Term Conversion Date shall be applied: first, to reduce the Deferred Principal Amount pro rata between the Tranches and among the Term Lenders within each such Tranche to $0.00; second, to reduce remaining scheduled principal payments of the Term Loans pro rata between the Tranches and among the Term Lenders within each such Tranche in inverse chronological order of their due dates to $0.00; third, to reduce the LC Loans resulting from a draw on the DSR Letters of Credit on a pro rata basis to $0.00; fourth, to reduce the Revolving Loans on a pro rata basis to $0.00; and finally to reduce any LC Loans resulting from a draw on the TA Letters of Credit on a pro rata basis.

 

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(e)           Mandatory prepayments to be made with Loss Proceeds, Disposition Proceeds and Buy-down Proceeds shall be made (i) in respect of any LIBOR Loan, on the last day of the relevant Interest Period in respect thereof or on such earlier date as selected by the Borrower (provided, that Borrower pays any Liquidation Costs arising from such earlier prepayment), (ii) in respect of any Base Rate Loan, on the fifth Business Day following receipt of the relevant Collateral Proceeds in the Proceeds Account and (iii) in respect of any Loan that has been Converted from a LIBOR Loan to a Base Rate Loan prior to prepayment in accordance with subpart (i) of this Section 3.17(e), on the third Business Day following such Conversion. Mandatory prepayments to be made with Distribution Sweep Proceeds shall be made on the Monthly Transfer Date immediately following the relevant Semi-Annual Date or on the following Interest Period in respect of LIBOR Loans but in no event later than three months after such Monthly Transfer Date.

 

(f)            Mandatory prepayments to be made with proceeds of any Delay Liquidated Damages shall be made on the Term Conversion Date (provided, that, if the Term Conversion Date occurs on a day that is not the last day of the relevant Interest Period in respect of any LIBOR Loan to be repaid, the Borrower pays any Liquidation Costs arising from such earlier prepayment).

 

3.18        Mandatory Reduction of Rate Swap Transactions.

 

(a)           If the Borrower prepays the Construction Loans prior to the Term Conversion Date, then the Borrower shall (i) reconstruct the Notional Amortization on the Projected Amortization Schedule by multiplying (x) the aggregate amount of the relevant Tranche of Construction Loans after giving effect to such prepayment plus the aggregate remaining Construction Loan Commitments of such Tranche by (y) the percentages set forth on Appendix C and (ii) concurrently with such prepayment, partially terminate the Rate Swap Transactions by reducing the relevant notional amount thereunder in accordance with the Rate Swap Agreements to the extent necessary (if necessary) so that after giving effect to such prepayment and the application thereof in accordance with Section 3.16 or 3.17, the Borrower is in compliance with Section 7.26.

 

(b)           If the Borrower prepays the Term Loans, then the Borrower shall, concurrently with such prepayment, partially terminate the Rate Swap Transactions by reducing the relevant notional amount thereunder in accordance with the Rate Swap Agreements to the extent necessary (if necessary) so that after giving effect to such prepayment and the application thereof in accordance with Section 3.16 or 3.17, the Borrower is in compliance with Section 7.26.

 

3.19        Cancellation of Commitments

 

(a)           Subject to Section 3.19(c), the Borrower may ratably cancel all or any part of (i) the Tranche A Construction Loan Commitments by written notice to the Tranche A Lenders, (ii) the Tranche B Construction Loan Commitments by written notice to the Tranche B Lenders or (iii) (after the Term Conversion Date) the Revolving Loan Commitments by written notice to the Revolving Lenders.

 

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(b)           The Borrower may not cancel all or any part of the LC Facilities.

 

(c)           Notwithstanding anything to the contrary set forth in this Credit Agreement, the Borrower shall not cancel all or any portion of the Tranche A Construction Loan Commitments or the Tranche B Construction Loan Commitments prior to the Term Conversion Date unless (i) no event has occurred or could reasonably be expected to occur to cause any Major Milestone Date to be delayed, (ii) the proposed reduction in Commitments requested by the Borrower will not result in a deficiency of funds necessary to achieve the Project Completion Date by the Date Certain and otherwise satisfy the condition contained in Section 4.6(e) and (iii) each Tranche A Lender or Tranche B Lender, as may be the case, shall have received a certificate from the Borrower, confirmed by the Independent Engineer, with respect to the matters set forth in this Section 3.19(c).

 

(d)           Notwithstanding anything to the contrary set forth in this Credit Agreement, on the Term Conversion Date:

 

(i)            all remaining Tranche A Construction Loan Commitments (after giving effect to (x) any Borrowing of Tranche A Construction Loans in accordance with Section 2.1 and (y) the Conversion of all Tranche A Construction Loans to Tranche A Term Loans in accordance with and pursuant to Sections 2.2 and 3.5(e)) shall automatically be cancelled; and

 

(ii)           all remaining Tranche B Construction Loan Commitments (after giving effect to (x) any Borrowing of Tranche B Construction Loans in accordance with Sections 2.1 and (y) the Conversion of all Tranche B Construction Loans to Tranche B Term Loans in accordance with and pursuant to Sections 2.2 and 3.5(e)) shall automatically be cancelled.

 

(e)           The Lenders may cancel their respective Commitments in accordance with Section 9.1.

 

(f)            The Lenders may cancel their respective Commitments if the initial Borrowing of the Construction Loans has not occurred on or prior to the twelve month anniversary of the Closing Date.

 

3.20        Method and Place of Payment.

 

(a)           Except as set forth in the following sentence or as otherwise specifically provided herein, all payments under this Credit Agreement or any Note shall be made to the Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 2:00 p.m. (New York City time) on the date when due and shall be made in Dollars in immediately available funds to the AA Payment Account or pursuant to such other instructions as the Administrative Agent shall designate to the Borrower in writing. Whenever any payment to be made hereunder or under any Note is stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest thereon shall be payable at the applicable rate during such extension; provided, that if the day on which any such payment relating to a LIBOR Loan is due

 

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is not a Business Day but is a day of the month after which no further Business Day occurs in such month, then the due date thereof shall be the next preceding Business Day.

 

(b)           With respect to any repayment of Loans pursuant to Section 3.15 or any mandatory prepayment of Loans pursuant to Section 3.17, the Borrower may designate the Types of Loans which are to be repaid or prepaid and, in the case of LIBOR Loans, the specific Borrowing or Borrowings pursuant to which such LIBOR Loans were made; provided, that (i) repayments and prepayments of LIBOR Loans may only be made on the last day of an Interest Period applicable thereto unless all such LIBOR Loans with Interest Periods ending on or prior to the date of required repayment or prepayment and all Base Rate Loans have been paid in full or the Borrower pays Liquidation Costs, (ii) if any repayment or prepayment of LIBOR Loans made pursuant to a single Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to an amount less than the Borrowing Minimum, then such outstanding Loans shall immediately be Converted into Base Rate Loans, and (iii) each repayment or prepayment of Loans made pursuant to a single Borrowing shall be applied pro rata across such Loans. In the absence of a designation by the Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion.

 

3.21        Computations. All computations of interest and Fees hereunder shall be made on the basis of a 360-day year and the actual number of days elapsed; provided that computations of interest on Base Rate Loans calculated under clause (b) of the definition thereof hereunder shall be made on the basis of a 365- or 366-day year, as the case may be, and the actual number of days elapsed.

 

3.22        Application of Payments; Sharing.

 

(a)           Subject to the provisions of this Section 3.22, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of the Borrower in respect of any Secured Obligations of the Borrower hereunder or under any other Financing Document, it shall promptly distribute such payment to the Lenders pro rata based upon their respective shares, if any, of the Secured Obligations with respect to which such payment was received.

 

(b)           If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (i) notify the Administrative Agent of such fact, and (ii) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided, that: (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and (ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express

 

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terms of this Credit Agreement (including the application of funds arising from the existence of a Defaulting Lender) or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or TALC Participations to any assignee or participant, other than to the Borrower or any Subsidiary thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

 

(c)           Notwithstanding the foregoing, if there are insufficient funds in the Secured Accounts to make each of the principal payments of the Loans in accordance with both Sections 3.4(e) and 7.8(iii) of the Collateral Agreement, then such funds shall be applied first, to the repayment in full of the outstanding principal amount of all Loans other than the Term Loans (if any); second, to the repayment in full of the outstanding principal amount of the Tranche A Term Loans; and finally, to the repayment of the outstanding principal amount of the Tranche B Term Loans.

 

3.23        Late Payments. If any amounts required to be paid by the Borrower under this Credit Agreement or the other Financing Documents (including the principal of or interest theretofore accrued on any Loan hereunder or any Fees or other amounts otherwise payable to the Administrative Agent, any Lender, any Issuing Bank or any Participating Banks) remain unpaid after such amounts are due, then (to the extent permitted by applicable Law) such overdue amounts shall bear interest from the date due until such amounts are paid in full at the Default Rate, with such interest to be payable on demand.

 

3.24        Net Payments

 

(a)           All payments made by the Borrower hereunder or under any other Financing Document will be made without setoff, counterclaim or other defense. Except as provided in Section 3.24(b), all such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding, in the case of any Lender, except as provided in the second succeeding sentence, Excluded Taxes) and all interest, penalties or similar liabilities with respect thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as “Applicable Taxes”). If any Applicable Taxes are so levied or imposed, the Borrower agrees to pay the full amount of such Applicable Taxes, and such additional amounts as may be necessary so that every payment of all amounts due hereunder or under any other Financing Document, after withholding or deduction for or on account of any Applicable Taxes, will not be less than the amount provided for herein or in such other Financing Document. If any amounts are payable in respect of Applicable Taxes pursuant to the preceding sentence, then the Borrower shall be obligated to reimburse each Lender, upon the written request of such Lender, for (i) taxes imposed on or measured by the net income of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or the jurisdiction in which the principal office or Applicable Lending Office of such Lender is located or any political subdivision or taxing

 

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authority thereof or therein, and (ii) any withholding of Applicable Taxes, in each case as such Lender determines are payable by, or withheld from, such Lender in respect of any amounts paid to or on behalf of such Lender pursuant to the preceding sentence and this sentence. The Borrower will furnish to the Administrative Agent within 45 days after the date of the payment of any Applicable Taxes due pursuant to applicable Law certified copies of tax receipts evidencing such payment by the Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Applicable Taxes so levied or imposed and paid by such Lender.

 

(b)

 

(i)            Each Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) agrees to deliver to the Borrower and the Administrative Agent, on or prior to the Closing Date, (i) two accurate and complete original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or successor forms) certifying to such Lender’s entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made to it under this Credit Agreement and under any other Financing Document or (ii) if such Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) pursuant to clause (i) above, (A) a certificate substantially in the form of Exhibit 3 (any such certificate, an “Applicable Tax Certificate”) and (B) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Lender’s entitlement as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made to it under this Credit Agreement and under any other Financing Document. In addition, each Lender agrees that from time-to-time after the Closing Date (or, in the case of a Lender that is an assignee or transferee of an interest under this Credit Agreement pursuant to Section 11.11 (unless such Lender was already a Lender hereunder prior to such assignment or transfer), from time-to-time after the date of such assignment or transfer to such Lender), when a lapse in time or change in circumstances renders the previous forms and/or Applicable Tax Certificate (as applicable) obsolete or inaccurate in any material respect, it will deliver to the Borrower and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to a complete exemption under an income tax treaty), Form W-8BEN (with respect to the portfolio interest exemption) (or successor forms) and/or an Applicable Tax Certificate, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments made to it under this Credit Agreement and any other Financing Document. If any Lender is unable to deliver any such form and/or Applicable Tax Certificate, it shall immediately notify the Borrower and the Administrative Agent of such inability, in which case

 

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such Lender shall not be required to deliver any such form and/or Applicable Tax Certificate pursuant to this Section 3.24(b). Notwithstanding anything to the contrary contained in Section 3.24(a), but subject to Section 11.11(d) and the immediately succeeding sentence: (x) the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, fees or other amounts payable hereunder for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. Federal income tax purposes to the extent that such Lender has not provided to the Borrower U.S. Internal Revenue Service forms that establish a complete exemption from such deduction or withholding and (y) the Borrower shall not be obligated pursuant to Section 3.24(a) hereof to gross-up payments to be made to a Lender in respect of income or similar taxes imposed by the United States if (I) such Lender has not provided to the Borrower the Internal Revenue Service forms required to be provided pursuant to this Section 3.24(b) or (II) in the case of a payment, other than interest, to a Lender that is not a “bank” as described in clause (ii) above, to the extent that such forms do not establish a complete exemption from withholding of such Applicable Taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 3.24, the Borrower agrees to pay additional amounts and to indemnify each Lender in the manner set forth in Section 3.24(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes after the Closing Date in any applicable Law relating to the deducting or withholding of income or similar Applicable Taxes.

 

(ii)           Each Lender that is a United States Person (as such term is defined in Section 7701(a)(30) of the Internal Revenue Code) shall deliver to the Borrower and the Administrative Agent executed originals of the Internal Revenue Service Form W-9 to enable the Borrower and the Administrative Agent, as the case may be, to determine whether or not such Lender is subject to backup withholding or information reporting requirements.

 

(c)           Each Lender described in Section 3.24(b)(i) shall provide, promptly upon the reasonable demand of the Borrower or the Administrative Agent, any information, form or document as prescribed by the Internal Revenue Service to (x) demonstrate that such Lender has complied with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) and 1472(b) of the Internal Revenue Code, as applicable), or (y) to determine the amount to deduct and withhold from such payment.

 

(d)           Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of taxes withheld or deducted from funds paid for the account of such Lender. If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Applicable Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts

 

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pursuant to Section 3.24(a), it shall pay to such Borrower an amount equal to such refund (but only to the extent of the indemnity payments made, or additional amounts paid, by such Borrower under Section 3.24 with respect to the Applicable Taxes giving rise to such refund), net of all out-of-pocket expenses and net of any loss or gain realized in the conversion of such funds from or to another currency incurred by the Administrative Agent or any Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the written request of the Administrative Agent or any Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or any Lender in the event the Administrative Agent or any such Lender is required to repay such refund to such Governmental Authority. This subsection shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to the Borrower or any other Person.

 

3.25        Specified Letter of Credit Mechanics.

 

(a)           To request the issuance of a Specified Letter of Credit under the TALC Facility, the Borrower shall deliver an appropriately completed and duly executed LC Request to the TALC Issuing Bank and the Administrative Agent not less than the second Business Day prior to the proposed Issuance Date thereof. To request the issuance of a Specified Letter of Credit under any other LC Facility, the Borrower shall deliver an appropriately completed and duly executed LC Request to the relevant Issuing Bank and the Administrative Agent not less than three Business Days in advance of the proposed Issuance Date thereof. If requested by any relevant Issuing Bank, the Borrower shall submit a letter of credit application on such Issuing Bank’s standard form in connection with any request for a Specified Letter of Credit.

 

(b)           To request the amendment, renewal or extension of an outstanding Specified Letter of Credit (to the extent such amendment, renewal or extension is in accordance with the terms, conditions and requirements of this Credit Agreement), the Borrower shall deliver an appropriately completed and duly executed LC Request to the relevant Issuing Bank and the Administrative Agent not less than two Business Days in advance of the requested date of amendment, renewal or extension thereof.

 

(c)           Each LC Request shall include or attach such information as shall be necessary to issue, amend, renew or extend such Specified Letter of Credit (including the beneficiary, maturity, initial stated amount, and form thereof).

 

(d)           The making of each LC Request shall be deemed to be a representation and warranty by the Borrower to the relevant Issuing Banks and the TALC Participating Banks (as applicable) that such Specified Letter of Credit may be issued, amended, renewed or extended in accordance with, and will not violate the requirements of, this Credit Agreement or any other Financing Document. The relevant Issuing Bank shall, on the terms and subject to the conditions of this Credit Agreement, on the date requested by the Borrower in the relevant LC Request, issue, amend, renew or extend (as applicable) the requested Specified Letter of Credit in accordance with the Issuing Bank’s usual and customary practices; provided, that in the case of the issuance of a Specified Letter of Credit, the relevant Issuing Bank shall not have received

 

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notice prior to such issuance from the Borrower, the Administrative Agent or any TALC Participating Bank (as applicable) that one or more of the conditions specified in Section 4.1, Section 4.3, Section 4.4 or Section 4.5 (as applicable) are not then satisfied. Upon the issuance, amendment, renewal or extension of any Specified Letter of Credit in accordance with the terms of this Credit Agreement, the relevant Issuing Bank shall promptly notify the Borrower, and the Administrative Agent and, if applicable, the TALC Participating Banks in writing of such issuance, amendment, renewal or extension, and such notice shall be accompanied by a copy of the relevant Specified Letter of Credit or the amendment thereto, as the case may be.

 

(e)           If the Issuing Bank shall make an LC Disbursement, the Issuing Bank shall give the Borrower, the Administrative Agent and (with respect to an LC Disbursement under a TA Letter of Credit) each TALC Participating Bank prompt written notice of such LC Disbursement; provided, that the failure to give any such notice shall in no way affect, impair or diminish the Borrower’s obligations hereunder (other than in respect of timing of its reimbursement obligations hereunder). The stated amount of any Specified Letter of Credit shall be reduced by the amount of each LC Disbursement thereunder.

 

(f)            Each LC Disbursement shall be automatically converted into loans hereunder in an aggregate initial principal amount equal to the amount of such LC Disbursement (or in the case of an LC Disbursement in respect of any TA Letter of Credit, each TALC Participating Bank’s TALC Percentage of the amount of such LC Disbursement) (each, an “LC Loan”). Upon the deemed Borrowing of LC Loans in accordance with this Section 3.25(f), the relevant LC Disbursement shall be deemed retired in full. The LC Loans made pursuant to this Section 3.25(f) shall be Base Rate Loans until Converted in accordance with Section 3.5.

 

(g)           Immediately upon the issuance by the TALC Issuing Bank of each TA Letter of Credit, the TALC Issuing Bank shall be deemed to have sold and transferred to each TALC Participating Bank and each TALC Participating Bank shall be deemed irrevocably and unconditionally to have purchased and received from the TALC Issuing Bank, without recourse or warranty, an undivided interest and participation, to the extent of such TALC Participating Bank’s TALC Percentage, in such TA Letter of Credit, each LC Disbursement made thereunder and the obligations of the Borrower under this Credit Agreement with respect thereto (including any LC Disbursement and the resulting LC Loans). In determining whether to pay under any TA Letters of Credit, the TALC Issuing Bank shall have no obligation relative to the other Lenders other than to confirm that any documents required to be delivered under such TA Letters of Credit appear to have been delivered and that they appear to substantially comply on their face with the requirements thereof. Any action taken or omitted to be taken by the TALC Issuing Bank under or in connection with any TA Letters of Credit shall not create any resulting liability to the Borrower, any Lender or any other Person unless such action is taken or omitted to be taken with gross negligence or willful misconduct on the part of the TALC Issuing Bank (as determined by a court of competent jurisdiction in a final and non-appealable decision). If the TALC Issuing Bank makes an LC Disbursement, then the TALC Issuing Bank shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each TALC Participating Bank, and each TALC Participating Bank shall promptly and unconditionally pay to the TALC Issuing Bank the amount of such TALC Participating Bank’s TALC Percentage of the amount of such LC Disbursement (less any amount received by the Issuing Bank from the Borrower in respect of such LC Disbursement prior to such payment) (as applicable to each

 

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TALC Participating Bank, such TALC Participating Bank’s “TALC Participation Amount”) in Dollars and in same day funds. If the Administrative Agent so notifies a TALC Participating Bank prior to 12:00 noon (New York City time) on any Business Day, then such TALC Participating Bank shall make available to the TALC Issuing Bank its TALC Participation Amount on such Business Day in same day funds. If the Administrative Agent so notifies a TALC Participating Bank after 12:00 noon (New York City time) on any Business Day, then such TALC Participating Bank shall make available to the TALC Issuing Bank its TALC Participation Amount on the next succeeding Business Day in same day funds. If and to the extent such TALC Participating Bank shall not have made its TALC Participation Amount available to the TALC Issuing Bank in accordance with this Section 3.25(g), such TALC Participating Bank agrees to pay to the TALC Issuing Bank, forthwith on demand its TALC Participation Amount, together with interest thereon, for each day from such date until the date such amount is paid to such TALC Issuing Bank at the interest rate applicable to Tranche B Construction Loans or Tranche B Term Loans, as applicable, that are maintained as Base Rate Loans. The failure of any TALC Participating Bank to make available to the TALC Issuing Bank its TALC Participation Amount shall not relieve any other TALC Participating Bank of its obligation hereunder to make available to the TALC Issuing Bank its TALC Participation Amount on the date required, as specified above, but no TALC Participating Bank shall be responsible for the failure of any other TALC Participating Bank to make available to the TALC Issuing Bank such other TALC Participating Bank’s TALC Participation Amount. Whenever the TALC Issuing Bank receives a payment of a reimbursement obligation as to which it has received any payments from the TALC Participating Banks pursuant to this Section 3.25(g), the TALC Issuing Bank shall pay to each such TALC Participating Bank which has paid a TALC Participation Amount, in Dollars and in same day funds, an amount equal to such TALC Participating Bank’s share (based upon the proportionate aggregate amount originally funded by such TALC Participating Bank to the aggregate amount funded by all TALC Participating Banks) of the principal amount of such reimbursement obligation and interest thereon accruing after the purchase of the respective participations in accordance herewith. Upon the request of any TALC Participating Bank, the TALC Issuing Bank shall furnish to such TALC Participating Bank copies of any TA Letters of Credit issued by it and such other documentation as may reasonably be requested by such TALC Participating Bank. The obligations of the TALC Participating Banks to make payments to the TALC Issuing Bank hereunder shall be irrevocable and not subject to any qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Credit Agreement under all circumstances, including any of the following circumstances: (i) any lack of validity or enforceability of this Credit Agreement or any of the other Financing Documents; (ii) the existence of any claim, setoff, defense or other right which the Borrower or any other Borrower Party may have at any time against a beneficiary named in any TA Letters of Credit, any transferee of any TA Letters of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, any TALC Participating Bank, or any other Person, whether in connection with this Credit Agreement, any TA Letters of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower or any other Borrower Party and the beneficiary named in any such TA Letters of Credit); (iii) any draft, certificate or any other document presented under any TA Letters of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) the

 

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surrender or impairment of any security for the performance or observance of any of the terms of any of the Financing Documents; or (v) the occurrence of any Default or Event of Default.

 

(h)           The obligations of the Borrower under this Section 3.25 to reimburse the relevant Issuing Bank with respect to drafts, demands and other presentations for payment under any Specified Letter of Credit (including, in each case, interest on such payments) in cash or by the automatic conversion thereof into LC Loans shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower or any other Borrower Party may have or have had against the Issuing Bank, including, any defense based upon the failure of any drawing under any Specified Letter of Credit to conform to the terms of such Specified Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing; provided, that the Borrower shall not be obligated to reimburse the Issuing Bank for any wrongful payment made by the Issuing Bank under any Specified Letter of Credit as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Issuing Bank (as determined by a court of competent jurisdiction in a final and non-appealable decision); provided, further, that such Issuing Bank shall not be excused from liability to the Borrower to the extent of any damages suffered by the Borrower that are caused by the Issuing Bank’s willful misconduct or gross negligence when determining whether drafts and other documents presented under a Specified Letter of Credit comply with the terms thereof.

 

3.26        Replacement of Lenders.

 

(a)           If (i) any Lender delivers a certificate requesting compensation pursuant to Section 3.11, (ii) any Lender delivers a notice described in Section 3.10, (iii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority on account of any Lender pursuant to Section 3.24, (iv) any Lender or Issuing Bank becomes a Non-Consenting Creditor, (v) any Lender becomes a Defaulting Lender or (vi) any Issuing Bank fails to issue a Specified Letter of Credit in accordance herewith, then the Borrower may, at its sole expense and effort (including with respect to the processing and recordation fee referred to in Section 11.11 except to the extent paid by the Eligible Assignee), upon notice to such Lender or Issuing Bank and the Administrative Agent, require such Lender or Issuing Bank to transfer and assign, without recourse (in accordance with and subject to the restrictions contained in Section 11.11), all of its interests, rights and obligations under this Credit Agreement to an Eligible Assignee that shall assume such assigned obligations; provided, that:

 

(A)          in the case of any such assignment resulting from the circumstances set forth in subparts (i), (ii) or (iii) above, such assignment will result in a reduction in the relevant compensation or payments thereafter;

 

(B)          in the case of any such assignment resulting from a Lender or Issuing Bank becoming a Non-Consenting Creditor, the applicable assignee shall have consented in writing to the applicable amendment, waiver or consent;

 

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(C)          such assignment shall not conflict with any applicable requirement of Law;

 

(D)          the Borrower shall have received each consent required by Section 11.11 in accordance therewith;

 

(E)           the Borrower or such Eligible Assignee shall have paid to the affected Lender or the Issuing Bank in immediately available funds an amount equal to the sum of the principal of its Loans, accrued interest thereon, Fees and other amounts payable to it hereunder and under the other Financing Documents (including any amounts under Section 3.12) from the assignee (to the extent of such outstanding principal and accrued interest and Fees) or the Borrower (in the case of all other amounts); and

 

(F)           if such Defaulting Lender is an Issuing Bank, the Borrower shall have delivered the originals of all Specified Letters of Credit issued by such Issuing Bank for cancelation by such Issuing Bank.

 

(b)           A Lender or Issuing Bank shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

3.27        Defaulting Lender Adjustments. Notwithstanding anything to the contrary contained in this Credit Agreement, if any Lender or Issuing Bank becomes a Defaulting Lender, then, until such time as such Lender or Issuing Bank is no longer a Defaulting Lender, to the extent permitted by applicable Law:

 

(a)           Waivers and Amendments. The amount of such Defaulting Lender’s applicable Commitment, applicable Loans and TALC Participation shall be excluded for purposes of voting, and the calculation of voting, on any matters (including the granting of any consents or waivers) with respect to any of the Financing Documents (other than consents, modification or waivers that (i) extend the final scheduled maturity of any Loan or Note held by such Defaulting Lender or extend the stated expiration date of any Specified Letter of Credit issued by such Defaulting Lender beyond the Maturity Date of such Loan, Note or Specified Letter of Credit, (ii) reduce the rate or extend the time of payment of interest or Fees on or in respect of any Loan or Note held by such Defaulting Lender or Specified Letter of Credit issued by such Defaulting Lender (except in connection with the waiver of applicability of any post-default increase in interest rates), (iii) reduce (or forgive) the principal amount of any Loan or Note held by such Defaulting Lender, (iv) increase the amount of any Commitment of such Defaulting Lender or (v) change the voting provisions hereof).

 

(b)           Defaulting Lender Waterfall. Any payment of principal, interest, Fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.14 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the

 

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payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment of any amounts owing by such Defaulting Lender to the TALC Issuing Bank hereunder; third, if such Defaulting Lender is a TALC Participating Bank, to Cash Collateralize the TALC Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 3.28; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Credit Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Credit Agreement and (y) if such Defaulting Lender is a TALC Participating Bank, Cash Collateralize the TALC Issuing Bank’s future Fronting Exposure with respect to such Defaulting Lender with respect to future TA Letters of Credit issued under this Credit Agreement, in accordance with Section 3.28; sixth, to the payment of any amounts owing to the Lenders or the Issuing Banks as a result of any judgment of a court of competent jurisdiction obtained by any Lender or Issuing Bank against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Credit Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Credit Agreement; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided, that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Specified Letters of Credit were issued at a time when the relevant conditions set forth in Article IV were satisfied or waived, such payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with the Commitments under the applicable Credit Facility without giving effect to Section 3.27(d). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 3.27(b) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(c)           Certain Fees.

 

(i)            No Defaulting Lender shall be entitled to receive any Commitment Fee under Sections 3.13(a) for any period during which the relevant Lender is a Defaulting Lender (and, notwithstanding anything to the contrary herein, the Borrower shall not be required to pay any such Fee that otherwise would have been required to have been paid to that Defaulting Lender).

 

(ii)           Each TALC Participating Bank that is a Defaulting Lender shall be entitled to receive Letter of Credit Fees under Sections 3.13(d)(i) or 3.13(d)(iii) for any period during which that Issuing Bank is a Defaulting Lender only to the extent allocable to that portion of the TALC Participation for which it has provided Cash Collateral pursuant to Section 3.28.

 

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(iii)          With respect to any Fees not required to be paid to any Defaulting Lender pursuant to Section 3.27(c)(ii), the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such Fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s TALC Participation that has been reallocated to such Non-Defaulting Lender pursuant to Section 3.27(d), (y) pay to the TALC Issuing Bank the amount of any such Fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such Fee.

 

(d)           Reallocation of TALC Participations to Reduce Fronting Exposure. All or any part of any Defaulting Lender’s TALC Participation shall be reallocated among the Non-Defaulting Lenders in accordance with their respective TALC Percentages (calculated without regard to such Defaulting Lender’s TALC Percentages) but only to the extent that (x) the conditions set forth in Section 4.4 are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation would not cause the aggregate TALC Participating Amount of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s TALC Commitment. For the avoidance of doubt, the TALC Issuing Bank and the TALC Participating Banks agree that drawings under the TA Letter of Credit under the Tolling Agreement result from or are otherwise predicated upon facts that constitute Defaults or Events of Default and that no reallocation will occur hereunder if a TALC Participating Bank becomes a Defaulting Lender solely as a result of its failure to pay to the TALC Issuing Bank its relevant TALC Participation Amount upon such drawing. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that TALC Participating Bank having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

 

(e)           Cash Collateral by Borrower; Prepayment of LC Loans. If the reallocation described in Section 3.27(d) cannot, or can only partially, be effected, then the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, Cash Collateralize the TALC Issuing Bank’s Fronting Exposure in accordance with the procedures set forth in Section 3.28; provided, that if any TALC Participating Bank becomes a Defaulting Lender solely as a result of its failure to pay to the TALC Issuing Bank its relevant TALC Participation Amount upon the drawing of a TA Letter of Credit, then the Borrower shall have the right, in lieu of Cash Collateralization and notwithstanding the provisions of Section 3.22, to prepay such LC Loans as are owed to the TALC Issuing Bank in aggregate amount equal to such Defaulting Lender’s TALC Participation Amount in accordance with Section 3.16 within five Business Days.

 

(f)            Defaulting Lender Cure. If the Borrower, the Administrative Agent and (if the Defaulting Lender is a TALC Participating Bank) the TALC Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding

 

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Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations of the Credit Facilities to be held pro rata by the Lenders in accordance with the Commitments under the applicable Credit Facility (without giving effect to Section 3.27(d)), whereupon such Lender will cease to be a Defaulting Lender; provided, that no adjustments will be made retroactively with respect to Fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

(g)           New TA Letters of Credit. So long as any TALC Participating Bank is a Defaulting Lender, the TALC Issuing Bank shall not be required to issue, extend, renew or increase any TA Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

 

3.28        Cash Collateralization.

 

(a)           Cash Collateralization. If at any time there shall exist a Defaulting Lender that is a TALC Participating Bank, then within five Business Days following the written request of the Administrative Agent or the TALC Issuing Bank (with a copy to the Administrative Agent) the Borrower shall Cash Collateralize or shall cause the Cash Collateralization of the TALC Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to Section 3.27(d) and any Cash Collateral provided by such Defaulting Lender) from funds that are not credited or creditable to the Secured Accounts in an amount not less than the Minimum Collateral Amount.

 

(b)           Grant of Security Interest. The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the TALC Issuing Bank, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of TALC Facility, to be applied pursuant to Section 3.28(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the TALC Issuing Bank as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, then the Borrower will, within five Business Days of demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

 

(c)           Application. Notwithstanding anything to the contrary contained in this Credit Agreement, Cash Collateral provided under this Section 3.28 or Section 3.27 in respect of TA Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations of TA Letters of Credit (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

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(d)           Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce the TALC Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 3.28 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the TALC Issuing Bank that there exists excess Cash Collateral; provided, that, subject to Section 3.27, the Person providing Cash Collateral and the TALC Issuing Bank may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations; and, provided, further, that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Collateral Documents.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

4.1          Conditions to Closing. The closing of the transactions hereunder (the “Closing”) is subject to the prior satisfaction of each of the following conditions (unless waived in writing by each Financing Party):

 

(a)           Representations and Warranties. The representations and warranties of the Borrower Parties set forth in the Financing Documents shall be true and correct in all material respects on and as of the Closing Date, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as of such earlier date).

 

(b)           Transaction Documents. Each of the Transaction Documents (other than the Term Notes, any Additional Project Documents not then in existence and the Rate Swap Confirmations) shall have been duly authorized, executed, delivered and (if applicable) released from documentary escrow by each party thereto. The Administrative Agent shall have received a fully-executed version of each such Transaction Document (it being understood that, to the extent an original counterpart thereof is not required to be delivered to the Administrative Agent as a condition to the effectiveness or enforceability thereof under applicable Law, a photostatic or electronic copy thereof shall satisfy this condition).

 

(c)           Notes. The Borrower shall have duly authorized and executed each Note (other than a Term Note) for the account of each Lender that has made a request therefor pursuant to Section 3.4(b). Each such Note shall be appropriately completed with the name of the payee, the maximum principal amount thereof and the date of issuance (which shall be the Closing Date) inserted therein. An original of each such Note shall have been delivered by the Borrower to the Administrative Agent for further distribution to the payee listed therein.

 

(d)           No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing.

 

(e)           Funding of Equity Contributions. The Pledgor shall have contributed to the Borrower the Required Equity Contribution. The proceeds of such Required Equity

 

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Contribution shall have been applied to the payment of Project Costs (directly by the Borrower or through the further contribution to and payment by the Procurement Sub or Project Owner).

 

(f)            Closing Certificates. The Borrower shall have appropriately completed, duly authorized, executed, and delivered to the Administrative Agent and (if applicable) released from documentary escrow the Borrower Closing Certificate. The Pledgor shall have appropriately completed, duly authorized, executed and delivered to the Administrative Agent and (if applicable) released from documentary escrow the Pledgor Closing Certificate. Each such Closing Certificate is true and correct in all respects and attaches true and correct copies of all documents specified therein appropriately completed as specified therein.

 

(g)           Good Standing. Each Borrower Party and the Pledgor shall be in good standing under the jurisdiction of its formation and the Administrative Agent shall have received a certificate of good standing in respect of each such Borrower Party and the Pledgor certified by the Secretary of State of such state and dated not more than ten days prior to the Closing Date. Each Borrower Party and the Pledgor shall be qualified to do business in the jurisdiction where the Project is located and the Administrative Agent shall have received a certificate of the relevant state official evidencing such qualification dated not more than ten days prior to the Closing Date.

 

(h)           Insurance. Insurance complying with the Collateral Agreement shall be in full force and effect, and each Financing Party shall have received a binder or certificates signed by the insurer or a broker authorized to bind the insurer with respect to each policy of insurance required to be in effect pursuant to the Collateral Agreement evidencing such insurance (including the designation of the Collateral Agent as loss payee or additional insured thereunder to the extent required by the Collateral Agreement). In addition, each Financing Party shall have received a report from the Insurance Consultant in accordance with Section 4.1(i) and a certificate from the Insurance Consultant dated the Closing Date, certifying that all insurance policies required to be maintained (or caused to be maintained) by the Borrower Parties pursuant to Section 7.17 and the Collateral Agreement have been obtained and are in full force and effect on the Closing Date, and that such insurance policies comply in all respects with the requirements of the Collateral Agreement.

 

(i)            Consultants’ Reports. Each Financing Party shall have received an electronic copy of a report of each Independent Consultant as to the matters set forth opposite such report on Appendix I.

 

(j)            Permits. Each Financing Party shall have received photostatic or electronic copies of (x) all Material Permits held in the name of the Borrower Parties and Affiliate Project Participants and, if requested, certified copies of all applications made for such Material Permits required to have been obtained on or before the Closing Date and (y) all Material Permits known to the Borrower that are held in the name of any Material Project Participants that are not Affiliate Project Participants except those Material Permits listed on Schedule 4.1(j).

 

(k)           Creation, Perfection and Priority of Liens. The Liens of the Collateral Agent over the Collateral shall have been created and perfected in accordance with the Collateral

 

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Agreement and such Liens shall constitute first-priority Liens subject only to (i) Permitted Priority Liens and (ii) other Permitted Liens to the extent junior to the Liens granted to the Collateral Agent under the Security Documents and the Administrative Agent shall have received evidence reasonably satisfactory to it of the foregoing.

 

(l)            Lien Searches. The Administrative Agent shall have received lien search reports of a recent date before the Closing Date for each of the jurisdictions in which UCC-1 financing statements, fixture filings and the Mortgage are intended to be filed in respect of the Collateral which such reports shall not include any Liens other than (i) Permitted Priority Liens and (ii) other Permitted Liens to the extent junior to the Liens granted to the Collateral Agent under the Security Documents. The Administrative Agent shall have received each California 20-Day Preliminary Notice issued pursuant to California Civil Codes §3097, 3098, 3111 and 3259.5 and delivered to the Borrower Parties on or prior to the Closing Date.

 

(m)          Legal Opinions. The Administrative Agent shall have received photostatic or electronic copies of the following legal opinions, which legal opinions shall be dated the Closing Date and addressed to, and be in form and substance satisfactory to, each Agent and each Financing Party:

 

(i)            a legal opinion of in-house counsel to each of the Borrower Parties and the Pledgor;

 

(ii)           a legal opinion of Jones Day, special New York and California counsel to the Borrower Parties, the Pledgor and each Affiliated Project Party;

 

(iii)          a legal opinion of Jones Day, special federal energy regulatory and federal permitting counsel to the Borrower Parties, the Pledgor and each Affiliated Project Party;

 

(iv)          a legal opinion of Stoel Rives LLP, special federal and state environmental counsel, state energy regulatory and state and local permitting counsel to the Borrower Parties, the Pledgor and each Affiliated Project Party;

 

(v)           a legal opinion of counsel to the Equipment Supplier and Equipment Servicer as to the matters set forth on Appendix 2 to each Consent Agreement with the Equipment Supplier and the Equipment Servicer; and

 

(vi)          a legal opinion of counsel to the BOP Contractor as to the matters set forth on Appendix 2 to each Consent Agreement with the BOP Contractor.

 

(n)           Financial Information, etc. Each Financing Party shall have received an electronic copy of a pro forma balance sheet of each Borrower Party and the Pledgor, dated the Closing Date.

 

(o)           U.S.A. Patriot Act. Each Financing Party shall have received, at least three Business Days prior to the Closing Date, electronic copies of all documentation and other information required by bank regulatory authorities or the generally applicable internal policies

 

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of the such Financing Party under applicable “know your customer” and anti-money laundering rules and regulations, including the U.S.A. Patriot Act.

 

(p)           Environmental Matters. Each Financing Party shall have received an electronic copy of a “Phase 1 Environmental Site Assessment” confirming that there are no recognized environmental conditions in connection with the Project, the Facility or the Site, except to the extent set forth on Schedule 5.14.

 

(q)           Fees and Expenses. The Borrower shall have paid or arranged for the payment when due of all reasonable and documented Fees, expenses (including Attorney Costs) and other charges due and payable by it on or prior to the Closing Date under this Credit Agreement or under any of the other Financing Documents.

 

(r)            Construction Budget and Project Schedule; Sources and Uses. Each Financing Party shall have received an electronic copy (whether delivered separately or as part of the Base Case Model delivered in accordance with Section 4.1(t)) of (i) the Construction Budget, (ii) each Project Schedule and (iii) a sources and uses of funds demonstrating that the Construction Facilities are sufficient to timely fund all future Project Costs set forth in the Construction Budget, including the Contingency, each of which shall be reasonably satisfactory to such Financing Party.

 

(s)            Pro Forma Operating Budget; Pro Forma Operating Report. Each Financing Party shall have received an electronic copy (whether delivered separately or as part of the Base Case Model delivered in accordance with Section 4.1(t)) of a pro forma Operating Budget and a pro forma Operating Report, in each case, in form, scope and substance reasonably satisfactory to such Financing Party.

 

(t)            Base Case Model. The Borrower shall have delivered to each Financing Party an electronic copy of the Base Case Model, incorporating the inputs from the Construction Budget, the Project Schedules, the projected Operating Performance and sources and uses of funds delivered in accordance with Section 4.1(r), the pro forma Operating Budget delivered in accordance with Section 4.1(s), and the anticipated fixed rate payable by the Borrower under each of the Rate Swap Transactions to be entered into in accordance with Section 7.26, and otherwise in form, scope and substance reasonably satisfactory to such Financing Party.

 

(u)           Financial Ratios. The Base Case Model delivered in accordance with Section 4.1(t) shall project a minimum Projected DSCR on a rolling twelve-month basis beginning on August 30, 2013 and ending on August 31, 2023 of not less than 1.40:1.00.

 

(v)           Commencement of Work. The Administrative Agent shall have received evidence that: (i) the Construction Manager shall have received and accepted the “Notice to Proceed” (as defined in the Construction Management Agreement); (ii) the BOP Contractor shall have received and accepted the “Full Notice to Proceed” (as defined in the BOP Contract); (iii) the Equipment Servicer shall have received and accepted the “Full Notice to Proceed” (as defined in the Equipment Services Agreement); and (iv) the Equipment Supplier shall have received and accepted the “Full Notice to Proceed” (as defined in the Equipment Purchase Agreement).

 

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(w)          Debt Repayment. Each Borrower Party shall have repaid all of its existing Indebtedness, other than Permitted Indebtedness and all Liens associated therewith encumbering any Collateral, other than Permitted Liens, shall have been released.

 

(x)           Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Credit Agreement and the other Transaction Documents shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received such other documents, certificates, and instruments relating to this Credit Agreement or any other Transaction Document or the transactions contemplated hereby or thereby as the Administrative Agent shall have reasonably requested, in each case in form and substance reasonably satisfactory to the Administrative Agent.

 

For purposes of this Section 4.1, a Financing Party shall be deemed to have received an electronic copy of any document that was posted on the Borrower’s online data site located at www.intralinks.com as of 5:00 p.m. (New York time) on the day immediately preceding the Closing Date; unless, (x) such Financing Party did not receive electronic notice of such posting or (y) such Financing Party notifies the Administrative Agent and the Borrower that such Financing Party has not had reasonably sufficient time to review such electronic copy prior to the Closing Date.

 

4.2          Conditions to the Disbursement of Construction Loans. The obligation of any (a) Tranche A Lender to make any Tranche A Construction Loan or (b) Tranche B Lender to make any Tranche B Construction Loan, as the case may be, on any Disbursement Date is subject to the prior satisfaction of each of the following conditions (unless waived in writing by (x) in the case of Tranche A Construction Loans, the Requisite Tranche A Lenders or (y) in the case of Tranche B Construction Loans, Requisite Tranche B Lenders):

 

(a)           Closing Date. The Closing shall have theretofore occurred.

 

(b)           Borrowing Request. The Administrative Agent shall have received a Borrowing Request pursuant to and in compliance with Section 3.2 in respect of the Disbursement of Construction Loans on such Disbursement Date.

 

(c)           Construction Requisition. The Administrative Agent shall have received (i) not less than five Business Days prior to such Disbursement Date, a Construction Requisition and (ii) not less than two Business Days prior to such Disbursement Date, a certificate of the Independent Engineer confirming such Construction Requisition.

 

(d)           Representations and Warranties. The representations and warranties of the Borrower contained in Article V hereof and the representations and warranties of each Borrower Party, and the Pledgor and the Affiliated Project Parties contained in any other Financing Document to which any such Person is a party shall be true and correct in all material respects on and as of such Disbursement Date as if made on and as of such date (both before and after giving effect to the Disbursement to be made on such date) (or, if stated to have been made solely as of an earlier date, were true and correct in all material respects as of such earlier date).

 

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(e)           No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing.

 

(f)            Construction Budget; Notional Disbursement Schedule. The making of such Construction Loan shall be in accordance with the Construction Budget and the Notional Disbursement Schedule (subject to variances to the Notional Disbursement Schedule that are reasonably commensurate with modifications to the Construction Budget that are made in accordance with Section 7.28). The aggregate amount of Project Costs set forth in the then-applicable Construction Budget are sufficient to cause the Term Conversion Date to occur prior to the Date Certain and the Available Construction Funds both before and after giving effect to such Disbursement shall be equal to or greater than the aggregate amount of unpaid Project Costs set forth in the Construction Budget.

 

(g)           No Liens. There shall not have been filed against or served upon the Collateral Agent or any of the Borrower Parties with respect to the Project or any part thereof any Stop Notice or notice of any Lien or claim of Lien or attachment upon or claim affecting the right to receive payment of any of the moneys payable to any of the Persons named on the relevant Construction Requisition (other than a Permitted Lien) which has not been released by prior payment (after the date hereof with the proceeds of Construction Loans) or in respect of which a bond or other security acceptable to Administrative Agent has not been posted or provided or which will not be released with the payment of the related obligation out of Construction Loans to be disbursed on the relevant Disbursement Date.

 

(h)           Lien Releases; Etc. The Borrower shall have delivered to the Administrative Agent (i) a Lien Waiver Report completed in good faith using commercially reasonable efforts setting forth the information required thereby in respect of each M&M Party known to the Borrower Parties, including any Person identified in a notice delivered to the Borrower Parties or their Affiliates in accordance with Section 8.1 of any of the BOP Contract, the Equipment Purchase Agreement or the Equipment Services Agreement and any Person that has delivered to the Borrower Parties or (if relating to the Project) their Affiliates a California 20-Day Preliminary Notice pursuant to California Civil Codes §3097, 3098, 3111 or 3259.5, (ii) properly completed and duly executed conditional lien waivers (in the form provided under California Civil Code §3262, as amended) from each M&M Party that is to be directly or indirectly paid from funds requested under the related Borrowing of the Construction Loans, each of which shall be dated not earlier than the Relevant Work Date, (iii) one or more properly completed and duly executed unconditional lien waivers (in the form provided under California Civil Code §3262, as amended) from each M&M Party that is to be directly or indirectly paid from funds requested under the related Borrowing, each of which shall be dated not earlier than the date of the most recent conditional lien waiver delivered in accordance with subpart (ii) of this sentence. All work previously done on the Project shall have been done in all material respects in accordance with the applicable M&M Contracts. Other than with respect to the initial Borrowing of the Construction Loans (to the extent amounts are funded from sources other than the Construction Loans on the date thereof), all amounts directly or indirectly paid to any M&M Party since the initial

 

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Borrowing of the Construction Loans have been directly or indirectly funded with the proceeds of the Construction Loans (unless otherwise approved by the Administrative Agent, such approval not to be unreasonably withheld, conditioned or delayed).

 

(i)            Fees and Expenses. The Borrower shall have paid or arranged for the payment when due (including, to the extent permitted, out of Disbursements) of all reasonable and documented Fees, expenses (including Attorney Costs) and other charges payable by it on or prior to such Disbursement Date under this Credit Agreement or under any other Financing Document.

 

(j)            Title Policy Endorsement. The Administrative Agent shall have received (i) a “bring-down” endorsement to the Title Policy to the Disbursement Date of such Construction Loans, insuring the continuing first priority Lien of the Mortgage (subject only to (A) Permitted Priority Liens and (B) other Permitted Liens to the extent junior to the Liens for the benefit of the Secured Parties under the Mortgage) and otherwise in form and substance satisfactory to the Administrative Agent and (ii) either (A) with respect to the initial Borrowing of the Construction Loans only, a 32-06 Endorsement and (B) with respect to each other Borrowing of the Construction Loans, a 33-06 Endorsement, in each case, with a Date of Coverage (as defined therein) that is the same as the date of the relevant Borrowing of the Construction Loans with copies of all executed conditional and unconditional lien waivers required to be delivered pursuant to Section 4.2(h) attached thereto.

 

(k)           Funding of Equity Contributions. The Pledgor shall have contributed to the Borrower the Required Equity Contribution. The proceeds of such Required Equity Contribution shall have been applied to the payment of Project Costs (directly by the Borrower or through the further contribution to and payment by the Procurement Sub or Project Owner).

 

(l)            Remediation. With respect solely to the initial Borrowing of the Construction Loans: (i) the U.S. Environmental Protection Agency shall have issued EPA Letters that set forth, with a reasonable level of certainty, the remediation that is as of such date required in respect of all environmental conditions identified at the Site on or prior to the initial Borrowing of the Construction Loans; (ii) the Borrower shall have delivered to the Administrative Agent the Remediation Work Plan, as updated as of the initial Borrowing of the Construction Loans; (iii) the Borrower shall, or shall have caused the relevant Borrower Parties to, have entered into such Change Orders, in accordance with Section 7.15, as are necessary to reflect the Remediation Work Plan; (iv) the Borrower shall have amended the Construction Budget, in accordance with Section 7.28, to the extent necessary to incorporate the costs of all such Change Orders, (v) the Borrower shall have delivered to the Administrative Agent a sources and uses of funds demonstrating that the Construction Facilities and the Required Equity Contribution are sufficient to fund all past and future Project Costs set forth in the then-applicable Construction Budget, including the Contingency and (vi) the Borrower shall have delivered to the Administrative Agent a written confirmation of the Independent Engineer that (A) the Remediation Work Plan as of the date of the initial Borrowing of the Construction Loans sets forth with reasonable certainty all corrective actions that are

 

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necessary or reasonably appropriate to satisfy the conditions and comply with any other requirements set forth in the EPA Letters and (B) the Change Orders referenced in subpart (iii) of this Section 4.2(l) incorporate with reasonable certainty all schedule and cost impacts to the Project that can reasonably be expected to result from the remaining execution of the Remediation Work Plan in accordance therewith. With respect solely to the initial Borrowing of the Construction Loans, the aggregate undrawn amount of the Environmental Indemnity is not less than $37,500,000.00.

 

(m)          Updated Base Case Model. With respect solely to the initial Borrowing of the Construction Loans, the Borrower shall have delivered to the Administrative Agent the updated Base Case Model, modified solely to reflect (x) any amendment to the Construction Budget prior to such initial Borrowing, (y) the fixed interest rate payable under the Rate Swap Transactions entered into in accordance with Section 7.26 and (z) the Tranche A Loan Amount as of the initial Borrowing of the Construction Loans, and such updated Base Case Model shall project a minimum Projected DSCR on a rolling twelve-month basis beginning on August 30, 2013 and ending on August 31, 2023 of not less than 1.40:1.00.

 

(n)           Updated Projected Amortization Schedule. With respect solely to the initial Borrowing of the Construction Loans, the Borrower shall have delivered to the Administrative Agent an updated Projected Amortization Schedule, modified solely to include the Tranche A Notional Amortization and the Tranche A Percentage Amortization.

 

4.3          Conditions to the Issuance of LGIA Letters of Credit or Disbursement of Revolving Loans. The obligation of the Revolver Lenders to make (x) any Revolving Loan on any Disbursement Date, or (y) issue an LGIA Letter of Credit, on any Issuance Date, is subject to the prior satisfaction of each of the following conditions (unless waived in writing by the Requisite Revolving Lenders):

 

(a)           Closing Date; Etc. The Closing shall have theretofore occurred. The initial Borrowing of the Construction Loans shall have been made or will be made concurrently therewith.

 

(b)           Borrowing Request. In the case of a request for Revolving Loans, the Administrative Agent shall have received a Borrowing Request pursuant to and in compliance with Section 3.2.

 

(c)           LGIA Letter of Credit Request. In the case of a request for the issuance of the LGIA Letter of Credit, the Revolving Lender shall have received an LC Request pursuant to and in compliance with Section 3.25(a) in respect of the issuance of such LGIA Letter of Credit.

 

(d)           Representations and Warranties. The representations and warranties of the Borrower contained in Article V hereof and the representations and warranties of each Borrower Party, and the Pledgor and the Affiliated Project Parties contained in any other Financing Document to which any such Person is a party shall be true and correct in all

 

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material respects on and as of such Issuance Date or Disbursement Date (both before and after giving effect to any Loans or the issuance of any Specified Letter of Credit on such Issuance Date or Disbursement Date) (or, if stated to have been made solely as of an earlier date, were true and correct in all material respects as of such earlier date).

 

(e)           No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing (unless the issuance of any LGIA Letter of Credit would cure any Default).

 

(f)            Fees and Expenses. The Borrower shall have paid or arranged for the payment when due (including, if a Disbursement Date, out of Disbursements) of all reasonable and invoiced Fees, expenses (including Attorney Costs) and other charges payable by it on or prior to such Disbursement Date or Issuance Date under this Credit Agreement or under any other Financing Document.

 

4.4          Conditions to the Issuance of the TA Letter of Credit. The obligation of the TALC Issuing Bank to issue a TA Letter of Credit on any Issuance Date is subject to the prior satisfaction of each of the following conditions (unless waived in writing by the TALC Issuing Bank and the Requisite TALC Participating Banks):

 

(a)           Closing Date; Etc. The Closing shall have theretofore occurred. The initial Borrowing of the Construction Loans shall have been made or will be made concurrently therewith.

 

(b)           LC Request. The TALC Issuing Bank shall have received an LC Request pursuant to and in compliance with Section 3.25(a) in respect of the issuance of such TA Letter of Credit.

 

(c)           Representations and Warranties. The representations and warranties of the Borrower contained in Article V hereof and the representations and warranties of each Borrower Party, and the Pledgor and the Affiliated Project Parties contained in any other Financing Document to which any such Person is a party shall be true and correct in all material respects on and as of such Issuance Date as if made on and as of such Issuance Date (both before and after giving effect to the issuance of the TA Letter of Credit on such date) (or, if stated to have been made solely as of an earlier date, were true and correct in all material respects as of such earlier date).

 

(d)           No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing (unless the issuance of any TALC Letter of Credit would cure any Default).

 

(e)           Fees and Expenses. The Borrower shall have paid or arranged for the payment when due (including, to the extent such Issuance Date is also a Disbursement Date, out of Disbursements) of all reasonable and invoiced Fees, expenses (including Attorney Costs) and other charges payable by it on or prior to such Issuance Date under this Credit Agreement or under any other Financing Document.

 

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4.5          Conditions to the Issuance of the DSR Letter of Credit. The obligation of each DSR Issuing Bank to issue a DSR Letter of Credit on any Issuance Date is subject to the prior satisfaction of each of the following conditions (unless waived in writing by such DSR Issuing Bank):

 

(a)           Closing Date; Etc. The Closing shall have theretofore occurred. The initial Borrowing of the Construction Loans shall have been made. The Term Conversion Date shall have theretofore occurred.

 

(b)           LC Request. Such DSR Issuing Bank shall have received an LC Request pursuant to and in compliance with Section 3.25(a) in respect of the issuance of such DSR Letter of Credit.

 

(c)           Representations and Warranties. The representations and warranties of the Borrower contained in Article V hereof and the representations and warranties of each Borrower Party, and the Pledgor and the Affiliated Project Parties contained in any other Financing Document to which any such Person is a party shall be true and correct in all material respects on and as of such Issuance Date as if made on and as of such date (both before and after giving effect to the issuance of the DSR Letters of Credit on such Issuance Date) (or, if stated to have been made solely as of an earlier date, were true and correct in all material respects as of such earlier date).

 

(d)           No Default or Event of Default. No Default or Event of Default shall have occurred and be continuing (unless the issuance of any DSR Letter of Credit would cure any Default).

 

(e)           Fees and Expenses. The Borrower shall have paid or arranged for the payment when due (including, to the extent such Issuance Date is also a Disbursement Date, out of Disbursements) of all reasonable and invoiced Fees, expenses (including Attorney Costs) and other charges payable by it on or prior to such Disbursement Date under this Credit Agreement or under any other Financing Document.

 

4.6          Conditions to the Term Conversion Date. The occurrence of the Term Conversion Date shall be subject to the conditions precedent that the Administrative Agent shall have received, or the Requisite Term Lenders shall have waived receipt of, the following documents, materials and other written information, each of which shall be in form and substance satisfactory to the Requisite Term Lenders, and that the other conditions set forth below shall have been satisfied or waived by the Requisite Term Lenders:

 

(a)           Term Notes. Each Lender that has made a request therefor pursuant to Section 3.4(b) shall have received original Term Notes in respect of the Term Loans made or maintained by it, duly completed, executed and delivered by the Borrower, each of which shall (i) be dated the Term Conversion Date, (ii) mature on the Term Maturity Date, and (iii) bear interest as provided in Article III.

 

(b)           Insurance. The Administrative Agent shall have received a certified copy of the insurance policies required to have been obtained and be in effect on the Term Conversion Date in accordance with Section 7.17 and the Collateral Agreement or

 

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certificates of insurance with respect thereto, together with evidence of the payment of all premiums therefor, and a certificate of the Insurance Consultant, certifying that insurance complying with the Collateral Agreement, covering the risks and otherwise satisfying the requirements referred to therein, has been obtained and is in full force and effect.

 

(c)           Permits. All Material Permits shall have been duly obtained, shall be held solely in the name of the Project Owner (or, if necessary, the applicable Project Participant) shall be in full force and effect, shall be final and not subject to any appeal or modification and all appeal periods applicable hereto have expired and shall be free from conditions or requirements the compliance with which could reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party, or which the relevant Borrower Party does not reasonably expect to be able to satisfy; provided, that with respect to Material Permits which cannot be obtained on or prior to the Term Conversion Date in the exercise of reasonable diligence (but which are routinely obtainable, can be obtained only after completion of certain operations testing or can be obtained only after a period of operations), the Administrative Agent shall have received assurances satisfactory to the Independent Engineer that such Permits will be obtained by the time needed in connection with the operation of the Project.

 

(d)           Completion Certificates. The Administrative Agent shall have received (i) an original executed counterpart of the Borrower Completion Certificate (the statements contained in which shall be true and correct in all material respects), and (ii) an original executed counterpart of the Independent Engineer Completion Certificate.

 

(e)           Project Completion Date. The Project Completion Date shall have occurred.

 

(f)            Opinions. The Administrative Agent shall have received supplemental opinions of counsel to the Borrower, dated as of the Term Conversion Date, opining as to each of the matters set forth on Appendix K, subject to such qualifications and assumptions as are customary in New York, California or Federal opinion practice (as applicable).

 

(g)           Operating Budget. The Borrower shall have proposed an Operating Budget in accordance with Section 6.6 for the period described in Section 6.6, and such Operating Budget shall have been adopted in accordance with Section 6.6.

 

(h)           Title Insurance; Survey.

 

(i)            The Borrower shall have delivered to the Administrative Agent a Title Policy which has been reissued by the Title Insurer (the “Reissued Title Policy”) and such Reissued Title Policy (a) insures the continuing first priority of the Mortgage (subject only to (A) Permitted Priority Liens and (B) other Permitted Liens to the extent junior to the Liens granted for the benefit of the Secured Parties pursuant thereto) and otherwise in form and substance reasonably satisfactory to Administrative Agent, (b) is

 

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issued as of the Term Conversion Date, (c) contains only the coverage exceptions set forth in the Title Policy as of the Closing Date or that are otherwise approved by the Administrative Agent (provided, that any mechanics’ and materialmen’s exceptions included in the Title Policy shall be deleted in the Reissued Title Policy), (d) provides that the ALTA 32 endorsement to the Title Policy is of no further force or effect and (e) is in an amount equal to the Title Policy Amount.

 

(ii)           The Borrower shall have delivered to the Administrative Agent a final “as-built” survey of the Site, addressed to -the Collateral Agent for the benefit of the Secured Parties, the Title Insurance Companies and the Borrower, updated to within thirty days of the Term Conversion Date, showing the completed Project, which survey shall be in form and substance reasonably satisfactory to the Collateral Agent and the Title Insurance Companies, and shall disclose no easements, rights-of-way or encumbrances, other than (A) Permitted Priority Liens and (B) other Permitted Liens to the extent junior to the Liens granted for the benefit of the Secured Parties pursuant to the Mortgage.

 

(iii)          The Borrower shall have prepared and caused to be executed and recorded such amendments to the Mortgage or other confirmatory documents as may be reasonably requested by the Collateral Agent in order to protect, confirm or maintain the first-priority Lien of the Mortgage on the Mortgaged Property, as reflected in the final survey delivered pursuant to this Section 4.6(h).

 

(i)            Lien Releases; Etc. The Borrower shall have delivered to the Administrative Agent (i) a properly completed and duly executed unconditional lien waiver upon final payment (in the form provided under California Civil Code §3262, as amended) from each M&M Party, each of which waivers shall be substantially consistent with any relevant requirements of the applicable M&M Contract, (ii) a properly completed and duly executed conditional lien waiver upon final payment (in the form provided under California Civil Code §3262, as amended) from each M&M Party together with evidence reasonably satisfactory to Administrative Agent that the amount set forth in such conditional lien waiver upon final payment has been paid, each of which waivers shall be substantially consistent with any relevant requirements of the applicable M&M Contract or (iii) other evidence reasonably satisfactory to Administrative Agent that such M&M Party has been paid in full or otherwise has no mechanics lien rights with respect to the Project. Notwithstanding anything to the contrary with the foregoing, the requirements under this Section 4.6(i) shall not be applicable with respect to work performed prior to the Closing Date by an M&M Party that does not perform work after the Closing Date to the extent payment for such work and such M&M Party are identified on the certificate delivered to the Title Company and attached hereto as Schedule 4.6(i).

 

(j)            No Liens. (i) There shall not have been filed against or served upon the Collateral Agent or any of the Borrower Parties with respect to the Project or any part thereof any Stop Notice or notice of any Lien or claim of Lien or attachment upon or claim affecting the right to receive payment of any of the moneys payable to any of the Persons named on any relevant Construction Requisition in respect of Construction Loans to be disbursed on the Term Conversion Date (other than a Permitted Lien) which

 

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has not been released by prior payment (after the date hereof, with the proceeds of Construction Loans) or in respect of which a bond or other security acceptable to Administrative Agent has not been posted or provided or which will not be released with the payment of the related obligation out of Construction Loans to be disbursed on the Term Conversion Date and (ii) all applicable filing periods for any such Liens that are mechanics’ and/or materialmen’s Liens shall have expired; unless, the Reissued Title Policy delivered pursuant to Section 4.6(h) above insures against any and all losses arising by reason of any such pending or potential relevant mechanics or materialmen’s Lien or other Lien gaining priority over the Mortgage.

 

(k)           Merger. The Procurement Sub and the Project Owner shall have effected the Merger contemplated by Section 7.33.

 

(l)            Borrower Equity Interests. The Borrower shall own no assets, other than the Pledged Equity Interests of the Project Owner.

 

(m)          Expected Initial Delivery Date. The Expected Initial Delivery Date shall have theretofore occurred.

 

(n)           Funding of DSRA. The Debt Service Reserve Account shall have been funded in cash or by the posting of DSR Letters of Credit to the DSR Required Balance in accordance with the Collateral Agreement.

 

(o)           TALC Facility. All LC Loans resulting from drawings under any TA Letter of Credit, together with any Liquidation Costs incurred by the Borrower as a result of such prepayment, have been repaid in accordance with Sections 3.17(b) and 3.17(f).

 

(p)           Other Documents. The Administrative Agent shall have received original counterparts of such other statements, certificates and documents as the Administrative Agent may reasonably request.

 

ARTICLE V

 

REPRESENTATIONS, WARRANTIES AND AGREEMENTS

 

In order to induce each of the Lenders to enter into this Credit Agreement and to make the Loans and issue or participate in the Specified Letters of Credit, the Borrower makes the following representations, warranties and agreements as of the date hereof (or as of such other date as may be expressly specified with respect to such representation, warranty or agreement), all of which shall survive the execution and delivery of this Credit Agreement and the Notes, the making, Conversion and continuance of the Loans and the issuance of the Specified Letters of Credit:

 

5.1          Organization. Each Borrower Party is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware. Each Borrower Party is duly authorized and qualified to do business and is in good standing in each jurisdiction in which it owns or leases Property or in which the conduct of its business requires it to so qualify, except where the failure to so qualify would not have a Material Adverse Effect. Each

 

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Borrower Party has the requisite limited liability company power and authority to own or lease and operate its Properties, to carry on its business (including with respect to the Project), to borrow money, to create the Liens as contemplated by the Security Documents and to execute, deliver and perform each Transaction Document (including the Notes) to which it is or will be a party.

 

5.2          Authority and Consents.

 

(a)           The execution, delivery and performance by each Borrower Party of each Financing Document to which it is or will be a party, and the transactions contemplated by the Financing Documents: (i) have been duly authorized by all necessary limited liability company action (including any necessary member action); (ii) will not breach, contravene, violate, conflict with or constitute a default under (A) any of its Charter Documents, (B) any applicable Law or (C) any contract, loan, agreement, indenture, mortgage, lease or other instrument to which it is a party or by which it or any of its Properties may be bound or affected, including all Permits and the Transaction Documents; and (iii) except for the Liens created by the Security Documents, will not result in or require the creation or imposition of any Lien upon or with respect to any of the Properties of the Borrower.

 

(b)           Each Financing Document (i) has been duly executed and delivered by each Borrower Party and (ii) when executed and delivered by each of the other parties thereto will be the legal, valid and binding obligation of each such Borrower Party, enforceable against each Borrower Party, as the case may be, in accordance with its terms, except as the enforceability thereof may be limited by (A) applicable bankruptcy, insolvency, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally and (B) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).

 

(c)           Except for the authorizations, consents, approvals, notices and filings listed on Schedule 5.2 or as contemplated under Section 4.6(c), no authorization, consent or approval of, or notice to or filing with, any Governmental Authority or any other Person has been, is or will be required to be obtained or made (i) for the due execution, delivery, recordation, filing or performance by each Borrower Party of any of the Financing Documents to which it is a party or any transaction contemplated by the Financing Documents, (ii) for the grant by each Borrower Party, or the perfection and maintenance, of the Liens contemplated by the Security Documents (including the first priority nature thereof) or (iii) for the exercise by the Collateral Agent or any other Secured Party of any of its rights under any Financing Document or any remedies in respect of the Collateral pursuant to the Security Documents, except for the authorizations, consents, approvals, notices and filings listed on Schedule 5.2, all of which have been duly obtained, taken, given or made, have been (where applicable) validly issued, are in full force and effect, are final and not subject to modification or appeal and all appeal periods applicable thereto have expired.

 

5.3          Capitalization; Indebtedness; Investments.

 

(a)           Schedule 5.3 contains a true and complete list of all of the authorized and outstanding Equity Interests of each Borrower Party by class, all commitments by the Pledgor to

 

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make capital contributions to the Borrower and all capital contributions previously made by the Pledgor to the Borrower. All of the Equity Interests of each Borrower Party have been duly authorized and validly issued and are fully paid and nonassessable. None of such Equity Interests have been issued in violation of any applicable Law. Except as set forth in Schedule 5.3, no Borrower Party is a party or subject to, has outstanding and is bound by, any subscriptions, options, warrants, calls, agreements, preemptive rights, acquisition rights, redemption rights or any other rights or claims of any character that restrict the transfer of, require the issuance of, or otherwise relate to any shares of its Equity Interests. The Equity Interests of each Borrower Party are owned beneficially and of record by the Persons set forth in Schedule 5.3. Except for the Liens created by the Pledge Agreements, there is no Lien on any of the Equity Interests of any Borrower Party, and no Borrower Party has been notified of the assignment of all or any part of (x) the Pledgor’s Investments in the Borrower other than the assignment in favor of the Collateral Agent pursuant to the Pledgor Pledge Agreement and (y) the Borrower’s investments in each of the Procurement Sub and the Project Owner other than the assignment in favor of the Collateral Agent pursuant to the Borrower Pledge Agreement.

 

(b)           As of the Closing Date, (i) none of the Borrower Parties has Indebtedness of any nature, whether due or to become due, absolute, contingent or otherwise (other than Permitted Indebtedness set forth on Schedule 5.3), and (ii) none of the Borrower Parties holds Investments other than Investments permitted by Section 7.7.

 

5.4          Financial Condition.

 

(a)           Each of the financial statements of the Borrower Parties and the Pledgor delivered in accordance with Sections 4.1(n), 6.1(a) and 6.1(b) fairly present the financial condition of such Person as at the relevant dates specified and (if applicable) the results of its operations for the periods ended on such dates, subject, in the case of interim statements, to normal year-end audit adjustments. Such financial statements have been prepared in accordance with U.S. GAAP consistently applied.

 

(b)           None of the Borrower Parties or the Pledgor has outstanding obligations or liabilities, fixed or contingent, except as disclosed in the financial statements described in Section 5.4(a) above. Since the date of the last financial statements described in 5.4(a) above, no event, condition or circumstance exists or has occurred which has resulted in or could reasonably be expected have a Material Adverse Effect.

 

5.5          Litigation; Labor Disputes. Except as set forth in Schedule 5.5, there is no action, suit, other legal proceeding, arbitral proceeding, inquiry or investigation pending or, to the Borrower’s knowledge, threatened, by or before any Governmental Authority or in any arbitral or other forum, nor any order, decree or judgment in effect, pending, or, to the Borrower’s knowledge, threatened, (a) against or affecting any Borrower Party or any of its Properties or rights or (b) to the Borrower’s knowledge, against or affecting any Project Participant or any of its Properties or rights, that, in the case of this clause (b), (i) relates to the Project, any of the Transaction Documents or any of the transactions contemplated thereby or (ii) has, or if adversely determined, could reasonably be expected to have, either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it

 

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is a party. There are no ongoing, or, to the knowledge of the Borrower, currently threatened, strikes, slowdowns or work stoppages by the employees of any Borrower Party, any EPC Contractor or any Operator.

 

5.6          Material Permits.

 

(a)           As of the date hereof, to the knowledge of the Borrower, (i) all Material Permits are set forth in Schedule 5.6 hereto and (ii) the Material Permits set forth in Part B of Schedule 5.6 hereto are not currently required by the applicable Governmental Authorities but will be required at a later stage of the acquisition, importation, ownership, construction, installation, operation, insurance or maintenance of the Project.

 

(b)           The Project Owner, the Procurement Sub (prior to the Merger) and the Affiliated Project Parties and, to the knowledge of the Borrower, each other Material Project Participant holds each Material Permit required to be held by it for the current stage of the acquisition, importation, ownership, construction, installation, operation, insurance or maintenance of the Project. Each such Material Permit held by Project Owner, the Procurement Sub (prior to the Merger) and the Affiliated Project Parties and, to the knowledge of the Borrower, each other Material Project Participant has been duly obtained or made, was validly issued, is in full force and effect, is final and not subject to modification or appeal and all appeal periods applicable thereto have expired, is held in the name of such Person and is free from conditions or requirements the compliance with which could reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party. No event has occurred that could reasonably be expected to (A) result in the reversal, rescission, revocation, termination or adverse modification of any such Material Permit held by the Project Owner, the Procurement Sub (prior to the Merger) or the Affiliated Project Parties or, to the knowledge of the Borrower, each other Material Project Participant or (B) adversely affect any rights of the Project Owner, the Procurement Sub (prior to the Merger) or the Affiliated Project Parties or, to the knowledge of the Borrower, each other Material Project Participant under any such Material Permit.

 

(c)           The Borrower has no reason to believe that any Material Permits which are not required to have been obtained as of the date of this Credit Agreement, but which will be required in the future (including those set forth in Part B of Schedule 5.6), will not be granted in due course prior to the time needed free from conditions or requirements which the Borrower does not reasonably expect the relevant Person to be able to satisfy or compliance with which could reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

(d)           The information set forth in each application submitted by or on behalf of the Project Owner, the Procurement Sub (prior to the Merger) or the Affiliated Project Parties or, to the knowledge of the Borrower, each other relevant Person in connection with each Material Permit held by such Person and in all correspondence sent by or on behalf of any such Person in respect of each such application is accurate and complete in all material respects.

 

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(e)           The Project, if imported, installed, constructed, owned and operated in accordance with the Plans and Specifications and the Transaction Documents, will conform to and comply in all material respects with all covenants, conditions, restrictions and requirements in all Material Permits, in the Transaction Documents applicable thereto and under all zoning, environmental, land use and other Laws applicable thereto.

 

5.7          Material Project Documents.

 

(a)           As of the date hereof (i) all Material Project Documents are set forth in Schedule 5.7 hereto, (ii) all Project Documents that have been entered into by the Borrower, the Project Owner, or the Procurement Sub (prior to the Merger) or the Affiliated Project Parties but are not Material Project Documents are set forth in Part B of Schedule 5.7 and (iii) each of the Affiliated Project Documents are denoted on Schedule 5.7 with an “*”. Each of the Project Documents set forth in Schedule 5.7 consist only of the original document (including appendices, exhibits, schedules and disclosure letters) and any amendments, waivers or supplements thereto expressly described in the relevant definitions appearing in Schedule 5.7 hereto, and there are no other amendments, waivers or supplements, written or oral, with respect thereto. The Financing Parties have received a true and complete copy of each Project Document set forth in Schedule 5.7, including all appendices, exhibits, schedules, disclosure letters, amendments, waivers or supplements referred to therein or delivered pursuant thereto, if any.

 

(b)           Each Material Project Document entered into by the Borrower, the Project Owner, or the Procurement Sub (prior to the Merger) or the Affiliated Project Parties has been duly authorized, executed and delivered by such Person, is in full force and effect and constitutes the legal, valid and binding obligation of such Person, enforceable against such Person (and, to the knowledge of the Borrower, each other Material Project Participant) in accordance with its terms, except as the enforceability thereof may be limited by (A) applicable bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (B) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity). Each of the Borrower, the Project Owner, and the Procurement Sub (prior to the Merger) and the Affiliated Project Parties, and to the knowledge of the Borrower, each other Material Project Participant, is in compliance in all material respects with the terms and conditions of the Material Project Documents to which it is a party, and no event has occurred that could reasonably be expected to (x) result in a default under, or a material breach of, any Material Project Document, (y) result in the revocation, termination or adverse modification of any Material Project Document or (z) adversely affect the rights of any Borrower Party under any Material Project Document.

 

(c)           All representations and warranties of the Borrower, the Project Owner, and the Procurement Sub (prior to the Merger) and the Affiliated Project Parties and, to the Borrower’s knowledge, the other parties thereto, contained in the Material Project Documents are true and correct in all material respects (except to the extent that any such representation or warranty is expressed to be made only as of an earlier date, in which case such representation or warranty was true and correct in all material respects on and as of such earlier date).

 

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(d)           All conditions precedent to the obligations of the respective parties under the Material Project Documents have been satisfied, except for such conditions precedent which by their terms cannot be (and are not required to be) met until a later stage in the construction or operation of the Project, and the Borrower has no reason to believe that any such conditions precedent cannot be satisfied prior to the time when such conditions are required to be met pursuant to the applicable Project Document.

 

5.8          Use of Proceeds.

 

(a)           The proceeds of the Loans will be used in accordance with Section 7.27.

 

(b)           None of the Borrower Parties is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock and no part of the proceeds of any Loan will be used to purchase or carry any Margin Stock.

 

(c)           Neither the making of any Loan nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation U or Regulation X.

 

(d)           Since the date of this Agreement, no Project Costs have been paid except from the proceeds of Construction Loans in accordance with Construction Requisitions properly issued in accordance with the Accounts Agreement.

 

5.9          ERISA.

 

(a)           Each Pension Plan is in compliance in form and operation with its terms and with ERISA and the Code and all other applicable laws and regulations, except where any failure to comply would not reasonably be expected to have a Material Adverse Effect. No ERISA Event has occurred, or is reasonably expected to occur, other than as would not, individually or in the aggregate, have a Material Adverse Effect.

 

(b)           There exists no Unfunded Pension Liability with respect to any Pension Plan, except as would not reasonably be expected to have a Material Adverse Effect.

 

(c)           No Multiemployer Plan is insolvent or in reorganization and no member of the ERISA Group has incurred a complete or partial withdrawal from any Multiemployer Plan, except, in each case, as would not reasonably be expected to have a Material Adverse Effect. If each member of the ERISA Group were to withdraw in a complete withdrawal from all Multiemployer Plans as of the date this assurance is given, the aggregate withdrawal liability that would be incurred would not reasonably be expected to have a Material Adverse Effect.

 

(d)           Except as would not reasonably be expected, either singly or in the aggregate, to have a Material Adverse Effect, there are no actions, suits or claims pending against or involving a Pension Plan (other than routine claims for benefits) or, to the knowledge of any member of the ERISA Group, which would reasonably be expected to be asserted successfully against any Pension Plan.

 

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(e)           All members of the ERISA Group have made all contributions to or under each Pension Plan and Multiemployer Plan required by law within the applicable time limits prescribed thereby, the terms of such Pension Plan or Multiemployer Plan, respectively, or any contract or agreement requiring contributions to a Pension Plan or Multiemployer Plan, save in each case where any failure to comply, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

(f)            Except as would not reasonably be expected to have a Material Adverse Effect, (i) no Pension Plan which is subject to Section 412 of the Code or Section 302 of ERISA has applied for or received an extension of any amortization period, within the meaning of Section 412 of the Code or Section 302 or 304 of ERISA; (ii) no member of the ERISA Group has ceased operations at a facility so as to become subject to the provisions of Section 4062(e) of ERISA, withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or ceased making contributions to any Pension Plan subject to Section 4064(a) of ERISA to which it made contributions; (iii) no member of the ERISA Group has incurred or reasonably expects to incur any liability to the PBGC save for any liability for premiums in the ordinary course; (iv) no lien imposed under the Code or ERISA on the assets of any member of the ERISA Group exists or is likely to arise on account of any Pension Plan; and (v) no member of the ERISA Group has any liability under Section 4069 or 4212(c) of ERISA.

 

(g)           Each Foreign Pension Plan has been maintained in compliance with its terms and with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities, except as would not reasonably be expected to result in a Material Adverse Effect. Except as would not reasonably be expected to result in a Material Adverse Effect, (i) all contributions required to be made with respect to a Foreign Pension Plan have been timely made, and (ii) neither the Borrower nor any of its Subsidiaries has incurred any obligation in connection with the termination of, or withdrawal from, any Foreign Pension Plan. Except as would not reasonably be expected to result in a Material Adverse Effect, the present value of the accrued benefits liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrower’s most recently ended fiscal year, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities.

 

5.10        Taxes.

 

(a)           Each Borrower Party has timely filed with the appropriate taxing authority all federal and material state, county and municipal income tax returns, and all other material tax and informational returns which are required to be filed by or with respect to the income, Properties or operations of the relevant Borrower Party. Each Borrower Party has paid all material taxes due pursuant to such returns or otherwise payable by the relevant Borrower Party, except such taxes, if any, as are being contested in good faith and by proper proceedings and as to which adequate reserves have been provided or the failure to pay which could not reasonably be expected to have a Material Adverse Effect. There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the knowledge of the Borrower, threatened by any authority regarding any material taxes relating to any Borrower Party. The Base Case Projections accurately reflect all material taxes that, under present Law, will be due and payable

 

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by the Borrower Parties assuming that such Borrower Parties have the income and expenses reflected in the Base Case Projections.

 

(b)           No material liability for any tax will be incurred by any Borrower Party as a result of the execution, delivery or performance of this Credit Agreement or any other Transaction Document or the consummation of the transactions contemplated hereby or thereby.

 

5.11        Investment Company Act. None of the Borrower Parties is an “investment company,” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended. Neither the making of any Disbursement, nor the application of the proceeds or repayment thereof by the Borrower or any other Borrower Party, nor the consummation of the other transactions contemplated hereby will violate any provisions of such act or any rule, regulation or order of the U.S. Securities and Exchange Commission promulgated thereunder or pursuant thereto.

 

5.12        Regulation.

 

(a)           The Borrower Parties, their respective Affiliates, and any Affiliate that is a holding company as such term is defined in the Public Utility Holding Company Act of 2005 and the rules and regulations promulgated thereunder (as amended, “PUHCA”), are exempt in accordance with 18 CFR § 366.3 from the accounting, record-retention and reporting requirements of PUHCA or, to the extent an Affiliate of the Borrower Party is not exempt, the requirements of PUHCA could not reasonably be expected to result in a Material Adverse Effect.

 

(b)           Other than the Project Owner, no Borrower Party is or will be subject to, or is or will not be exempt from, regulation as a “public utility” under the Federal Power Act (the “Federal Power Act”) as such term is defined therein.

 

(c)           None of the Borrowing Parties or Affiliates thereof, is subject to any state laws or state regulations respecting rates or the financial or organizational regulation of utilities, other than (i) with respect to those that are QFs, such state regulations contemplated by 18 C.F.R. Section 292.602(c)(2), (ii) “lightened regulation” by the New York State Public Service Commission (the “NYPSC”) of the type described in the NYPSC’s order issued on September 23, 2004 in Case 04-E-0884, and (iii) with respect to Affiliates of the Borrower Parties that are Texas retail electric providers, regulations issued by the Public Utility Commission of Texas (“PUCT”) and (iv) such state laws and state regulations which, if not satisfied, would not be expected to result in a Material Adverse Effect. No approval is required to be obtained in connection with this transaction from the FERC, or any other state or federal Governmental Authority.

 

(d)           Prior to placing test power onto the grid, the Project Owner will obtain an order from FERC accepting for filing pursuant to Section 205 of the Federal Power Act and the rules and regulations promulgated thereunder a market based rate schedule for sale at wholesale of electric energy, capacity and ancillary services to be offered by the Project Owner and that are regulated under the Federal Power Act and authorizing the Project Owner to sell at wholesale electric energy, capacity and ancillary services at market based rates, and granting to the Project

 

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Owner all of the waivers and blanket authorizations customarily granted to wholesale power sellers with market based rate authority (the “Market Rate Authorization”). The information to be submitted in connection with the application for the Market Rate Authorization will be accurate and complete. The Project Owner will comply with all requirements imposed by FERC as a holder of a Market Rate Authorization, including filing of electric quarterly reports and tariff amendments.

 

(e)           Prior to placing test power onto the grid, the Project Owner will be an exempt wholesale generator (“EWG”) pursuant to PUHCA. The Project Owner will file with FERC a notice of self-certification as an EWG. Any information submitted in connection with the notice of self-certification will be accurate and complete. The Project Owner shall comply with any and all requirements necessary to maintain EWG status.

 

(f)            The Project Owner will obtain authorization from FERC to issue securities and assume liabilities under Section 204 of the Federal Power Act and Part 34 of FERC’s regulations prior to placing test power onto the grid.

 

(g)          The (i) Project Owner, as owner of the Project, (ii) O&M Operator, as operator of the Project and (iii) Energy Marketer, as seller of power, shall register with the North American Electric Reliability Corporation (“NERC”), to the extent required by law, in connection with such ownership of the Project, operation of the Project and/or sale of power generated by the Project, and neither the Project Owner nor to its knowledge the O&M Operator or the Energy Marketer is in receipt of any notice of violation of, and the Project is not the subject of any pending proceeding relating to a violation of, any reliability requirement promulgated by NERC, except as could not reasonably be expected to result in a Material Adverse Effect.

 

(h)           There is no action, suit, proceeding, pending notice of investigation or alleged violation or investigation at law or in equity or by or before any court, arbitrator or governmental agency or authority pursuant to any applicable Law which may result in: (i) denial of (A) the Market Rate Authorization or (B) the status of the Project Owner as an EWG (except, in each case, applications associated with acquiring such regulatory approvals as contemplated in this Credit Agreement which the Borrower expects to receive in the ordinary course); or (ii) the assessment of any criminal or civil penalties against any Borrower Party; and to the Borrower’s knowledge, no such action, suit, proceeding or investigation is threatened.

 

(i)             The Project is not subject to, or is exempt from, the Power Plant & Industrial Fuel Use Act, 42 USC Section 8301, et seq.

 

5.13        Title; Security Documents.

 

(a)           The applicable Borrower Party will, upon payment of the amounts payable by it under the BOP Contract, the Equipment Purchase Agreement and the Equipment Services Agreement, own and have good and marketable title to the Project and, upon payment of the amounts payable by it under the Site Agreements and due registration of the relevant public deed in respect of the Site, own and have a good and marketable leasehold interest in the Site, in each case free and clear of all Liens other than (A) Permitted Priority Liens and (B) other Permitted

 

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Liens to the extent junior to the Liens granted for the benefit of the Collateral Agent (on behalf of the Secured Parties) pursuant to the Security Documents.

 

(b)           Each Borrower Party has good and marketable title to all of the Property purported to be owned by it, free and clear of all Liens, other than (A) Permitted Priority Liens and (B) other Permitted Liens to the extent junior to the Liens granted for the benefit of the Collateral Agent (on behalf of the Secured Parties) pursuant to the Security Documents and holds such title and all of such Property in its own name and not in the name of any nominee or other Person. The Project Owner is lawfully possessed of a valid and subsisting leasehold estate in and to all Property which it purports to lease, free and clear of all Liens, other than (A) Permitted Priority Liens and (B) other Permitted Liens to the extent junior to the Liens granted for the benefit of the Collateral Agent (on behalf of the Secured Parties) pursuant to the Security Documents. The Project Owner holds such leasehold estates in its own name and not in the name of any nominee or other Person. No Borrower Party has created nor is contractually bound to create any Lien on or with respect to any of its assets, Properties, rights or revenues, except for (A) Permitted Priority Liens and (B) other Permitted Liens to the extent junior to the Liens granted for the benefit of the Collateral Agent (on behalf of the Secured Parties) pursuant to the Security Documents, and, except (x) for this Credit Agreement, in the case of the Borrower, and (y) for the relevant Guaranty, in the case of the Project Owner and the Procurement Sub and (z) the Collateral Documents, no Borrower Party is restricted by contract, law or otherwise from creating Liens on any of its Properties.

 

(c)           Except as set forth on Schedule 5.12(a), all Property owned, leased or otherwise used by any Borrower Party is located in the State of California.

 

(d)           The provisions of the Security Documents are effective to create, in favor of the Collateral Agent, for the benefit of the Secured Parties, legal, valid and enforceable Liens on or in all of the Collateral intended to be covered thereby, and all necessary recordings and filings have been made in all necessary public offices and all other necessary and appropriate action has been taken so that the Liens created by each Security Document constitute perfected Liens on or in the Collateral intended to be covered thereby, prior and superior to all other Liens other than Permitted Priority Liens, and all necessary consents to the creation, effectiveness, priority and perfection of each such Lien have been obtained. No mortgage or financing statement or other instrument or recordation covering all or any part of the Collateral is on file in any recording office, except such as may have been filed in favor of the Secured Parties or in respect of (A) Permitted Priority Liens and (B) other Permitted Liens to the extent junior to the Liens granted for the benefit of the Collateral Agent (on behalf of the Secured Parties) pursuant to the Security Documents.

 

5.14        Environmental Matters.

 

(a)           Except as set forth in the materials listed on Schedule 5.14, copies of which have been made available to the Administrative Agent, each Borrower Party has complied and is now complying in all respects with (i) all Environmental Laws applicable to the Project or such Borrower Party and (ii) the requirements of any Permits issued under such Environmental Laws with respect to the Project, including Federal and State Clean Air Act and South Coast Air Quality Management District air quality permitting requirements applicable to the Project,

 

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including but not limited to, as and if necessary, the United States Environmental Protection Agency’s Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, except in each case for non-compliance that would not reasonably be expected either individually or in the aggregate to have a Material Adverse Effect.

 

(b)           Except as set forth in the materials listed on Schedule 5.14, copies of which have been made available to the Administrative Agent, there are no facts, circumstances, conditions or occurrences regarding the Project that, to the knowledge of the Borrower, (i) form or could reasonably be anticipated to form the basis of an Environmental Claim against the Project, any Borrower Party, any Site Owner, any EPC Contractor or any Operator or any other Person occupying or conducting operations on or about the Site, (ii) could reasonably be anticipated to cause the Site to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law or (iii) could reasonably be anticipated to require the filing or recording of any notice, registration, permit or disclosure document under any Environmental Law (other than filings or recordings described in Schedule 5.6 hereto), in each case which if adversely determined could reasonably be expected either individually or in the aggregate to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

(c)           Except as set forth in the materials listed on Schedule 5.14, copies of which have been made available to the Administrative Agent, there are no pending, or, to the knowledge of the Borrower, any past or threatened, Environmental Claims against (i) any Borrower Party or the Project or (ii) any Site Owner, any EPC Contractor or any Operator or any other Person occupying, using, or conducting operations on or about the Site, which could reasonably be expected either individually or in the aggregate to have a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

(d)           Except as set forth in the materials listed on Schedule 5.14, copies of which have been made available to the Administrative Agent, Hazardous Materials have not at any time been generated, used, treated, recycled, stored on, or transported to or from, or Released, deposited or disposed of on all or any portion of the Site by the Borrower Parties, the Affiliate Project Participants or, to the knowledge of the Borrower, any other Project Participant, other than in compliance at all times with all applicable Environmental Laws, except as would not reasonably be expected either individually or in the aggregate to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

(e)           Except as set forth in the materials listed on Schedule 5.14, copies of which have been made available to the Administrative Agent, to the knowledge of the Borrower, there are not now and never have been any underground storage tanks located on the Site, there is no asbestos contained in, forming part of, or contaminating any part of the Project, and no polychlorinated biphenyls (PCBs) are used, stored, located at or contaminate any part of the Project.

 

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(f)            Except as set forth in the materials listed on Schedule 5.14, copies of which have been made available to the Administrative Agent, the Borrower does not have knowledge of any groundwater contamination or pollution at, on, under, or migrating from the Site.

 

(g)           The Borrower has delivered or otherwise made available to the Administrative Agent copies of each “Phase 1 Environmental Site Assessment” delivered pursuant to Section 4.1(p) and the RCRA Facility Investigation Work Plan. As of the Closing Date, the Borrower has no knowledge of any other environmental studies that contain any environmental information material to the Project and/or the Site that are not addressed in substance in the documents referenced in the immediately preceding sentence.

 

(h)           The Borrower is in material compliance with all normative requirements of the Equator Principles applicable to it and the Project as and to the extent specifically required in writing by any Lender.

 

5.15        Subsidiaries. Except to the extent constituting Permitted Investments, (a) the Borrower does not beneficially own any Equity Interests or other ownership interest of any other Person other than the Pledged Equity Interests of the Project Owner and (prior to the Merger) of the Procurement Sub; (b) the Borrower has no Subsidiaries other than the Project Owner and (prior to the Merger) the Procurement Sub; and (c) neither the Project Owner nor the Procurement Sub beneficially owns any Equity Interests of any Person or has any Subsidiaries.

 

5.16        Intellectual Property. The Borrower Parties (prior to the Merger) together have, and the Project Owner (on and after the Merger) alone has, the right to use all patents, trademarks, permits, service marks, trade names, copyrights, franchises, formulas, licenses and other intellectual property rights of whatsoever nature and has obtained assignment of all licenses and other intellectual property rights of whatsoever nature, in each case as necessary for the ownership and operation of the Project as contemplated by the Transaction Documents, without any conflict with the rights of others. The Borrower Parties do not own any patents, trademarks, service marks, trade names, copyrights, franchises, formulas, licenses or other intellectual property rights of whatsoever nature. No product, process, method, substance, part or other material sold or employed or presently contemplated to be sold or employed by any Borrower Party or the Affiliated Project Parties in connection with the ownership and operation of the Project as contemplated by the Transaction Documents infringes or will infringe any patent, trademark, permit, service mark, trade name, copyright, franchise, formula, license or other intellectual property right, except for any such infringement that could not reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

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

 

5.18        Compliance with Laws. None of the Borrower Parties or the Affiliated Project Parties is in violation of any Law, Permit, order, writ, injunction or decree or its Charter

 

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Documents, except for any violation of any Law, Permit, order, writ, injunction or decree that could not reasonably be expected to have a Material Adverse Effect.

 

5.19        Disclosure.

 

(a)           All documents, reports or other written information pertaining to any Borrower Party, the Affiliated Project Parties or the Project that have been furnished to any Financing Party by or on behalf of any such party (including (i) any application to any Lender for the extensions of credit provided for in the Financing Documents, (ii) in connection with the preparation, negotiation and/or execution of the Financing Documents, including the appendices, exhibits and schedules attached thereto, (iii) all other information relating to any Borrower Party or the Project provided by any such party to any Financing Party and (iv) any such documents, reports or other written information provided by the Pledgor, any Sponsor or any Affiliate thereof, but excluding the Base Case Projections, the Construction Budget and other forecasts and projections), taken as a whole, are 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 herein or therein not materially misleading. There is no fact, event or circumstance known to the Borrower that has not been disclosed to the Administrative Agent in writing, the existence of which could reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

(b)           The Construction Budget specifies in all material respects all costs and expenses incurred as of the date thereof, and the Borrower’s best estimate of all costs and expenses anticipated by the Borrower to be incurred after the date thereof and prior to the Date Certain, in each case in connection with the acquisition, importation, installation, construction, financing and implementation of the Project in the manner contemplated by the Transaction Documents. The Construction Budget and the Base Case Projections (i) are, as of the Closing Date, based on reasonable assumptions as to all legal and factual matters material to the estimates set forth therein, (ii) are, as of the Closing Date, consistent with the provisions of the Transaction Documents in all material respects, (iii) have been prepared in good faith and with due care and (iv) fairly represent the Borrower’s reasonable expectations as to the matters covered thereby as of the date thereof. All projections and budgets to be furnished to the Lenders by or on behalf of the Borrower after the Closing Date (A) will be based on reasonable assumptions as to all legal and factual matters material to the estimates set forth therein, (B) will be consistent with the provisions of the Transaction Documents in all material respects, (C) will be prepared in good faith and with due care and (D) will fairly represent the Borrower’s reasonable expectations as to the matters covered thereby as of the respective dates thereof.

 

5.20        Utilities, etc. All utility services, means of transportation, facilities and other materials necessary for the acquisition, importation, installation, construction, operation and maintenance of the Project (including gas, electrical, potable and raw water supply, storm, telephone and sewage services and facilities, as necessary) are or will be available to the Project (in the case of utility services, at the boundaries of the Site) when necessary for construction, operations testing and start-up of the Project and arrangements have been or will, when necessary, be made on commercially reasonable terms for such services, means of transportation,

 

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facilities and other materials, in each case on terms consistent with those reflected in the Construction Budget and the Base Case Projections.

 

5.21        Transactions with Affiliates. As of the date hereof, other than the Affiliated Project Documents set forth on Schedule 5.7, none of the Borrower Parties has engaged or agreed to engage in any transactions (including any transactions relating to the buying or selling of any Properties or any products of the Project or involving the receipt of money as payment for goods or services) with any Affiliate of such Borrower Party.

 

5.22        Project Completion Date; Project Costs.

 

(a)           As of the date hereof, the Borrower estimates, in good faith, that the Project Completion Date will occur no later than the Date Certain and that the aggregate proceeds of the Construction Loans will be sufficient to achieve the Project Completion Date.

 

(b)           As of the date hereof, except as set forth on Schedule 5.22, no Change Order has been proposed and no Change Order is being contemplated for proposal in the future by the Borrower Parties, or, to the knowledge of the Borrower, by any EPC Contractor.

 

5.23        Single-Purpose Entity. None of the Borrower Parties has engaged in any business other than acquisition, importation, installation, construction, operation or maintenance of the Project and other activities incidental thereto. The Pledgor has not engaged in any business other than directly owning the Pledged Ownership Interests in the Borrower which constitute 100.00% of the Equity Interests of the Borrower. Each Borrower Party has established offices in the State of California, and does not have a principal place of business or chief executive office at any other location.

 

5.24        Ranking. The Secured Obligations of the Borrower constitute unconditional and unsubordinated Indebtedness of the Borrower Parties and rank at least pari passu in priority of payment with all other present and future unsubordinated Indebtedness of the Borrower Parties (other than obligations preferred by statute or by operation of Law).

 

5.25        Anti-Terrorism Laws. No Borrower Party nor any Affiliate of any such Borrower Party is in violation of any Anti-Terrorism Laws. The use of the proceeds of the Loans by the Borrower will not violate any Anti-Terrorism Laws.

 

5.26        Collateral Not in Flood Zone. None of the Collateral located on the Site is located in an area that has been identified by the Director of the Federal Emergency Management Agency as an area having special flood hazards or in which flood insurance is required and has been made available under the National Flood Insurance Act of 1968, unless the Borrower has provided the Administrative Agent with proof of appropriate flood insurance with respect thereto.

 

5.27        Accounts. None of the Borrower Parties has opened or holds any bank account other than the Accounts.

 

5.28        Taking; Event of Loss. No Taking or Event of Loss has occurred.

 

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ARTICLE VI

 

COMPLIANCE COVENANTS

 

The Borrower covenants and agrees with each of the Lenders that, so long as any Commitment remains in effect, any Specified Letter of Credit remains outstanding, any Loan or other amount is owing to any Lender or the Administrative Agent hereunder, and until payment in full of all amounts payable by any Borrower Party under the Financing Documents to which they are a party:

 

6.1          Annual and Quarterly Information Covenants; Financial Statements. The Borrower shall, and shall cause each other Borrower Party to, deliver or cause to be delivered to the Administrative Agent at the times and covering the periods set forth below:

 

(a)           Annual Financial Statements. As soon as available and in any event within 120 days after the end of each fiscal year of the Borrower Parties, a copy of the complete audited, and consolidated statements of income, retained earnings and cash flow of the Borrower Parties, and the related audited, and consolidated balance sheet of the Borrower Parties as at the end of such year and any related audit letter, in each case with footnotes, if any, and setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and accompanied by an unqualified opinion thereon (but subject to any explanatory provisions) of KPMG, or such other firm of independent certified public accountants of recognized national standing as may be acceptable to the Requisite Financing Parties, which opinion shall state that said financial statements fairly present the financial condition and results of operations of the relevant Person as at the end of, and for, such fiscal year in accordance with U.S. GAAP, and a certificate of such accountants stating that, in making the examination necessary for their opinion, they obtained no knowledge, except as specifically stated, of any Default or Event of Default.

 

(b)           Quarterly Financial Statements. As soon as available and in any event within ninety days after the end of each quarterly fiscal period of the Borrower Parties, a copy of the complete unaudited, and consolidated statements of income, retained earnings and cash flow of the Borrower Parties, and the related unaudited, and consolidated balance sheet of the Borrower Parties as at the end of such period, setting forth in each case in comparative form the corresponding figures for the corresponding period in the preceding fiscal year, if any, accompanied by a certificate of an Authorized Officer of the relevant Person, which certificate shall state that said financial statements fairly present the financial condition and results of operations of the relevant Person, in accordance with U.S. GAAP, consistently applied, as at the end of, and for, such periods (subject to normal year-end audit adjustments).

 

(c)           Officer’s Certificate. At the time it furnishes each set of financial statements pursuant to Section 6.1(a) or 6.1(b) above, an Officer’s Certificate from each Borrower Party to the effect that no Default or Event of Default has occurred and is continuing (or, if any Default or Event of Default has occurred and is continuing,

 

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describing the same in reasonable detail and describing what action the Borrower has taken and proposes to take with respect thereto).

 

(d)           DSCR Certificates. Within fifteen Business Days after each Semi-Annual Date, an Officer’s Certificate from the Borrower setting forth the calculation of the Historical DSCR for the DSCR Calculation Period ending on such Semi-Annual Date. Each such Officer’s Certificate shall set forth, in reasonable detail, the inputs or assumptions, as applicable, upon which the relevant calculations were based and in the form set forth on Exhibit 16 hereto (each, a “DSCR Certificate”). The Historical DSCR set forth in each DSCR Certificate shall become effective for purposes of the Financing Documents on the fifth Business Day following delivery of the relevant Officer’s Certificate to the Administrative Agent unless the Administrative Agent notifies the Borrower that the methodology or any input or assumption employed by the Borrower in making such calculation is not satisfactory to the Administrative Agent in any respect.

 

(e)           Operating Reports. As soon as available and in any event within thirty days after the end of each fiscal quarter following the First Unit Operation Date, an operating report in the form set forth on Exhibit 17 hereto with respect to the Project for such quarterly period and for the portion of the Operating Year then ended, which report shall (i) correspond to the items and classifications and periods set forth in the applicable Operating Budget, (ii) show all Project Revenues, all O&M Expenses, the Operating Performance of the Project and a reasonably detailed accounting of the use of any amounts transferred from the Operating Account, (iii) be certified as complete and correct by an Authorized Officer of the Borrower, which certification shall also state that the O&M Expenses reflected therein complied with the requirements contained in Section 7.25 hereof, or, if any such certifications cannot be given, shall state in detail any necessary qualifications to such certifications and (iv) be in substantially the form of the pro forma Operating Report delivered in accordance with Section 4.1(s).

 

(f)            Environmental Report. Within 45 days after the end of each year, a report summarizing the environmental performance of the Project during such year, which report shall include narrative summaries in reasonable detail of (i) the results of any environmental monitoring or sampling activity, (ii) accidents having an impact on the environment or resulting in the loss of life, (iii) environmental deficiencies identified by any Governmental Authority, and (iv) any non-compliance with any Environmental Law and any remedial actions taken with respect thereto.

 

(g)           Insurance Report and Certificates. Within 45 days after the end of each year, a report of an independent broker, signed by an Authorized Officer of such independent broker, stating that in the opinion of such broker, the insurance then carried or to be renewed complies with the terms of the Collateral Agreement. The Borrower shall deliver to the Administrative Agent, within ten Business Days after each annual policy renewal date for each policy, (1) certificates of insurance or binders, in form and substance reasonably satisfactory to the Administrative Agent in consultation with the Insurance Consultant, evidencing all of the insurance required by the Collateral Agreement. Such certificates of insurance/binders shall be executed by an Authorized Officer of each insurer where it is not practical for such insurer to execute the certificate

 

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itself. Such certificates of insurance/binders shall identify underwriters, the type of insurance, the insurance limits and the policy term and shall specifically list the special provisions enumerated for such insurance required by the Collateral Agreement. Upon request, the Borrower will promptly furnish the Administrative Agent with copies of all insurance policies (except in the case of corporate insurance programs where detailed insurance summaries shall be acceptable), binders and cover notes or other evidence of such insurance relating to the insurance required to be maintained by the Borrower Parties. The schedule of insurance shall include the name of the insurance company, policy number, type of insurance, major limits of liability and expiration date of the insurance policies.

 

6.2          Monthly Construction Reporting. The Borrower shall deliver or cause to be delivered to the Administrative Agent, promptly upon receipt, but in any event not later than five Business Days after receipt thereof, each IE Construction Report, Monthly Progress Report (as defined in the BOP Contract), each Monthly Report (as defined in the Construction Management Agreement), each Monthly Progress Report (as defined in the Equipment Services Agreement) and each Monthly Progress Report (as defined in the Equipment Purchase Agreement).

 

6.3          Further Distribution of Operational Notices. The Borrower shall promptly, but in any event not later than five Business Days after delivery or receipt of any of the following communications, deliver or cause to be delivered to the Administrative Agent:

 

(a)           Governmental Authorities. A copy of each material notice, demand or other communication given to a Governmental Authority by or on behalf of any Borrower Party or received by any Borrower Party from a Governmental Authority or from any Person on behalf of a Governmental Authority.

 

(b)           Material Project Participants. A copy of each material notice, demand or other communication given or received by or on behalf of any Borrower Party to or from a Material Project Participant pursuant to or relating to any of the Material Project Documents (including all requests for assignments, amendments or waivers thereto).

 

(c)           Change Orders; Amendments to Construction Budget. A copy of any Change Order entered into in accordance Section 7.15 or any revision to the Construction Budget as provided in Section 7.28.

 

(d)           Management Letters; Accountant Communications. A copy of any “management letter” or other similar communication received by any Borrower Party from the such Borrower Party’s accountants relating to such Borrower Party’s financial, accounting and other systems, management or accounts.

 

(e)           Environmental Studies. A copy of each environmental study regarding the Project or the Site that (i) is or has been prepared by or under the direction of Affiliates of the Sponsor (including the Remediation Work Plan and all updates thereto) or (ii) is or has been prepared by or under the direction of Persons other than Affiliates of the Sponsor and is in the possession of the Borrower (it being understood that the Borrower

 

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shall use commercially reasonable efforts to obtain possession of such environmental studies prepared by or under the direction of Persons other than Affiliates of the Sponsor upon attaining knowledge thereof).

 

6.4          Notice of Certain Events and Circumstances. The Borrower shall promptly, but in any event not later than five Business Days after obtaining knowledge of any of the following events or circumstances, deliver or cause to be delivered to the Administrative Agent:

 

(a)           Material Permits. Copies of any Material Permits issued after the date hereof that are held in the name of any Borrower Party or Affiliate Project Participant and any Material Permits held in the name of any other Material Project Participant received by any Borrower Party or Affiliated Project Participant (it being understood that the Borrower shall use commercially reasonable efforts to obtain possession of such Material Permits upon attaining knowledge thereof) and notice of any pending or threatened application or proceeding by or before any Governmental Authority for the purpose of reversing, revoking, rescinding, terminating, withdrawing, suspending, modifying or withholding any Material Permit.

 

(b)           Dispositions. Notice of any Disposition in excess of $500,000 for any one Disposition or $1,500,000 in the aggregate in any calendar year.

 

(c)           Takings, Loss Events, Etc. Notice of any (i) Taking or (ii) Event of Loss or other casualty, damage or loss to any Property of any Borrower Party, whether or not the relevant Property is insured, through fire, theft, other hazard or casualty, that could reasonably be expected to result in Loss Proceeds (or if uninsured would have reasonably been expected to result in Loss Proceeds if insured) in excess of $500,000 for any one casualty or loss or $1,500,000 in the aggregate in any calendar year.

 

(d)           Disputes. Notice of any litigation, investigation, arbitration or other contentious proceeding or dispute that is pending or threatened against any Borrower Party, the Pledgor or the Project in which the amount involved could reasonably be expected to exceed $500,000 or in which injunctive, declaratory or similar relief is requested or any litigation, investigation, arbitration or other contentious proceeding affecting any Material Project Participant which if adversely determined could reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

(e)           Environmental Matters.

 

(i)            Notice of (A) any fact, circumstance, condition, occurrence or Release at, on, under or from the Project or the Site that results or could reasonably be expected to result in noncompliance with any Environmental Law applicable to the Project or the Site, (B) any Release at, on, under or from the Project or the Site that has resulted or could reasonably be expected to result in personal injury or material property damage or an Environmental Claim or that

 

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otherwise has or could reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party or (C) any pending Environmental Claim or any Environmental Claim threatened in writing against or affecting any Borrower Party or any other Persons occupying or conducting operations at the Project or the Site that could, if adversely determined, be reasonably expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party;

 

(ii)           copies of all material communications with any Governmental Authority relating to any Environmental Law or any Environmental Claim promptly after the giving or receiving of any such communications (including any such communications in respect of each EPA Letter); and

 

(iii)          such other information concerning any Environmental Claim relating to the Project or the Site as may be reasonably requested by the Administrative Agent.

 

(f)            Force Majeure. Notice of any event constituting force majeure under any of the Project Documents or any claim by any Project Participant alleging that a force majeure event thereunder has occurred.

 

(g)           Delay. Notice of any delay for any reason in the construction of the Project beyond the Major Milestone Dates.

 

(h)           Cessation; Suspension. Any actual, proposed or threatened (in writing) cessation or suspension of the Work for any reason by any EPC Contractor for a period in excess of three consecutive Business Days or any unscheduled shutdown or reduction in operation of the Project, or any substantial labor dispute which could lead to such a shutdown or reduction.

 

(i)            Material Adverse Effect. Any event, circumstance, development or condition which could reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

(j)            Bankruptcy Events. The occurrence of any Bankruptcy Event suffered by the Pledgor, the Borrower, the Project Owner, the Procurement Sub or any other Material Project Participant.

 

(k)           Defaults. Without limiting the foregoing, the occurrence of any Default or Event of Default.

 

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(l)            ERISA. To the extent that any of the following events, individually or in the aggregate, would reasonably be expected to result in a liability to a Borrower Party of greater than $1,500,000: (i) the occurrence of any ERISA Event and the filing of any notice with the PBGC or the IRS pertaining to such ERISA Event or the receipt of any notice by any member of the ERISA Group from the PBGC or any other governmental agency with respect thereto, but only to the extent that such ERISA Event, individually or in the aggregate, would reasonably be expected to result in a liability to a Borrower Party of greater than $1,500,000; (ii) a material increase in Unfunded Pension Liabilities (taking into account only Pension Plans with positive Unfunded Pension Liabilities) since the date the representations hereunder are given, or from any prior notice, as applicable; (iii) the existence of potential withdrawal liability under Section 4201 of ERISA, if any member of the ERISA Group were to withdraw completely from any and all Multiemployer Plans; (iv) the adoption of, or the commencement of contributions to, any Pension Plan subject to Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA by any member of the ERISA Group; or (v) the adoption of any amendment to a Pension Plan subject to Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA.

 

Each notice delivered pursuant to this Section 6.4 shall be accompanied by a statement signed by an Authorized Officer of the Borrower setting forth a description in reasonable detail of the occurrence referred to therein and stating what action the Borrower proposes to take with respect thereto.

 

6.5          Further Information. From time-to-time, the Borrower shall provide the Administrative Agent with such other information regarding the financial condition, operations, business or prospects of any Borrower Party or the Project or, to the extent obtainable by the Borrower upon the exercise of its commercially reasonable efforts, any Project Participant, as may be reasonably requested by the Administrative Agent.

 

6.6          Operating Budget.

 

(a)           On or prior to the thirtieth day prior to the First Unit Operation Date, the Borrower shall deliver to the Administrative Agent a proposed Operating Budget in substantially the form of the pro forma Operating Budget delivered in accordance with Section 4.1(s) for the period commencing on such First Unit Operation Date and ending on the next succeeding December 31 (or, if such First Unit Operation Date is projected to occur on or after September 30, on the second succeeding December 31).

 

(b)           On or prior to the thirtieth day prior to the beginning of each Operating Year, the Borrower shall deliver to the Administrative Agent a proposed Operating Budget in substantially the form of the Operating Budget delivered in accordance with Section 6.6(a) for the period commencing on January 1 of such Operating Year and ending on the next succeeding December 31.

 

(c)           Each proposed Operating Budget shall set forth the Borrower’s reasonable projection of the anticipated amount of O&M Expenses for each month covered thereby. Such O&M Expenses shall be itemized in the Operating Budget in accordance with U.S. GAAP using

 

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substantively the same line items as set forth in the pro forma Operating Budget delivered in accordance with Section 6.6(a). Any O&M Expenses that cannot be (or should not be in accordance with U.S. GAAP) itemized in accordance with the immediately preceding sentence shall be set forth as separate line items, shall be clearly described and shall be denoted as extraordinary O&M Expenses (“Extraordinary O&M Expenses”). The aggregate annual, aggregate monthly, and monthly line-item amounts of O&M Expenses set forth in the proposed Operating Budget shall be compared against each of the following (expressed as a percentage thereof): (i) the amount of such O&M Expenses set forth in the Base Case Model; (ii) the amount of such O&M Expenses set forth in the then-current Operating Budget (unless the proposed Operating Budget is delivered in accordance with Section 6.6(a)); and (iii) the amount of such O&M Expenses actually incurred by the Borrower in the then-current Operating Year, as set forth in the latest Operating Report delivered in accordance with Section 6.1(e) (unless the proposed Operating Budget is delivered in accordance with Section 6.6(a)). In addition, each Operating Budget shall attach, in narrative form, a description in reasonable detail of: (A) the maintenance and overhaul schedule (including any major maintenance or overhauls which are projected for the relevant Operating Year); (B) anticipated staffing plans; (C) mobilization schedules; (D) capital expenditure requirements; (E) equipment acquisitions; (F) spare parts and consumable inventories; (G) administrative activities and (H) any other material underlying assumptions in connection with the proposed Operating Budget.

 

(d)           If no OB Approval Threshold is exceeded or triggered in respect of a proposed Operating Budget, then no consent of the Administrative Agent or any other Person shall be required and such Operating Budget shall be deemed adopted as of the first day of the relevant Operating Year (or, in the case of the proposed Operating Budget referred to in Section 6.6(a), as of the First Unit Operation Date), unless the Administrative Agent notifies the Borrower in writing prior to such day that any OB Approval Threshold has been exceeded or triggered.

 

(e)           If any OB Approval Threshold is exceeded or triggered in respect of a proposed Operating Budget, then such proposed Operating Budget shall be subject to the prior written approval of the Administrative Agent (acting, if applicable, at the direction of the Requisite Financing Parties). If such prior written approval is not obtained prior to the first day of the Operating Year to which such proposed Operating Budget relates (or, in the case of the proposed Operating Budget referred to in Section 6.6(a), prior to the First Unit Operation Date), then the Borrower shall cause the Project Owner to operate the Project in accordance with an interim Operating Budget that does not exceed or trigger any OB Approval Threshold and is delivered to the Administrative Agent prior to the first day of such Operating Year, the First Unit Operation Date, until such time as a final Operating Budget is adopted in accordance with Section 6.6(c) or this Section 6.6(e).

 

(f)            The Borrower may at any time (or, in the case of Section 7.25, shall) propose to amend the Operating Budget for the remainder of the then current Operating Year by not less than thirty days prior written notice to the Administrative Agent. Sections 6.6(c), 6.6(d) and 6.6(e) shall apply mutatis mutandis to the form, scope, substance and approval of any proposed amended Operating Budget.

 

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6.7          Inspection.

 

(a)           The Borrower shall permit, shall cause each Borrower Party and the Affiliated Project Parties to permit, and shall use commercially reasonable efforts to cause the EPC Contractors to permit, in accordance with the terms of the applicable Transaction Documents, at the expense of the Borrower, representatives of the Administrative Agent, the Independent Engineer and during the continuance of an Event of Default, the Lenders, with reasonable advance notice, during normal business hours and at such intervals as such Person shall reasonably request, to visit and inspect the Project and to witness and verify the Completion Tests, to examine, copy and make extracts from its (and their) books and records relating to the Project, to inspect its Properties, and to discuss its (and their) business and affairs related to the Project with its (and their) officers and engineers, all to the extent reasonably requested by the Administrative Agent, the Independent Engineer or, during the continuance of an Event of Default, the Lenders (as the case may be). The Borrower will, and will cause each other Borrower Party to, authorize its auditors (whose fees and expenses shall be for the account of the Borrower) to communicate directly with the officers and designated representatives of the Administrative Agent and, if reasonably necessary, the Independent Engineer, in each case with reasonable cause at any reasonable time and upon prior written notice to the Borrower, regarding its accounts and operations; provided, that any written correspondence shall be made with a concurrent copy delivered to the Borrower Parties; and provided, further, that only two communications shall be made outside the presence of the Borrower in a given fiscal year (other than such communications made during the continuance of a Default or Event of Default).

 

(b)           The Borrower shall permit, and shall cause each other Borrower Party to permit, the Administrative Agent, the Independent Engineer and, to the extent reasonably necessary, any other Independent Consultant to review (i) all Plans and Specifications, (ii) any quality control data and performance test data, and (iii) any other data relating to the Project or to the progress of construction as may be reasonably requested by the Administrative Agent, the Independent Engineer or such other Independent Consultant. Further, the Borrower shall permit, and shall cause each other Borrower Party to permit, the Administrative Agent, the Independent Engineer and, to the extent reasonably necessary, any other Independent Consultant to monitor, witness and review the Work.

 

(c)           The Borrower shall give timely notice of and permit, and shall cause each other Borrower Party, and use commercially reasonable efforts to cause the EPC Contractors, to give timely notice of and permit, the Administrative Agent, the Independent Engineer, and, to the extent reasonably necessary, any other Independent Consultant to attend, (i) all Project construction progress review meetings held by any such Person or its agents or representatives and (ii) any and all Completion Tests or other performance tests of the Project or any component thereof (whether any such test is to be conducted on or off the Site).

 

ARTICLE VII

 

RESTRICTIVE COVENANTS

 

The Borrower covenants and agrees that, so long as any Commitment or any Loan or any other Secured Obligation is outstanding and until payment in full of all amounts payable

 

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by the Borrower under the Financing Documents, the Borrower shall (or shall cause the relevant Borrower Party to) comply with the following covenants:

 

7.1          Maintenance of Existence; Conduct of Business. Each Borrower Party shall (a) preserve and maintain its legal existence as a limited liability company under the laws of Delaware, and all of its material licenses, rights, privileges and franchises necessary for the maintenance of its limited liability company existence, and comply, in all material respects, with its Charter Documents, (b) engage solely in the business of constructing, owning, operating and maintaining the Project and performing its obligations pursuant to the Transaction Documents to which it is a party or (c) not cancel, terminate, permit the cancellation or termination of, amend, modify or change any material terms or conditions of, or grant any material consent, waiver or approval under, or take or fail to take any other material action the result of which would impair the value of the interest or impair the rights of any Borrower Party under, any of its Charter Documents.

 

7.2          Compliance with Laws. Each Borrower Party shall conduct its business in compliance with all applicable requirements of Law, including all relevant Permits and Environmental Laws, except where any failure to comply could not individually or in the aggregate have a Material Adverse Effect, and except that the relevant Borrower Party may, at its expense, contest by appropriate proceedings conducted in good faith the validity or application of any such requirement of Law, so long as (a) none of the Secured Parties or the relevant Borrower Party would be subject to any criminal liability for failure to comply therewith, (b) all proceedings to enforce such requirement of Law against the Secured Parties, the relevant Borrower Party, the Project or any part thereof shall have been duly stayed and (c) such contest does not involve any risk of the sale, forfeiture or loss of any of the Collateral.

 

7.3          Accounting and Financial Management. Each Borrower Party shall (a) maintain adequate management information and cost control systems and (b) maintain a system of accounting in which full and correct entries shall be made of all financial transactions and the assets and business of the relevant Borrower Party in accordance with U.S. GAAP. In the event that any Borrower Party replaces its existing auditors for any reason, the relevant Borrower Party shall appoint and maintain as auditors another firm of independent public accountants, which firm shall be internationally recognized and approved by the Requisite Financing Parties.

 

7.4          Tax Elections, Payment of Taxes, etc.

 

(a)           The Borrower shall not, and shall ensure that the Borrower Parties shall not, take any action or fail to take any action (including electing to be treated as a corporation for Federal income tax purposes) that would cause any Borrower Party to be subject to (i) any material taxes other than as set forth in the Base Case Model or (ii) any material obligations under any agreements or arrangements with respect to any taxes.

 

(b)           Each Borrower Party shall duly pay and discharge before they become overdue (i) all material taxes, assessments and other governmental charges or levies imposed upon it or any of its Property, income or profits, (b) all material utility and other governmental charges incurred in connection with the ownership, operation, maintenance, use, occupancy and upkeep of its business and (c) all lawful claims and obligations that, if unpaid, could result in the

 

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imposition of a Lien upon any of its Property; provided, that the relevant Borrower Party may contest in good faith any such tax, assessment, charge, levy, claim or obligation and, in such event, may permit the tax, assessment, charge, levy, claim or obligation to remain unpaid during any period, including any period during which an appeal is pending, when the relevant Borrower Party is in good faith contesting the same by proper proceedings, so long as (i) adequate reserves shall have been established with respect to any such tax, assessment, charge, levy, claim or obligation, accrued interest thereon and potential penalties or other costs relating thereto, or other adequate provision for payment thereof shall have been made, (ii) such contest does not involve any risk of the sale, forfeiture or loss of any of the Collateral and (iii) enforcement of the contested item shall be effectively stayed.

 

7.5          Borrower’s Equity Interests. None of the Borrower Parties shall (a) permit or consent to the transfer (by assignment, sale or otherwise) of the Pledged Equity Interests (other than by way of the Merger in accordance with Section 7.33) or (b) issue any new Equity Interests.

 

7.6          Merger; Etc. The Borrower shall not merge into or consolidate with any other Person, or liquidate or dissolve itself (or suffer any liquidation or dissolution), or sell, lease, transfer, or otherwise dispose of all or substantially all of its assets. Neither the Project Owner nor the Procurement Sub shall merge or consolidate with any other Person, or liquidate or dissolve itself (or suffer any liquidation or dissolution), or sell, lease, transfer, or otherwise dispose of all or substantially all of its assets, except for the Merger in accordance with Section 7.33.

 

7.7          Investments; Subsidiaries. None of the Borrower Parties shall make or permit to remain outstanding any Investments except Permitted Investments. None of the Borrower Parties shall establish, create or acquire any Subsidiary (other than, with respect to the Borrower, the Procurement Sub (prior to the Merger) and the Project Owner).

 

7.8          Transactions with Affiliates. Except as provided in the Affiliate Project Documents or the Intercompany Notes and in the Accounts Agreement, none of the Borrower Parties shall directly or indirectly (a) make any payment to an Affiliate of any Borrower Party, (b) transfer, sell, lease, assign or otherwise dispose of any Property to an Affiliate of any Borrower Party, (c) purchase or acquire Property from an Affiliate of any Borrower Party or (d) enter into any other transaction or arrangement directly or indirectly with or for the benefit of an Affiliate of any Borrower Party.

 

7.9          Distributions; Restricted Payments.

 

(a)           Except as set forth in Sections 7.9(b), 7.9(c) and 7.9(d), none of the Borrower Parties shall (i) make any distributions to Pledgor or to any other Person (other than, with respect to the Procurement Sub (prior to the Merger) and the Project Owner, to the Borrower) in respect of its Equity Interests or any other ownership interest in such Borrower Party, whether in cash or other Property, or redeem, purchase or otherwise acquire any interest of Pledgor in such Borrower Party, or permit Pledgor to withdraw any capital from such Borrower Party (all of the foregoing being referred to as “Distributions”) or (ii) make any payment of any Affiliate O&M Fees to any Affiliate of

 

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such Borrower Party (each such Distribution or payment of Affiliate O&M Fees, a “Restricted Payment”).

 

(b)           Unless a Default or Event of Default shall have occurred and be continuing, the Borrower may pay Affiliate O&M Fees when due and payable under the Affiliated Project Documents pursuant to and in accordance therewith and with the Accounts Agreement.

 

(c)           Amounts constituting True-Up Drawings may be Distributed by the Borrower as directed by it in its sole discretion (the “True-Up Distributions”), notwithstanding any other provision of the Financing Documents to the contrary; provided, that (x) no Default or Event of Default shall have occurred and be continuing as of such Distribution, (y) the Debt-To-Equity Ratio (after giving pro forma effect to the relevant True-Up Distribution) will be no greater than 80:20 and (z) the Projected DSCR on the date of such True-Up Distribution is equal to or greater than 1.40x (calculated using the Base Case Model delivered in accordance with Section 4.2(m), updated in respect of any True-Up Distribution to occur more than thirty days after the date of the initial Borrowing to take account of any Operating Budget delivered in accordance with Section 6.6(a) and the projected Operating Performance of the Project in light of the results of any Completion Tests, and using an initial DSCR Calculation Period ending on the first Semi-Annual Date following the one-year anniversary of (x) the Projected Completion Date, in respect of any True Up Distribution to occur prior to the Term Conversion Date or (y) the Term Conversion Date, in respect of any True Up Distribution to occur on the Term Conversion Date).

 

(d)           Amounts on deposit in the Distribution Reserve Account as of any Semi-Annual Date may be transferred to the Distribution Account by the Borrower in accordance with the Collateral Agreement and the Accounts Agreement, so long as each of the Distribution Conditions is satisfied on such Semi-Annual Date.

 

(e)           Amounts on deposit in the Distribution Account may be distributed to Pledgor as Distributions and/or Restricted Payments or to any other Person for any other purpose at any time and from time-to-time.

 

7.10        Separateness. The Borrower Parties shall:

 

(a)           maintain separate bank accounts and separate books of account from the Pledgor and any Affiliate (other than the Borrower Parties) of the Pledgor;

 

(b)           cause the liabilities of the Borrower Parties to be readily distinguishable from the liabilities of the Pledgor and any Affiliate (other than the Borrower Parties) of the Pledgor;

 

(c)           conduct their business solely in their own names in a manner not misleading to other Persons as to its identity, including by ensuring that oral and written communications (including letters, invoices, purchase orders, contracts, statements, and applications) shall be made in the name of such Borrower Party;

 

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(d)           comply with the provisions set forth on Appendix H;

 

(e)           in the case of the Borrower, comply with the separateness covenants set forth in the Borrower Pledge Agreement; and

 

(f)            cause the Pledgor and each permitted successor or assignee of the Pledgor to comply with the separateness covenants set forth in the Pledgor Pledge Agreement;

 

it being understood and agreed by the parties that de minimis breaches of this Section 7.10 that (i) are not, in the aggregate, misleading as to the identity of the relevant Borrower Party or the Pledgor (as applicable), (ii) do not call into question the corporate separateness of the Borrower Party or the Pledgor (as applicable) from their respective Affiliates and (iii) otherwise do not materially adversely undermine the purpose intended to be served by the provisions of this Section 7.10 shall not be deemed a breach of this Section 7.10.

 

7.11        Chief Place of Business; etc. The place of business or, if it has more than one place of business, the chief executive office of each Borrower Party and the place where the records of the Borrower Parties concerning the Collateral are kept is at 5790 Fleet Street, Suite 200, Carlsbad, CA 92008. The originals of all documents evidencing the Collateral and the only original books of account and records of the Borrower Parties relating thereto are, and will continue to be, kept at such place of business or chief executive office, or at such new location as the Borrower may establish in accordance with this Credit Agreement. Each Borrower Party’s jurisdiction of organization and “location” for the purposes of Section 9-307 of the Uniform Commercial Code is Delaware. The exact legal name of the Borrower is as set forth on the signature pages hereto. The Borrower shall not (a) establish a new “location” for the purposes of Section 9-307 of the Uniform Commercial Code, (b) change its chief executive office or its jurisdiction of organization, (c) change its name or (d) do business under any name other than the name set forth on the signature pages hereto until (i) it shall have given to the Administrative Agent not less than thirty days’ prior written notice of its intention so to do, clearly describing such new location, jurisdiction and/or name and providing such other information in connection therewith as the Administrative Agent may reasonably request and (ii) with respect to such new location, jurisdiction and/or name, it shall have taken all action, satisfactory to the Administrative Agent, to maintain the Liens in the Collateral granted for the benefit of one or more of the Secured Parties pursuant to the Security Documents at all times fully perfected and in full force and effect.

 

7.12        Permits. Each Borrower Party shall (i) from time-to-time obtain and maintain, and comply with, or cause the applicable Material Project Participant to maintain and comply with, all Material Permits to which such Borrower Party or Material Project Participant (as applicable) is a party as shall now or hereafter be required under applicable Laws, (ii) cause the Project to be duly constructed, completed, operated and maintained in all material respects in accordance with all applicable Laws, and (iii) intervene in and contest or cause the applicable Material Project Participant to intervene in and contest any proceeding which seeks or may reasonably be expected, to rescind, terminate, modify or suspend any Material Permit and, if reasonably requested by the Administrative Agent on the recommendation of the Independent Engineer, appeal or cause the applicable Material Project Participant to appeal any such rescission, termination, modification or suspension in the manner and to the fullest extent

 

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permitted by applicable Law; provided, that the obligations of the Borrower Parties under this Section 7.12 shall not in any way limit or impair the rights or remedies of the Secured Parties under any Financing Document directly or indirectly arising as a result of any such rescission, termination, modification or suspension.

 

7.13                        Security Documents.

 

(a)                                 Each Borrower Party shall take all actions necessary or requested by the Administrative Agent or the Collateral Agent to maintain each Security Document in full force and effect and enforceable in accordance with its terms and to maintain and preserve the Liens created by the Security Documents and the priority thereof in accordance with the Collateral Agreement. In furtherance of the foregoing, (A) the Borrower shall ensure that all Property acquired by any Borrower Party shall become subject to the Lien of the Security Documents having the priority contemplated thereby promptly following the acquisition thereof and (B) none of the Borrower Parties shall open or maintain any bank account (other than the Accounts).

 

(b)                                 Each Borrower Party shall take all action necessary to cause each Additional Project Document to be or become subject to the Liens of the Security Documents (whether by amendment to any Security Document, execution of a new Security Document or otherwise) in favor of the Collateral Agent, and shall deliver or cause to be delivered to the Administrative Agent such legal opinions of counsel to such Borrower Party, certificates of such Borrower Party or other documents with respect to each such Additional Material Project Document as the Administrative Agent may reasonably request. The Borrower shall cause each Material Project Participant that is a party to an Additional Material Project Document to execute and deliver a Consent Agreement in the form attached to the relevant Security Agreement or otherwise reasonably satisfactory to the Administrative Agent and the related opinion with respect to such Additional Material Project Document specified therein.

 

7.14                        Material Project Documents.

 

(a)                                 Each Borrower Party shall perform and observe all of its covenants and agreements contained in any of the Material Project Documents to which it is or becomes a party.

 

(b)                                 Each Borrower Party shall take any and all action as may be reasonably necessary to promptly enforce its rights and to promptly collect any and all sums due to it under the Material Project Documents to which it is or becomes a party and shall not waive any default under or breach of any Material Project Document to which it is or becomes a party or waive, fail to enforce, forgive or release any right, interest or entitlement, howsoever arising, under or in respect of any such Material Project Document (except to the extent the Administrative Agent, in consultation with the Independent Engineer, has determined in writing that the failure to comply with this Section 7.14(b) is in the best interest of the Project).

 

(c)                                  Each Borrower Party shall take all necessary action to prevent the cancelation, suspension or termination of any Material Project Document to which it is or becomes a party in accordance with the terms thereof or otherwise and shall not permit a Material Project Participant to cancel, suspend or terminate any Material Project Document to

 

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which it is or becomes a party or petition, request or take any other legal or administrative action that seeks, or may be expected, to cancel, suspend or terminate any Material Project Document to which it is or becomes a party or amend or modify all or any part thereof. Prior to, concurrently with, or promptly after the expiration of each SoCalGas Transportation Contract, the Borrower will cause the Project Owner to enter into a new SoCalGas Transportation Contract and will use commercially reasonable efforts to cause such SoCalGas Transportation Contract to provide for Firm Priority Service.

 

(d)                                 Each Borrower Party shall not sell, assign (other than pursuant to the Security Documents) or otherwise dispose of (by operation of law or otherwise) any part of its interest in any Material Project Document to which it is or becomes a party.

 

(e)                                  Each Borrower Party shall not agree to or permit the assignment of any rights or the delegation of any obligations of any Material Project Participant under any Material Project Document to which it is or becomes a party except (i) as permitted without the consent of the Borrower by the terms of such Material Project Document or (ii) with the prior written consent of the Administrative Agent (acting, in respect of the Tolling Agreement, upon the instructions of the Requisite Financing Parties).

 

(f)                                   Except as provided in Section 7.15, no Borrower Party shall amend, supplement, modify or give any consent under any Material Project Document or exercise any material option thereunder (except to the extent the Administrative Agent, in consultation with the Independent Engineer, has determined in writing that such amendment, supplement, modification, consent or exercise is in the best interest of the Project).

 

(g)                                  No Borrower Party shall enter into any Additional Material Project Document other than (i) upon the prior written consent of the Administrative Agent (acting upon the instructions of the Requisite Financing Parties) or (ii) in accordance with Section 8.8(e).

 

(h)                                 The Borrower Parties shall instruct all Project Participants to make all payments payable to any of the Borrower Parties to the Account Bank for deposit in the appropriate Account in accordance with the Accounts Agreement.

 

(i)                                     Each of the Borrower Parties shall, on the date hereof and on the date it enters into any Material Project Document after the date hereof, (i) enter into a Consent Agreement in accordance with the Collateral Agreement and (ii) deliver to the Collateral Agent a fully-executed version of each such Consent Agreement and (unless otherwise agreed by the Administrative Agent) the related opinion required to be delivered to the Collateral Agent in accordance therewith.

 

(j)                                    Prior to the Term Conversion Date, no Borrower Party shall enter into any Material Project Document or execute any Change Order in accordance with Section 7.15 unless (A) 100% of all Project Costs to be incurred thereunder are set forth in the Construction Budget and (B) after giving pro forma effect to the execution of such Material Project Document or Change Order, the Borrower Parties have Available Construction Funds at their disposal that are equal to or greater than the aggregate amount of unpaid Project Costs set forth in the

 

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Construction Budget. The Borrower shall provide the Administrative Agent with prompt notice of its consent to any subcontractor granted under any EPC Contractor.

 

7.15                        Change Orders. Notwithstanding the provisions of Section 7.14(f) (but without limiting Section 7.14(j)), the Borrower may permit the Project Owner, upon five Business Days’ prior notice to the Independent Engineer and the Administrative Agent, to enter into any Change Order if (a) such Change Order does not change the Plans and Specifications, (b) the CO Cost of such Change Order does not exceed $5,000,000 or cause the aggregate CO Cost of all Change Orders theretofore made, together with the CO Cost of such Change Order, to exceed $15,000,000, (c) such Change Order does not result in an extension of any Major Milestone Date beyond the applicable date set forth on Appendix J, (d) such Change Order does not result in any change to, or amendment of, the Completion Tests, the Delay Liquidated Damages, the Buy-down Proceeds, the Performance Guarantees or the conditions pursuant to which payment of any such damages is required to be made, either directly or indirectly and (e) such Change Order could not otherwise reasonably be expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party.

 

7.16                        Certain Agreements. No Borrower Party shall enter into any agreement or undertaking (except for the Financing Documents and except pursuant to any agreement approved by the Requisite Financing Parties for the refinancing of any of the Loans) restricting, or purporting to restrict, the ability of any Borrower Party to (a) amend this Credit Agreement or any other Financing Document, (b) sell any of its assets, (c) create Liens, (d) create or incur Indebtedness or (e) make any Restricted Payment.

 

7.17                        Insurance Requirements. Each Borrower Party shall maintain or cause to be maintained in full force and effect all insurance coverages for the Project set forth in the Collateral Agreement.

 

7.18                        Events of Loss. If an Event of Loss shall occur with respect to any Collateral, then the relevant Borrower Party shall (a) diligently pursue all its rights to compensation against any Person with respect to such Event of Loss, (b) cause all Loss Proceeds to be deposited in the Proceeds Account pursuant to the Accounts Agreement, (c) cause all Business Interruption Proceeds to be deposited in the Business Interruption Proceeds Account pursuant to the Accounts Agreement and (d) cause all Loss Proceeds and any Business Interruption Proceeds to be applied in accordance with the Collateral Agreement, the Accounts Agreement and Section 3.17 hereof.

 

7.19                        Asset Acquisitions. No Borrower Party shall purchase or acquire any assets or Property other than (a) assets reasonably required for the completion of the Project in accordance with the Construction Budget, (b) assets in consideration of O&M Expenses expended in accordance with Section 7.25, (c) assets acquired in connection with any Restoration of the Project in accordance with the Collateral Agreement and the Accounts Agreement and (iv) Permitted Investments.

 

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7.20                        Asset Dispositions. No Borrower Party shall make any Disposition other than: (a) sales of electrical energy, capacity, ancillary services and other products pursuant to the Revenue Contracts; (b) subject to the requirements of Sections 3.17(a)(ii) and 6.4(b), Dispositions having a value of equal to or less than $3,000,000 per asset or $5,000,000 in the aggregate in any year by all Borrower Parties since the date hereof, and otherwise determined by the relevant Borrower Party (in its reasonable opinion) to be obsolete, redundant, no longer best in class, or otherwise no longer used by or useful to the relevant Borrower Party for the operation or maintenance of the Project; (c) sales of Permitted Investments prior to the maturity thereof; and (d) Distributions, Restricted Payments or other payments in accordance with Section 7.9.

 

7.21                        Indebtedness. No Borrower Party shall create, incur, suffer to exist or otherwise become liable for any Indebtedness except for the following (“Permitted Indebtedness”):

 

(a)                                 Indebtedness arising under the Financing Documents;

 

(b)                                 Indebtedness arising under the Rate Swap Transactions entered into and maintained in accordance with Section 7.26;

 

(c)                                  Capital Lease Obligations incurred in the ordinary course of business that do not at any time exceed $500,000;

 

(d)                                 trade accounts payable (other than Indebtedness for borrowed money) arising, and accrued expenses incurred, in the ordinary course of the relevant Borrower Party’s business so long as such trade accounts payable are payable within 60 days of the date the respective goods are delivered or the respective services are rendered and are not more than 60 days past due;

 

(e)                                  unsecured Indebtedness owed by any Borrower Party to the Borrower or owed by the Borrower to the Pledgor, provided, that such Indebtedness is subordinated to the Secured Obligations, is collaterally assigned by the Pledgor or the Borrower (as applicable) to the Collateral Agent in accordance with the terms specified in the relevant Pledge Agreement and is issued pursuant to the subordination and other terms required by such Pledge Agreement;

 

(f)                                   purchase money obligations to the extent incurred in the ordinary course of business to finance equipment (and Indebtedness incurred to finance any such obligations); provided, that (A) if such obligations are secured, they are secured only by Liens upon the equipment being financed and (B) the aggregate principal amount and the capitalized portion of such obligations by all Borrower Parties do not at any time exceed $2,000,000; and

 

(g)                                  additional unsecured Indebtedness owed by any Borrower Party in an aggregate principal amount (for all Borrower Parties and including all capitalized interest) not to exceed $5,000,000 at any time.

 

7.22                        Leases. No Borrower Party shall enter into any agreement, or be or become liable as lessee under any agreement, for the lease, hire or use of any real or personal

 

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Property, except for (i) the Site Agreements, (ii) the Real Property Agreements and (iii) operating leases of personal Property to the extent that (a) no such operating lease constitutes a Capital Lease Obligation, (b) each such operating lease is provided for in the then current Operating Budget, (c) the relevant personal Property is not affixed to the Project, (d) the relevant personal Property does not constitute “fixtures” under applicable Law, (e) the relevant personal Property is composed of standard, non-customized items; and (f) the aggregate payment obligations of all Borrower Parties under all such leases of personal Property does not exceed $1,000,000 in any year.

 

7.23                        Limitation on Liens. No Borrower Party shall create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for Permitted Liens.

 

7.24                        Operation and Maintenance.

 

(a)                                 Each Borrower Party shall maintain and preserve the Project, the Facility, the Site and all of its other Properties necessary or useful in or to the proper conduct of its business in good working order and in such condition that the Project will have the capacity and functional ability to perform, on a continuing basis (ordinary wear and tear excepted), in normal commercial operation, the functions for which it was specifically designed in accordance with the EPC Contracts at substantially the levels contemplated thereby. The Borrower shall, and shall cause the other Borrower Parties to, cause the Project, the Facility and the Site to be operated, serviced, maintained and repaired so that the condition and Operating Performance thereof will be maintained and preserved (ordinary wear and tear excepted) in all material respects in accordance and compliance with (i) Good Utility Practices, (ii) such operating standards as shall be required to enforce any material warranty claims against dealers, manufacturers, vendors, contractors, and sub-contractors, (iii) the terms and conditions of all insurance policies maintained with respect to the Project at any time, (iv) all requirements of Law and all Material Permits applicable to the Project, and (v) the terms of the Project Documents.

 

(b)                                 No Borrower Party shall alter, remodel, add to, reconstruct, improve or demolish any part of the Project, the Facility, the Site or any other Collateral after the Project Completion Date, except in accordance with any Restoration of the Project in accordance with the Collateral Agreement and the Accounts Agreement.

 

(c)                                  No Borrower Party shall appoint or allow the appointment of any replacement Operator without the prior written consent of the Administrative Agent (acting at the direction of the Requisite Financing Parties).

 

7.25                        O&M Expenses. No Borrower Party shall expend any amount for O&M Expenses during any month if such expenditure would exceed any OB Approval Threshold without the prior written consent of the Administrative Agent (acting, if applicable, at the direction of the Requisite Financing Parties), unless such O&M Expense could not reasonably be anticipated and failure to make such expenditure would create an abnormal risk of personal injury to employees or significant physical damage to the Project and, in any such event, the Borrower shall immediately advise the Administrative Agent of such excess expenditure and,

 

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within fifteen days of the making of any such excess expenditure, prepare and file with the Administrative Agent an amended Operating Budget that reflects such expenditure in accordance with Section 6.6(f).

 

7.26                        Rate Swap Transactions. The Borrower shall execute, on the same Business Day as the initial Borrowing of the Construction Loans, and thereafter maintain in full force and effect one or more Rate Swap Transactions with Rate Swap Counterparties which effectively protect the Borrower against the risk of LIBO Rate fluctuations above the weighted average of the fixed rates set forth in the Base Case Model delivered in accordance with Section 4.2(m) and have an aggregate notional amount with respect to each Semi-Annual Date to occur after the Rate Swap Commencement Date equal to not less than 75.00% and not more than 105.00% of the Notional Loan Amount in respect of such Semi-Annual Date. For purposes of the foregoing, the “Notional Loan Amount” in respect of each Semi-Annual Date shall be (x) if determined prior to the Term Conversion Date (1) with respect to each Semi-Annual Date to occur prior to the last projected Disbursement on the Notional Disbursement Schedule, the aggregate principal amount of the Construction Loans that are projected to be outstanding on the immediately preceding Semi-Annual Date based on the Notional Disbursement Schedule and (2) with respect to each Semi-Annual Date to occur on or after the last projected Disbursement on the Notional Disbursement Schedule, the aggregate principal amount of the Construction Loans then-outstanding plus the aggregate undrawn Construction Loan Commitments minus the aggregate amount of Notional Amortization projected prior to such Semi-Annual Date, as set forth on the Projected Amortization Schedule and (y) if determined on and after the Conversion Date, the aggregate principal amount of the Term Loans outstanding as of the date of such determination minus the aggregate amount of scheduled principal payments projected to be made on the Term Loans prior to such Semi-Annual Date in accordance with the Amortization Schedules (in each case, after giving full effect to the application of prepayments of the Construction Loans or the Term Loans, as applicable, in accordance with Section 3.16 or 3.17(c)).

 

7.27                        Use of Proceeds. The Borrower will use the proceeds of the Loans solely for the purposes set forth in Article II.

 

7.28                        Construction Budget. The Borrower shall not amend, revise or modify the Construction Budget to increase or decrease or otherwise change the number or type of Construction Budget categories, allocate or reallocate the Contingency to any Construction Budget category, or request any Construction Loans for the purpose of funding any Project Costs in excess of the amount contained in the Construction Budget for such category of Project Costs; except, (x) to the extent no CB Approval Threshold is triggered or exceeded or (y) if a CB Approval Threshold is triggered or exceeded upon obtaining the prior written approval specified on Appendix E. The Borrower shall promptly deliver to the Administrative Agent a copy of any revisions to the Construction Budget effected without the consent of the Administrative Agent pursuant to this Section 7.28.

 

7.29                        Engineering, Procurement and Construction. Each Borrower Party shall cause the Project to be duly engineered and constructed and all equipment procured in accordance with the Construction Budget, the EPC Contracts and Good Utility Practices and shall cause the Project Completion Date and the Term Conversion Date to occur on or before the

 

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Date Certain. The Borrower shall not, and shall not permit the other Borrower Parties to, directly or indirectly, make or commit to make any expenditure in respect of the purchase or other acquisition of fixed or capital assets prior to the Project Completion Date, other than expenditures contemplated by the Construction Budget.

 

7.30                        Completion; Completion Tests.

 

(a)                                 No Borrower Party shall, without the prior written consent of the Administrative Agent (after consultation with the Independent Engineer), (i) take any action or fail to take any action (other than the execution of a Change Order in accordance with Section 7.15(c)) which could extend, or which could permit an extension of, any guaranteed completion or acceptance date (including the Mechanical Completion Guaranteed Dates (as such term is defined in the BOP Contract), Substantial Completion Guaranteed Date and the Final Completion Guaranteed Date (as each such term is defined in the Equipment Services Agreement) under the EPC Contracts, (ii) accept or confirm that the Project or any Generating Unit, as the case may be, has achieved Mechanical Completion (as such term is defined in the BOP Contract), Substantial Completion (as such term is defined in the Equipment Services Agreement), Final Completion (as such term is defined in the Equipment Services Agreement) or fail to advise the Construction Manager, the BOP Contractor, the Equipment Supplier and the Equipment Servicer of any defects, deficiencies or discrepancies in the Work of which such Borrower Party has knowledge, (iii) notify the Equipment Servicer that it accepts the Final Punchlist (as such term is defined in the Equipment Services Agreement), (iv) notify the BOP Contractor and that it accepts the Final Completion Punch List (as such term is defined in the BOP Contract), (iv) issue, approve or execute any acceptance or completion certificate or otherwise confirm acceptance or completion of the Project or any portion or phase thereof, (v) waive, defer or reduce any of the requirements of any of the Completion Tests or Performance Guarantees, (vi) accept or confirm that the Project has satisfied any of the Completion Tests or met any of the Performance Guarantees, (vii) reject the Project or (viii) deliver any written direction to pay all or any portion of the Retainage Balance (as defined in the Retainage Escrow Agreement).

 

(b)                                 No Borrower Party shall schedule or agree or permit to the scheduling of any Completion Tests without at providing at least five Business Days’ prior written notice to the Administrative Agent and the Independent Engineer; provided, that if any such Completion Test is canceled or fails and a new Completion Test is scheduled within 72 hours of the originally scheduled Completion Test, then the relevant Borrower Party shall be required to promptly notify the Administrative Agent and Independent Engineer of its intent to run or rerun such Completion Test within such 72-hour period and shall give the Administrative Agent and the Independent Engineer reasonable advance notice prior to the conduct of such Completion Test within such 72-hour period.

 

7.31                        Payment of Project Costs; Project Revenues.

 

(a)                                 Any Project Revenues (other than proceeds of any Delay Liquidated Damages) received prior to the Term Conversion Date shall be deposited into the Construction Account and applied, in accordance with the Accounts Agreement, to the payment of Project Costs.

 

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(b)                                 Any proceeds of any Delay Liquidated Damages received prior to the Term Conversion Date shall be deposited into the Proceeds Account and applied, in accordance with the Accounts Agreement, to the mandatory prepayment of Loans in accordance with Section 3.17(a)(iii).

 

7.32                        EWG Status, etc. The Project Owner shall, prior to placing test power onto the grid, and at all times thereafter, (i) maintain its status as an EWG, (ii) be exempt in accordance with 18 CFR § 366.3 from the accounting, record-retention and reporting requirements of PUHCA, (iii) be authorized by FERC pursuant to the Market Rate Authorization to sell electric energy, capacity and ancillary services at negotiated rates under a market-based rate tariff and be in compliance with all requirements and regulations imposed by FERC in connection with such authorization and all waivers of regulation and blanket authorizations granted by FERC in connection with such authorization and (iv) be exempt from or not subject to, the Power Plant & Industrial Fuel Use Act set forth in 42 USC § 8301, et. seq.

 

7.33                        Merger. On or prior to the Term Conversion Date, the Borrower shall cause the Merger to occur on terms and conditions satisfactory to the Requisite Financing Parties. Prior to effecting the Merger, the Borrower shall deliver to the Administrative Agent a plan of merger setting out each of the actions necessary to accomplish the Merger and attaching all documents required to be executed, delivered or filed to effect the Merger, including all such documents under the Delaware Limited Liability Company Act. The Merger shall not be effected without the prior written consent of the Administrative Agent (in consultation with White & Case LLP), such approval not to be unreasonably delayed. Promptly upon effecting the Merger, the Borrower shall deliver to the Administrative Agent evidence thereof, including duly executed, delivered and filed copies of each of the documents referred to in the immediately preceding sentence.

 

7.34                        Equipment. On the Business Day immediately following the Closing Date, the Borrower shall contribute, transfer, convey and deliver to the Procurement Sub, and the Procurement Sub shall accept from the Borrower, all of the Borrower’s right, title and interest in any Equipment (as defined in the Equipment Purchase Agreement), including the Generating Units, in which the Borrower has title as of the Closing Date, free and clear of all Liens, other than (i) Permitted Priority Liens and (ii) other Permitted Liens to the extent junior to the Liens granted to the Collateral Agent under the Security Documents.

 

7.35                        Further Assurances. Each Borrower Party shall make commercially reasonable efforts to promptly and duly execute and deliver to the Administrative Agent such documents and assurances to take such further action as the Administrative Agent may from time-to-time reasonably request in order to carry out more effectively the intent and purpose of the Financing Documents and to establish, protect and perfect the rights and remedies created or intended to be created in favor of the Secured Parties pursuant to the Financing Documents.

 

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ARTICLE VIII

 

EVENTS OF DEFAULT

 

The occurrence of any of the following events or circumstances shall constitute an “Event of Default” hereunder:

 

8.1                               Failure to Make Payments. (a) The Borrower shall fail to pay, in accordance with the terms of this Credit Agreement, any principal on any Loan on the date that such sum is due; (b) the Borrower shall fail to pay, in accordance with the terms of this Credit Agreement, any interest or fees on any Loan or Specified Letter of Credit within three Business Days after the date that such sum is due; or (c) the Borrower shall fail to pay, in accordance with the terms of this Credit Agreement, any cost, charge or other amount payable under any Financing Document (other than principal of, or interest or fees on, the Loans or any Specified Letter of Credit) within ten Business Days after the due date thereof, including amounts in respect of any required Liquidation Costs.

 

8.2                               Certain Other Fundamental Breaches. (a) The Borrower shall fail (or shall fail to cause any Borrower Party) to perform, comply with or observe any covenant or agreement set forth in Sections 3.28(a), 3.28(b), 7.1, 7.5, 7.6, 7.7, 7.9, 7.11, 7.14(d), 7.14(e), 7.14(f) or 7.14(g), 7.17, 7.19, 7.20, 7.21, 7.23, 7.27, 7.30, 7.33 and 7.34; (b) Borrower shall fail (or shall fail to cause any Borrower Party) to perform, comply with or observe any covenant or agreement set forth in Article VI; or (c) any Borrower Party shall fail (or Borrower shall fail to cause any Borrower Party) to perform, comply with or observe any covenant or agreement set forth in any other Financing Document within the cure period therein specified (to the extent such cure period is therein specified).

 

8.3                               Breach of Covenant. The Borrower shall fail to perform or observe (including by failing to cause any Borrower Party to fail to perform or observe) any covenant or agreement to be performed or observed by it hereunder or under any other Financing Document and not otherwise specifically provided for in Section 8.1 or 8.2 and such failure shall continue unremedied for a period of thirty days after any Borrower Party has knowledge of the circumstances giving rise to such failure; provided that, if (a) such failure cannot be cured within such thirty-day period, (b) such failure is susceptible to cure within an additional sixty days, (c) the Borrower and any other relevant Borrower Party are proceeding with diligence and in good faith to cure such failure, (d) the existence of such failure does not impair the Liens on the Collateral and cannot reasonably be expected within the next succeeding sixty days to impair the Liens on the Collateral, (e) the existence of such failure has not had and cannot be reasonably expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party within the next sixty days and (f) prior to the expiration of the initial thirty-day cure period specified above, the Administrative Agent shall have received an Officer’s Certificate certifying to the matters set forth in clauses (a), (b), (c), (d) and (e) above and stating what actions the Borrower and any other relevant Borrower Party are taking to cure such failure, then no Event of Default shall occur under this Section 8.3 until the earlier of (i) the date that the Borrower or any other relevant Borrower Party are no longer

 

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diligently and in good faith attempting to cure such failure and (ii) the sixtieth day following the last day of the initial thirty-day cure period specified above.

 

8.4                               Breach of Representation or Warranty. Any representation or warranty made by the Borrower herein or in any other Financing Document or in any certificate delivered by or on behalf of the Borrower in accordance with any Financing Document to the Administrative Agent or any Secured Party shall contain in any material respect an untrue or misleading statement of a material fact as of the date such representation or warranty is made (or, if expressly made as of an earlier date, as of such earlier date); provided, that if (a) the circumstances that rendered such representation, warranty or certification untrue or misleading are reasonably susceptible of being removed, reversed or remedied within sixty days, (b) the Borrower and any other relevant Borrower Party are proceeding with diligence and in good faith to remove, reverse or remedy such circumstances, (c) the existence of such circumstances does not impair the Liens on the Collateral and cannot reasonably be expected within the next succeeding sixty days to impair the Liens on the Collateral, (d) the existence of such circumstances has not had and cannot be reasonably expected to have either a Material Adverse Effect or a material adverse effect on the ability of any Material Project Participant to timely perform any of its material obligations under any of the Material Project Documents to which it is a party within the next sixty days and (e) the Administrative Agent shall have received an Officer’s Certificate certifying to the matters set forth in clauses (a), (b), (c) and (d) above and stating what actions the Borrower and any other relevant Borrower Party are taking to remove, reverse or remedy such circumstances, then no Event of Default shall occur under this Section 8.4 until the earlier of (i) the date that the Borrower or any other relevant Borrower Party are no longer diligently and in good faith attempting to remove, reverse or remedy such circumstances and (ii) the ninetieth day following the date that any Borrower Party has knowledge of such circumstances.

 

8.5                               Breach of Financing Documents by Borrower Affiliates. (a) The Pledgor, the Procurement Sub, the Project Owner or any other Affiliate of the Borrower that is a party to a Financing Document (if any) shall fail to perform or observe any covenant or agreement to be performed or observed by it thereunder; (b) any representation or warranty made by the Pledgor, the Procurement Sub, the Project Owner or any other Affiliate of the Borrower that is a party to a Financing Document (if any) in any Financing Document or in any certificate delivered by or on behalf of such Person in accordance with any Financing Document to the Administrative Agent or any Secured Party shall contain in any material respect an untrue or misleading statement of a material fact as of the date such representation or warranty is made (or, if expressly made as of an earlier date, as of such earlier date); or (c) any other “default” or “event of default” (or event of substantively the same import) shall occur under any Financing Document and the Pledgor, the Procurement Sub, the Project Owner or any other Affiliate of the Borrower that is a party to such Financing Document is the defaulting party; and, in each such case, all applicable cure periods under such Financing Document have expired.

 

8.6                               Loss of Financing Documents. Any of the Financing Documents shall fail (a) to be in full force and effect, (b) to be enforceable or (c) to provide the Lenders, the Administrative Agent, the Collateral Agent, the Account Bank or any other Financing Party or their respective trustees, agents or other representatives with the material rights, titles, interest, remedies, powers or privileges intended to be created thereby (if any).

 

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8.7                               Actual or Prospective Failure of Security.

 

(a)                                 The Collateral Agent shall fail to have a first-priority perfected Lien in any portion of the Collateral (on behalf of the Financing Parties as Secured Parties), subject only to (i) Permitted Priority Liens and (ii) other Permitted Liens to the extent junior to the Liens granted for the benefit of the Collateral (on behalf of the Financing Parties as Secured Parties) under the Security Documents.

 

(b)                                 The validity of any Security Document or the applicability thereof to the Loans, any Notes, any Specified Letter of Credit 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.

 

8.8                               Breach or Loss of Material Project Documents.

 

(a)                                 Any MPD Termination Event shall have occurred and be continuing under any Material Project Document.

 

(b)                                 Any Material Project Participant that is a party to a Revenue Contract or, prior to the Term Conversion Date, the Equipment Purchase Agreement or the Equipment Services Agreement shall breach or be in default under any material term, condition, provision or covenant contained in such Revenue Contract, Equipment Purchase Agreement or Equipment Services Agreement (other than to the extent constituting a Bankruptcy Event) and such breach or default shall remain unremedied for the relevant cure period specified therein plus thirty days.

 

(c)                                  Any Material Project Participant (other than in respect of a Revenue Contract or, prior to the Term Conversion Date, the Equipment Purchase Agreement or the Equipment Services Agreement) shall breach or be in default under any material term, condition, provision or covenant contained in any Material Project Document (other than to the extent constituting a Bankruptcy Event) and such breach or default shall remain unremedied for the relevant cure period specified in such Material Project Document; unless, within ninety days after the last day of such cure period (x) the relevant Borrower Party terminates such Material Project Document in accordance with its terms and (y) the relevant Borrower Party has entered into a replacement Material Project Document with a new counterparty in accordance with Section 8.8(e).

 

(d)                                 Any Revenue Contract or, prior to the Term Conversion Date, the Equipment Purchase Agreement or the Equipment Services Agreement shall cease for any reason to be in full force and effect.

 

(e)                                  Any Material Project Document (other than a Revenue Contract or, prior to the Term Conversion Date, the Equipment Purchase Agreement or the Equipment Services Agreement) shall cease for any reason to be in full force and effect unless terminated in accordance with its terms and not as a result of a default of the relevant Borrower Party thereunder; unless such other Material Project Document has been replaced by a replacement Material Project Document on substantively the same terms, subject to substantively the same conditions, and with a counterparty that is reasonably acceptable to the Administrative Agent within ninety days after the earliest of (x) the last day of any cure period afforded to the relevant

 

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Material Project Participant if terminated as a result of the breach of or default affecting such Material Project Participant (including a Bankruptcy Event), (y) the occurrence of such termination and (z) the failure to be in full force and effect.

 

8.9                               Voluntary Bankruptcy Events.

 

(a)                                 The Borrower, the Procurement Sub, the Project Owner, any Affiliated Project Party or any Material Project Participant that is a party to a Revenue Contract, or, prior to the Term Conversion Date, the Equipment Purchase Agreement or the Equipment Services Agreement shall suffer a Voluntary Bankruptcy Event.

 

(b)                                 Any Material Project Participant that is not an Affiliated Project Party, a party to a Revenue Contract, or, prior to the Term Conversion Date, the Equipment Purchase Agreement or the Equipment Services Agreement shall suffer a Voluntary Bankruptcy Event; unless (i) such Material Project Participant has been replaced as the counterparty under the relevant Material Project Document within ninety days of such Voluntary Bankruptcy Event by another Person reasonably acceptable to the Administrative Agent, (ii) the Material Project Participant has assumed such Material Project Document in accordance with the Bankruptcy Code and the Borrower has confirmed to the reasonable satisfaction of the Administrative Agent that such Material Project Participant is performing its post-petition obligations under, and has not rejected, such Material Project Document or (iii) both (A) such Material Project Document is rejected in bankruptcy or the Borrower terminates such Material Project Document in accordance with its terms and (B) the Borrower enters into a replacement Material Project Document with a new counterparty in accordance with Section 8.8(e) within the time period therein specified.

 

8.10                        Involuntary Bankruptcy Events. The Borrower, the Procurement Sub, the Project Owner or any Material Project Participant shall suffer an Involuntary Bankruptcy Event; provided, that it shall not be an Event of Default under this Section 8.10 if:

 

(a)                                 within sixty days after the occurrence of the relevant Involuntary Bankruptcy Event, such Involuntary Bankruptcy Event shall have been cured by: (i) the lifting by the relevant Governmental Authority of the relevant suspension of payments, moratorium or similar arrangement; or (ii) the dismissal by the relevant court of the relevant petition commencing an involuntary case under applicable Debtor Relief Law or the relevant complaint or other action commencing any similar proceeding under any other applicable federal, state or other Law;

 

(b)                                 within ninety days after the occurrence of the relevant Involuntary Bankruptcy Event, with respect solely to an Involuntary Bankruptcy Event suffered by a Material Project Participant that is not an Affiliated Project Party, a party to a Revenue Contract, or, prior to the Term Conversion Date, the Equipment Purchase Agreement or the Equipment Services Agreement, such Material Project Participant has been replaced as the counterparty under the relevant Material Project Document by another Person reasonably acceptable to the Administrative Agent; or

 

(c)                                  within ninety days after the occurrence of the relevant Involuntary Bankruptcy Event, with respect solely to an Involuntary Bankruptcy Event suffered by a

 

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Material Project Participant that is not an Affiliated Project Party, a party to a Revenue Contract, or, prior to the Term Conversion Date, the Equipment Purchase Agreement or the Equipment Services Agreement either (i) the Material Project Participant has affirmed such Material Project Document in accordance with the Bankruptcy Code and the Borrower has confirmed to the reasonable satisfaction of the Administrative Agent that such Material Project Participant is performing its obligations under such Material Project Document or (ii) both (A) such Material Project Document is rejected in bankruptcy or the relevant Borrower Party terminates such Material Project Document in accordance with its terms and (B) the relevant Borrower Party enters into a replacement Material Project Document with a new counterparty in accordance with Section 8.8(e).

 

8.11                        Judgments. A final judgment or final judgments that is or are not covered by available insurance, as acknowledged in writing by the provider of such insurance or as certified to the Administrative Agent by the Insurance Consultant, or that is or are not otherwise covered by an indemnity in favor of the relevant Borrower Party, shall be entered against any Borrower Party in the aggregate amount of $7,000,000 or more and remains or remain unstayed or unsatisfied, or no bond is posted in respect of such judgment or judgments, for more than 45 consecutive days after entry of the relevant judgment or judgments..

 

8.12                        Loss of Material Permits. Any Material Permit shall be modified in a materially adverse manner, reversed, rescinded, revoked, terminated, withdrawn, suspended or cancelled or the Borrower shall fail (or fail to cause the relevant other Borrower Party or Material Project Participant) to obtain or renew any Material Permit when required by applicable Law, unless, in each such case, such Material Permit is reinstated, renewed or obtained (as applicable) within fifteen days after the expiration of any grace period in such Material Permit or under applicable Law in respect of such modification, reversal, rescission, revocation, termination, withdrawal, suspension, cancellation, lapse, or non-renewal or failure to obtain when required.

 

8.13                        Loss of Collateral. Any material portion of any of the Borrower Parties’ respective Property is Taken without fair value being paid therefor such as to allow replacement of such Property and/or prepayment in full of all Secured Obligations (other than indemnities) in each case, unless such Taking allows the relevant Borrower Party, in the Administrative Agent’s reasonable judgment, to continue satisfying its obligations hereunder and under the other Transaction Documents notwithstanding the same.

 

8.14                        Abandonment of Project. Any Borrower Party, any EPC Contractor or the O&M Operator shall have abandoned the construction or operation of the Project for fifteen consecutive days.

 

8.15                        Environmental Claim.

 

(a)                                 Any Environmental Claim shall have been asserted against any Borrower Party or any Project Participant; unless, any of the following apply (i) such Environmental Claim is adjudicated or otherwise resolved and the amount payable by the Borrower Parties thereunder is equal to or less than $7,000,000, (ii) the Independent Engineer confirms in writing at such times and from time-to-time as requested by the

 

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Administrative Agent that, if adversely determined, such Environmental Claim could not reasonably be expected to exceed $7,000,000 or otherwise have a Material Adverse Effect or (iii) such Environmental Claim has remained unadjudicated or unresolved for less than 365 days and the relevant Borrower Party or Project Participant confirms in writing at such times and from time-to-time as requested by the Administrative Agent that, in its reasonable determination, based on consultation with reputable counsel, such Environmental Claim has no reasonable likelihood of success.

 

(b)                                 Any Release, emission, discharge or disposal of any Hazardous Materials shall have occurred in violation of any Environmental Law; unless, such event could not reasonably be expected to have a Material Adverse Effect.

 

8.16                        Change in Control. A Change in Control shall have occurred.

 

8.17                        Term Conversion. The Term Conversion Date shall not have occurred by the Date Certain.

 

8.18                        Cross-Default. Any Secured Party that is not a Financing Party issues a Default Notice as defined in and in accordance with the Collateral Agreement in respect of an Event of Default (as defined therein). The occurrence or existence of either (a) a default, event of default or other similar condition or event (however described) in respect of any Borrower Party under one or more agreements or instruments relating to Permitted Indebtedness (other than the Secured Obligations) of any of them (individually or collectively) where the aggregate principal amount of such agreements or instruments, either alone or together with the amount, if any, referred to in clause (b) below, is not less than $5,000,000 which has resulted in such Permitted Indebtedness becoming due and payable under such agreements or instruments before it would otherwise have been due and payable or (b) a default by any Borrower Party (individually or collectively) in making one or more payments under such agreements or instruments on the due date for payment (after giving effect to any applicable notice requirement or grace period) in an aggregate amount, either alone or together with the amount, if any, referred to in clause (a) above, of not less than $5,000,000.

 

8.19                        ERISA. Both (a) any of the following shall occur: (i) one or more ERISA Events shall have occurred; (ii) there is or arises an Unfunded Pension Liability (taking into account only Pension Plans with positive Unfunded Pension Liability); or (iii) there is or arises any potential withdrawal liability under Section 4201 of ERISA, if any member of the ERISA Group were to withdraw completely from any and all Multiemployer Plans; and (b) there shall result from any such event or events described in clause (a) of this Section 8.19 the imposition of any Liens and such Liens, individually or in the aggregate, has had, or would reasonably be expected to have, a Material Adverse Effect.

 

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ARTICLE IX

 

REMEDIES

 

9.1                               Acceleration.

 

(a)                                 If any Event of Default specified in Section 8.9 or Section 8.10 shall occur with respect to the Borrower, any other Borrower Party or the Pledgor, then automatically all Commitments shall immediately terminate and all Loans (with accrued and unpaid interest thereon) and all other amounts owing to the Secured Parties under the Financing Documents shall immediately become due and payable.

 

(b)                                 If any Event of Default (other than an Event of Default referred to in Section 9.1(a)) shall occur, then the Administrative Agent (acting at the direction of the Requisite Financing Parties) may by notice to the Borrower (i) declare the Commitments to be terminated, whereupon all Commitments shall immediately terminate and/or (ii) declare the Loans, all accrued and unpaid interest thereon and all other amounts owing to the Secured Parties under the Financing Documents to be due and payable, whereupon the same shall become immediately due and payable.

 

(c)                                  Except as expressly provided above in this Section 9.1, presentment, demand, protest and all other notices and other formalities of any kind are hereby expressly waived by the Borrower.

 

9.2                               Letters of Credit.

 

(a)                                 With respect to all Specified Letters of Credit for which presentment for honor shall not have occurred at the time of an acceleration of the Loans pursuant to Section 9.1, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount (without duplicating any amounts on deposit in accordance with Section 3.28) equal to the aggregate then undrawn and unexpired amount of such Specified Letters of Credit.

 

(b)                                 Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Specified Letters of Credit, and the unused portion thereof after all such Specified Letters of Credit shall have expired or been fully drawn upon, all LC Loans shall have been paid in full and all other obligations of the Borrower hereunder and the Borrower Parties under the other Financing Documents shall have been paid in full, the balance, if any in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto).

 

9.3                               Other Remedies. Upon the occurrence and during the continuation of an Event of Default:

 

(a)                                 The Administrative Agent may (and if instructed by the Requisite Financing Parties shall) direct the Collateral Agent, in accordance with the Collateral Agreement, to exercise any or all rights and remedies at law or in equity (in any combination or order that the Administrative Agent may elect to direct), including,

 

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without prejudice to the Collateral Agent’s other rights and remedies, any and all rights and remedies available under any of the Collateral Documents.

 

(b)                                 The Administrative Agent may (and if instructed by the Requisite Financing Parties shall) direct the EPC Contractors or any subcontractor to submit invoices to the account of the Borrower or any Borrower Party to the Administrative Agent, and the Lenders may, in their respective sole discretion, elect to make payments directly to the EPC Contractors, such subcontractor or any other Person.

 

(c)                                  Any funds of any Lender or the Administrative Agent (including the proceeds of any Loans) used for any purpose referred to in this Section 9.3, whether or not in excess of the relevant Commitments (without obligating any Lender to fund any Loans in excess of such Commitments) shall (i) be governed hereby, (ii) constitute part of the Secured Obligations secured by the Security Documents, (iii) bear interest at the Default Rate and (iv) be payable upon demand by such Lender or the Administrative Agent, as applicable.

 

ARTICLE X

 

THE AGENTS; VOTING

 

10.1                        Appointment and Authorization.

 

(a)                                 Each Financing Party hereby irrevocably (subject to Section 10.9) appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Credit Agreement and each other Financing Document to which it is a party and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Credit Agreement or any such other Financing Document, together with such powers as are reasonably incidental thereto.

 

(b)                                 Each Financing Party hereby irrevocably consents to (i) the appointment by the Administrative Agent of Credit Agricole Corporate and Investment Bank as Collateral Agent under the Collateral Agreement, and (ii) the appointment by the Collateral Agent of Union Bank, N.A. as Account Bank under the Accounts Agreement (each such person, together with the Administrative Agent, an “Agent”).

 

(c)                                  Each of the Financing Parties authorizes the Administrative Agent to execute, deliver and perform (and authorizes the Administrative Agent to direct each other Agent to execute, deliver and perform) each of the Financing Documents to which the Administrative Agent (or such other Agent) is or is intended to be a party and each Financing Party agrees to be bound by all of the agreements of the Administrative Agent (and each such other Agent) contained in the Financing Documents. Each of the Financing Parties agrees that upon execution of the Collateral Agreement such Financing Party will be bound by the provisions thereof in accordance therewith as a Secured Creditor (as defined therein) to the same extent as if such Financing Party were a party thereto.

 

(d)                                 Notwithstanding any provision to the contrary contained elsewhere in this Credit Agreement or in any other Financing Document, none of the Agents shall have any duties

 

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or responsibilities except those expressly set forth herein and in the other Financing Documents, nor shall any of the Agents have or be deemed to have any fiduciary relationship with any Financing Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or any other Financing Document or otherwise exist against any of the Agents. Without limiting the generality of the foregoing sentence, the use of the terms “Administrative Agent”, “Collateral Agent” or “Account Bank” in this Credit Agreement with reference to the Administrative Agent, or the Collateral Agent or the Account Bank is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead, such terms are used merely as a matter of market custom, and are intended to create or reflect only a relationship between independent contracting parties.

 

10.2                        Delegation of Duties. The Administrative Agent may execute any of its duties under this Credit Agreement or any other Financing Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible to the Financing Parties or the Borrower for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.

 

10.3                        Liability of the Administrative Agent. The Administrative Agent shall not (a) be liable for any action taken or omitted to be taken by it under or in connection with this Credit Agreement or any other Transaction Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable decision) or (b) be responsible in any manner to any of the Financing Parties or any other Person for any recital, statement, representation or warranty made by the Borrower or any Affiliate of the Borrower, or any officer thereof, contained in this Credit Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Credit Agreement or any other Transaction Document, or for the value of or title to any Collateral, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Credit Agreement or any other Transaction Document, or for any failure of the Borrower or any other party to any Transaction Document to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Secured Party to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Credit Agreement or any other Transaction Document, or to inspect the Properties, books or records of the Borrower or any Affiliate of the Borrower.

 

10.4                        Reliance by the Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrower), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Credit Agreement or any other Transaction Document (a) if such action would, in the opinion of the Administrative Agent (upon consultation with legal counsel), be contrary to applicable Law or the terms of any Financing Document, (b) if such action is not

 

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specifically provided for in the Financing Documents to which the Administrative Agent is a party, and it shall not have received advice as provided in the foregoing sentence approving or concurring in any such action or the approval of the Requisite Financing Parties, as it deems appropriate or (c) unless, if it so requests, the Administrative Agent shall first be indemnified to its satisfaction by the Financing Parties against any and all liabilities and expenses which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Credit Agreement or any other Transaction Document in accordance with a request or consent of the Requisite Financing Parties and such request or consent and any action taken or failure to act pursuant thereto shall be binding upon all of the Financing Parties.

 

10.5                        Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Financing Parties, unless the Administrative Agent shall have received written notice from a Financing Party or the Borrower referring to this Credit Agreement, describing such Default or Event of Default and stating that such notice is a “Notice of Default.” If the Administrative Agent receives any such notice of the occurrence of a Default or an Event of Default from the Borrower, it shall give notice thereof to the Financing Parties. The Administrative Agent shall take such action with respect to such Default or Event of Default as may be requested by the Requisite Financing Parties in accordance with this Article X; provided, that unless and until the Administrative Agent has received any such request, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Financing Parties.

 

10.6                        Credit Decision. Each Financing Party acknowledges that none of the Agents or the Agent-Related Persons, any Joint Bookrunner or any Mandated Lead Arranger (collectively, the “Applicable Group”) has made any representation or warranty to it, and that no act by any member of the Applicable Agent hereafter taken, including any review of the Project or of the affairs of any Borrower Party, shall be deemed to constitute any representation or warranty by any member of the Applicable Group to any Financing Party. Each Financing Party represents to each member of the Applicable Group that it has, independently and without reliance upon any member of the Applicable Group and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, Property, financial and other condition and creditworthiness of each Borrower Party, the Pledgor, the Project, the value of and title to any Collateral, and all applicable bank regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Credit Agreement and to extend credit to the Borrower hereunder. Each Financing Party also represents that it will, independently and without reliance upon any member of the Applicable Group and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, Property, financial or other condition and creditworthiness of each Borrower Party, the Pledgor, the Project, the value of and title to any Collateral, and all applicable bank regulatory Laws relating to the transaction contemplated hereby. Except for

 

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notices, reports and other documents expressly required pursuant to any Financing Document to be furnished to the Financing Parties by the Agents, no member of the Applicable Group shall have any duty or responsibility to provide any Financing Party with any credit or other information concerning the business, prospects, operations, Property, financial and other condition or creditworthiness of the Project, the Borrower Parties or the Pledgor, the value of and title to any Collateral, and all applicable bank regulatory Laws relating to the transaction s contemplated hereby which may come into the possession of any Agent or any member of the Applicable Group.

 

10.7                        Indemnification of Administrative Agent.

 

(a)                                 Whether or not the transactions contemplated hereby are consummated, the Financing Parties shall indemnify upon demand the Administrative Agent (to the extent not reimbursed by or on behalf of the Borrower and without limiting the obligation of the Borrower to do so), pro rata in accordance with the aggregate principal amount of the Loans held or committed by such Financing Party, from and against any and all Indemnified Liabilities; provided, that (i) such Indemnified Liabilities were incurred by or asserted against the Administrative Agent (or the relevant Indemnified Person) in its capacity as such and (ii) no Financing Party shall be liable for the payment to the Administrative Agent of any portion of such Indemnified Liabilities resulting solely from the gross negligence or willful misconduct of the relevant Indemnified Person (as determined by a court of competent jurisdiction in a final and non-appealable decision).

 

(b)                                 Without limiting the foregoing, each Financing Party shall reimburse the Administrative Agent upon demand for its ratable share as provided above of any costs and out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Credit Agreement, any other Transaction Document or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower; provided, that such costs and out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent were incurred by it in its capacity as such.

 

(c)                                  The undertakings of the Financing Parties in this Section 10.7 shall survive the payment of all Secured Obligations hereunder and the resignation or replacement of the Administrative Agent.

 

10.8                        Individual Capacity. The Administrative Agent and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrower or its Affiliates as though it were not the Administrative Agent hereunder and without notice to or consent of the Financing Parties. The Financing Parties acknowledge that, pursuant to such activities, the Administrative Agent or any of its Affiliates may receive information regarding the Borrower or its Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or such Affiliates) and acknowledge that the Administrative Agent shall be under no obligation to

 

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provide such information to them. The Administrative Agent, in its capacity as Financing Party, shall have the same rights and powers under this Credit Agreement as any other Financing Party and may exercise the same as though it were not an agent, and the terms “Financing Party” and “Financing Parties” shall include the Administrative Agent in its individual capacity.

 

10.9                        Successor Agent.

 

(a)                                 Subject to the appointment and acceptance of a successor as provided below, (i) the Administrative Agent may resign at any time by giving thirty days prior written notice thereof to the other Agents, the Financing Parties and the Borrower and (ii) the Administrative Agent may be removed at any time with or without cause by the Requisite Financing Parties (excluding, for purposes of the determination thereof, the Commitments and Loans held by the Administrative Agent). Upon any such resignation or removal, the Requisite Financing Parties (in consultation with the Borrower unless an Event of Default has occurred and is continuing) shall have the right to appoint a successor to the Administrative Agent. If no successor Administrative Agent shall have been appointed by the Requisite Financing Parties and shall have accepted such appointment within thirty days after the giving of notice by the Administrative Agent of its resignation or the giving of notice by the Requisite Financing Parties of their removal of the Administrative Agent, then the resigning or removed Administrative Agent may appoint a successor satisfactory to the Requisite Financing Parties. Upon the acceptance of its appointment as a successor Administrative Agent hereunder, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of such resigning or removed Administrative Agent, and such resigning or removed Administrative Agent shall be discharged from its duties and obligations hereunder.

 

(b)                                 The Administrative Agent shall, on the instructions of the Requisite Financing Parties, vote to cause the removal and replacement of any other Agent in accordance with the relevant Financing Documents.

 

(c)                                  After the Administrative Agent’s resignation or removal, the provisions of this Article X and of Sections 11.1 and 11.2 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent.

 

10.10                 Registry. The Borrower hereby designates the Administrative Agent, and the Administrative Agent agrees, to serve as the Borrower’s agent, solely for purposes of this Section 10.10, to maintain a register at one of its offices in New York, New York (the “Register”) on which it will record the Commitments from time-to-time of each of the Financing Parties, the Loans made by each of the Financing Parties and each repayment in respect of the principal amount of the Loans of each Financing Party. Failure to make any such recordation, or any error in such recordation shall not affect the Borrower’s obligations in respect of such Loans. With respect to any Financing Party, the transfer of the Commitments of such Financing Party and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments shall not be effective until such transfer is recorded on the Register with respect to ownership of such Commitments and Loans, and prior to such recordation all amounts owing to the transferor with respect to such Commitments and Loans shall remain owing to the transferor. The registration of an assignment or transfer of all or part of any Commitments and Loans shall be recorded by the Administrative Agent on the Register only upon the acceptance by the

 

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Administrative Agent of a properly executed and delivered Assignment and Acceptance pursuant to Section 11.11.

 

10.11                 Voting.

 

(a)                                 Whenever the Administrative Agent, pursuant to any provision of this Credit Agreement or any other Financing Document, is requested or required to or may act at the direction or with the approval or consent of the Requisite Financing Parties, an affirmative vote of the Requisite Financing Parties shall be required to give such direction, approval or consent, which vote shall be taken in accordance herewith. The Administrative Agent may at any time solicit direction from the Requisite Financing Parties as to any action that it may be requested or required to take, or which it may propose to take, in the performance of its obligations under this Credit Agreement and the other Financing Documents, and shall be fully justified in failing or refusing to act whether under this Credit Agreement or any other Financing Document until it shall have received such direction.

 

(b)                                 Notwithstanding the foregoing, no waiver, amendment, supplement or modification to this Credit Agreement or any other Financing Document shall (i) increase the Commitment of any Financing Party (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in any Commitment, shall not constitute an increase of any Commitment of any Financing Party), without the prior written consent of such Financing Party, (ii) postpone or delay the scheduled Maturity Date of any Loan, without the prior written consent of each affected Financing Party, or postpone or delay any date fixed by this Credit Agreement or any other Financing Document for any payment of principal, interest or Fees due to any Financing Party hereunder or under any other Financing Document, without the prior written consent of such Financing Party, (iii) reduce the principal of, or the rate of interest specified in any Financing Document on, any Loan of any Financing Party, without the prior written consent of such Financing Party, (iv) direct the Administrative Agent to direct or permit any other Agent to release all or substantially all of the Collateral except as shall be otherwise provided in any Security Document or other Financing Document or consent to the assignment or transfer by the Borrower of any of its respective obligations under this Credit Agreement or any other Financing Document, without the prior written consent of each Financing Party, (v) amend, modify or waive any provision of this Section 10.11 or Sections 11.1 or 11.2, without the prior written consent of each Financing Party, (vi) reduce the percentage specified in or otherwise amend the definition of Requisite Financing Parties, without the prior written consent of each Financing Party (it being understood that, with the consent of the Requisite Financing Parties (determined before giving effect to the additional extensions of credit), extensions of credit pursuant to this Credit Agreement in addition to those set forth in or contemplated by this Credit Agreement on the Closing Date may be included for the purposes of the definition of the term “Requisite Financing Parties” on substantially the same basis as the extensions of Loans and Commitments are included on the Closing Date) or (vii) amend, modify or waive any provision of Section 3.22 or direct the Administrative Agent to vote in favor of the amendment, modification or waiver of Sections 7.1, 7.7 or 7.8 of the Collateral Agreement or the definitions of Secured Debt or Secured Obligations set forth therein, without the prior written consent of each Financing Party.

 

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(c)                                  If any Affiliate of the Borrower Parties is a Financing Party, then the amount of Loans and Commitments held by such Affiliate of the Borrower Parties shall be disregarded for purposes of calculating the aggregate Loans and Commitments underlying the definitions of Majority Lenders, Requisite Financing Parties, Requisite Revolver Lenders, Requisite TALC Participating Banks, Requisite Tranche A Lenders, Requisite Tranche B Lenders, Requisite Term Lenders and for all other voting provisions hereunder.

 

(d)                                 The Administrative Agent shall act under the Collateral Agreement (including, without limitation, in connection with any actions pursuant to Sections 5.4 and 6.1 of the Collateral Agreement) in accordance with the provisions of this Credit Agreement and such actions by the Administrative Agent shall be subject to the rights of the Financing Parties set forth in Section 10.11(b) hereof.

 

10.12                 Acknowledgement of Collateral Agreement. Notwithstanding anything herein to the contrary, the Liens granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Credit Agreement and the exercise of any right or remedy by the Collateral Agent for the benefit of the Secured Parties hereunder are subject to the provisions of the Collateral Agreement. In the event of any conflict between the terms of the Collateral Agreement and this Credit Agreement, the terms of the Collateral Agreement shall govern and control.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1                        Costs, Expenses and Attorneys’ Fees. On the Closing Date, the Borrower shall pay to the Administrative Agent, the other Agents, the Joint Bookrunners, the Lead Arrangers, the Lenders and the Issuing Bank all reasonable costs and expenses of each such party and their respective Affiliates in connection with the preparation, issuance, delivery, filing, recording and administration of this Credit Agreement, the other Transaction Documents, and any other documents which may be delivered in connection herewith or therewith, including the reasonable and documented fees, expenses and disbursements of White & Case LLP, Sheppard Mullin Richter and Hampton LLP, and each Independent Consultant. In addition, from and after the Closing Date, the Borrower shall pay to the Administrative Agent all of its reasonable out-of-pocket costs and expenses in connection with the costs of administering this Credit Agreement, the Loans or Commitments or any Specified Letter of Credit, and any other documents contemplated hereby (including any amendments, waivers or consents thereof or thereto, whether or not granted), including, without duplication, (a) the reasonable and documented fees, expenses and disbursements of White & Case LLP, one other counsel in respect of each specialty or jurisdiction not within the competency of White & Case LLP, (b) the reasonable and documented fees, expenses and disbursements of the Independent Consultants incurred in connection with such administration of this Credit Agreement or the Loans or Commitments or any Specified Letter of Credit and any other documents contemplated hereby and (c) the reasonable out-of-pocket travel, telecommunication, filing and recording, due diligence, computer, duplication, messenger, appraisal, Intralinks or similar services, audit costs, and other expenses incurred by the Administrative Agent in connection with the administration of this Credit Agreement; provided, that the Borrower shall be responsible only for the cost of two visits

 

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to the Site per calendar year by the Administrative Agent prior to the Term Conversion Date and one visit to the Site per calendar year by the Administrative Agent after the Term Conversion Date (in each case, unless an Event of Default has occurred and is continuing). The Borrower shall reimburse the Administrative Agent, the Lenders and the Issuing Banks for all costs and expenses, including attorneys’ fees, expended or incurred by the Administrative Agent, any Lender and/or the Issuing Banks in enforcing this Credit Agreement or the other Financing Documents in connection with any Event of Default or Default (including any Bankruptcy Event suffered by the Borrower), or in connection with preservation of their rights hereunder or thereunder or in connection with any refinancing, any restructuring or similar work-out negotiations with the Borrower in respect of this Credit Agreement, in actions for declaratory relief in any way related to this Credit Agreement, in collecting any sum which becomes due to the Administrative Agent, any Lender and/or the Issuing Banks on the Notes or any Specified Letter of Credit or under any Financing Document. All undisputed amounts payable pursuant to this Section 11.1 after the Closing Date shall be payable within thirty days following the date of receipt by the Borrower of written notice thereof (together with reasonable supporting documentation in respect thereof); provided, that if a Default or Event of Default has occurred and is continuing, then such amounts shall be payable within five days following receipt by the Borrower of written notice thereof.

 

11.2                        Indemnity. Whether or not the transactions contemplated hereby are consummated:

 

(a)                                 The Borrower shall, and shall cause each other Borrower Party to, defend, protect, indemnify, save and hold the Administrative Agent and each Secured Party, Joint Bookrunners and Mandated Lead Arranger and each of their respective officers, directors, employees, counsel, agents, attorneys-in-fact and Affiliates (each, an “Indemnified Person”) harmless from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, charges, expenses or disbursements (including Attorney Costs and consultants’ fees and disbursements) of any kind or nature whatsoever which may at any time (including at any time following repayment of the Loans, the termination, resignation or replacement of the Administrative Agent or the replacement of any Financing Party) be imposed on, incurred by or asserted against any such Person in any way relating to or arising out of this Credit Agreement or any other Transaction Document, including the Security Documents and any other document or instrument contemplated by or referred to herein or therein, or the transactions contemplated hereby and thereby, or any action taken or omitted by any such Person under or in connection with any of the foregoing, including with respect to the exercise by any Secured Party of any of its respective rights or remedies under any of the Financing Documents, and any investigation, litigation or proceeding (including any bankruptcy, insolvency, reorganization or other similar proceeding or appellate proceeding) related to this Credit Agreement or any other Transaction Document or the Loans, or the use of the proceeds thereof, whether or not any Indemnified Person is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”); provided, that no Borrower Party shall have an obligation hereunder to any Indemnified Person with respect to Indemnified Liabilities arising from the gross negligence or willful misconduct of such Indemnified Person (as determined by a court of competent jurisdiction in a final and non-appealable decision).

 

(b)                                 Environmental Indemnity.

 

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(i)                                             Without in any way limiting the generality of the other provisions contained in this Section 11.2, the Borrower agrees, and shall cause each other Borrower Party, to defend, protect, indemnify, save and hold harmless each Indemnified Person, whether as beneficiary of any of the Security Documents, as a mortgagee in possession, as successor-in-interest to the Borrower or any other Borrower Party by foreclosure deed or deed in lieu of foreclosure or otherwise, from and against any and all liabilities, obligations, losses, damages (including foreseeable and unforeseeable consequential damages and punitive claims), penalties, claims, actions, judgments, suits, costs, fees, charges, expenses or disbursements (including Attorney Costs and consultants’ fees and disbursements) and expenses (collectively, “Losses”) of any kind or nature whatsoever that may at any time be incurred by, imposed on, asserted or awarded against any such Indemnified Person directly or indirectly based on, or arising out of or resulting from: (A) the actual or alleged presence of Hazardous Materials on, in, under or affecting all or any portion of the Site whether or not the same originates or emanates from the Site or any property adjoining or adjacent to the Site or from properties at which any Hazardous Materials generated, stored or handled by the Borrower were Released or disposed of; (B) any Environmental Claim relating to the Site or the Project; or (C) the exercise of any Secured Party’s rights under any of the provisions of the Security Documents (the “Indemnified Matters”), whether any of the Indemnified Matters arise before or after foreclosure of any of the Liens or other taking of title to all or any portion of the Collateral by any Secured Party, including: (x) the costs of removal of any and all Hazardous Materials from all or any portion of the Site or any Property adjoining or adjacent to the Site; (y) costs required to take reasonable precautions to protect against the Release of Hazardous Materials at or from the Site into the air, any body of water, any other public domain or any surrounding areas; and (z) costs incurred to comply, in connection with all or any portion of the Site or, to the extent actually or potentially affected by Hazardous Materials at or from the Site, any surrounding areas, with all applicable Environmental Laws with respect to Hazardous Materials, except to the extent that any such Indemnified Matter arises from the gross negligence or willful misconduct of such Indemnified Person (as determined by a court of competent jurisdiction in a final and non-appealable decision).

 

(ii)                                          In no event shall any Site visit, observation or testing by any Indemnified Person (or any representative of any such Indemnified Person) be deemed to be a representation or warranty that Hazardous Materials are or are not present in, on, or under the Site, or that there has been or shall be compliance with any Environmental Law. Except to the extent provided in a reliance letter, neither the Borrower nor any other Person is entitled to rely on any Site visit, observation or testing by any Indemnified Person. No Indemnified Person owes any duty of care to protect the Borrower or any other Person against, or to inform the Borrower or any other Person of, any Hazardous Materials or any other adverse condition affecting the Site or the Project, except and only to the extent such Hazardous Materials were actually Released or such adverse condition was actually caused by the negligent actions of such Indemnified Person or its representatives in connection with a Site visit or invasive testing at the Site. No Indemnified Person shall be obligated to disclose to the Borrower or any other Person any report or findings made as a result of, or in connection with, any Site visit, observation or testing by any Indemnified Person.

 

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(c)                                  Survival; Defense. The obligations in this Section 11.2 shall survive repayment in full of the Loans and payment of all other Secured Obligations. At the election of any Indemnified Person, the Borrower’s indemnification obligations under this Section 11.2 shall include the obligation to defend such Indemnified Person using legal counsel satisfactory to such Indemnified Person, at the sole cost and expense of the Borrower. All amounts owing under this Section 11.2 shall be paid within thirty days after written demand therefore.

 

(d)                                 Contribution. To the extent that any undertaking in the preceding paragraphs of this Section 11.2 may be unenforceable because it is violative of any Law or public policy, the Borrower will contribute the maximum portion that it is permitted to pay and satisfy under applicable Law to the payment and satisfaction of such undertaking.

 

(e)                                  Settlement. So long as the Borrower is in compliance with its obligations under this Section 11.2, the Borrower shall not be liable to any Indemnified Person under this Section 11.2 for any settlement made by such Indemnified Person without the Borrower’s consent.

 

11.3                        Notices.

 

(a)                                 All notices, requests and other communications provided for hereunder shall be in writing and shall be faxed, sent or delivered to the physical or e-mail address or facsimile number specified on Appendix G or to such other physical or e-mail address or facsimile number as shall be designated by such party in a written notice to the other parties hereto.

 

(b)                                 All such notices, requests and communications (i) sent by express courier will be effective upon delivery to or refusal to accept delivery by the addressee, (ii) transmitted by facsimile will be effective when sent and facsimile confirmation is received, (iii) on the date on which such notice or other communication has been made generally available on an Approved Electronic Platform, Internet website or similar telecommunication device to the class of Person(s) being notified (regardless of whether any such Person must accomplish, and whether or not any such Person shall have accomplished, any action prior to obtaining access to such items, including registration, disclosure of contact information, compliance with a standard user agreement or undertaking a duty of confidentiality) and such Person has been notified in respect of such posting that a communication has been posted to such Approved Electronic Platform, Internet website or similar telecommunication device if delivered by posting to such Approved Electronic Platform, Internet website or similar telecommunication device requiring that a user have prior access to such Approved Electronic Platform, Internet website or similar telecommunication device and (iv) sent by e-mail will be effective when sent and electronic confirmation of receipt is received, except that (x) all notices and other communications to the Administrative Agent shall not be effective until actually received during normal business hours and (y) any communications transmitted by the Borrower by facsimile or e-mail shall be immediately confirmed by a telephone call to the recipient at the number specified on Appendix G and shall be followed promptly by a hard copy original thereof by express courier.

 

(c)                                  Notwithstanding Sections 11.3(a) and 11.3(b) (unless the Administrative Agent requests that the provisions of Sections 11.3(a) and 11.3(b) be followed) and any other

 

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provision in this Credit Agreement or any other Financing Document providing for the delivery of any Approved Electronic Communication by any other means, the Borrower, the other Borrower Parties and the Pledgor, as the case may be, shall deliver all Approved Electronic Communications to the Administrative Agent by properly transmitting such Approved Electronic Communications in an electronic/soft medium in a format acceptable to the Administrative Agent to lindsay.scully@ca-cib.com or such other electronic mail address (or similar means of electronic delivery) as the Administrative Agent may notify to the Borrower. Nothing in this Section 11.3(c) shall prejudice the right of the Administrative Agent or any Lender to deliver any Approved Electronic Communication to any Secured Party in any manner authorized in this Credit Agreement or to request that the relevant Borrower Parties or the Pledgor effect delivery in such manner.

 

(d)                                 Posting of Approved Electronic Communications.

 

(i)                                     The Borrower and each Lender agree that the Administrative Agent may, but shall not be obligated to, make the Approved Electronic Communications available to the Lenders by posting such Approved Electronic Communications on IntraLinksTM or a substantially similar electronic platform chosen by the Administrative Agent to be its electronic transmission system (the “Approved Electronic Platform”).

 

(ii)                                  Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the date of this Credit Agreement, a dual firewall and a User ID/Password Authorization System) and the Approved Electronic Platform is secured through a single-user-per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each Lender and each Secured Party acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution. In consideration for the convenience and other benefits afforded by such distribution and for the other consideration provided hereunder, the receipt and sufficiency of which is hereby acknowledged, each Lender and each Secured Party hereby approves distribution of the Approved Electronic Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

 

(e)                                  THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. NONE OF THE ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY DISCLAIMS ANY LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR

 

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FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES IN CONNECTION WITH THE APPROVED ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM.

 

(f)                                   Each Lender agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Approved Electronic Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally-applicable document retention procedures and policies.

 

(g)                                  The Borrower acknowledges and agrees, and shall cause each other Borrower Party to acknowledge and agree, that any agreement of the Lenders to receive certain notices by telephone, Approved Electronic Platform, e-mail or facsimile is solely for the convenience and at the request of the Borrower Parties and the Pledgor. The Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the Borrower to give such notice and the Lenders shall not have any liability to the Borrower or other Person on account of any action taken or not taken by any of the Secured Parties in reliance upon such telephonic, e-mail or facsimile notice.

 

(h)                                 Notwithstanding any other provision of this Section 11.3 to the contrary, any communication in respect of the Borrower Parties and their Affiliates which is transmitted through the Approved Electronic Platform shall be subject to any confidentiality agreements entered into between any Borrower Party and any Lender or Agent or Issuing Bank in respect of this Credit Agreement, the other Financing Documents and Transaction Documents and the transactions contemplated.

 

11.4                        Benefit of Agreement. This Credit Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto. The Borrower may not assign or otherwise transfer any of its rights or obligations under this Credit Agreement or any of the other Financing Documents.

 

11.5                        No Waiver; Remedies Cumulative. No failure or delay on the part of any of the Secured Parties or the holder of any Note in exercising any right, power or privilege hereunder or under any other Financing Document and no course of dealing between the Borrower and any Secured Party or the holder of any Note shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Financing Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Secured Party or the holder of any Note to take any other or further action in any circumstances without notice or demand. All remedies, either under this Credit Agreement or any other Financing Document or pursuant to any applicable Law or otherwise afforded to any Secured Party or the holder of any Note shall be cumulative and not alternative or exclusive in nature.

 

11.6                        Third Party Beneficiaries. (a) The agreement of each Lender to make extensions of credit to the Borrower and each Issuing Bank to issue any Specified Letter of

 

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Credit on the terms and conditions set forth in this Credit Agreement and the other Financing Documents is solely for the benefit of the Borrower and the other Borrower Parties, and no other Person (including any other Project Participant, or any contractor, sub-contractor, supplier, worker, carrier, warehouseman, materialman or vendor furnishing supplies, goods or services to or for the benefit of the Borrower, any other Borrower Party or the Project or receiving services from the Project) shall have any rights hereunder against any Secured Party with respect to the Loans, the Specified Letters of Credit, the proceeds thereof or otherwise.

 

(b)                                 Each Indemnified Person is an intended third party beneficiary of Section 11.2 hereof.

 

11.7                        Reinstatement. To the extent that any Secured Party receives any payment by or on behalf of the Borrower, which payment or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to the Borrower or to its estate, trustee, receiver, custodian or any other party under any Debtor Relief Law or otherwise, then to the extent of the amount so required to be repaid, the obligation or part thereof which has been paid, reduced or satisfied by the amount so repaid shall be reinstated by the amount so repaid and shall be included within the Secured Obligations as of the date such initial payment, reduction or satisfaction occurred.

 

11.8                        No Immunity. To the extent that the Borrower may be entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to this Credit Agreement or any other Financing Document, to claim for itself or its revenues, assets or Properties any immunity from suit, the jurisdiction of any court, attachment prior to judgment, attachment in aid of execution of judgment, set-off, execution of a judgment or any other legal process, and to the extent that in any such jurisdiction there may be attributed to such Person such an immunity (whether or not claimed), the Borrower hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity to the fullest extent permitted by the Law of the applicable jurisdiction.

 

11.9                        Counterparts. This Credit Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart to this Credit Agreement by facsimile or electronic transmission in “.pdf” format shall be as effective as delivery of a manually signed original.

 

11.10                 Amendment or Waiver. No provision of this Credit Agreement may be amended, supplemented, modified or waived, except by a written instrument signed by the Administrative Agent (acting in accordance with Section 10.11) and the Borrower. Any waiver and any amendment, supplement or modification made or entered into in accordance with this Section 11.10 shall be binding upon each of the Lenders.

 

11.11                 Assignments, Participations, etc.

 

(a)                                 Subject to first obtaining any prior approvals set forth in Section 11.11(b) and otherwise complying with this Section 11.11, each Financing Party may assign to one or

 

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more Eligible Assignees all or any part of any Loan, Commitment, Specified Letter of Credit, TALC Percentage or TALC Participating Amount and the other rights and obligations of such Lender or Issuing Bank hereunder and under the other Financing Documents; provided, that (A) each such assignment by a Lender of Construction Loans, Construction Notes, and Construction Loan Commitments shall only be assigned contemporaneously with a corresponding portion of Term Loan Commitments; (B) in the case of an assignment of any part of a Loan or Commitment to any Eligible Assignee, such assignment shall not be for an amount less than (x) $1,000,000 in respect of any Eligible Assignee that is a Financing Party prior to giving effect to such assignment or (y) $5,000,000 in respect of any Eligible Assignee that is not a Financing Party prior to giving effect to such assignment, (or a higher integral multiple of 1,000,000 in excess thereof) in each instance; and (C) the Borrower and the Administrative Agent may continue to deal solely and directly with the assigning Lender or Issuing Bank in connection with the interest so assigned until (1) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Eligible Assignee, shall have been given to the Borrower and the Administrative Agent by such assigning Lender or Issuing Bank and the Eligible Assignee, (2) the assigning Lender, Issuing Bank or Eligible Assignee has paid to the Administrative Agent a processing fee in the amount of $3,500 and (3) the assigning Lender or Issuing Bank shall have delivered to the Borrower and the Administrative Agent an Assignment and Acceptance substantially in the form of Exhibit 13 hereto (an “Assignment and Acceptance”) with respect to such assignment from the assigning Lender or Issuing Bank; provided, further, that, if the Eligible Assignee is an Affiliated Lender, then (A) such Affiliated Lender (whether as a direct purchaser of the Loans or as the ultimate purchaser of the Loans through a broker or other intermediary) shall ensure that its identity as an Affiliate of the Borrower is known to the assigning Lender and the Administrative Agent and (B) at the time of such assignment and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing.

 

(b)                                 Prior to making any assignment of Loan, Commitment, Specified Letter of Credit, TALC Percentage or TALC Participating Amount hereunder, the assigning Lender or Issuing Bank (or the Borrower if the Borrower is proceeding in accordance with Section 3.26) shall obtain the written consent of (i) the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed), (ii) except upon the occurrence and continuance of a Default or Event of Default, the Borrower (such consent not to be unreasonably withheld, conditioned or delayed) and (iii) if constituting an assignment of a TALC Percentage or a TALC Participating Amount, the TALC Issuing Bank (which consent may be granted or withheld in the TALC Issuing Bank’s sole discretion); provided, that no written consent of the Administrative Agent or Borrower shall be required in connection with any such assignment by a Lender to (i) an Eligible Assignee that is an Affiliate of such Lender or (ii) to another Lender that is an Eligible Assignee.

 

(c)                                  Subject to Section 10.10, from and after the date that the Administrative Agent notifies the assigning Lender and the Borrower that it has received (and, where required in accordance with Section 11.11(a), provided its consent with respect to) an executed Assignment and Acceptance and payment of the above-referenced processing fee, (i) the Eligible Assignee under such Assignment and Acceptance shall be a party hereto and, to the extent that rights and obligations hereunder and under the other Financing Documents have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender

 

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hereunder and under the other Financing Documents, and this Credit Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to effect the addition of the Eligible Assignee, and any reference to the assigning Lender hereunder or under the other Financing Documents shall thereafter refer to such Lender and to the Eligible Assignee to the extent of their respective interests and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Financing Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations hereunder and under the other Financing Documents; provided, that any Lender that assigns all of its Commitments and Loans hereunder in accordance with Section 11.11(a) shall continue to have the benefit of any indemnification provisions under this Credit Agreement (including Sections 3.10, 3.24, 11.1 and 11.2) and under the other Financing Documents (to the extent having arisen prior to such assignment), which shall survive such assignment as to such assigning Lender. At the time of each assignment pursuant to Section 11.11(a) to a Person which is not already a Lender hereunder, the relevant Eligible Assignee shall provide to the Borrower and the Administrative Agent the appropriate Internal Revenue Service Forms (and, if applicable, an Applicable Tax Certificate) described in Section 3.24(b) to the extent such forms would provide a complete exemption from or reduction in United States withholding tax. To the extent that an assignment of all or any portion of a Lender’s Commitments and related outstanding Obligations pursuant to this Section 11.11 would, at the time of such assignment, result in increased costs under Section 3.24 from those being charged by the respective assigning Lender prior to such assignment, then the Borrower shall not be obligated to pay such increased costs (although the Borrower, in accordance with and pursuant to the other provisions of this Credit Agreement, shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective assignment).

 

(d)                                 Promptly after the Borrower receives notice from the Administrative Agent that the Administrative Agent has received an executed Assignment and Acceptance and payment of the above-referenced processing fee, upon the request of the Eligible Assignee, the Borrower shall execute and deliver to the Administrative Agent new Notes evidencing the Eligible Assignee’s assigned Commitments and Loans and, upon the request of the assigning Lender, if the assigning Lender has retained a portion of its Loans, the Borrower shall execute and deliver to the Administrative Agent replacement Notes reflecting the Commitments and Loans retained by the assigning Lender (such Notes to be in exchange for, but not in payment of, the Notes, if any, held by such Lender).

 

(e)                                  Any Lender (the “Originating Lender”) may at any time sell to one or more commercial banks or other Persons not Affiliates of the Borrower (a “Participating Bank”) participating interests in any Loans; provided, that (i) the Originating Lender’s obligations under this Credit Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) the Borrower and the Administrative Agent shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s rights and obligations under this Credit Agreement and the other Financing Documents and (iv) no Lender shall transfer or grant any participating interest under which the Participating Bank shall have rights to approve any amendment or modification to, or give any consent or waiver with respect to, this Credit Agreement or any other Transaction Document, except to the extent such amendment, modification, consent or waiver would require unanimous consent of the Lenders as described in Section 11.10. In the case of any such

 

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participation, the Participating Bank shall not have any rights under this Credit Agreement or any of the other Financing Documents (the Participating Bank’s rights against the Originating Lender in respect of such Participation to be those set forth in the agreement executed by the Originating Lender in favor of the Participating Bank relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation.

 

(f)                                   Notwithstanding any other provision contained in this Credit Agreement or any other Transaction Document to the contrary, any Lender may assign all or any portion of the Loans or Notes held by it as collateral security; provided, that any payment in respect of such assigned Loans or Notes made by the Borrower to or for the account of the assigning or pledging Lender in accordance with the terms of this Credit Agreement shall satisfy the Borrower’s obligations hereunder in respect to such assigned Loans or Notes to the extent of such payment. No such assignment shall release the assigning Lender from its obligations hereunder.

 

(g)                                  Notwithstanding any other provision contained in this Credit Agreement or any other Transaction Document to the contrary, no Affiliated Lender shall have any right to (i) attend (including by telephone or electronic means) any meeting or discussions (or portion thereof) among the Administrative Agent or any Financing Party to which representatives of the Borrower Parties are not invited or (ii) receive any information or material prepared by the Administrative Agent or any other Financing Party or any communication by or among the Administrative Agent and one or more other Financing Parties or have access to Intralinks or such other Electronic Platform used to distribute information to the other Financing Parties, except to the extent such information or materials have been made available to any Borrower Party or its representatives.

 

(h)                                 Each Affiliated Lender agrees that it (i) shall not disclose any information it receives in its capacity as a Lender to the Borrower Parties and (ii) shall not have any right to make or bring (or participate in, other than as a passive participant in or recipient of its pro rata benefits of) any claim, in its capacity as a Lender, against the Agents or any Financing Party with respect to any duties or obligations or alleged duties or obligations of such Agent or any other such Financing Party under the Financing Documents, except with respect to any claims that any such Agent or any other such Financing Party is treating such Affiliated Lender, in its capacity as a Lender, in a disproportionate manner relative to the other Financing Parties (other than as expressly provided herein or in any other Financing Document).

 

(i)                                     Notwithstanding anything in this Section 11.11 or the definition of “Required Financing Parties” to the contrary, for purposes of determining whether the Required Financing Parties, all affected Financing Parties or all Financing Parties have (A) consented (or not consented) to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Financing Document or any departure by any Financing Party therefrom, (B) otherwise acted on any matter related to any Financing Document, or (C) directed or required the Administrative Agent, the Collateral Agent or any Financing Party to undertake any action (or refrain from taking any action) with respect to or under any Financing Document, each Affiliated Lender shall be deemed to have voted its interest as a Financing Party without its discretion in the same proportion as the allocation of voting with respect to such matter by Financing Parties who are not Affiliated Lenders; provided, that no amendment, modification, waiver, consent or other action with respect to any Financing Document shall deprive any

 

101

 

Affiliated Lender of its pro rata share of any payments to which such Affiliated Lender is entitled under the Financing Documents without such Affiliated Lender providing its consent; and in furtherance of the foregoing, (x) each Affiliated Lender agrees to execute and deliver to the Administrative Agent any instrument reasonably requested by the Administrative Agent to evidence the voting of its interest as a Lender in accordance with the provisions of this Section 11.11 (provided, that if such Affiliated Lender fails to promptly execute such instrument such failure shall in no way prejudice any of the Administrative Agent’s rights under this paragraph) and (y) the Administrative Agent is hereby appointed (such appointment being coupled with an interest) by such Affiliated Lender as such Affiliated Lender’s attorney-in-fact, with full authority in the place and stead of such Affiliated Lender and in the name of such Affiliated Lender from time to time in the Administrative Agent’s discretion to take any action and to execute any instrument that the Administrative Agent may deem reasonably necessary to carry out the provisions of this Section 11.11.

 

(j)                                    Each Affiliated Lender, solely in its capacity as a Lender, hereby agrees, and each Assignment and Acceptance shall provide a confirmation that, if any Borrower Party or any of their assets shall be subject to any voluntary or involuntary proceeding commenced under the Bankruptcy Code (“Bankruptcy Proceedings”), (i) such Affiliated Lender shall not take any step or action in such Bankruptcy Proceeding to object to, materially impede, or materially delay the exercise of any right or the taking of any action by the Administrative Agent (or the taking of any action by a third party that is supported by the Administrative Agent) in relation to such Affiliated Lender ‘s claim with respect to its Loans (an “Affiliated Lender Claim”) (including objecting to any debtor in possession financing, use of cash collateral, grant of adequate protection, sale or disposition, compromise, or plan of reorganization) so long as such Affiliated Lender is treated in connection with such exercise or action on the same or better terms as the other Lenders and (ii) with respect to any matter requiring the vote of Financing Parties during the pendency of a Bankruptcy Proceeding (including voting on any plan of reorganization), the Loans held by such Affiliated Lender (and any Affiliated Lender Claim with respect thereto) shall be deemed to be voted in accordance with this Section 11.11(j), so long as such Affiliated Lender is treated in connection with the exercise of such right or taking of such action on the same or better terms as the other Financing Parties. For the avoidance of doubt, each Affiliated Lender and the other Financing Parties agree and acknowledge that the provisions set forth in this Section 11.11(j), and the related provisions set forth in the Assignment and Acceptance, constitute a “subordination agreement” as such term is contemplated by, and utilized in, Section 510(a) of the Bankruptcy Code, and, as such, would be enforceable for all purposes in any case where a Borrower Party has filed for protection under the Bankruptcy Code.

 

11.12                 Survival. All indemnification and expense reimbursement provisions set forth herein, including those set forth in Sections 11.1 and 11.2, shall survive the execution and delivery of this Credit Agreement and the Notes and the making and repayment of the Loans. In addition, each representation and warranty made or deemed to be made pursuant hereto shall survive the making of such representation and warranty, and no Lender shall be deemed to have waived, by reason of making any extension of credit, any Default or Event of Default which may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding that such Lender may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time such extension of credit was made.

 

102

 

11.13                 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS CREDIT AGREEMENT, THE NOTES OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING HERETO OR THERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE FINANCING PARTIES TO ENTER INTO THIS CREDIT AGREEMENT.

 

11.14                 Right of Set-off. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held, and other obligations (in whatever currency) at any time owing, by such Lender, such Issuing Bank or any such Affiliate, to or for the credit or the account of the Borrower or any other Borrower Party against any and all of the obligations of the Borrower or such Borrower Party now or hereafter existing under this Credit Agreement or any other Financing Document to such Lender or such Issuing Bank or their respective Affiliates, irrespective of whether or not such Lender, Issuing Bank or Affiliate shall have made any demand under this Credit Agreement or any other Loan Document and although such obligations of the Borrower or such Borrower Party may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or such Issuing Bank different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 3.27 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Banks, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Bank or their respective Affiliates may have. Each Lender and Issuing Bank agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided, that the failure to give such notice shall not affect the validity of such setoff and application.

 

11.15                 Severability. Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and without affecting the validity or enforceability of any provision in any other jurisdiction.

 

11.16                 Domicile of Loans. Each Lender may transfer and carry its Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender.

 

103

 

11.17                 Limitation of Recourse. There shall be full recourse to the Borrower and to all of its assets for the liabilities of the Borrower under this Credit Agreement and the other Financing Documents and its other Secured Obligations, but in no event shall any of the Financing Parties have any claims with respect to the Transactions contemplated under the Transaction Documents against the Sponsor, the Pledgor or any of the Sponsor’s or Pledgor’s Affiliates (other than any Borrower Party), or in either case any of their respective shareholders, officers, directors, employees, representatives or agents (collectively, the “Non-Recourse Parties”), provided, that the foregoing shall not: (a) constitute a waiver, release or discharge (or otherwise impair the enforceability) of any of the Secured Obligations, or of any of the terms, covenants, conditions, or provisions of this Credit Agreement or any other Financing Document and the same shall continue (but without personal liability of the Non-Recourse Parties) until fully paid, discharged, observed, or performed; (b) constitute a waiver, release or discharge of any Lien purported to be created pursuant to any Security Document (or otherwise impair the ability of any Secured Party to realize or foreclose upon any Collateral); (c) limit or restrict the right of the Administrative Agent, the Collateral Agent or any other Secured Party (or any assignee, beneficiary or successor to any of them) to name any Borrower Party or any other person as a defendant in any action or suit for a judicial foreclosure or for the exercise of any other remedy under or with respect to this Credit Agreement or any other Financing Document, or for injunction or specific performance, so long as no judgment in the nature of a deficiency judgment shall be enforced against any Non-Recourse Party, except as set forth in other provisions of this Section 11.17; (d) in any way limit or restrict any right or remedy of the Administrative Agent, the Collateral Agent or any other Financing Party (or any assignee or beneficiary thereof or successor thereto) with respect to, and each Non-Recourse Party shall remain fully liable to the extent that it would otherwise be liable for its own actions with respect to, any fraud (which shall not include innocent or negligent misrepresentation), wilful misrepresentation, or misappropriation of revenues, profits of or proceeds from each of the Project or any Collateral, that should or would have been paid as provided herein or paid or delivered to the Administrative Agent, the Collateral Agent or any other Financing Party (or any assignee or beneficiary thereof or successor thereto) towards any payment required under this Credit Agreement or any other Financing Document; or (e) affect or diminish in any way or constitute a waiver, release or discharge of any specific written obligation, covenant, or agreement made by any of the Non-Recourse Parties (or any security granted by the Non-Recourse Parties in support of the obligations of any person) under any Financing Document (including the Pledge Agreements) or as security for the Secured Obligations. The limitations on recourse set forth in this Section 11.17 shall survive the termination of this Credit Agreement, the termination of all Commitments and the full payment and performance of the Secured Obligations under this Credit Agreement and the other Financing Documents.

 

11.18                 Governing Law; Submission to Jurisdiction.

 

(a)                                 THIS CREDIT AGREEMENT AND EACH OF THE OTHER FINANCING DOCUMENTS (UNLESS ANY SUCH DOCUMENT EXPRESSLY STATES OTHERWISE THEREIN) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

104

 

(b)                                 The Borrower hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for the purposes of all legal actions and proceedings arising out of or relating to this Credit Agreement, any other Financing Document or the transactions contemplated hereby or thereby. The Borrower hereby irrevocably waives, to the fullest extent permitted by applicable Law, any objection which it may now or hereafter have to the laying of the venue of any such action or proceeding brought in such a court and any claim that any such action or proceeding brought in such a court has been brought in an inconvenient forum. Nothing herein shall affect the right to serve process in any other manner permitted by applicable Law or any right to bring any legal action or proceeding in any other competent jurisdiction, including judicial or non-judicial foreclosure of real property interests which are part of the Collateral. The Borrower further agrees that the aforesaid courts of the State of New York and of the United States for the Southern District of New York shall have exclusive jurisdiction with respect to any claim or counterclaim of the Borrower based upon the assertion that the rate of interest charged by or under this Credit Agreement or under the other Financing Documents is usurious. To the extent permitted by applicable Law, the Borrower further irrevocably agrees to the service of process of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by certified mail, postage prepaid, return receipt requested, to the Borrower at the address referenced in Section 11.3, such service to be effective upon the date indicated on the postal receipt returned from the Borrower.

 

11.19                 Complete Agreement. THIS CREDIT AGREEMENT AND THE OTHER FINANCING DOCUMENTS REPRESENT THE FINAL AND COMPLETE AGREEMENT OF THE PARTIES HERETO, AND ALL PRIOR NEGOTIATIONS, REPRESENTATIONS, UNDERSTANDINGS, WRITINGS AND STATEMENTS OF ANY NATURE ARE HEREBY SUPERSEDED IN THEIR ENTIRETY BY THE TERMS OF THIS CREDIT AGREEMENT AND THE OTHER FINANCING DOCUMENTS.

 

*              *              *

 

105

 

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Credit Agreement as of the date first above written.

 

 

	
 
    	
NRG WEST HOLDINGS LLC,
    
	
 
    	
as Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Valentino
    
	
 
    	
 
    
	
 
    	
Name: Scott Valentino
    
	
 
    	
Title: President
    

 

Credit Agreement

 

 

	
 
    	
MIZUHO CORPORATE BANK, LTD.,
    
	
 
    	
as Lender, Issuing Bank, Mandated Lead Arranger and Joint   Bookrunner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Takuma Kanai
    
	
 
    	
 
    
	
 
    	
Name:          TAKUMA KANAI
    
	
 
    	
Title: DEPUTY GENERAL MANAGER
    

 

Credit Agreement

 

 

	
 
    	
RBS SECURITIES INC.,
    
	
 
    	
as Mandated Lead Arranger and Joint Bookrunner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Matthew Wade
    
	
 
    	
 
    
	
 
    	
Name: Matthew Wade
    
	
 
    	
Title: Director
    

 

Credit Agreement

 

 

	
 
    	
THE ROYAL BANK OF SCOTLAND PLC,
    
	
 
    	
as Lender and Issuing Bank
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Matthew Wade
    
	
 
    	
 
    	
Authorised   Signatory
    
	
 
    	
Name: Matthew Wade
    
	
 
    	
Title: Director
    

 

Credit Agreement

 

 

	
 
    	
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,
    
	
 
    	
as Lender, Issuing Bank, Mandated Lead Arranger, Joint   Bookrunner and Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Evan S. Levy
    
	
 
    	
 
    
	
 
    	
Name:
    	
Evan S.   Levy
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James Guidera
    
	
 
    	
 
    
	
 
    	
Name:
    	
James   Guidera
    
	
 
    	
Title:
    	
Managing Director
    

 

Credit Agreement

 

 

	
 
    	
ING CAPITAL LLC,
    
	
 
    	
as Lender, Issuing Bank and Mandated Lead Arranger
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Stephen E. Fischer
    
	
 
    	
 
    
	
 
    	
Name:
    	
STEPHEN E. FISCHER
    
	
 
    	
Title:
    	
MANAGING DIRECTOR
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sven Wellock
    
	
 
    	
 
    
	
 
    	
Name:
    	
SVEN WELLOCK
    
	
 
    	
Title:
    	
DIRECTOR
    

 

Credit Agreement

 

 

	
 
    	
UNION BANK, N.A.,
    
	
 
    	
as Lender and Mandated Lead Arranger
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeff Fesenmaier
    
	
 
    	
 
    
	
 
    	
Name: Jeff Fesenmaier
    
	
 
    	
Title: Vice President
    

 

Credit Agreement

 

 

	
 
    	
SIEMENS FINANCIAL SERVICES, INC.,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Douglas Maher
    
	
 
    	
 
    
	
 
    	
Name:
    	
Douglas Maher
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kirk H. Edelman
    
	
 
    	
 
    
	
 
    	
Name:
    	
Kirk H. Edelman
    
	
 
    	
Title:
    	
President and CEO
    
	
 
    	
 
    	
Siemens Financial   Services, Inc
    

 

Credit Agreement

 

 

	
 
    	
COBANK, ACB,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lori A. Kepner
    
	
 
    	
 
    
	
 
    	
Name: Lori A. Kepner
    
	
 
    	
Title: Vice President
    

 

Credit Agreement

 

 

	
 
    	
DNB NOR BANK ASA,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Giacomo Landi
    
	
 
    	
 
    
	
 
    	
Name: Giacomo Landi
    
	
 
    	
Title: Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Cathleen Buckley
    
	
 
    	
 
    
	
 
    	
Name: Cathleen Buckley
    
	
 
    	
Title: Senior Vice President
    

 

Credit Agreement

 

 

	
 
    	
LANDESBANK HESSEN THÜRINGEN GIROZENTRALE, NEW YORK BRANCH,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Erica Egan
    
	
 
    	
 
    
	
 
    	
Name:
    	
Erica Egan
    
	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    	
Corporate Finance Division
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Karl Strombom
    
	
 
    	
Name:
    	
Karl Strombom
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
Corporate Finance
    
				

 

Credit Agreement

 

 

	
 
    	
SOCIETE GENERALE,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniel Mallo
    
	
 
    	
 
    
	
 
    	
Name: Daniel Mallo
    
	
 
    	
Title: Managing Director
    

 

Credit Agreement

 

 

	
 
    	
LLOYDS TSB BANK PLC,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Julia R. Franklin
    
	
 
    	
 
    
	
 
    	
Name:
    	
Julia R. Franklin
    
	
 
    	
Title:
    	
Assistant Vice President
    
	
 
    	
 
    	
F014
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Karen Weich
    
	
 
    	
 
    
	
 
    	
Name:
    	
Karen Weich
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
W011
    

 

Credit Agreement

 

 

	
 
    	
SUMITOMO MITSUI BANKING CORPORATION,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Hiroshi Higuma
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Hiroshi Higuma
    
	
 
    	
Title:
    	
Joint General Manager
    
	
 
    	
 
    	
Specialized Finance Dept.
    

 

Credit Agreement

 

 

	
 
    	
SOVEREIGN BANK,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Daniela Hofer-Gautschi
    
	
 
    	
 
    
	
 
    	
Name:
    	
Daniela Hofer-Gautschi
    
	
 
    	
Title:
    	
VP
    

 

Credit Agreement

 

 

	
 
    	
THE BANK OF NOVA SCOTIA,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Pamela McDougall
    
	
 
    	
 
    
	
 
    	
Name:
    	
PAMELA McDOUGALL
    
	
 
    	
Title:
    	
MANAGING DIRECTOR
    

 

Credit Agreement

 

 

	
 
    	
CIT CAPITAL USA INC.,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    
	
 
    	
Name:
    	
[ILLEGIBLE]
    
	
 
    	
Title:
    	
Director
    

 

Credit Agreement

 

 

	
 
    	
CIT BANK,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Benjamin Haslam
    
	
 
    	
 
    
	
 
    	
Name:
    	
Benjamin Haslam
    
	
 
    	
Title:
    	
Authorized Signatory
    

 

Credit Agreement

 

 

	
 
    	
ASSOCIATED BANK, N.A.,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Kristin Isleib
    
	
 
    	
 
    
	
 
    	
Name:
    	
Kristin Isleib
    
	
 
    	
Title:
    	
Senior Vice President
    

 

Credit Agreement

 

 

	
 
    	
CREDIT INDUSTRIEL ET COMMERCIAL,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bordes Patrick
    
	
 
    	
 
    
	
 
    	
Name:
    	
BORDES Patrick
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark D. Palin
    
	
 
    	
 
    
	
 
    	
Name:
    	
Mark D. PALIN
    
	
 
    	
Title:
    	
Vice President
    

 

Credit Agreement

 

 

	
 
    	
LANDESBANK BADEN-WUERTTEMBERG, NEW YORK BRANCH,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ [ILLEGIBLE]
    
	
 
    	
 
    
	
 
    	
Name:
    	
[ILLEGIBLE]
    
	
 
    	
Title:
    	
CONSULTANT
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Leonard J. Crann
    
	
 
    	
 
    
	
 
    	
Name:
    	
Leonard J. Crann
    
	
 
    	
Title:
    	
General Manager
    

 

Credit Agreement

 

 

	
 
    	
DEKABANK DEUTSCHE GIROZENTRALE,
    
	
 
    	
as Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Peter Bahn
    
	
 
    	
 
    
	
 
    	
Name:
    	
Peter Bahn
    
	
 
    	
Title:
    	
Executive Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Achim Grobosch
    
	
 
    	
 
    
	
 
    	
Name:
    	
Achim Grobosch
    
	
 
    	
Title:
    	
Vice President
    

 

Credit Agreement

 

 

Appendix A

to

Credit Agreement

 

DEFINED TERMS AND RULES OF INTERPRETATION

 

1.             Defined Terms.

 

“AA Disbursement Account” means the account of the Administrative Agent so-designated on Appendix G to this Credit Agreement or such other account as so-designated by the Administrative Agent by notice to the Lenders.

 

“AA Payment Account” means the account of the Administrative Agent so-designated on Appendix G to this Credit Agreement or such other account as so-designated by the Administrative Agent by notice to the Lenders.

 

“Accounts” has the meaning set forth in the Accounts Agreement and shall include any other accounts or sub-accounts established pursuant to the Accounts Agreement.

 

“Accounts Agreement” means the Accounts Agreement, dated the date hereof, among the Borrower, the Project Owner, the Procurement Sub, the Collateral Agent and the Account Bank.

 

“Account Bank” means the institution appointed as such in accordance with the Accounts Agreement or any successor institution so-appointed pursuant to the Accounts Agreement.

 

“Additional Material Project Document” means any Additional Project Document that is a Material Project Document.

 

“Additional Project Document” means any Project Document entered into by any Borrower Party with any other Person subsequent to the date of this Credit Agreement (including Project Documents entered into in substitution for any Project Document that has been terminated in accordance with its terms or otherwise).

 

“Adjusted LIBO Rate” means, for any LIBOR Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the quotient obtained by dividing (a) the LIBO Rate for such LIBOR Loan for such Interest Period by (b) 1 minus the Reserve Requirement for such LIBOR Loan for such Interest Period.

 

“Administrative Agent” means Credit Agricole Corporate and Investment Bank, acting in its capacity as agent for the Lenders pursuant to this Credit Agreement, or any successor Administrative Agent appointed in accordance with Section 10.9 of this Credit Agreement.

 

“Affiliate” means, as to any Person, any Subsidiary of such Person and any other Person which, directly or indirectly, controls or is controlled by or is under direct or indirect common control with such specified Person. For the purposes of this definition and any obligation to cause another Person to take or refrain from taking any action, “control”, when

 

 

used with respect to any Person, shall mean the possession of the power to direct or cause the direction of management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract, management agreement, common directors, officers or trustees or otherwise. The terms “controlling” and “controlled” shall have correlative meanings.

 

“Affiliate O&M Fee” means all amounts, whether fees or otherwise, payable by the Borrower or any other Borrower Party to any Affiliated Project Party pursuant to any Affiliated Project Document, other than (x) in the case of the O&M Agreement, Reimbursable Expenses (as such term is defined in the O&M Agreement) and (y) in the case of the Project Administration Agreement, Reimbursable Expenses (as such term is defined in the Project Administration Agreement).

 

“Affiliated Lender” means each Lender that is an Affiliate of the Borrower Parties (other than the Borrower Parties).

 

“Affiliated Project Documents” means any Project Document with any Affiliated Project Party.

 

“Affiliated Project Party” means each Affiliate of the Sponsor (other than the Borrower or any other Borrower Party) that is a party to a Project Document.

 

“Agent” has the meaning set forth in Section 10.1(b) of this Credit Agreement.

 

“Agent-Related Persons” means, with respect to the Administrative Agent, its officers, directors, employees, representatives, attorneys, agents and Affiliates.

 

“ALTA” means the American Land Title Association.

 

“Amortization Schedule” has the meaning set forth in Section 3.15.

 

“Anti-Terrorism Laws” means (i) the anti-money laundering provisions of the U.S.A. Patriot Act, (ii) any of the foreign asset control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto and (iii) Executive Order No. 13,224 Fed. Reg. 49,079 (2001) issued by the President of the United States (Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism).

 

“Applicable Group” has the meaning set forth Section 10.6 of this Credit Agreement

 

“Applicable Lending Office” means, for each Lender and for each Type of Loan, the “Lending Office” of such Lender (or of an Affiliate thereof) designated for such Type of Loan in Appendix G or such other office of such Lender (or its Affiliate) as such Lender may from time-to-time specify to the Administrative Agent and the Borrower by written notice in accordance with the terms hereof as the office by which its Loans of such Type are to be made and maintained.

 

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“Applicable Margin” means, with respect to any Tranche and any period, the percentage set forth below such Tranche and opposite such period on Appendix B.

 

“Applicable Taxes” has the meaning set forth in Section 3.24 of this Credit Agreement.

 

“Applicable Tax Certificate” has the meaning set forth in Section 3.24 of this Credit Agreement.

 

“Approved Electronic Communications” means each Communication that the Borrower, any other Borrowing Party or the Pledgor is obligated to, or otherwise chooses to, provide to the Administrative Agent, the Collateral Agent or the Account Bank pursuant to any Financing Document or the transactions contemplated therein, including any financial statement, financial and other report, notice, request, certificate and other information material; provided, that, solely with respect to delivery of any such Communication by any of the Borrower, any other Borrowing Party or the Pledgor to any such Agent and without limiting or otherwise affecting either the Administrative Agent’s right to effect delivery of such Communication by posting such Communication to the Approved Electronic Platform or the protections afforded hereby to the Administrative Agent in connection with any such posting, “Approved Electronic Communication” shall exclude (i) any Borrowing Request or Specified Letter of Credit, notice of conversion or continuation, and any other notice, demand, communication, information, document and other material relating to a request for a new, or a conversion of an existing, Borrowing, (ii) any notice pursuant to Sections 3.16 and 3.17 and any other notice relating to the payment of any principal or other amount due under any Financing Document prior to the scheduled date therefor, (iii) all notices of any Default or Event of Default and (iv) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Article IV or any other condition to any Borrowing or other extension

 

“Approved Electronic Platform” has the meaning set forth in Section 11.3(a) to this Credit Agreement.

 

“Assignment and Acceptance” has the meaning set forth in Section 11.11 of this Credit Agreement.

 

“Assignment of Project Labor Agreement” means the Assignment of Project Labor Agreement, dated January 3, 2001, by El Segundo Power II LLC to the Project Owner.

 

“Assumed Interest Expense” means, with respect to any period, the aggregate of (x) the amount of interest projected to be payable during such period hereunder (based on the actual rate established hereunder during any current Interest Period or a reasonable published or third party proprietary forward rate in respect of any future Interest Period) plus or minus (y) the aggregate amount payable by or to the Borrower in accordance with each Rate Swap Transaction entered into in accordance with Section 7.26 of this Credit Agreement during such period.

 

“Attorney Costs” means all reasonable and invoiced fees and disbursements of any law firm or other external counsel, the reasonable allocated cost of internal legal services and all reasonable disbursements of internal counsel; provided, that the Administrative Agent shall

 

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not be required to establish the reasonability of fees or the allocated cost of internal legal services in respect of or relating to: any alleged, potential or actual Defaults or Events of Default; the prospective or actual exercise of remedies hereunder; the preservation of any rights or remedies hereunder or under any Collateral Document; or any claim for indemnification hereunder.

 

“Authorized Officer” means (i) with respect to any Person that is a corporation, the chairman, president, chief executive officer, any vice president or secretary of such Person, (ii) with respect to any Person that is a manager-managed limited liability company, any such manager, (iii) with respect to any Person that is a member-managed limited liability company, such member (or if such member is not a natural Person, the Authorized Officer of such member), (iv) with respect to any Person that is a partnership, the general partner or managing partner of such Person (or if such general partner or managing partner is not a natural Person, the Authorized Officer of such general partner or managing partner) and (v) any Person that has been duly and specifically authorized by all necessary and appropriate corporate, limited liability company or partnership action (as applicable) to take the relevant action, as evidenced by a duly executed and delivered certificate of a Person who is an Authorized Officer of the relevant Person in accordance with subparts (i), (ii), (iii) or (iv) of this definition that has theretofore been delivered to the Administrative Agent setting forth the name, title and specimen signature of such duly and specifically authorized Person.

 

“Available Construction Funds” means, as of any day, the sum of (x) the aggregate amount of proceeds from the Construction Loans on deposit in or credited to the Construction Account on such day, without giving effect to any withdrawals therefrom on such day, plus (y) the aggregate amount of the Construction Loan Commitments on such day (other than the Construction Loan Commitment of any Defaulting Lender), without giving effect to any Disbursement of Construction Loans on such day.

 

“Bankruptcy Code” means the United States Federal Bankruptcy Code of 1978, 11 U.S.C. § 101 et seq.

 

“Bankruptcy Event” means a Voluntary Bankruptcy Event or an Involuntary Bankruptcy Event.

 

“Base Case Model” means the Microsoft Excel file entitled “CLOSING MODEL ESEC 0818 Syndication” posted to www.intralinks.com on August 19, 2011, as modified in accordance with Sections 4.2(m) and 7.9(c).

 

“Base Case Projections” means a projection of operating results for the Project over a period ending no sooner than December 31, 2030, showing the Borrower’s reasonable good faith estimates, as of the Closing Date, of projected Project Costs, projected Project Revenues, projected O&M Expenses, Assumed Interest Expense, all Fees payable hereunder, and scheduled principal payments in respect of the Loans over the forecast period.

 

“Base Rate” means, for any day, means the rate per annum equal to the highest of (a) the Federal Funds Rate for such day plus 0.50%, (b) the Prime Rate for such day and (c) unless Section 3.9 applies in respect of the one-month LIBO Rate, the LIBO Rate for one month commencing on such day. Any changes in the Base Rate due to a change in the Prime Rate or

 

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the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or Federal Funds Rate.

 

“Base Rate Loans” means Loans which bear interest based upon the Base Rate.

 

“BOP Contract” means the Amended and Restated Construction Agreement, dated June 6, 2011, between the BOP Contractor and the Project Owner.

 

“BOP Contractor” means ARB, Inc., a California corporation.

 

“BOP Guarantor” means Primoris Services Corporation, a Delaware corporation.

 

“BOP Guaranty” means the Parent Guaranty, dated as of May 31, 2011, by the BOP Guarantor in favor of the Project Owner.

 

“Borrower” has the meaning set forth in the Preamble of this Credit Agreement.

 

“Borrower Closing Certificate” means the certificate, substantially in the form of Exhibit 11 to this Credit Agreement, dated the Closing Date, duly completed and signed by an Authorized Officer of the Borrower.

 

“Borrower Completion Certificate” means a certificate, substantially in the form of Exhibit 14 to the Credit Agreement, dated the Term Conversion Date, duly completed and signed by an Authorized Officer of the Borrower.

 

“Borrower Parties” means each of the Borrower, the Project Owner and the Procurement Sub.

 

“Borrower Pledge Agreement” means the Pledge Agreement dated the date hereof between the Borrower and the Collateral Agent in respect of, inter alia, the Equity Interests of the Project Owner and the Procurement Sub.

 

“Borrowing” means a borrowing of Loans of one Type from the Lenders on a given date (or the Conversion of a Loan or Loans of a Lender or Lenders on a given date) having, in the case of LIBOR Loans, the same Interest Period.

 

“Borrowing Minimum” means the amount set forth opposite the heading “Borrowing Minimum” on Appendix B.

 

“Borrowing Multiple” means the amount set forth opposite the heading “Borrowing Multiple” on Appendix B.

 

“Borrowing Request” means a request for Loans in substantially the form set forth as Exhibit 1, appropriately completed and duly executed by an Authorized Officer of the Borrower.

 

“Business Day” means (i) with respect to any payment to be made by the Borrower or any Borrower Party, a “Business Day” as defined in the Accounts Agreement, (ii)

 

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with respect to any other action to be taken by the Borrower or any other Person, any day except Saturday, Sunday and any day which shall be in the location where such action is to be taken, a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close in any such location and (iii) without limiting the foregoing, with respect to all notices and determinations in connection with, and payments of principal and interest on, LIBOR Loans, any day which is a Business Day described in clause (i) above and which is also a day for trading by and between banks in the London interbank eurodollar market.

 

“Business Interruption Proceeds” has the meaning set forth in the Collateral Agreement.

 

“Buy-down Proceeds” has the meaning set forth in the Collateral Agreement.

 

“CAISO” means the California Independent System Operator Corporation.

 

“Capital Adequacy Regulation” means any rule, regulation, order, guideline, directive or request of any central bank or other Governmental Authority (whether or not having the force of Law), or any other Law, in each case regarding the capital adequacy of any bank or of any corporation controlling a bank.

 

“Capital Lease Obligations” means, for any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real or personal Property which obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under U.S. GAAP (including Statement of Financial Accounting Standards No. 13 of the Financial Accounting Standards Board (for the purposes hereof, “Statement No. 13”)) and, for purposes of this Credit Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with U.S. GAAP (including such Statement No. 13).

 

“Cash Collateralize” means, to deposit in a Controlled Account or to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the TALC Issuing Bank, as collateral for TALC Participations, cash or deposit account balances or, if the Administrative Agent and the TALC Issuing Bank shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and the TALC Issuing Bank. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

 

“CB Approval Threshold” means each threshold set forth on Appendix E under the heading “CB Approval Threshold”.

 

“CFADS” means, in respect of any DSCR Calculation Period, the sum of (i) the aggregate amount deposited (or, as applicable, projected to be deposited) in the Operating Account (other than transfers from any other Secured Account to the Operating Account or the proceeds of any Indebtedness or Equity Contributions deposited therein) during such DSCR Calculation Period minus (ii) the aggregate amount transferred (or, as applicable, projected to be transferred) from the Operating Account to the O&M Expense Account during such DSCR Calculation Period.

 

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“Change in Control” means any event as a result of which (i) on or prior to the Term Conversion Date, the Sponsor ceases to directly or indirectly own at least 50.1% of each class of Equity Interests of the Borrower, (ii) after the Term Conversion Date, the Sponsor ceases to directly or indirectly own at least 35% of each class of Equity Interests of the Borrower, (iii) after the Term Conversion Date, 50.1% of all Equity Interests of the Borrower cease to be owned by the Sponsor or (iv) the Sponsor ceases to have the unilateral power to direct or cause the direction of the management and policy of the Borrower, whether through ownership of voting securities, by contract, management agreement, or common directors, officers or trustees or otherwise (other than with respect to customary significant and enumerated matters requiring the approval of minority equity holders).

 

“Change in Law” means the occurrence, after the date of the Credit Agreement, of any of the following: (a) the adoption or taking effect of any applicable Law, (b) any change in any applicable Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) without limiting the foregoing, the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change Order” means, as applicable, Change Orders (as defined in each of the BOP Contract, the Equipment Purchase Agreement or the Equipment Services Agreement) and change orders described in Section 4.5 of the Construction Management Agreement.

 

“Charter Documents” means, with respect to any Person and as applicable to such Person, (i) the articles of incorporation, limited liability company agreement, partnership agreement, or other similar organizational document of such Person, (ii) the by-laws or other similar document of such Person, (iii) any certificate of designation or instrument relating to the rights of preferred shareholders or other holders of Equity Interests of such Person, and (iv) any shareholder rights agreement or other similar agreement.

 

“Closing” has the meaning set forth in Section 4.1 of this Credit Agreement.

 

“Closing Certificate” means each of the Borrower Closing Certificate and the Pledgor Closing Certificate.

 

“Closing Date” means the date upon which the conditions precedent set forth in Section 4.1 of this Credit Agreement have been satisfied (or waived by the Financing Parties).

 

“CO Cost” means, in respect of any Change Order, the aggregate sum of (i) all costs incurred or to be incurred by any Borrower Party in respect thereof plus (ii) any Assumed Interest Expense, fees or other costs attributable to a delay in any Major Milestone Date as a

 

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result of such Change Order plus (iii) any other cost incurred by any Borrower Party directly or indirectly as a result of such Change Order.

 

“Code” shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.

 

“Collateral” has the meaning set forth in the Collateral Agreement.

 

“Collateral Agent” means the institution appointed as such in accordance with the Collateral Agreement or any successor institution so-appointed pursuant to the Collateral Agreement.

 

“Collateral Agreement” means the Collateral Agreement dated the date hereof among the Borrower, the Procurement Sub, the Project Owner, the Pledgor, the Administrative Agent (on behalf of the Financing Parties) and the Collateral Agent.

 

“Collateral Documents” has the meaning set forth in the Collateral Agreement.

 

“Collateral Proceeds” has the meaning set forth in the Collateral Agreement.

 

“Commercial Operation Date” means the first date on which both Generating Units have achieved the Initial Delivery Date.

 

“Commitment Fee” has the meaning set forth in Section 3.13(a) of this Credit Agreement.

 

“Commitments” means, as applicable, the Tranche A Construction Loan Commitments, the Tranche B Construction Loan Commitments, the Term Commitments, the Revolving Commitments, the DSR Commitments and the TALC Commitments.

 

“Communications” means each notice, demand, communication, information, document and other material provided for hereunder or under any other Financing Document or otherwise transmitted between the parties hereto relating this Credit Agreement, the other Financing Documents, the Borrower, the other Borrower Parties or the Pledgor, or any of their respective Affiliates, or the transactions contemplated by this Credit Agreement or the other Financing Documents including all Approved Electronic Communications.

 

“Completion Tests” means, for each Generating Unit and for the Project, (i) each “Acceptance Test” (as such term is defined in the Equipment Services Agreement), (ii) each emissions, source or other acceptance or final test required to be performed by any Borrower Party in connection with the issuance to any such Borrower Party by the South Coast Air Quality Management District of a final permit to operate the Project and (iii) each test required by Article Seven of the Tolling Agreement.

 

“Consent Agreement” has the meaning set forth in the Collateral Agreement.

 

“Construction Account” has the meaning set forth in the Accounts Agreement.

 

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“Construction Budget” means the construction budget dated the Closing Date, setting forth all Project Costs theretofore incurred and thereafter expected to be incurred by the Borrower Parties on or prior to the Term Conversion Date, as the same may be amended from time-to-time in accordance with Section 7.28 of this Credit Agreement.

 

“Construction Coordination Agreement” means the Construction Coordination Agreement, dated March 21, 2011, among the Project Owner, the Procurement Sub, the Equipment Servicer and the BOP Contractor.

 

“Construction Facilities” has the meaning set forth in Section 2.1(b) of this Credit Agreement.

 

“Construction Lender” means each Lender that has a Construction Loan Commitment or Construction Loans.

 

“Construction Loan Commitments” means the Tranche A Construction Loan Commitments and the Tranche B Construction Loan Commitments.

 

“Construction Loans” has the meaning set forth in Section 2.1(c) of this Credit Agreement.

 

“Construction Management Agreement” means the Construction Management Agreement, dated as of March 31, 2011 between the Project Owner and the Construction Manager.

 

“Construction Manager” means NRG Construction LLC, a Delaware limited liability company.

 

“Construction Notes” means each Note issued as evidence of one or more Construction Loans.

 

“Construction Requisition” has the meaning set forth in the Accounts Agreement.

 

“Contingency” means the amount so-specified in the Construction Budget.

 

“Contingent Obligation” means, as to any Person, any obligation of such Person guaranteeing or intending to guarantee any Indebtedness, leases, dividends or other obligations (for the purposes hereof, “primary obligations”) of any other Person (for the purposes hereof, the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefore, (ii) to advance or supply funds (a) for the purchase or payment of any such primary obligation or (b) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of such primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the

 

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primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

“Contracted Amortization Amount” has the meaning set forth in Section 3.14(a).

 

“Controlled Account” means each deposit account that is established for holding Cash Collateral and is subject to a deposit account control agreement in form and substance satisfactory to the Administrative Agent and the TALC Issuing Bank.

 

“Conversion” means the conversion of one Type of Loan into another Type of Loan in accordance with Section 3.5 of this Credit Agreement. The term “Convert” shall have a correlative meaning.

 

“Conversion Request” means a request for the Conversion of one or more Tranches of Loans in substantially the form set forth as Exhibit 2.

 

“Credit Agreement” means the Credit Agreement to which this Appendix A is attached.

 

“Credit Facility” means the Tranche A Construction Facility, the Tranche B Construction Facility, the Tranche A Term Facility, the Tranche B Term Facility, the Revolving Facility, the DSR LC Facility or the TALC Facility.

 

“Date Certain” has the meaning set forth in Section 3.15(a) of this Credit Agreement.

 

“Debt-to-Equity Ratio” means, as at any date, the ratio of (x) the aggregate outstanding principal amount of all Loans to (y) the aggregate amount of Equity Contributions made by the Pledgor to the Borrower minus the aggregate amount of Distributions made in accordance herewith.

 

“Debt Service Reserve Account” has the meaning set forth in the Accounts Agreement.

 

“Debtor Relief Law” means the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

 

“Default” means any event or circumstance which with notice or lapse of time or both would become an Event of Default.

 

“Default Rate” means a per annum rate equal to the Base Rate plus the Applicable Margin plus (ii) 2%.

 

“Defaulting Lender” shall mean, subject to Section 3.27(f), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such

 

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Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied or (ii) pay to the Administrative Agent, the TALC Issuing Bank or any other Lender any other amount required to be paid by it hereunder (including in respect of its TALC Participation, if any) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or, if a TALC Participating Bank, the TALC Issuing Bank in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (A) become the subject of a proceeding under any Debtor Relief Law, or (B) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity (provided that a Lender shall not be a Defaulting Lender pursuant to this clause (d) solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender ). Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 3.27(f)) upon delivery of written notice of such determination to such Defaulting Lender, the Borrower, the TALC Issuing Bank and each other Lender.

 

“Deferred Principal Amount” has the meaning set forth in Section 3.15(c).

 

“Delay Liquidated Damages” means all liquidated damages payable under Section 13.1 of the BOP Contract and Section 15.2 and 15.3 of the Equipment Services Agreement.

 

“Disbursement” means any disbursement of a Loan pursuant hereto.

 

“Disbursement Date” means (i) prior to the Disbursement of any Loans, the date specified in a Borrowing Request as the date on which Disbursements of such Loans are requested by the Borrower and (ii) after the Disbursement of any Loans, the date such Loans are actually Disbursed.

 

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“Disposition” has the meaning set forth in the Collateral Agreement.

 

“Disposition Proceeds” has the meaning set forth in the Collateral Agreement.

 

“Distribution” has the meaning set forth in Section 7.9 of this Credit Agreement.

 

“Distribution Account” has the meaning set forth in the Accounts Agreement.

 

“Distribution Conditions” means, as of any date, each of the following conditions: (i) the Term Conversion Date shall have occurred; (ii) no LC Loans (other than LC Loans that are Revolving Loans as a result of a draw on the LGIA Letters of Credit) are then-outstanding; (iii) no Deferred Principal Amount is then-outstanding; (iv) no Default or Event of Default has occurred and is continuing or would result from the making of such Distribution or other payment; (v) no Event of Loss has occurred unless the Project has been Restored in accordance with this Credit Agreement and the other Financing Documents; (vi) the Historical DSCR for the most recently ending DSCR Calculation Period was at least 1.20x, as confirmed by the most recent DSCR Certificate delivered by the Borrower in accordance with Section 6.1(d); and (vii) the Debt Service Reserve Account has been funded up to the DSR Required Balance.

 

“Distribution Reserve Account” has the meaning set forth in the Accounts Agreement.

 

“Distribution Sweep Proceeds” has the meaning set forth in the Collateral Agreement.

 

“Dollars” and the sign “$” shall each mean freely transferable, lawful money of the United States.

 

“DSCR Calculation Period” means in respect of each Semi-Annual Date, the four consecutive quarterly periods preceding such Semi-Annual Date.

 

“DSCR Certificate” has the meaning set forth in Section 6.1(d) of this Credit Agreement.

 

“DSR Availability Period” means the period commencing on the Term Conversion Date and ending on the seventh anniversary of the Closing Date.

 

“DSR Commitments” means, as to any Issuing Bank, the applicable percentage set forth opposite such Issuing Bank’s name in Appendix F to this Credit Agreement under the heading “DSR Commitment” multiplied by the DSR LC Facility Amount.

 

“DSR Issuing Banks” means each Financing Party with a DSR Commitment.

 

“DSR LC Facility” has the meaning set forth in Section 2.5(a) of this Credit Agreement.

 

“DSR LC Facility Amount” has the meaning set forth in Section 2.5(a) of this Credit Agreement.

 

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“DSR Letters of Credit” has the meaning set forth in Section 2.5(b) of this Credit Agreement.

 

“DSR Maturity Date” has the meaning set forth in Section 2.5(d) of this Credit Agreement.

 

“DSR Required Balance” has the meaning set forth in the Collateral Agreement.

 

“Eligible Assignee” means (a) with respect to any assignment, (i) a commercial bank or other financial institution having a combined capital and surplus of at least $1,000,000,000, (ii) a Person that is primarily engaged in the business of commercial banking and that is a Lender or an Affiliate of a Lender and (iii) the United States Federal Reserve, (b) with respect to each assignment of an Issuing Bank of its obligation to issue a TA Letter of Credit under the TALC Facility, a Person that fulfills the requirements set forth in the definition of “Letter of Credit” in the Tolling Agreement, (c) with respect to each assignment of an Issuing Bank of its obligation to issue an LGIA Letter of Credit under the Revolving Facility, a Person that fulfills the requirements set forth in Section 11.5 of the LGIA, (d) with respect to each assignment of an Issuing Bank of its obligation to issue an DSR Letter of Credit under the DSR Facility, a Person that fulfills the requirements set forth in Section 3.6(b) of the Collateral Agreement and (e) with respect to only to an assignment of Construction Loans or Term Loans, any Affiliate of the Borrower Parties (other than the Borrower Parties).

 

“Energy Marketing Agreement” means the Energy Marketing Services Agreement, dated March 31, 2011, between the Energy Marketer and the Project Owner.

 

“Energy Marketer” means NRG Power Marketing LLC, a Delaware limited liability company.

 

“Environmental Claim” has the meaning set forth in the Collateral Agreement.

 

“Environmental Indemnity” means the Environmental Indemnity Agreement, dated the date hereof, between NRG Energy, Inc. and the Project Owner.

 

“Environmental Laws” has the meaning set forth in the Collateral Agreement.

 

“Environmental Remediation Contractor” means AECOM or any other environmental remediation contractor reasonably acceptable to the Administraitve Agent (in consultation with the Independent Engineer) that is retained to develop the Remediation Work Plan.

 

“EPA Letters” means, collectively, (i) the conditional approval letter from the USEPA, dated April 1, 2011, approving El Segundo Power, LLC’s letter of notification, dated March 2, 2011, (ii) the second conditional approval letter from the USEPA, dated June 6, 2011, modifying the April 1, 2011 letter referred to in subpart (i) above, (iii) the third conditional approval letter from the USEPA, dated July 15, 2011, further modifying the April 1, 2011 letter referred to in subpart (i) above, (iv) the fourth conditional approval letter from the USEPA, dated August 4, 2011, addressing the groundwater issue at the Site as it relates to polychlorinated biphenyls contamination, and (v) any other correspondence received from the USEPA or any

 

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other relevant Governmental Authority in respect of remediation of the contamination by polychlorinated biphenyls in concrete foundations below ground surface, soils, and groundwater at, on and under the Site.

 

“EPC Contracts” means the BOP Contract, the BOP Guaranty, the Construction Management Agreement, the Equipment Purchase Agreement, the Equipment Supplier Guaranty, the Equipment Services Agreement, the Equipment Servicer Guaranty, the Construction Coordination Agreement, the Project Labor Agreement and the Assignment of Project Labor Agreement or any other Project Document providing for construction services on, or delivery of any equipment or materials to, the Site.

 

“EPC Contractors” means the BOP Contractor, the Equipment Supplier, the Equipment Supplier Guarantor, the Equipment Servicer, the Equipment Servicer Guarantor, the Construction Manager and each other counterparty to an EPC Contract.

 

“Equator Principles” “Equator Principles” means those principles so entitled and described in “The ‘Equator Principles’ — A financial industry benchmark for determining, assessing and managing social and environmental risk in project financing” (July 2006) and available at: http://www.equator-principles.com/documents/Equator_Principles.pdf, as adopted in such form by certain financial institutions.

 

“Equipment Purchase Agreement” means the Equipment Purchase Agreement, dated as of July 15, 2010, between the Borrower and the Equipment Supplier.

 

“Equipment Services Agreement” means the Services Agreement, dated as of July 19, 2010, between the Equipment Servicer and the Procurement Sub.

 

“Equipment Servicer” means Siemens Energy, Inc., a Delaware corporation.

 

“Equipment Servicer Guaranty” means the Guaranty, dated November 2, 2010, by the Equipment Servicer Guarantor for the benefit of the Procurement Sub and the Borrower.

 

“Equipment Servicer Guarantor” means Siemens Corporation, a Delaware corporation.

 

“Equipment Supplier” means Siemens Energy, Inc., a Delaware corporation.

 

“Equipment Supplier Guaranty” means the Guaranty, dated November 2, 2010, by the Equipment Supplier Guarantor for the benefit of the Procurement Sub and the Borrower.

 

“Equipment Supplier Guarantor” means Siemens Corporation, a Delaware corporation.

 

“Equity Contributions” means equity contributions made in cash or in-kind by the Pledgor to the Borrower; provided, that for purposes of Sections 2.1(e), 4.1(e) and 7.9(c) of the Agreement and the definition of “Debt-to-Equity Ratio”, the amount of Equity Contributions deemed contributed in-kind by the Pledgor shall not exceed 105% of the amount of Project Costs

 

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that have been validated by the Independent Engineer as being properly incurred by Affiliates of the Borrower and contributed in-kind (directly or indirectly) to the Borrower.

 

“Equity Interests” means (i) as to any Person organized as a limited liability company or a partnership, any and all shares of the profits and losses of such Person, any and all rights to receive distributions of such Person’s assets, and any and all rights, benefits or privileges pertaining to any of the foregoing, including voting rights and the right to participate in management, (ii) as to any Person organized as a corporation, any ordinary shares, preferential shares, convertible shares, warrants or other securities representing or convertible into any of the foregoing and (iii) as to any other Person (other than a natural Person), any equity interests of any kind in such Person whether or not analogous to the foregoing.

 

“ERISA” means the U.S. Employee Retirement Income Security Act of 1974 and the regulations promulgated and rulings issued thereunder or pursuant thereto.

 

“ERISA Affiliate” means each person (as defined in Section 3(9) of ERISA) which, together with the Borrower or any Subsidiary of the Borrower, would be deemed to be a “single employer” (i) within the meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code or (ii) as a result of the Borrower or any Subsidiary of the Borrower being or having been a general partner of such person.

 

“ERISA Event” means (a) any reportable event, as defined in Section 4043 of ERISA, with respect to a Pension Plan, as to which the PBGC has not waived the requirement of Section 4043(a) of ERISA that it be notified of such event, (b) the filing of a notice of intent to terminate any Pension Plan, if such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, the filing under Section 4041(c) of ERISA of a notice of intent to terminate any Pension Plan, or the termination of any Pension Plan under Section 4041(c) of ERISA, (c) the institution of proceedings by the PBGC under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, (d) the failure to make a required contribution to any Pension Plan that would result in the imposition of a Lien or the provision of security under Section 430 of the Code or Section 303 or 4068 of ERISA, or the arising of such a Lien, (e) the failure to satisfy the minimum funding standard under Section 412 of the Code or Section 302 of ERISA, whether or not waived, or the filing of any request for or receipt of a minimum funding waiver under Section 412 of the Code with respect to any Pension Plan or Multiemployer Plan or a determination that any Pension Plan is considered an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA, (f) engaging in a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA with respect to a Pension Plan, (g) the complete or partial withdrawal of any member of the ERISA Group from a Multiemployer Plan if there is any potential liability therefor, the reorganization or insolvency under Title IV of ERISA of any Multiemployer Plan or the receipt by any member of the ERISA Group of any notice, or the receipt by any Multiemployer Plan from any member of the ERISA Group of any notice that a Multiemployer Plan is in endangered or critical status under Section 432 of the Code or Section 305 of ERISA or (h) any Borrower Party incurring any liability under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA).

 

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“ERISA Group” means the Borrower Parties and their ERISA Affiliates.

 

“Event of Default” has the meaning set forth in Article VIII of this Credit Agreement.

 

“Event of Loss” has the meaning set forth in the Collateral Agreement.

 

“EWG” has the meaning set forth in Section 5.12 of this Credit Agreement.

 

“EWG Order” has the meaning set forth in Section 5.12 of this Credit Agreement.

 

“Excess Fuel Consumption Liquidated Damages” has the meaning set forth in the Equipment Services Agreement.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, or by any jurisdiction as a result of a present or former connection between such recipient and the jurisdiction imposing such tax (or any political subdivision thereof), other than any such connection arising solely from such recipient having executed, delivered or performed its obligations or received a payment under, or enforced, this Credit Agreement or any other Financing Document, (b) any branch profits taxes imposed by the United States, (c) any backup withholding tax that is required by the Code to be withheld from amounts payable to a Lender, and (d) in the case of a Lender described in Section 3.24(b)(i) (other than an assignee pursuant to a request by the Borrower under Section 11.11 and Section 3.26), any United States withholding tax that is required to be imposed on amounts payable to such Lender pursuant to the Laws in force at the time such Lender becomes a party hereto (or designates a new Lending Office) except to the extent that such Lender (or its assignor, if any) was entitled, at the time of the designation of a new lending office (or assignment) to receive additional amounts from any Borrower with respect to such withholding tax pursuant to Section 3.24 or (ii) is imposed with respect to the requirements of FATCA.

 

“Expected Initial Delivery Date” means 12:01 a.m. on August 1, 2013.

 

“Expropriation Event” means (i) any condemnation, nationalization, seizure or expropriation by a Governmental Authority of all or a substantial portion of the Project or the Property or the assets of any Borrower Party or of its Equity Interests, (ii) any assumption by a Governmental Authority of control of the Property, assets, business or operations of any Borrower Party or of its Equity Interests, (iii) any taking of any action by a Governmental Authority for the dissolution or disestablishment of any Borrower Party or (iv) any taking of any action by a Governmental Authority that would prevent any Borrower Party from carrying on its business or operations or a substantial part thereof.

 

“Extraordinary O&M Expenses” has the meaning set forth in Section 6.6(c).

 

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“Facility” means, collectively, the two Generating Units to be located on the Site and all associated facilities (including all associated electrical, gas, steam and water interconnection, transmission, storage and treatment facilities, to the extent owned by any Borrower Party) designed to generate approximately 550MW of electrical energy.

 

“FATCA” means sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Credit Agreement (or any amended or successor version of FATCA that is substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof.

 

“Federal Funds Rate” means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that (i) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (ii) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent (in its individual capacity) on such day on such transactions as determined by the Administrative Agent.

 

“Federal Power Act” has the meaning set forth in Section 5.12 of this Credit Agreement.

 

“Fees” means all amounts payable pursuant to or referred to in Section 3.13 of this Credit Agreement.

 

“FERC” means the Federal Energy Regulatory Commission of the United States or any successor agency thereto.

 

“Financing Documents” means, collectively, (i) this Credit Agreement, the Guaranties, the Collateral Agreement, the Title Indemnity and each Security Document, (ii) each other document that is specified to be a Financing Document either in such document or in any of the documents referred to in clause (i) and (iii) each amendment, consent or waiver granted in respect of or pursuant to any of the documents referred to in clauses (i) and (ii) (whether or not such amendment, consent or waiver specifies therein that such amendment, consent or waiver is a Financing Document).

 

“Financing Parties” means the Lenders, the TALC Issuing Bank, the LGIA Issuing Banks, the DSR Issuing Banks and the TALC Participating Banks.

 

“Firm Priority Service” has the meaning set forth in the Tolling Agreement.

 

“First Unit Operation Date” means the Substantial Completion Date (as defined in the Equipment Services Agreement) of the first Unit (as defined in the Equipment Services Agreement).

 

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“Foreign Pension Plan” means shall mean any plan, fund (including any superannuation fund) or other similar program established or maintained outside the United States by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and which plan is not subject to ERISA or the Code.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender that is a TALC Participating Bank, such Defaulting Lender’s TALC Participation minus the amount thereof that has been reallocated to other TALC Participating Banks or Cash Collateralized in accordance with the terms hereof.

 

“Generating Units” means the gas-fired combined cycle combustion turbines to be procured, installed and constructed in accordance with the EPC Contracts and located at the Site.

 

“Good Utility Practices” means the professional practices, methods, equipment, specifications and safety and output standards and industry codes of the electrical generation industry for projects of the same approximate type, location and capacity as the Project, with respect to the design, installation, operation, maintenance and use thereof, all of the above in compliance with applicable standards of safety, output, dependability, efficiency and economy, including recommended practice, of a good, safe, prudent and workman-like character and in compliance with all applicable Laws. Good Utility Practices are not intended to be limited to the optimum or minimum practice or method to the exclusion of all others, but rather to be a spectrum of reasonable and prudent practices and methods as practiced in the electrical generation industry.

 

“Governmental Authority” means any government, governmental department, commission, board, bureau, agency, regulatory authority, instrumentality, judicial or administrative body, domestic or foreign, federal, state or local having jurisdiction over the matter or matters in question, including those of the State of California, the State of New York, and the United States.

 

“Guaranties” has the meaning set forth in the Collateral Agreement.

 

“Hazardous Material” has the meaning set forth in the Collateral Agreement.

 

“Hedging Agreement” means any agreement in respect of any interest rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of the foregoing transactions) or any combination of the foregoing transactions entered into by any Person.

 

“Historical DSCR” means, in respect of any DSCR Calculation Period, the ratio of (i) CFADS for such DSCR Calculation Period to (ii) the Scheduled Debt Service for such DSCR Calculation Period.

 

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“IE Construction Report” means, in respect of any month, a construction report of the Independent Engineer for such month in substantially the form set forth as Exhibit 19.

 

“Indebtedness” of any Person means (i) all indebtedness of such Person for borrowed money, (ii) the deferred purchase price of assets or services which in accordance with U.S. GAAP would be shown on the liability side of the balance sheet of such Person, (iii) the face amount of all letters of credit issued for the account of such Person and, without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any Property owned by such first Person, whether or not such Indebtedness has been assumed, (v) all Capital Lease Obligations of such Person, (vi) all obligations of such Person to pay a specified purchase price for goods or services whether or not delivered or accepted (i.e., take-or-pay and similar obligations), (vii) all net obligations of such Person under Hedging Agreements and (viii) all Contingent Obligations of such Person; provided, that Indebtedness shall not include trade payables arising in the ordinary course of business so long as such trade payables are payable within ninety days of the date the respective goods are delivered or the respective services are rendered and are not overdue.

 

“Indemnified Liabilities” has the meaning set forth in Section 11.2(a) of this Credit Agreement.

 

“Indemnified Matters” has the meaning set forth in Section 11.2(b)(i) of this Credit Agreement.

 

“Indemnified Person” has the meaning set forth in Section 11.2(a) of this Credit Agreement.

 

“Independent Consultant” means each of the Independent Engineer and the Insurance Consultant.

 

“Independent Engineer” means SAIC Energy, Environment & Infrastructure, LLC or any other Person from time-to-time appointed by the Requisite Financing Parties to act as Independent Engineer for the purposes of this Credit Agreement.

 

“Independent Engineer Completion Certificate” means the certificate of the Independent Engineer in the form attached hereto as Exhibit 15.

 

“Inflation Factor” means, in respect of any payment in any year, the sum of 1 plus the positive difference (if any) between (x) the Inflation Index for the immediately preceding year, expressed as a percentage of the base year thereof, minus (y) the Inflation Index for the year in which the Closing Date occurs, expressed as a percentage of the base year thereof.

 

“Inflation Index” means the non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers, reported monthly by the Bureau of Labor Statistics of the US Department of Labor (unrevised) (Series Id: CUUR0000SA0) (Base Period: 1982-1984 = 100), and as published on Bloomberg page CPURNSA; provided, that if the base year of such index changes, the Inflation Index shall be such index converted in accordance with the relevant conversion factor published by the US Department of Labor.

 

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“Initial Delivery Date” has the meaning set forth in Section 2.04 of the Tolling Agreement.

 

“Insurance Consultant” means Moore McNeil, LLC or any other Person from time-to-time appointed by the Required Creditors to act as Insurance Consultant for the purposes of this Credit Agreement.

 

“Intercompany Notes” means, collectively, the Intercompany Subordinated Note, dated as of the date hereof, issued by the Project Owner for the benefit of the Borrower, the Intercompany Subordinated Note, dated as of the date hereof, issued by the Procurement Sub for the benefit of the Borrower and the Intercompany Subordinated Note, dated as of the date hereof, issued by the Borrower for the benefit of the Pledgor, in each case, evidencing Indebtedness extended in accordance with Section 7.21(e).(1)

 

“Interest Determination Date” means, with respect to any LIBOR Loan, the second Business Day prior to the commencement of any Interest Period relating to such LIBOR Loan.

 

“Interest Period” has the meaning set forth in Section 3.7 of this Credit Agreement.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time-to-time, and the regulations promulgated and rulings issued thereunder.

 

“Investment” in any Person means, without duplication: (a) the acquisition (whether for cash, securities, other Property, services or otherwise) or holding of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of such Person, or any agreement to make any such acquisition or to make any capital contribution to such Person; or (b) the making of any deposit with, or advance, loan or other extension of credit to, such Person.

 

“Involuntary Bankruptcy Event” means, with respect to any Person, (i) the declaration by a Governmental Authority of a generally applicable suspension of payments, moratorium or any similar arrangement in respect of the Indebtedness of such Person or (ii) the commencement of an involuntary case against such Person seeking the liquidation or reorganization of such Person under Debtor Relief Law or any similar proceeding under any other applicable federal, state or other applicable Law.

 

“Issuance Date” means (i) prior to the issuance of any Specified Letter of Credit, the date specified in an LC Request as the date on which such Specified Letter of Credit is requested by the Borrower to be issued and (ii) after the issuance of any Specified Letter of Credit, the date such Specified Letter of Credit was actually issued.

 

“Issuing Banks” means, as the context may require, (i) each DSR Issuing Bank, (ii) the TALC Issuing Bank and (iii) each LGIA Issuing Bank.

 

(1) NOTE TO NRG: Please confirm dates.

 

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“Joint Bookrunner” means each of the financial institutions designated as such in the Preamble of this Credit Agreement.

 

“Large Generator Interconnection Agreement” means the Large Generator Interconnection Agreement among El Segundo Power II LLC, the Offtaker and CAISO, with an effective date of March 9, 2007, as amended by the first amendment with an effective date of December 1, 2007, the second amendment with an effective date of July 24, 2009 and the third amendment, dated March 14, 2011.

 

“Law” means, with respect to any Person (i) any statute, law, regulation, ordinance, rule, judgment, order, decree, permit, concession, grant, franchise, license, agreement, treaty, or other governmental restriction or any interpretation or administration of any of the foregoing by any Governmental Authority (including Permits) and (ii) any directive, guideline, policy, requirement or any similar form of decision of or determination by any Governmental Authority which is binding on such Person, in each case, whether now or hereafter in effect (including, in each case, any Environmental Law).

 

“LC Disbursement” means any payment to the beneficiary of any Specified Letter of Credit in accordance therewith.

 

“LC Facilities” means the Revolving Facility (in respect solely of the LGIA Letters of Credit), the TALC Facility and the DSR LC Facility.

 

“LC Loan” has the meaning set forth in Section 3.25(f).

 

“LC Request” means a request for a Specified Letter of Credit in substantially the form set out as Exhibit 10.

 

“LGIA Availability Period” means the period commencing on the Closing Date and ending on the Term Conversion Date.

 

“LGIA Issuing Banks” means each of the Revolver Lenders.

 

“LGIA Letter of Credit” has the meaning set forth in 2.3(b).

 

“Lender” means each Lender named on Appendix G and any Assignee thereof pursuant to Section 11.11 of this Credit Agreement.

 

“Letters of Credit Fees” has the meaning set forth in 3.13(c).

 

“LIBOR Loan” means Loans which bear interest based on the Adjusted LIBOR Rate.

 

“LIBO Rate” means, with respect to any Interest Period for any LIBOR Loan, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters LIBOR01 Page (or any successor page, or any substitute for such page, providing rate quotations comparable to those currently provided on such page or such pages, as determined by the Administrative Agent from time-to-time for purpose of providing quotations or interest rates

 

21

 

 

applicable to deposits in Dollars in the London interbank market) as the London interbank offered rate for overnight deposits in Dollars at approximately 11:00 a.m. (London time) on the second Business Day prior to the first day of such Interest Period. If for any reason the Reuters LIBOR01 Page (or any such agreed page or any successor or substitute page is not available), the term “LIBO Rate” means, with respect to any Interest Period for any LIBOR Loan, the rate determined by taking the average (rounded upward to the nearest whole multiple of 1/16 of 1% per annum, if such average is not a multiple) of the rates per annum at which overnight deposits in Dollars in an amount equal to $5,000,000 are offered by the principal office of each of the Reference Banks to prime banks in the London interbank market at approximately 11:00 a.m. (London time) on such day.

 

“Lien” means, with respect to any Property of any Person, any mortgage, lien, deed of trust, hypothecation, fiduciary transfer of title, assignment by way of security, pledge, charge, lease, sale and lease-back arrangement, easement, servitude, trust arrangement, security interest or encumbrance of any kind in respect of such Property, 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 Property of any kind (and a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, any agreement in respect of Capital Lease Obligations or other title retention agreement relating to such Property).

 

“Lien Waiver Report” means, in respect of any proposed Borrowing, a lien waiver report of the Borrower in substantially the form set forth as Exhibit 20.

 

“Liquidation Costs” has the meaning set forth in Section 3.12 of this Credit Agreement.

 

“Loan” means any loan made by any Lender pursuant to this Credit Agreement, including any Construction Loan, Term Loan, Revolving Loan or LC Loan.

 

“Losses” has the meaning set forth in Section 11.2(b)(i) of this Credit Agreement.

 

“Loss Proceeds” has the meaning set forth in the Collateral Agreement.

 

“M&M Contract” means any EPC Contract and any other Project Document under which the Title Insurance Companies require Lien waivers as conditions to the issuance of the 32-06 Endorsement or any 33-06 Endorsement.

 

“M&M Party” means (i) any EPC Contractor, (ii) any subcontractor, supplier or vendor of any EPC Contractor of any tier, or any other Project Participant party to any other M&M Contract, in each case, if and to the extent that any of the foregoing Persons has or may reasonably be expected to have mechanics’ lien rights in respect of the Project and (iii) any other Person from whom the Title Insurance Companies require Lien waivers as conditions to the issuance of the 32-06 Endorsement or any 33-06 Endorsement.

 

“Major Milestone Dates” means each of the milestones so designated under the heading “Major Milestone Dates” on Appendix J.

 

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“Majority Lenders” means Lenders whose aggregate remaining Commitments plus aggregate outstanding principal amount of funded Loans exceeds 50.0% of the total aggregate remaining Commitments plus the total aggregate principal amount of funded Loans of all Lenders.

 

“Mandated Lead Arrangers” means each of the financial institutions designated as such in the Preamble of this Credit Agreement.

 

“Mandatory Prepayment Portion” has the meaning set forth in the Collateral Agreement.

 

“Margin Stock” means margin stock within the meaning of Regulation U and Regulation X.

 

“Market Rate Authorization” has the meaning set forth in Section 5.12 of this Credit Agreement.

 

“Material Adverse Effect” has the meaning set forth in the Collateral Agreement.

 

“Material Permit” means (i) each Permit that is or will be required by any Governmental Authority to be held by any Borrower Party or an Affiliated Project Party to acquire, import, own, construct, install, operate, insure or maintain the Project or any material portion of the Project, (ii) each Permit in respect of the Project or any material portion of the Project that is or will be required by any Governmental Authority to be held by a Material Project Participant (whether or not required to be held on behalf of or for the benefit of any Borrower Party) in order for such Material Project Participant to (as applicable) acquire, import, construct, install, operate, insure or maintain the Project or any material portion of the Project in accordance with each Material Project Document to which it is a party, (iii) each Permit that is or will be required by any Governmental Authority to be held by any Borrower Party or any relevant Material Project Participant to duly execute, deliver or perform any Material Project Document, (iv) each Permit that is or will be required by any Governmental Authority to be held in the name of any Borrower Party or any Affiliated Project Party to cause any Material Project Document to be the legal, valid and binding obligation of such Person or of the Material Project Participant that is a party to any such Material Project Document and (v) each Permit that is or will be required by any Governmental Authority to be held in the name of any Borrower Party or an Affiliated Project Party in order to conduct its business generally or to maintain its existence.

 

“Material Project Document” means (i) each Project Document that is or will be necessary or advisable for the Borrower Parties to enter into in order to acquire, import, own, construct, install, operate, insure or maintain the Project or any material portion of the Project (other than services, materials or rights that can reasonably be expected to be readily available on commercially reasonable terms), (ii) each Project Document that is or will be necessary or advisable for the Borrower Parties to enter into in order for such Borrower Party to obtain, maintain in full force and effect or comply with any other Material Project Document, any Material Permit or any material applicable Law, (iii) each Project Document that is or will be necessary or advisable for the Borrower Parties to enter into in order to maintain their respective business generally or to maintain their respective existence, (iv) without limiting the foregoing

 

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(other than the parenthetical set forth in subclause (i) of this definition), each Project Document where (A) the aggregate cost or value of goods and services to be acquired by any Borrower Party pursuant thereto could reasonably be expected to exceed $2,000,000 or the equivalent in any other currency in any year, (B) the aggregate amount of termination fees or liquidated damages which could be incurred by any Borrower Party in respect of such Additional Project Document in any single year could reasonably be expected to exceed $2,000,000 or the equivalent in any other currency or (C) such Project Document provides for the sale of any goods, services, capacity, or other right, title or interest in any Property of any Borrower Party (other than Dispositions permitted in accordance with Section 7.20) and (v) without limiting the foregoing, any and all EPC Contracts and the Environmental Indemnity.

 

“Material Project Participant” means each party to a Material Project Document (other than the Borrower Parties).

 

“Maturity Date” means, as applicable, to the relevant Tranche of Loans, the Date Certain, the Term Maturity Date, the Revolver Maturity Date, the TALC Maturity Date or the DSR Maturity Date.

 

“Merger” has the meaning set forth in the Collateral Agreement.

 

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 100% of the Fronting Exposure of the TALC Issuing Bank with respect to TA Letters of Credit issued and outstanding at such time and (ii) otherwise, an amount determined by the TALC Issuing Bank in its sole discretion.

 

“Modified Business Day Convention” has the meaning set forth in the Swap Definitions.

 

“Monthly Period” means a period commencing on the day succeeding a Monthly Transfer Date and ending on the next succeeding Monthly Transfer Date.

 

“Monthly Transfer Date” means the last Business Day of each calendar month commencing on the first such day occurring on or after the Term Conversion Date.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Mortgage” has the meaning set forth in the Collateral Agreement.

 

“Mortgaged Property” has the meaning set forth in the Collateral Agreement.

 

“MPD Termination Event” means, with respect to any Material Project Document, any event or condition that would, either immediately or with the giving of notice, entitle the relevant Material Project Participant to terminate or suspend its obligations thereunder (and shall include, in any event, the occurrence of any “Termination Event” or other analogous event as defined in the Consent Agreement entered into in respect of such Material Project Document).

 

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“Multiemployer Plan” means an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made or accrued obligations to make contributions.

 

“NERC” has the meaning set forth in Section 5.12 of this Credit Agreement.

 

“Non-Consenting Creditor” means any Lender or Issuing Bank that does not approve any consent, waiver or amendment that (a) requires the approval of all affected Financing Parties in accordance with Section 10.11 and has been approved by all other affected Financing Parties in accordance with Section 10.11 and (b) has been approved by the Requisite Financing Parties.

 

“Non-Recourse Parties” has the meaning set forth in Section 11.7 of this Credit Agreement.

 

“Note” means, with respect to any Tranche of Loans, each promissory note delivered in respect of such Tranche of Loans to a Lender hereunder, in substantially the form set out as Exhibit 4, Exhibit 5, Exhibit 6, Exhibit 7 or Exhibit 8 (as applicable).

 

“Notice of Merger Certificate” has the meaning set forth in Section 7.33 of this Credit Agreement.

 

“Notice Office” means the office of the Administrative Agent set forth on Appendix G or such other office as the Administrative Agent may hereafter designate in writing as such to the Borrower and each Lender.

 

“Notional Amortization” means, in respect of any Semi-Annual Date, the notional principal amount projected to be payable on such Semi-Annual Date, as set forth under the heading “Tranche A $” or “Tranche B $” on the Projected Amortization Schedule, as applicable.

 

“Notional Disbursement Schedule” has the meaning set forth in Section 3.14(b).

 

“Notional Loan Amount” has the meaning set forth in Section 7.26 of this Credit Agreement.

 

“NYPSC” has the meaning set forth in Section 5.12(c) of this Credit Agreement.

 

“O&M Agreement” means the Operation and Maintenance Management Agreement, dated as of March 31, 2011, between the Project Owner and the O&M Operator, as amended by the first amendment to the O&M Agreement, dated June 1, 2011.

 

“O&M Operator” means NRG El Segundo Operations Inc., a Delaware corporation.

 

“O&M Expenses” means, collectively, without duplication, all (i) expenses of administering and operating the Project and of maintaining it in accordance with Good Utility Practices incurred by the Borrower Parties (including any items properly chargeable by U.S.

 

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GAAP to fixed capital accounts or that are or should be classified as capital expenditures), (ii) fuel procurement and transportation costs payable by the Borrower Parties, (iii) direct operating and maintenance costs of the Project payable by the Borrower Parties, (iv) insurance premiums payable by the Borrower Parties (including construction insurance premiums paid for coverage obtained prior to the Project Completion Date), (v) property, sales, value-added and excise taxes payable by the Borrower Parties (other than taxes imposed on or measured by income or receipts), (vi) costs and fees incurred by the Borrower Parties in connection with obtaining and maintaining in effect the Permits required in connection with the Project, (vii) legal, engineering, accounting, construction, management and other professional fees incurred in the ordinary course of business in connection with the Project payable by the Borrower Parties (viii) “Reimbursable Expenses” as defined in the O&M Agreement and the Project Administration Agreement, respectively; provided, that “O&M Expenses” shall not include payments into the Debt Service Reserve Account.

 

“OB Approval Threshold” means each threshold set forth on Appendix E under the heading “OB Approval Threshold”.

 

“Officer’s Certificate” means, with respect to each Borrower Party, an officer’s certificate signed by an Authorized Officer of such Borrower Party in respect of such Borrower Party.

 

“Offtaker” means Southern California Edison Company, a California corporation.

 

“Operating Account” has the meaning set forth in the Accounts Agreement.

 

“Operating Agreements” means the O&M Agreement, the Energy Marketing Agreement, the Spare Parts Agreement and the Project Administration Agreement.

 

“Operating Budget” means, for, any Operating Year, the operating and O&M Expense budget forecasts for the Project showing the costs and expenses necessary to operate, service, maintain and repair the Project, which includes (i) a detailed line item breakdown of the total costs of the Project at a level of detail satisfactory to Administrative Agent, (ii) a detailed description of the methodology and all material assumptions used to produce such estimates and the Base Case Projections.

 

“Operating Performance” means the operating and performance parameters of the Project, including power production, fuel consumption and efficiency, heat rate information, availability, capacity, maintenance performed, outages, changes in operating status, inspections and any other significant events relating to the operation of the Project, including each Generating Unit.

 

“Operating Report” means an operations report prepared quarterly by the Borrower in accordance with Section 6.1(e).

 

“Operating Year” means each calendar year (or portion thereof) occurring after the First Unit Operation Date and prior to the Term Maturity Date.

 

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“Operators” means the O&M Operator, the Energy Marketer, the Spare Parts Supplier and the Project Administrator.

 

“Optional True-Up Date” has the meaning set forth in Section 2.1(e) of this Credit Agreement.

 

“Originating Lender” has the meaning set forth in Section 11.11(d) of this Credit Agreement.

 

“Participating Bank” has the meaning set forth in Section 11.11(d) of this Credit Agreement.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

 

“Pension Plan” means an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either is, or at any time within the preceding five years has been, maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group.

 

“Performance Guarantees” has the meaning set forth in the Equipment Services Agreement.

 

“Permit” means any authorization, consent, approval, license, ruling, permit, tariff, rate, certification, exemption, filing, variance, claim, order, judgment, decree, publication, notice to, declaration of or with, or registration by or with, any Governmental Authority.

 

“Permitted Indebtedness” has the meaning set forth in Section 7.21 of this Credit Agreement.

 

“Permitted Investments” has the meaning set forth in the Accounts Agreement.

 

“Permitted Lien” has the meaning set forth in the Collateral Agreement.

 

“Permitted Priority Liens” has the meaning set forth in the Collateral Agreement.

 

“Person” means any individual, corporation, limited liability company, company, voluntary association, partnership, joint venture, trust, or other enterprise or unincorporated organization or government (or any agency, instrumentality or political subdivision thereof).

 

“Plans and Specifications” means the plans and specifications relating to the Project as set forth in or contemplated by the EPC Contracts.

 

“Pledge Agreements” means each of the Pledgor Pledge Agreement and the Borrower Pledge Agreement.

 

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“Pledged Equity Interests” means the Equity Interests pledged pursuant to the relevant Pledge Agreement.

 

“Pledgor” means Natural Gas Repowering LLC, a limited liability company duly organized and existing under the laws of Delaware.

 

“Pledgor Closing Certificate” means a certificate, substantially in the form of Exhibit 12, dated the Closing Date, appropriately completed and duly executed by an Authorized Officer of the Pledgor.

 

“Pledgor Pledge Agreement” means the Pledge Agreement dated the date hereof between the Pledgor and the Collateral Agent in respect of, inter alia, the Equity Interests of the Borrower.

 

“Prime Rate” means the per annum rate of interest established from time-to-time by the Administrative Agent as its prime rate, which rate may not be the lowest rate of interest charged by the Administrative Agent to its customers.

 

“Principal Payment Date” means each date on which principal of the Loans is due in accordance with the Amortization Schedule.

 

“Proceeds Account” has the meaning set forth in the Accounts Agreement.

 

“Procurement Sub” means NRG West Procurement Company LLC, Delaware limited liability company and a wholly-owned Subsidiary of the Borrower.

 

“Project” means the engineering, construction, procurement, installation, testing, commissioning, operation, maintenance and ownership of the Facility to be located at the Site, including all buildings, structures and improvements erected on the Site, all alterations thereto or replacements thereof, all fixtures, attachments, equipment, machinery, parts and other articles which may from time-to-time be incorporated or installed in or attached thereto, all associated facilities (including all associated electrical, gas, steam and water interconnection, transmission, storage and treatment facilities), and all easements, leasehold interests, licenses, permits, contract rights and other real and personal property interests, in each case, now owned or hereafter acquired by the Borrower Parties or in which the Borrower Parties have any rights.

 

“Project Administration Agreement” means the Project Administration Services Agreement, dated as of March 31, 2011, among the Borrower, the Project Owner and the Project Administrator.

 

“Project Administrator” means NRG West Coast LLC, a Delaware limited liability company.

 

“Project Completion Date” means the date upon which all of the following events shall have occurred:

 

(i)                                     Unit Mechanical Completion (as defined in the BOP Contract) of each Unit (as defined in the BOP Contract) shall have occurred;

 

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(ii)                                  the Project shall have been started up and operated, and Final Completion (as such term is defined in the Equipment Services Agreement) of each Unit (as such term is defined in the Equipment Services Agreement) shall have occurred;

 

(iii)                               the Work (except for the Final Completion Punch List (as such term is defined in the BOP Contract) and the Final Punchlist (as such term is defined in the Equipment Services Contract)) items the total cost of which to complete shall not exceed $250,000) shall have been completed in accordance with the BOP Contract and the Equipment Services Contract, as the case may be, and in compliance with all applicable Laws and Permits, and all clearing, landscaping, lighting and paving of the Project site, and all ancillary construction, upgrades and improvements necessary for the operation of the Project as contemplated by the Transaction Documents, including the interconnection and transmission facilities contemplated by the Revenue Contracts, the Large Generator Interconnection Agreement and the SoCalGas Transportation Contract, shall have been completed;

 

(iv)                              issuance to the Project Owner of a final permit to operate the Project by the South Coast Air Quality Management District;

 

(v)                                 the Borrower shall have delivered the Borrower Completion Certificate to the Administrative Agent;

 

(vi)                              the Administrative Agent shall have received an executed counterpart of the Independent Engineer Completion Certificate; and

 

(vii)                           the Commercial Operation Date.

 

“Project Costs” means (a) all costs and expenses incurred or to be incurred by the Borrower Parties to develop, finance, complete and start-up the Project and achieve the Project Completion Date (and complete all Punch List items) in the manner contemplated by the Transaction Documents, including all amounts payable to third parties under the Project Documents and other contracts for the supply of equipment or services relating to the construction of the Facility, all costs and expenses incurred in connection with the negotiation and preparation of the Transaction Documents, and all other expenses required for the financing, development, design, engineering, construction, equipment procurement, installation, start-up and initial operation of the Project that are properly capitalized or expensed in accordance with U.S. GAAP, (b) all Fees and interest payable on the Secured Obligations prior to the Term Conversion Date and (c) all O&M Expenses payable prior to the Term Conversion Date. “Project Costs” shall not include (a) payments of principal of any Indebtedness, (b) any indemnification payments to any Secured Party or (c) any payments of any kind to any Borrower Party or any Affiliate thereof other than (x) the letter of credit fees set forth in the First Amended Intercompany Note, dated as of July 1, 2010, issued by the Project Owner for the benefit of the Sponsor and the Third Amended and Restated Credit Agreement, dated as of June 30, 2010, among, inter alia, the Sponsor, as borrower, Citicorp North Amercia Inc., as administrative agent and collateral agent, and the lenders party thereto from time to time, and (y) other amounts payable pursuant to the Affiliated Project Documents.

 

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“Project Documents” means all contracts, agreements, side letters, leases, powers of attorney or other instruments or documents entered into or to be entered into by any Borrower Party in connection with the Project that are not Financing Documents.

 

“Project Labor Agreement” means the Project Labor Agreement, dated as of 2001, among El Segundo Power II LLC, the State Building and Construction Trades Council of California and its affiliated local unions who have executed the Project Labor Agreement.

 

“Project Owner” means El Segundo Energy Center LLC, a Delaware limited liability company and a wholly-owned Subsidiary of the Borrower.

 

“Project Participants” means each party (other than the Borrower) to any Project Document.

 

“Project Revenues” means, for any period, without duplication, the aggregate of (i) payments to the Borrower Parties under the Revenue Contracts plus (ii) interest accrued on, and other income derived from, the balance outstanding during such period in the Secured Accounts plus (iii) Business Interruption Proceeds plus (iv) the proceeds of any Delay Liquidated Damages plus (v) the proceeds of any Excess Fuel Consumption Liquidated Damages. For the avoidance of doubt, Project Revenues shall exclude (a) net amounts payable to the Borrower under any Hedging Agreements, (b) proceeds payable in respect of any insurance (other than business interruption insurance), (c) the proceeds of any Buy-down Proceeds and any liquidated damages payable to the Borrower Parties under any Operating Agreement in respect of performance deficiencies and (d) warranty or indemnity payments or damages payable to the Borrower Parties under any Project Document.

 

“Project Schedules” means, collectively, each project schedule attached to each EPC Contract on the date hereof.

 

“Projected Amortization Schedule” means the percentage and notional amortization schedule attached hereto as Appendix C, as updated in accordance with Section 3.15 and 3.18(a).

 

“Projected Completion Date” means August 1, 2013 plus the number of days (if any) that the Substantial Completion Guaranteed Date (as defined in the Equipment Services Agreement) has been extended pursuant to a Change Order entered into in accordance with Section 7.15.

 

“Projected DSCR” means, for any applicable period, the ratio of (i) the expected CFADS for such period, to (ii) the Scheduled Debt Service for such period (including scheduled principal payments in respect of the Loans required to be paid during such period but excluding mandatory prepayments in respect of the Loans payable during such period pursuant to the Financing Documents) and the Assumed Interest Expense in respect of the Loans required to be paid during such period.

 

“Property” means any property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, and any right or interest therein.

 

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“PUHCA” has the meaning set forth in Section 5.12 of this Credit Agreement.

 

“Punch List” has the meaning set forth in the BOP Contract.

 

“Punch List Amount” has the meaning set forth in the Accounts Agreement.

 

“Rate Swap Agreement” has the meaning set forth in the Collateral Agreement.

 

“Rate Swap Commencement Date” means the first Semi-Annual Date to occur after January 1, 2012.

 

“Rate Swap Confirmation” has the meaning set forth in the Collateral Agreement.

 

“Rate Swap Counterparty” has the meaning set forth in the Collateral Agreement.

 

“Rate Swap Transaction” has the meaning set forth in the Collateral Agreement.

 

“RCRA Facility Investigation Work Plan” means the RCRA Facility Investigation Work Plan, dated August 2007 (as revised June 23, 2008 and October 19, 2010, and as further revised, amended, supplemented or otherwise modified from time to time) prepared by Shaw Environmental, Inc. for El Segundo Power II LLC.

 

“Real Property Agreements” has the meaning set forth in the Collateral Agreement.

 

“Reference Banks” means those reference banks selected from time-to-time by the British Bankers Association as the panel of banks that contribute to the fixing of US Dollar bbalibor, as set forth as of the date hereof at http://www.bbalibor.com/panels/usd.

 

“Register” has the meaning set forth in Section 10.10 of this Credit Agreement.

 

“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System (or any successor).

 

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System (or any successor).

 

“Regulation X” means Regulation X of the Board of Governors of the Federal Reserve System (or any successor).

 

“Reissued Title Policy” has the meaning set forth in Section 4.6(h)(i).

 

“Release” has the meaning set forth in the Collateral Agreement.

 

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“Relevant Work Date” means, with respect to any amount to be paid to any M&M Party from proceeds of the Construction Loans, the date reasonably determined by Borrower in good faith and set forth on the Lien Waiver Report that the milestone or similar event entitling the M&M Party to such payment was achieved, the goods entitling such M&M Party to such payment were delivered to the site, the services entitling such M&M Party to such payment were performed at the site, or the work entitling such M&M Party to such payment was otherwise performed, as applicable.

 

“Remediation Work Plan” means the work plan agreed to among the Project Owner, El Segundo Power, LLC and the Environmental Remediation Contractor setting forth all corrective actions necessary or appropriate to satisfy the conditions and other requirements set forth in the EPA Letters.

 

“Required Equity Contribution” means the greater of (x) the positive difference between the aggregate amount of historical and projected Project Costs (including the Contingency) set forth in the then-applicable Construction Budget minus the sum of the Tranche A Loan Amount and the Tranche B Loan Amount and (y) 20% of the aggregate amount of historical and projected Project Costs (including the Contingency) set forth in the then-applicable Construction Budget.

 

“Requisite Financing Parties” means, at any time, Lenders holding at least:

 

(i)                                     50.1% of the sum of (A) the Tranche A Construction Commitment (or after the termination thereof, outstanding Tranche A Construction Loans or the Tranche A Term Loans, as applicable), (B) the Revolving Loan Commitments (or after the termination thereof, outstanding Revolving Loans), (C) the DSR Commitments (or after the termination thereof, outstanding LC Loans in respect of any draws on the DSR Letters of Credit) and (D) the TALC Commitments (or after the termination thereof, outstanding LC Loans in respect of any draw on the TA Letters of Credit);

 

(ii)                                  50.1% of the Tranche B Construction Commitment (or after termination thereof, outstanding Tranche B Construction Loans or Tranche B Term Loans, as applicable); and

 

(iii)                             66.6% of the sum of (A) the Tranche A Construction Commitment (or after the termination thereof, outstanding Tranche A Construction Loans or the Tranche A Term Loans, as applicable), (B) Tranche B Construction Commitment (or after termination thereof, outstanding Tranche B Construction Loans or Tranche B Term Loans, as applicable); (C) Revolving Loan Commitments (or after the termination thereof, outstanding Revolving Loans), (D) the DSR Commitments (or after the termination thereof, outstanding LC Loans in respect of any draws on the DSR Letters of Credit) and (E) the TALC Commitments (or after the termination thereof, outstanding LC Loans in respect of any draw on the TA Letters of Credit).

 

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“Requisite Revolver Lenders” means Revolver Lenders holding at least 50.1% of the aggregate outstanding principal amount of the Revolving Loans or, if no Revolving Loans have been made, at least 50.1% of the aggregate Revolving Loan Commitments of all Revolver Lenders.

 

“Requisite TALC Participating Banks” means TALC Participating Banks holding at least 50.1% of the aggregate outstanding principal amount of the LC Loans resulting from a drawing on the TALC Letters of Credit or, if no LC Loans have been made, at least 50.1% of the aggregate LC Loan Commitments of all TALC Participating Banks.

 

“Requisite Tranche A Lenders” means Tranche A Lenders holding at least 50.1% of the aggregate outstanding principal amount of the Tranche A Construction Loans or the Tranche A Loans, as applicable, or, if no Tranche A Construction Loans have been made, at least 50.1% of the aggregate Tranche A Construction Loan Commitments of all Tranche A Lenders.

 

“Requisite Tranche B Lenders” means Tranche B Lenders holding at least 50.1% of the aggregate outstanding principal amount of the Tranche B Construction Loans or the Tranche B Term Loans, as applicable, or, if no Tranche B Construction Loans have been made, at least 50.1% of the aggregate Tranche B Construction Loan Commitments of all Tranche B Lenders.

 

“Requisite Term Lenders” means each of the Requisite Tranche A Lenders and the Requisite Tranche B Lenders.

 

“Requisition Date” has the meaning set forth in the Accounts Agreement.

 

“Reserve Requirement” means, at any time, the maximum rate at which reserves (including any marginal, special, supplemental, or emergency reserves) are required to be maintained under regulations issued from time-to-time by the Board of Governors of the Federal Reserve System (or any successor) by member banks of the Federal Reserve System against “Eurocurrency liabilities” (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by reference to which the Adjusted LIBO Rate is to be determined, and (ii) any category of extensions of credit or other assets which include LIBOR Loans. The Adjusted LIBO Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Requirement.

 

“Restore” has the meaning set forth in the Collateral Agreement.

 

“Restricted Payment” has the meaning set forth in Section 7.9 of this Credit Agreement.

 

“Retainage Escrow Agreement” means the Escrow Agreement dated May 18, 2011 among the Project Owner, the BOP Contractor and California Bank & Trust.

 

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“Revenue Contracts” means (i) the Tolling Agreement and (ii) at all times after the execution thereof, each Additional Material Project Document specified in subpart (iii) of the definition thereof.

 

“Revolver Availability Period” means the period commencing on the Closing Date and ending on the earlier to occur of (i) the termination of the Revolving Commitment pursuant to the provisions of this Credit Agreement, and (ii) the seventh anniversary of the Closing Date.

 

“Revolver Lender” means each Lender that has a Revolving Commitment or Revolving Loans.

 

“Revolver Maturity Date” has the meaning set forth in Section 2.3(f) of this Credit Agreement.

 

“Revolving Amount” has the meaning set forth in Section 2.3(a) of this Credit Agreement.

 

“Revolving Commitment” means, as to any Lender, the applicable percentage set forth opposite such Lender’s name in Appendix F to this Credit Agreement under the heading “Revolving Commitment” multiplied by the Revolving Amount.

 

“Revolving Facility” has the meaning set forth in Section 2.3(a) of this Credit Agreement.

 

“Revolving Loans” has the meaning set forth in Section 2.3(b) of this Credit Agreement.

 

“Scheduled Debt Service” means, in respect of any DSCR Calculation Period, the sum of (i) the aggregate amount of interest paid during such DSCR Calculation Period (or, as applicable, the Assumed Interest Expense for such DSCR Calculation Period) plus (ii) the aggregate amount of Fees paid (or, as applicable, projected to be paid) during such DSCR Calculation Period plus (iii) the aggregate amount of amortized principal of the Loans paid (or, as applicable, required to be paid) during such DSCR Calculation Period.

 

“Secured Accounts” has the meaning set forth in the Collateral Agreement.

 

“Secured Parties” has the meaning set forth in the Collateral Agreement.

 

“Secured Obligations” has the meaning set forth in the Collateral Agreement.

 

“Security Agreements” means (a) the Security Agreement dated the date hereof between the Borrower and the Collateral Agent, (b) the Security Agreement dated the date hereof between the Procurement Sub and the Collateral Agent and (c) the Security Agreement dated the date hereof between the Project Owner and the Collateral Agent.

 

“Security Documents” has the meaning set forth in the Collateral Agreement.

 

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“Semi-Annual Dates” means the last day of each of August and February; provided, that if a payment is required to be made on a Semi-Annual Date and such last day is not a Business Day, then such payment shall be made in accordance with the Modified Business Day Convention.

 

“Site” means the site upon which the Project will be installed, together with any fixtures and civil works constructed thereon and any other easements, licenses and other real property rights and interests required for the installation and operation of the Project, including the land referred to in the Site Agreements and the Real Property Agreements.

 

“Site Agreements” means , collectively, (i) the Amended and Restated Ground Lease and Easement Agreement, dated as of July 15, 2011, by and between El Segundo Power LLC and Project Owner, a memorandum of which was recorded on August 19, 2011, in the Los Angeles County Recorder’s Office as document number 20111121480, (ii) the Amended and Restated Easement Agreement , dated as of July 15, 2011, by and between El Segundo Power II LLC and the Project Owner, which was recorded on August 19, 2011, in the Los Angeles County Recorder’s Office as document number 20111121480, (iii) the Land Lease, dated as of July 1, 2010, as amended by the First Amendment to Land Lease, dated as of September 22, 2010, by and between First Industrial, L.P. and the Project Owner, (iv) the License Agreement, dated April 27, 2011, by and between Chevron Products Company and the Project Owner, and (v) the License Agreement, dated as of March 31, 2011, by and between Long Beach Generation LLC and the Project Owner.

 

“Site Owners” means, collectively, (i) El Segundo Power LLC and (ii) El Segundo Power II LLC.

 

“SoCalGas Transportation Contract” has the meaning set forth in the Tolling Agreement.

 

“Spare Parts Agreement” means the Program Parts, Miscellaneous Hardware, Program Management Services and Scheduled Outage Services Contract, dated February 11, 2011, between the Project Owner and the Spare Parts Supplier.

 

“Spare Parts Supplier” means Siemens Energy, Inc., a Delaware corporation.

 

“Specified Letter of Credit” means each LGIA Letter of Credit, DSR Letter of Credit and the TA Letter of Credit.

 

“Sponsor” means NRG Energy, Inc. or any Person into whom the Sponsor is merged, amalgamated or otherwise combined to the extent that NRG Energy, Inc. is not the surviving entity.

 

“Stop Notice” has the meaning provided under California Civil Code Section 3103.

 

“Subsidiary” means, for any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons

 

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performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

 

“Substantial Completion” has the meaning set forth in the Services Agreement.

 

“Swap Definitions” means the 2006 ISDA® Definitions, as published by the International Rate Swaps and Derivatives Association, Inc.

 

“Taking” means any circumstance or event, or series of circumstances or events (including an Expropriation Event), in consequence of which the Project or any portion thereof is condemned, nationalized, seized, compulsorily acquired or otherwise expropriated by any Governmental Authority under power of eminent domain or otherwise. The term “Taken” shall have a correlative meaning.

 

“TALC Availability Period” means the period commencing on the Closing Date and ending on the seventh anniversary of the Closing Date.

 

“TALC Commitment” means, as to any TALC Participating Bank, the applicable percentage set forth opposite such Participating Bank’s name in Appendix F to this Credit Agreement under the heading “TALC Percentage” multiplied by the TALC Facility Amount.

 

“TALC Issuing Bank” means The Royal Bank of Scotland plc.

 

“TALC Facility” has the meaning set forth in 2.4(a) of this Credit Agreement.

 

“TALC Facility Amount” has the meaning set forth in 2.4(a) of this Credit Agreement.

 

“TALC Maturity Date” has the meaning set forth in Section 2.4(e) of this Credit Agreement.

 

“TALC Participating Amount” has the meaning set forth in Section 3.25(g) of this Credit Agreement.

 

“TALC Participating Bank” means each Lender having a TALC Percentage.

 

“TALC Participation” means, in respect of any TALC Participating Bank as of any day, the aggregate face amount of all TA Letters of Credit multiplied by such TALC Participating Bank’s TALC Percentage.

 

“TALC Percentage” means, in respect of each TALC Participating Bank, the percentage set forth under the heading “TALC Percentage” and opposite such TALC Participating Bank’s name on Appendix F.

 

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“TA Letters of Credit” has the meaning set forth in 2.4(b) of this Credit Agreement.

 

“Term Conversion” means the conversion of the Construction Loans into Term Loans on the Term Conversion Date.

 

“Term Conversion Date” means the date on which the conditions precedent set forth in Section 4.6 of this Credit Agreement are satisfied and Term Conversion occurs.

 

“Term Facility” has the meaning set forth in Section 2.2(c) of this Credit Agreement.

 

“Term Lender” means each Lender that has a Term Loan Commitment or Term Loans.

 

“Term Loans” has the meaning set forth in Section 2.2(c) of this Credit Agreement.

 

“Term Loan Commitment” means, as to any Lender, an amount equal to the aggregate amount of Construction Loans of such Lender as of the Term Conversion Date (after giving effect to any Borrowing of Construction Loans on such date in accordance with Section 2.1 of this Credit Agreement and any prepayment of Construction Loans on such date in accordance with 3.16 or 3.17 of this Credit Agreement).

 

“Term Maturity Date” has the meaning set forth in Section 2.2(e) of this Credit Agreement.

 

“Term Note” means each Note issued as evidence of one or more Term Loans.

 

“Termination Amount” means, in respect of any Rate Swap Transaction, the amount payable pursuant to Section 6(e) of the 1992 ISDA® Master Agreement or 2002 ISDA® Master Agreement (as applicable).

 

“33-06 Endorsement” means the ALTA Form 33-06 title insurance endorsement in the form attached to and made a part of the Title Policy.

 

“32-06 Endorsement” means means the ALTA Form 32-06 title insurance endorsement in the form attached to and made a part of the Title Policy.

 

“Title Indemnity” means the Title Indemnity and Guaranty Agreement, dated the date hereof, by Natural Gas Repowering LLC in favor of the Collateral Agent.

 

“Title Insurance Company” has the meaning set forth in the Collateral Agreement.

 

“Title Policy” has the meaning set forth in the Collateral Agreement.

 

“Title Policy Amount” has the meaning set forth in the Collateral Agreement.

 

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“Tolling Agreement” means the Amended and Restated Power Purchase Tolling Agreement, dated August 24, 2010, between the Offtaker and the Project Owner, as amended by the Amendment No. 1 thereto dated on or about the date hereof.

 

“Tranche” means the tranche of Loan determined with regard to the credit facility under which such Loan was issued, i.e., whether a Tranche A Construction Loan, Tranche B Construction Loan, Tranche A Term Loan, Tranche B Term Loan, Revolving Loan or LC Loan.

 

“Tranche A Construction Facility” has the meaning set forth in Section 2.1(a) of this Credit Agreement.

 

“Tranche A Construction Loan Availability Period” means the period commencing on the Closing Date and ending on the earliest to occur of (i) the full utilization of the Tranche A Construction Loan Commitments of the Tranche A Lenders, (ii) the Date Certain, (iii) the Term Conversion Date and (iv) the termination of the Tranche A Construction Loan Commitments pursuant to the provisions of this Credit Agreement.

 

“Tranche A Construction Loan Commitment” means, as to any Lender, the applicable percentage set forth opposite such Lenders’ name in Appendix F to this Credit Agreement under the heading “Tranche A Construction Loan Commitment” multiplied by the (a) at all times prior to the date of the initial Borrowing of the Construction Loans, $480,000,000 and (b) at all times on and after the initial Borrowing of the Construction Loans, the lesser of (x) $480,000,000 and (y) the Tranche A Loan Amount.

 

“Tranche A Construction Loans” has the meaning set forth in Section 2.1(c) of this Credit Agreement.

 

“Tranche A Deferred Principal Amount” has the meaning set forth in Section 3.15(c) of this Credit Agreement.

 

“Tranche A Lender” means each Lender that has a Tranche A Construction Loan Commitment or that holds a Tranche A Construction Loan or a Tranche A Term Loan.

 

“Tranche A Loan Amount” has the meaning set forth in Section 3.14(a).

 

“Tranche A Notional Amortization” has the meaning set forth in Section 3.14(a).

 

“Tranche A Percentage Amortization” has the meaning set forth in Section 3.14(c).

 

“Tranche A Term Facility” has the meaning set forth in Section 2.2(a) of this Credit Agreement.

 

“Tranche A Term Loans” has the meaning set forth in Section 2.2(c) of this Credit Agreement.

 

“Tranche B Construction Facility” has the meaning set forth in Section 2.1(b) of this Credit Agreement.

 

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“Tranche B Construction Loan Availability Period” means the period commencing on the Closing Date and ending on the earliest to occur of (i) the full utilization of the Tranche B Construction Loan Commitments of the Tranche B Lenders, (ii) the Date Certain, (iii) the Term Conversion Date and (iv) the termination of the Tranche B Construction Loan Commitments pursuant to the provisions of this Credit Agreement.

 

“Tranche B Construction Loan Commitment” means, as to any Lender, the applicable percentage set forth opposite such Lenders’ name in Appendix F to this Credit Agreement under the heading “Tranche B Construction Loan Commitment” multiplied by the Tranche B Loan Amount.

 

“Tranche B Construction Loans” has the meaning set forth in Section 2.1(c) of this Credit Agreement.

 

“Tranche B Deferred Principal Amount” has the meaning set forth in Section 3.15(c) of this Credit Agreement.

 

“Tranche B Lender” means each Lender that has a Tranche B Construction Loan Commitment or that holds a Tranche B Construction Loan or a Tranche B Term Loan.

 

“Tranche B Loan Amount” has the meaning set forth in Section 2.1(b) of this Credit Agreement.

 

“Tranche B Term Facility” has the meaning set forth in Section 2.2(b) of this Credit Agreement.

 

“Tranche B Term Loans” has the meaning set forth in Section 2.2(c) of this Credit Agreement.

 

“Transaction Documents” means, collectively, the Project Documents and the Financing Documents.

 

“Transfer Date Certificate” means has the meaning set forth in the Accounts Agreement.

 

“True-Up Distributions” has the meaning set forth in Section 7.9(c) of this Credit Agreement.

 

“True-Up Drawings” has the meaning set forth in Section 2.1(e) of this Credit Agreement.

 

“Type” means the type of Loan determined with regard to the interest option applicable thereto, i.e., a Base Rate Loan or a LIBOR Loan.

 

“Unavailable Commitment” means, at any time and in respect of any Credit Facility and any Financing Party, the aggregate Commitment of such Financing Party under such Credit Facility that is not available at such time as a result solely of the fact that the Term Conversion Date or the Initial Delivery Date has not theretofore occurred.

 

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“Unfunded Pension Liability” of any Pension Plan shall mean the amount, if any, by which the value of the accumulated plan benefits under the Plan, determined on a plan termination basis, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions).

 

“Uniform Commercial Code” means the Uniform Commercial Code as adopted in any applicable jurisdiction.

 

“United States” and “U.S.” shall each mean the United States of America.

 

“Unutilized Commitment” means, in respect of any Credit Facility and any Financing Party, the aggregate Commitment of such Financing Party less the Unavailable Commitment of such Financing Party in respect of such Credit Facility less the aggregate principal amount of all Loans or the aggregate (or, in the case of the TALC Facility, the relevant TALC Participating Bank’s pro rata share of the aggregate) stated amount of all Specified Letters of Credit made or issued by (or, in the case of the TALC Facility, purchased by) such Financing Party under such Credit Facility (as applicable).

 

“USEPA” means the United States Environmental Protection Agency.

 

“U.S. GAAP” means generally accepted accounting principles applied on a consistent basis in the United States (except to the extent approved or required by the independent public accountants certifying such statements and disclosed therein).

 

“U.S.A. Patriot Act” means the U.S.A. PATRIOT Improvement and Reauthorization Act, Title III of Pub. L. 109-177 (signed into law March 9, 2009).

 

“Voluntary Bankruptcy Event” means, with respect to any Person, (i) the institution by such Person of a voluntary case seeking liquidation or reorganization under any Debtor Relief Law, (ii) the consent by such Person to the institution of an involuntary case against it under any Debtor Relief Law, (iii) the application by such Person for, or the consent or acquiescence of such Person to, the appointment of a receiver, liquidator, sequestrator, trustee or other officer with similar powers, (iv) the making by such Person of an assignment of its assets for the benefit of creditors or (v) the admission of such Person in writing of its inability to pay its debts generally as they become due.

 

“Work” has the respective meanings provided in the EPC Contracts.

 

2.                                      Rules of Interpretation. In each Financing Document, unless otherwise indicated:

 

(a)                               each reference to, and the definition of, any document (including any Financing Document) shall be deemed to refer to such document as it may be amended, supplemented, revised or modified from time-to-time in accordance with its terms and, to the extent applicable, the terms of this Credit Agreement;

 

40

 

(b)                                 each reference to a Law or Permit shall be deemed to refer to such Law or Permit as the same may be amended, supplemented or otherwise modified from time-to-time;

 

(c)                                  any reference to a Person in any capacity includes a reference to its permitted successors and assigns in such capacity and, in the case of any Governmental Authority, any Person succeeding to any of its functions and capacities;

 

(d)                                 references to days shall refer to calendar days unless Business Days are specified; references to weeks, months or years shall be to calendar weeks, months or years, respectively;

 

(e)                                  all references to the “Preamble”, “Recitals”, a “Section,” an “Appendix,” a “Schedule” or an “Exhibit” in a Financing Document are to the preamble, recitals or relevant section of such Financing Document or to the relevant appendix, schedule or exhibit attached thereto;

 

(f)                                   the table of contents and Section headings and other captions therein are for the purpose of reference only and do not affect the interpretation of such Financing Document;

 

(g)                                  defined terms in the singular shall include the plural and vice versa, and the masculine, feminine or neuter gender shall include all genders;

 

(h)                                 the words “hereof,” “herein” and “hereunder,” and words of similar import, when used in any Financing Document, shall refer to such Financing Document as a whole and not to any particular provision of such Financing Document;

 

(i)                                     the words “include,” “includes” and “including” are deemed to be followed by the phrase “without limitation”;

 

(j)                                    where the terms of any Financing Document require that the approval, opinion, consent or other input of any Secured Party be obtained, such requirement shall be deemed satisfied only where the requisite approval, opinion, consent or other input is given by or on behalf of the relevant party in writing;

 

(k)                                 where the terms of any Financing Document require or permit any action to be taken by the Collateral Agent, such action shall be taken strictly in accordance with the applicable provisions of the relevant Financing Documents; and

 

(l)                                     any reference to a document shall be deemed to include all exhibits, annexes, appendices and schedules thereto.

 

41Exhibit 10.8

 

EXECUTION COPY

 

LOAN GUARANTEE AGREEMENT

 

dated as of September 30, 2011

 

among

 

HIGH PLAINS RANCH II, LLC,
 as Borrower,

 

U.S. DEPARTMENT OF ENERGY,
 as Guarantor,

and

U.S. DEPARTMENT OF ENERGY,
 as Loan Servicer

 

California Valley Solar Ranch Project
 San Luis Obispo County, California

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
PAGE
    
	
ARTICLE 1   DEFINITIONS; RULES OF INTERPRETATION
    	
2
    
	
SECTION 1.1.
    	
Definitions
    	
2
    
	
SECTION 1.2.
    	
Rules of Interpretation
    	
2
    
	
SECTION 1.3.
    	
Conflict with FFB Documents
    	
2
    
	
ARTICLE 2 FUNDING
    	
 
    	
2
    
	
SECTION 2.1.
    	
Availability of Advances
    	
2
    
	
SECTION 2.2.
    	
Mechanics for Requesting Advances
    	
3
    
	
SECTION 2.3.
    	
Mechanics for Funding Advances
    	
4
    
	
SECTION 2.4.
    	
Advance Requirements under the FFB Documents
    	
5
    
	
SECTION 2.5.
    	
No Approval of Work
    	
5
    
	
ARTICLE 3 PAYMENTS;   PREPAYMENTS
    	
5
    
	
SECTION 3.1.
    	
Place and Manner of Payments
    	
5
    
	
SECTION 3.2.
    	
Interest Provisions Relating to All Advances
    	
8
    
	
SECTION 3.3.
    	
FFB Note Transfer
    	
9
    
	
SECTION 3.4.
    	
Prepayments
    	
9
    
	
SECTION 3.5.
    	
Payment of Guaranteed Loan Fees
    	
12
    
	
SECTION 3.6.
    	
Evidence of Debt
    	
13
    
	
ARTICLE 4 CONDITIONS   PRECEDENT
    	
13
    
	
SECTION 4.1.
    	
Conditions Precedent to Guarantee Agreement Date
    	
13
    
	
SECTION 4.2.
    	
Conditions Precedent to First Advance
    	
25
    
	
SECTION 4.3.
    	
Quarterly Conditions Precedent to Advances
    	
32
    
	
SECTION 4.4.
    	
Conditions Precedent to Each Advance
    	
36
    
	
SECTION 4.5.
    	
Semi-Annual Conditions Precedent to Advances
    	
42
    
	
SECTION 4.6.
    	
Determination of Satisfaction of Conditions Precedent
    	
44
    
	
ARTICLE 5   REPRESENTATIONS AND WARRANTIES
    	
44
    
	
SECTION 5.1.
    	
Organization
    	
44
    
	
SECTION 5.2.
    	
Authorization; No Conflict
    	
44
    
	
SECTION 5.3.
    	
Legality; Validity; Enforceability
    	
45
    
	
SECTION 5.4.
    	
Capitalization
    	
45
    
	
SECTION 5.5.
    	
Title
    	
45
    
	
SECTION 5.6.
    	
Real Property
    	
45
    
	
SECTION 5.7.
    	
Security Interests; Liens
    	
46
    
	
SECTION 5.8.
    	
Required Approvals
    	
47
    
	
SECTION 5.9.
    	
Insurance
    	
48
    
	
SECTION 5.10.
    	
Intellectual Property
    	
48
    
	
SECTION 5.11.
    	
Litigation, Labor Disputes
    	
49
    
	
SECTION 5.12.
    	
Tax
    	
49
    
	
SECTION 5.13.
    	
Financial Statements
    	
50
    
	
SECTION 5.14.
    	
Business; Contracts; Powers of Attorney; Contingency Fees
    	
50
    
	
SECTION 5.15.
    	
Transactions with Affiliates
    	
50
    
	
SECTION 5.16.
    	
No Additional Fees
    	
50
    
	
SECTION 5.17.
    	
Investments; Subsidiaries
    	
51
    
	
SECTION 5.18.
    	
Sufficiency of Project Documents
    	
51
    

 

i

 

	
SECTION 5.19.
    	
Project Milestone Schedule and Construction Budget;   Operating Forecasts and Base Case Projections
    	
52
    
	
SECTION 5.20.
    	
Sufficient Funds
    	
53
    
	
SECTION 5.21.
    	
Use of Proceeds
    	
53
    
	
SECTION 5.22.
    	
Fees and Enforcement
    	
53
    
	
SECTION 5.23.
    	
Compliance with Applicable Laws
    	
53
    
	
SECTION 5.24.
    	
Environmental Laws
    	
53
    
	
SECTION 5.25.
    	
U.S. Government Requirements
    	
54
    
	
SECTION 5.26.
    	
No Judgment Liens; No Indebtedness
    	
57
    
	
SECTION 5.27.
    	
Insolvency Proceedings; Solvency
    	
57
    
	
SECTION 5.28.
    	
No Defaults; Material Adverse Effect
    	
57
    
	
SECTION 5.29.
    	
Certain Program Requirements
    	
57
    
	
SECTION 5.30.
    	
Full Disclosure
    	
58
    
	
SECTION 5.31.
    	
Cash Grant Application
    	
58
    
	
SECTION 5.32.
    	
Cash Grant Compliance
    	
58
    
	
SECTION 5.33.
    	
Ownership by Disqualified Person
    	
59
    
	
SECTION 5.34.
    	
Cargo Preference Act
    	
59
    
	
ARTICLE 6 AFFIRMATIVE   COVENANTS
    	
59
    
	
SECTION 6.1.
    	
Information Covenants
    	
59
    
	
SECTION 6.2.
    	
Books, Records and Inspections; Accounting and Auditing Matters
    	
67
    
	
SECTION 6.3.
    	
Maintenance of Existence, Property and Insurance
    	
68
    
	
SECTION 6.4.
    	
Compliance with Applicable Laws; Environmental Laws; Governmental Approvals
    	
68
    
	
SECTION 6.5.
    	
Taxes, Duties, Expenses and Liabilities
    	
69
    
	
SECTION 6.6.
    	
Proper Legal Form
    	
69
    
	
SECTION 6.7.
    	
Construction and Approved Construction Changes
    	
69
    
	
SECTION 6.8.
    	
Diligent Construction of Project
    	
70
    
	
SECTION 6.9.
    	
Acceptance and Startup Testing
    	
70
    
	
SECTION 6.10.
    	
Operating Plan; Operations
    	
70
    
	
SECTION 6.11.
    	
Operating Budget
    	
70
    
	
SECTION 6.12.
    	
Performance of Obligations
    	
72
    
	
SECTION 6.13.
    	
Replacement of Certain Project Participants
    	
72
    
	
SECTION 6.14.
    	
Accounts; Cash Deposits
    	
73
    
	
SECTION 6.15.
    	
Debt Service Reserve
    	
73
    
	
SECTION 6.16.
    	
Debt to Equity Ratio
    	
73
    
	
SECTION 6.17.
    	
Safety Audit
    	
73
    
	
SECTION 6.18.
    	
Independent Consultants
    	
73
    
	
SECTION 6.19.
    	
Title; Rights to Land
    	
74
    
	
SECTION 6.20.
    	
Creation and Perfection of Security Interests; Additional Documents;   Filings and Recordings
    	
74
    
	
SECTION 6.21.
    	
Event of Loss
    	
75
    
	
SECTION 6.22.
    	
Application of Loss Proceeds
    	
75
    
	
SECTION 6.23.
    	
Technology
    	
76
    
	
SECTION 6.24.
    	
Compliance with Certain U.S. Government Requirements
    	
77
    
	
SECTION 6.25.
    	
Anti-Terrorism Order
    	
80
    

 

ii

 

	
SECTION 6.26.
    	
Borrower Bankruptcy Remote
    	
81
    
	
SECTION 6.27.
    	
Internal Controls
    	
82
    
	
SECTION 6.28.
    	
Corporate Governance
    	
83
    
	
SECTION 6.29.
    	
Cash Grant Application
    	
83
    
	
SECTION 6.30.
    	
Cash Grant Guidance Terms and Conditions
    	
83
    
	
SECTION 6.31.
    	
Cargo Preference Act
    	
84
    
	
SECTION 6.32.
    	
Update of Required Approvals’ Schedules
    	
84
    
	
SECTION 6.33.
    	
Interest Rate Swaption Agreements
    	
84
    
	
SECTION 6.34.
    	
Maintenance of the CEQA Litigation Support Instruments
    	
85
    
	
SECTION 6.35.
    	
Maintenance of the Cash Grant Shortfall Security
    	
85
    
	
ARTICLE 7 NEGATIVE   COVENANTS
    	
86
    
	
SECTION 7.1.
    	
Indebtedness
    	
86
    
	
SECTION 7.2.
    	
Liens
    	
86
    
	
SECTION 7.3.
    	
Leases
    	
86
    
	
SECTION 7.4.
    	
Loans, Advances and Investments
    	
86
    
	
SECTION 7.5.
    	
Capital Expenditures
    	
87
    
	
SECTION 7.6.
    	
Subsidiaries; Partnerships
    	
87
    
	
SECTION 7.7.
    	
Ordinary Course of Conduct; No Other Business
    	
87
    
	
SECTION 7.8.
    	
Merger; Bankruptcy; Dissolution; Transfer of Assets
    	
87
    
	
SECTION 7.9.
    	
Organizational Documents; Fiscal Year; Legal Form; Capital Structure
    	
88
    
	
SECTION 7.10.
    	
Restricted Payments
    	
88
    
	
SECTION 7.11.
    	
Redemption or Issuance of Stock
    	
90
    
	
SECTION 7.12.
    	
Other Transactions
    	
90
    
	
SECTION 7.13.
    	
Accounts
    	
90
    
	
SECTION 7.14.
    	
Commissions
    	
90
    
	
SECTION 7.15.
    	
Amendment of and Notices Under Transaction Documents
    	
91
    
	
SECTION 7.16.
    	
Operating Costs Expenditures; Approved Construction Changes;   Amendments
    	
92
    
	
SECTION 7.17.
    	
Other Agreements
    	
93
    
	
SECTION 7.18.
    	
Hedging Agreements
    	
93
    
	
SECTION 7.19.
    	
Compromise or Settlement of Disputes 
    	
93
    
	
SECTION 7.20.
    	
Abandonment or Suspension of Project
    	
93
    
	
SECTION 7.21.
    	
Improper Use
    	
94
    
	
SECTION 7.22.
    	
Assignment
    	
94
    
	
SECTION 7.23.
    	
Margin Regulations
    	
94
    
	
SECTION 7.24.
    	
Environmental Laws
    	
94
    
	
SECTION 7.25.
    	
ERISA
    	
94
    
	
SECTION 7.26.
    	
Investment Company Act
    	
94
    
	
SECTION 7.27.
    	
Public Utility Holding Company Act
    	
95
    
	
SECTION 7.28.
    	
Subordinated Debt
    	
95
    
	
SECTION 7.29.
    	
Powers of Attorney
    	
95
    
	
ARTICLE 8 EVENTS OF   DEFAULT; REMEDIES
    	
95
    
	
SECTION 8.1.
    	
Events of Default
    	
95
    
	
SECTION 8.2.
    	
Remedies for Events of Default
    	
106
    
	
SECTION 8.3.
    	
Automatic Acceleration
    	
107
    

 

iii

 

	
SECTION 8.4.
    	
Remedies
    	
107
    
	
SECTION 8.5.
    	
Appointment of a Receiver
    	
108
    
	
ARTICLE 9 AGENTS AND   ADVISORS
    	
108
    
	
SECTION 9.1.
    	
Appointment of Loan Servicer
    	
108
    
	
SECTION 9.2.
    	
Duties and Responsibilities
    	
108
    
	
SECTION 9.3.
    	
Rights and Obligations
    	
109
    
	
SECTION 9.4.
    	
No Responsibility for Certain Conduct
    	
110
    
	
SECTION 9.5.
    	
Defaults
    	
111
    
	
SECTION 9.6.
    	
No Liability
    	
111
    
	
SECTION 9.7.
    	
Fees and Expenses of Loan Servicer
    	
112
    
	
SECTION 9.8.
    	
Resignation and Removal
    	
113
    
	
SECTION 9.9.
    	
Successor Loan Servicer
    	
113
    
	
SECTION 9.10 .
    	
Due Authorization; Execution; Delivery
    	
114 
    
	
SECTION 9.11 .
    	
Actions
    	
114 
    
	
SECTION 9.12 .
    	
Delegation of Duties
    	
114 
    
	
SECTION 9.13 .
    	
Patriot Act
    	
114 
    
	
SECTION 9.14 .
    	
Authority of the Loan Servicer
    	
114 
    
	
SECTION 9.15 .
    	
Force Majeure
    	
115
    
	
SECTION 9.16 .
    	
Representations and Warranties of the Loan Servicer
    	
115
    
	
SECTION 9.17 .
    	
Survival
    	
116
    
	
ARTICLE 10   REIMBURSEMENT
    	
116
    
	
SECTION 10.1.
    	
Reimbursement Obligation
    	
116
    
	
SECTION 10.2.
    	
Payments and Computations
    	
116
    
	
SECTION 10.3.
    	
Obligations Absolute
    	
117
    
	
SECTION 10.4.
    	
Security
    	
119
    
	
SECTION 10.5.
    	
DOE Rights
    	
119
    
	
SECTION 10.6.
    	
Further Assurances
    	
119
    
	
ARTICLE 11   MISCELLANEOUS
    	
120
    
	
SECTION 11.1.
    	
Addresses
    	
120
    
	
SECTION 11.2.
    	
Further Assurances
    	
120
    
	
SECTION 11.3.
    	
Delay and Waiver
    	
120
    
	
SECTION 11.4.
    	
Right of Set-Off
    	
121
    
	
SECTION 11.5.
    	
Amendment or Waiver
    	
121
    
	
SECTION 11.6.
    	
Entire Agreement
    	
121
    
	
SECTION 11.7.
    	
Governing Law
    	
121
    
	
SECTION 11.8.
    	
Severability
    	
122
    
	
SECTION 11.9.
    	
Calculations
    	
122
    
	
SECTION 11.10.
    	
Borrower’s Disclaimers
    	
122
    
	
SECTION 11.11.
    	
Limitation on Liability
    	
122
    
	
SECTION 11.12.
    	
Waiver of Jury Trial
    	
122
    
	
SECTION 11.13.
    	
Consent to Jurisdiction
    	
123
    
	
SECTION 11.14.
    	
Successors and Assigns
    	
123
    
	
SECTION 11.15.
    	
Participations
    	
124
    
	
SECTION 11.16.
    	
Reinstatement
    	
124
    
	
SECTION 11.17.
    	
No Partnership; Etc.
    	
124
    
	
SECTION 11.18.
    	
Payment of Costs and Expenses
    	
125
    

 

iv

 

	
SECTION 11.19.
    	
Counterparts
    	
127
    
	
SECTION 11.20.
    	
Contest Rights
    	
127
    

 

Exhibits to the Loan Guarantee Agreement

 

	
Exhibit A
    	
 
    	
Definitions
    
	
Exhibit B
    	
 
    	
Rules of Interpretation
    
	
Exhibit C-1 
    	
 
    	
Borrower Guarantee Agreement Date Certificate (Section 4.1.14(a))    
    
	
Exhibit C-2
    	
 
    	
Borrower Advance Date Certificate (Section 4.2.19(a)/4.4.15(a))
    
	
Exhibit D
    	
 
    	
[RESERVED]
    
	
Exhibit E
    	
 
    	
Independent Engineer Certificate (Section 4.1.14(d)/4.2.6(a))
    
	
Exhibit F-1
    	
 
    	
DOE Insurance Advisor Certificate (Section 4.1.14(e)/4.2.6(b))
    
	
Exhibit F-2 
    	
 
    	
Borrower Insurance Advisor Certificate (Section 4.3.7)
    
	
Exhibit G
    	
 
    	
Master Advance Notice (Section 4.2.1(a)/4.4.1)
    
	
Exhibit H
    	
 
    	
Sponsor Certificate (Section 4.2.19(b)/4.3.8/4.4.15(b))
    
	
Exhibit I-1
    	
 
    	
Financial Officer’s Certificate — Ultimate Parent/Sponsor   (Section 4.1.3)
    
	
Exhibit I-2
    	
 
    	
Financial Officer’s Certificate — Borrower   (Section 4.1.3/6.1.2/6.1.4)
    
	
Exhibit I-3
    	
 
    	
Financial Officer’s Certificate — Sponsor (Section 6.1.6)
    
	
Exhibit J
    	
 
    	
Title Policy Endorsement (Section 4.4.18(b))
    
	
Exhibit K
    	
 
    	
Major Project Participant Certificate (Section 4.2.19(c))
    
	
Exhibit L
    	
 
    	
Borrower Quarterly Reporting Certificate (Section 4.3.8(a)/Section 6.1.5(c))
    
	
Exhibit M
    	
 
    	
Independent Engineer Quarterly Certificate (Section 4.3.8(c))
    
	
Exhibit N
    	
 
    	
Davis-Bacon Act Required Provisions
    
	
Exhibit O
    	
 
    	
Definition of Project Completion
    
	
Exhibit P
    	
 
    	
Form of Subordination Agreement
    
	
Exhibit Q
    	
 
    	
Monitoring Table
    
	
Exhibit R
    	
 
    	
[RESERVED]
    
	
Exhibit S
    	
 
    	
[RESERVED]
    
	
Exhibit T
    	
 
    	
Cash Grants — Amount and Outside Date of Payment
    
	
Exhibit U
    	
 
    	
Sponsor Tax Certificate (Section 4.1.14(c))
    
	
Exhibit V
    	
 
    	
[RESERVED]
    
	
Exhibit W
    	
 
    	
Borrower Recovery Act Certificate (Section 4.4.14)
    
	
Exhibit X
    	
 
    	
[RESERVED]
    
	
Exhibit Y
    	
 
    	
Form of SunPower Cash Grant Shortfall Security
    
	
Exhibit Z
    	
 
    	
[RESERVED]
    
	
Exhibit AA
    	
 
    	
 Form of NRG Cash Grant   Shortfall Security — Guarantee
    
	
Exhibit BB
    	
 
    	
Form of Total Guarantee
    
	
Exhibit CC 
    	
 
    	
Form of CEQA Letter of Credit
    

 

Schedules to the Loan Guarantee Agreement

 

	
Schedule 1.1
    	
 
    	
Major Project Milestones
    
	
Schedule 4.1.2(a)(iii) 
    	
 
    	
Financial Plan
    
	
Schedule 4.1.2(a)(v) 
    	
 
    	
Advance Schedule
    

 

v

 

	
Schedule 4.1.6
    	
 
    	
Permits and Approvals (Guarantee Agreement Date)
    
	
Schedule 4.1.18
    	
 
    	
Actions
    
	
Schedule 4.2.5
    	
 
    	
Permits and Approvals (First Advance Date)
    
	
Schedule 4.3.3
    	
 
    	
Permits and Approvals (Quarterly Approval Date)
    
	
Schedule 4.4.8
    	
 
    	
Permits and Approvals (Master Advance Request Date)
    
	
Schedule 4.2.20
    	
 
    	
Subordinated Contracts
    
	
Schedule 5.12(b)
    	
 
    	
Withholding Taxes
    
	
Schedule 5.15
    	
 
    	
Affiliate Contracts
    
	
Schedule 5.24(b)
    	
 
    	
Hazardous Substances
    
	
Schedule 6.3(b)
    	
 
    	
Insurance
    
	
Schedule 6.24(a)
    	
 
    	
Davis-Bacon Act Covered Contracts
    
	
Schedule 6.24(h)
    	
 
    	
Prevailing Wages
    
	
Schedule 6.3(b)
    	
 
    	
Required Insurance
    
	
Schedule 11.1
    	
 
    	
Addresses
    

 

vi

 

LOAN GUARANTEE AGREEMENT

 

This LOAN GUARANTEE AGREEMENT, dated as of September 30, 2011, is by and among (i) High Plains Ranch II, LLC, a limited liability company organized and existing under the laws of the State of Delaware, as borrower (the “Borrower”); (ii) the U.S. DEPARTMENT OF ENERGY, acting by and through the Secretary of Energy (or appropriate authorized representative thereof), for itself as guarantor of the Advances (as defined herein) (in such capacity, “DOE” or the “Guarantor”); and (iii) the U.S. DEPARTMENT OF ENERGY, acting by and through the Secretary of Energy (or appropriate authorized representative thereof), as the loan servicer (in such capacity, the “Loan Servicer”).

 

WHEREAS, SunPower Corporation, Systems, a Delaware corporation (“SunPower”), has, through the Borrower, developed the Project pursuant to that certain Development Services Agreement;

 

WHEREAS, the Sponsor and SunPower have entered into that certain Purchase and Sale Agreement pursuant to which SunPower agreed to sell to the Sponsor 100% of the Equity Interests in the Borrower;

 

WHEREAS, HPR III has merged into the Borrower, pursuant to those certain Merger Documents, with the Borrower as a surviving entity;

 

WHEREAS, the Sponsor assigned its rights and obligations under the Purchase and Sale Agreement to NRG Solar CVSR Holdings LLC (the “Holding Company”);

 

WHEREAS, immediately after such assignment, the Holding Company purchased 100% of the Equity Interests of the Borrower and became the direct owner of 100% of the Equity Interests of the Borrower;

 

WHEREAS, NRG Solar Sunrise LLC directly owns 100% of the Equity Interests of the Holding Company; the Sponsor directly owns 100% of the Equity Interests of NRG Solar Sunrise LLC; NRG Repowering Holdings LLC (the “Intermediate Parent Company”), directly owns 100% of the Equity Interests of the Sponsor, and the Ultimate Parent directly owns 100% of the Equity Interests of the Intermediate Parent Company;

 

WHEREAS, subject to the terms and conditions of the Equity Funding Agreement, the Sponsor has agreed to make, or procure the making of, Equity Contributions to the Borrower;

 

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

 

(i)                                     FFB (a) make Term Loan Advances and Cash Grant Bridge Loan Advances pursuant to the FFB Documents in the aggregate principal amount not exceeding the

 

1

 

Guaranteed Term Loan Amount and Guaranteed Cash Grant Bridge Loan Amount, respectively, and (b) capitalize interest on the outstanding amount of the Advances as contemplated by Section 7(b) of the applicable FFB Promissory Note in an aggregate amount not to exceed the maximum capitalized interest amount for the Term Loan Advances or the Cash Grant Bridge Loan Advances, respectively; and

 

(ii)                                  DOE guarantee the repayment of the Guaranteed Loans by the Borrower to FFB pursuant to the DOE Guarantee; and

 

WHEREAS, the execution of this Loan Guarantee Agreement is a condition precedent to the obligations of DOE and FFB under this Loan Guarantee Agreement and the FFB Documents, as applicable.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valid consideration, the receipt and adequacy of which are hereby expressly acknowledged, the parties hereby agree as follows:

 

ARTICLE 1
  DEFINITIONS; RULES OF INTERPRETATION

 

SECTION 1.1.               Definitions.

 

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

 

SECTION 1.2.               Rules of Interpretation.

 

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

 

SECTION 1.3.               Conflict with FFB Documents.

 

Except as otherwise expressly provided herein, in the case of any conflict between the terms of this Loan Guarantee Agreement and the terms of any FFB Document, the terms of this Loan Guarantee Agreement, as between the Borrower and DOE, shall control.

 

ARTICLE 2
  FUNDING

 

SECTION 2.1.               Availability of Advances.

 

2.1.1.  Availability. Subject to the satisfaction (or waiver by DOE or FFB, as applicable, in writing) of each applicable condition precedent set forth in this Loan Guarantee Agreement and in the FFB Documents, Term Loan Advances shall be made during the Term Loan Availability Period and each of the Cash Grant Bridge Loan Advances shall be made during their respective Cash Grant Bridge Loan Availability Periods.

 

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2.1.2.  FFB Commitment Reductions and Cancellations. The Borrower may, on not less than ten (10) Business Days prior written notice to DOE and upon the satisfaction of any consent requirement or other applicable provisions of the FFB Documents, permanently reduce the unutilized portions of the FFB Commitment, in whole or in part, but only if:

 

(a)                                      each partial reduction is in an amount permitted under the FFB Documents;

 

(b)                                      DOE is satisfied, in its sole discretion, that such cancellation or reduction will not impair achievement of Project Completion on or prior to the Guaranteed Project Completion Date;

 

(c)                                       after taking into account the proposed reduction, Total Funding Available equals or exceeds the amount of Total Project Costs projected by the Borrower and agreed by DOE as of the date of such reduction; and

 

(d)                                      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 FFB Documents.

 

Once reduced or canceled, the FFB Commitment shall not be increased or reinstated.

 

2.1.3.  DOE Commitment Reductions and Cancellations. If the first Advance has not occurred by the Cutoff Date (or such later date as agreed by DOE), DOE shall be entitled to cancel the DOE Guarantee and terminate this Loan Guarantee Agreement upon written notice to the Borrower. Once cancelled or terminated, the DOE Guarantee and this Loan Guarantee Agreement, as the case may be, may not be reinstated without the written consent of DOE.

 

SECTION 2.2.               Mechanics for Requesting Advances.

 

2.2.1. Master Advance Notice.

 

(a)                                      The Borrower may request an Advance of either Guaranteed Loan by delivering to DOE and the Loan Servicer, with a copy to the Independent Engineer, within three (3) months following any Quarterly Approval Date or the First Advance Date but not less than ten (10) Business Days prior to the Requested Advance Date, a completed Master Advance Notice for such Advance.

 

(b)                                      No more than once per calendar month the Borrower may deliver a Master Advance Notice requesting (x) a Term Loan Advance during the Term Loan Availability Period, (y) a Cash Grant Bridge Loan Advance during the applicable Cash Grant Bridge Loan Availability Period or (z) contemporaneously, both a Term Loan Advance and one or more Cash Grant Bridge Loan Advances during the Term Loan Availability Period and applicable Cash Grant Bridge Loan Availability Period, respectively; provided that in any three consecutive calendar month period during the Term Loan Availability Period the Borrower may deliver one (1) additional Master Advance Notice requesting Advances as described in the foregoing clauses (x) through (z).

 

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(c)                                  Each Master Advance Notice shall be in the form set forth in Exhibit G and otherwise in form and substance acceptable to DOE.

 

SECTION 2.3.               Mechanics for Funding Advances.

 

2.3.1.  Satisfaction of Conditions Precedent.

 

(a)                                 Promptly after receipt of each Master Advance Notice, the Loan Servicer shall review such Master Advance Notice and other applicable documentation submitted to the Loan Servicer pursuant to this Agreement to determine whether the requirements of Section 4.4 (and in the case of the first Advance, Section 4.2) have been satisfied.

 

(b)                                 If the Loan Servicer determines that (i) the Master Advance Notice has been satisfactorily completed, (ii) all applicable conditions precedent set forth in Section 4.4 (and, in the case of the first Advance, Section 4.2) for the requested Advance have been satisfied (or waived) and (iii) the FFB Advance Request and all other certificates and documentation required under the FFB Documents in respect of the requested Advance have been provided and are satisfactory (or have been waived), then DOE shall sign and forward the FFB Advance Request Approval Notice attached to the FFB Advance Request to FFB, with a copy to the Borrower, the Collateral Agent and the Independent Engineer.

 

(c)                                  If the Loan Servicer disapproves any Master Advance Notice, the Loan Servicer shall promptly notify the Borrower of such documentation, identifying all deficiencies with reasonable specificity and any necessary change to the Master Advance Notice, FFB Advance Request and other certificates and documentation required under this Agreement and the FFB Documents in respect of the requested Advance.

 

2.3.2.  Notices of Cancellation.

 

(a)                                 Issuance. At any time after the Loan Servicer forwards an FFB Advance Request Approval Notice and before FFB makes the Advance referred to therein, the Loan Servicer may deliver a notice of withdrawal or cancellation of the FFB Advance Request Approval Notice (a “Notice of Cancellation”) to FFB pursuant to Section 7.4(d) of the FFB Note Purchase Agreement or otherwise pursuant to the FFB Documents if the Loan Servicer determines that the applicable conditions in Section 4.4 (and, in the case of the first Advance, Section 4.2) for such Advance are not met or, having been met, are no longer met.

 

(b)                                 Costs. The Borrower shall pay all expenses incurred by DOE, FFB, the Loan Servicer or the Collateral Agent in respect of any Advance that is not made due to the issuance of a Notice of Cancellation.

 

2.3.3.  No Liability. Without limiting the generality of Section 9.6 hereunder, none of DOE, the Loan Servicer or the Collateral Agent has any liability to the Borrower or any Borrower Affiliate or to any other Person arising from the issuance of, or failure to issue, any FFB Advance Request Approval Notice, Notice of Cancellation, or any other notice contemplated by this Section 2.3.

 

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SECTION 2.4.               Advance Requirements under the FFB Documents.

 

The Borrower shall comply with all disbursement requirements set forth in the FFB Documents. Unless otherwise specified in the FFB Documents, all determinations in relation to Advances under this Loan Guarantee Agreement and the FFB Documents (except as expressly reserved for FFB in the FFB Documents) shall be made by the Loan Servicer.

 

SECTION 2.5.               No Approval of Work.

 

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

 

ARTICLE 3
  PAYMENTS; PREPAYMENTS

 

SECTION 3.1.               Place and Manner of Payments.

 

3.1.1.  Repayment of Guaranteed Loan. The Borrower shall repay each Guaranteed Loan, including all fees and interest (whether taking the form of a Capitalized Interest Amount or otherwise) accrued thereon, in accordance with the FFB Documents. All payments due under the FFB Documents shall be made by the Borrower pursuant to the terms of the FFB Documents and the Accounts Agreement. Each payment shall be applied by the Collateral Agent in accordance with the Accounts Agreement; provided, however, that, notwithstanding any instructions to the contrary in the applicable FFB Promissory Note, for purposes of administering payments to FFB, the Borrower shall remit such payments directly to an account designated by the Loan Servicer for payment to FFB. The Borrower may not reborrow any amount of the Guaranteed Loan (whether in the form of an Advance or Capitalized Interest Amount) that is repaid.

 

3.1.2.  Net of Tax, Etc.

 

(a)                                 Tax. Any and all payments to any Secured Party by the Borrower hereunder or under any other Financing Document shall be made free and clear of, and without deduction for, any and all Taxes, excluding (i) Taxes imposed on or measured by the net income (however denominated) of such Secured Party 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 and such jurisdiction or political subdivision (other than any connection arising as a result of the transactions contemplated by the Financing Documents) and (ii) any withholding Taxes or other Tax based on gross income imposed by the United States of America except any such Taxes arising as a result of a Change of Law (all such non-excluded Taxes, “Covered Taxes”). If the Borrower is required by law to withhold or deduct any Covered Taxes from or in respect of any sum payable hereunder or under any other Financing Document to any Secured Party, (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 receives an amount equal to the sum it would have received had no such deductions been made, (B) the Borrower shall make such deductions and (C) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with all Applicable Laws; provided, however, that the Borrower shall not be 

 

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required to increase any such amounts payable to any Secured Party with respect to any Covered Taxes to the extent such Covered Taxes (x) are withholding Taxes imposed as a result of any Secured Party voluntarily designating a different lending office on or after the date hereof, (y) would not have been imposed but for a failure by the Secured Party, by any direct or indirect owner of the Secured Party, or by any financial institution through which any payment is made to such Secured Party or to any of its direct or indirect owners, to comply with the applicable requirements of Sections 1471 through 1474 of the Internal Revenue Code and any published administrative or similar guidance implementing such Sections, or (z) are withholding Taxes imposed on amounts payable to such Secured Party at the time such Secured Party becomes a party to this Loan Guarantee Agreement, except to the extent that such Secured Party’s assignor (if any) was entitled (or would have been so entitled if such assignor were a domestic corporation within the meaning of Section 7701(a)(30) of the Internal Revenue Code), at the time of the assignment, to receive additional amounts from the Borrower with respect to such Covered Taxes pursuant to this Section 3.1.2(a). If the Borrower makes any payment with respect to Covered Taxes under this Section 3.1.2(a) to or for the benefit of any Secured Party and if such Secured Party claims any credit or deduction for such Covered Taxes against any other Taxes payable by such Secured Party that are not Covered Taxes, then such Secured Party shall pay to the Borrower an amount equal to the amount the Secured Party determines, in good faith and absent manifest error, is the amount by which such other Taxes are actually reduced; provided that the aggregate amount payable by such Secured Party pursuant to this sentence shall not exceed the aggregate amount previously paid by the Borrower with respect to such Covered Taxes, and no such amount shall be payable while a Potential Event of Default or Event of Default is continuing.

 

(b)                                 Indemnity. The Borrower hereby indemnifies each Secured Party for the full amount of Covered Taxes (including any 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 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 to the extent the Borrower is actually and materially prejudiced by such failure with respect to any such notice given by a Secured Party and only if such notice was given by a Secured Party more than sixty (60) days after such Secured Party has notice or knowledge of such claim. Payments by the Borrower pursuant to this indemnification shall be made within thirty (30) Business Days after the date such Secured Party makes written demand therefor, 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(b) for the period following such Borrower payment) received by such Secured Party for Covered Taxes that were paid by the Borrower pursuant to this Section 3.1.2(b) and to provide reasonable assistance to the Borrower (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 lawfully or properly assessed. For the avoidance of doubt, unless an Event of Default or a potential Event of Default has occurred and is continuing at the time the Borrower would (if this Section 3.1.2(b) were applicable, without regard to this final sentence thereof) be required to make a payment under this Section

 

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3.1.2(b), the indemnification obligation contained in this Section 3.1.2(b) shall not extend to Taxes imposed for which the Secured Party with respect to whom the obligation would otherwise exist would not have been eligible to receive payment of additional amounts under Section 3.1.2(a), or to the extent that such Secured Party received additional amounts with respect to such payments.

 

(c)                                       Notice. Within ten (10) Business 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 upon 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 evidence or, if available, such receipt.

 

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

 

(e)                                       Documentation. Each Secured Party shall deliver to each of the Borrower and the Collateral Agent either (A) if such Secured Party is a “United States Person” as defined in Section 7701(a)(30) of the Internal Revenue Code (a “U.S. Lender”), two copies of a U.S. Internal Revenue Service Form W-9 or any successor form, properly completed and duly executed by such U.S. Lender, certifying such U.S. Lender’s complete exemption from “backup withholding” Tax on all payments made by the Borrower under this Agreement and the other Financing Documents; or (B) if such Secured Party is not a U.S. Lender, two copies of either U.S. Internal Revenue Service Form W-8BEN, Form W-8IMY or Form W-8ECI, as appropriate. Such forms shall be delivered by each Secured Party on or before the date it becomes a party to this Loan Guarantee Agreement (or, in the case of any participant, on or before the date such participant purchases the related participation).

 

(i)                           Each Secured Party shall deliver the appropriate form referred to in this Section 3.1.2(e) promptly upon the obsolescence or invalidity of any form previously delivered by such Secured Party, and shall deliver extensions or renewals thereof as may reasonably be requested by the Borrower or the Collateral Agent.

 

(ii)                        Each Secured Party shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose).

 

(iii)                     Notwithstanding any other provision of this paragraph, a Secured Party shall not be required to deliver any form pursuant to this Section 3.1.2(e) that such Person is not legally able to deliver.

 

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(f)                                        Treaty Exemption or Reduction. A Secured Party that is entitled to an exemption from or reduction of non-U.S. withholding Tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Loan Guarantee Agreement shall deliver to the Borrower (with a copy to the Collateral Agent), 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, provided that such Secured Party is legally entitled to complete, execute and deliver such documentation and in such Secured Party’s judgment such completion, execution or submission would not materially prejudice the legal position of such Secured Party.

 

SECTION 3.2.               Interest Provisions Relating to All Advances.

 

3.2.1.  Interest Account and Interest Computations. Interest shall accrue on the unpaid principal amount of each Advance and any related Capitalized Interest Amount from (x) in the case of the principal amount of any Advance, the date such Advance is disbursed or deemed disbursed pursuant to the FFB Documents and (y) in the case of any related Capitalized Interest Amount, the Payment Date on which such Capitalized Interest Amount was capitalized in accordance with Section 7(b) of the applicable FFB Promissory Note, to the date such Advance and any related Capitalized Interest Amount is paid in full, at a rate per annum specified in the FFB Documents. The Borrower hereby authorizes the Loan Servicer to record in an account or accounts maintained by the Loan Servicer on behalf of DOE (a) the interest rates applicable to all Term Loan Advances and Cash Grant Bridge Loan Advances and related Capitalized Interest Amounts, (b) each Capitalized Interest Amount in respect of any Advance, (c) the date and amount of each payment on the applicable Guaranteed Loan (including whether such payment is a payment in respect of the outstanding principal amount of an Advance, a payment in respect of any Capitalized Interest Amounts or a payment of cash interest) outstanding and (d) such other information as DOE or the Loan Servicer may determine is necessary for the computation of interest payable by the Borrower hereunder. All computations of interest shall be made as set forth in the relevant FFB Documents.

 

3.2.2.  Interest Payment Dates.

 

(a)                                           Interest shall accrue from the date of the first Advance and be payable in cash, in arrears on each Payment Date, commencing on the First Payment Date or earlier, as set forth in the FFB Promissory Notes. Interest will be capitalized as set forth in the FFB Promissory Notes. After that, interest shall be due and payable on each Payment Date.

 

(b)                                           Subject to the terms of the FFB Documents, the Borrower shall pay accrued interest on the outstanding principal amount of each Advance and any related Capitalized Interest Amounts on each Payment Date, on prepayment (to the extent thereof) and at maturity (whether by acceleration or otherwise).

 

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SECTION 3.3.               FFB Note Transfer.

 

Upon any FFB Note Transfer or receipt by the Borrower, the Loan Servicer or DOE of notice of FFB’s intention to make any FFB Note Transfer in accordance with the FFB Note Purchase Agreement, the Borrower, DOE and the Loan Servicer shall cooperate with the transferee of the applicable FFB Promissory Note to amend this Loan Guarantee Agreement and any other Financing Documents to incorporate customary terms and conditions reasonably satisfactory to such transferee with respect to:

 

(a)                                      any Change of Law that makes it unlawful or impossible for any transferee Lender to make, hold or maintain the applicable Guaranteed Loan;

 

(b)                                      any Change of Law that subjects such transferee Lender to any tax, duty or other charge with respect to the applicable Guaranteed Loan; and

 

(c)                                       such transferee Lender designating an alternative lending office for its Guaranteed Loan to mitigate costs or to avoid any circumstances that might make it unlawful or impossible for such transferee Lender to maintain a Guaranteed Loan.

 

SECTION 3.4.               Prepayments.

 

3.4.1.  Terms of all Prepayments.

 

(a)                                      With respect to any prepayment of all or any portion of either Guaranteed Loan, whether such prepayment is voluntary or mandatory and including a prepayment upon acceleration, the Borrower shall comply with all applicable terms and provisions of the FFB Documents.

 

(b)                                      All prepayments of the Guaranteed Loans shall be applied in accordance with the FFB Documents.

 

(c)                                       The Borrower may not reborrow any amount of either Guaranteed Loan (whether in the form of an Advance or Capitalized Interest Amount) that is prepaid.

 

(d)                                      At the Borrower’s election, on one or more dates selected by the Borrower, the Borrower may prepay in full or in part one or more Advances selected by the Borrower, and any such partial prepayment shall be applied to installments of principal in the inverse order of maturity.

 

3.4.2.  Voluntary Prepayments.

 

(a)                                      Prior to the end of the Term Loan Availability Period and without the consent of DOE, except as required by Section 3.4.3, the Borrower may not prepay the Guaranteed Term Loan unless the Borrower simultaneously cancels the outstanding FFB Term Loan Commitment and fully repays the Guaranteed Term Loan. After the end of the Term Loan Availability Period, the Borrower may prepay the Guaranteed Term Loan in part or in full in accordance with the FFB Documents upon at least five (5) Business Days prior written notice submitted by the Borrower to DOE (with a copy to the Collateral Agent). Voluntary prepayments of the Guaranteed Term Loan may be subject to make whole premiums or discounts as are set forth in the FFB Documents.

 

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(b)                                      Prior to the end of the applicable Cash Grant Bridge Loan Availability Period and without the consent of DOE, except as required by Section 3.4.3, the Borrower may not prepay any Guaranteed Cash Grant Bridge Loan unless the Borrower simultaneously cancels the applicable outstanding FFB Cash Grant Bridge Loan Commitment and fully repays such Guaranteed Cash Grant Bridge Loan. After the end of the applicable Cash Grant Bridge Loan Availability Period, the Borrower may prepay such Guaranteed Cash Grant Bridge Loan in part or in full in accordance with the FFB Documents upon at least five (5) Business Days prior written notice submitted by the Borrower to DOE (with a copy to the Collateral Agent). Voluntary prepayments of each Guaranteed Cash Grant Bridge Loan may be subject to make whole premiums or discounts as are set forth in the FFB Documents.

 

3.4.3.  Mandatory Prepayments. The Borrower shall be required to make or cause to be made, as applicable, mandatory prepayments of the applicable Guaranteed Loan on the dates and in the amounts set forth in this Section 3.4.3:

 

(a)                                      of the Guaranteed Term Loan, upon the receipt by the Borrower of any Performance Liquidated Damages (as that term is defined in the EPC Contract) or amounts paid to the Borrower pursuant to section 11.09(a) of the Purchase and Sale Agreement, in each case, that are not, with DOE’s consent, used to pay to construct, repair or restore the Project, to be applied as a Full Advance Prepayment;

 

(b)                                      of the Guaranteed Term Loan, upon the receipt by the Borrower of Loss Proceeds, any such amount paid that exceeds the amount of such Loss Proceeds used or to be used to repair, replace or rebuild the Project in accordance with Section 6.22, to be applied at DOE’s election, as (i) a Full Advance Prepayment or (ii) to the extent the remaining useful life of the Project will, according to a written determination of the Independent Engineer, following the use of such Loss Proceeds to repair, replace or rebuild the Project, end prior to the Term Loan Maturity Date, a prepayment of Advances in inverse order of maturity;

 

(c)                                       of the Guaranteed Term Loan, in an amount equal to all cash in the Restricted Payment Account to the extent any cash has been on deposit in the Restricted Payment Account, beginning from the Project Completion Date, for eight (8) consecutive calendar quarters due to the failure of the Borrower to satisfy the conditions set forth in Section 7.10(a), to be applied as a Full Advance Prepayment; provided, however, that, if DOE’s prior written consent has been obtained, the money on deposit in the Restricted Payment Account may be reinvested into the Project as directed by the Borrower;

 

(d)                                      of the Guaranteed Term Loan, upon any sale (which must be a Permitted Disposition) of any assets no longer used or useful in the operation of the Project Facility, in an amount equal to the proceeds of such sale, net of the prior, concurrent or prospective application of such proceeds to the acquisition of replacement assets, if such amount exceeds (or will exceed) $50,000, to be applied as a prepayment of Advances in inverse order of maturity; provided that, if such proceeds are not applied in accordance with clause (d) of the definition of “Permitted Disposition” then, to the extent such proceeds exceeded $50,000, an amount equal to 100% of such proceeds shall be applied to the Guaranteed Term Loan, as a prepayment of Advances in inverse order of maturity;

 

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(e)           of the Guaranteed Term Loan, if (i) the HPR II Delivery Term for Phase 3 commences before October 31, 2013, or (ii) the HPR III Delivery Term commences before October 31, 2012, in each case, on each Monthly Transfer Date, a prepayment from cash available at payment priority Sixth in Section 4.03(b)(ii) of the Accounts Agreement, to be applied as a prepayment of Advances in inverse order of maturity until the projected date of full amortization of the Guaranteed Loans is not later than the date that is (x) 23 years after commencement of the HPR II Delivery Term for Phase 3 or (y) 24 years after commencement of the HPR III Delivery Term;

 

(f)            of the Guaranteed Term Loan, in an amount equal to Excess Major Project Document Breach Damages or Excess Major Project Document Termination Damages, immediately upon the determination that any such damages exist, to be applied as DOE shall direct; or

 

(g)           of a Guaranteed Cash Grant Bridge Loan, one (1) Business Day following the receipt of the Cash Grant for a Phase associated with such Guaranteed Cash Grant Bridge Loan, the Borrower shall, if immediate prepayment of the applicable Guaranteed Cash Grant Bridge Loan would:

 

(i)                   result in no prepayment premium, first, to prepay such Guaranteed Cash Grant Bridge Loan in full together with all fees and interest accrued thereon, and second, to fund the Cash Grant Proceeds Account; or

 

(ii)                  result in a prepayment premium, deposit such proceeds into the Cash Grant Proceeds Account and, at any time on or prior to the applicable Guaranteed Cash Grant Bridge Loan Maturity Date, direct disbursement of all or any portion of the funds in the Cash Grant Proceeds Account to satisfy the applicable Guaranteed Cash Grant Bridge Loan until it has been, together with all fees and interest accrued thereon, fully repaid.

 

If on the date of receipt of the Cash Grant for a Phase (or, with respect to the Cash Grants for Phase 2 or Phase 4, the later of the receipt of (x) the Cash Grant for Phase 2 and (y) the Cash Grant for Phase 4) the amount of Cash Grant proceeds is, together with amounts on deposit in the Cash Grant Proceeds Account and the Restricted Payment Account, insufficient to repay the applicable Guaranteed Cash Grant Bridge Loan, the DOE shall direct the Collateral Agent to make demand on the NRG Cash Grant Shortfall Security and/or draw on the SunPower Cash Grant Shortfall Security in (A) amounts necessary to ensure there are sufficient funds for repayment of the applicable Guaranteed Cash Grant Bridge Loan and (B) proportions determined by DOE in its sole discretion, and the proceeds of such draws and demands will be applied consistent with this Section 3.4.3(g). Notwithstanding anything in this clause (g) to the contrary, each Guaranteed Cash Grant Bridge Loan becomes due and payable at its applicable Guaranteed Cash Grant Bridge Loan Maturity Date; and

 

(h)           of the Guaranteed Term Loan, in the event that, as of the Project Completion Date, the Projected Debt Service Coverage Ratio is less than the Minimum DSCR for any Payment Period, prepayment from cash available at the payment priority specified in section 4.03(b)(ii) of the Accounts Agreement until the Projected Debt Service Coverage Ratio for each Payment

 

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Period is equal to or greater than the Minimum DSCR, to be applied as a Full Advance Prepayment; provided that any prepayment under this Section 3.4.3(h) will not exceed the DSCR Restoration Cap Amount; and

 

(i)            of the Guaranteed Term Loan, in the event that the Borrower receives Interest Rate Swaption Proceeds after the Project Completion Date and all Project Costs incurred during the Construction Period have been paid in full, in an amount equal to (A) 100% of such Interest Rate Swaption Proceeds multiplied by (B) the percentage equal to (x) the Guaranteed Loan component of the Debt to Equity Ratio divided by (y) the sum of the Guaranteed Loan component of the Debt to Equity Ratio and the Equity Contribution component of the Debt to Equity Ratio.

 

For the avoidance of doubt, nothing in this Section 3.4 shall be interpreted to require the Borrower to make a prepayment without giving adequate notice to FFB, if any is required under the FFB Documents.

 

SECTION 3.5.     Payment of Guaranteed Loan Fees.

 

(a)             The Borrower shall pay to DOE, not later than the Guarantee Agreement Date and before the issuance of the DOE Guarantee, a loan facility fee in an aggregate amount equal to $1,625,000 plus 0.50% of the Guaranteed Loan Amount. DOE acknowledges that it received a portion of such facility fee in the amount of $1,512,101.50 on April 15, 2011.

 

(b)             The Borrower shall pay annually in advance to DOE, for its own account, the DOE Maintenance Fee. The Borrower shall pay the initial DOE Maintenance Fee not later than the Guarantee Agreement Date (but in any event before the issuance of the DOE Guarantee) and each subsequent DOE Maintenance Fee on January 1 of each calendar year after the Guarantee Agreement Date (provided that the initial DOE Maintenance Fee shall be pro-rated on a daily basis for the number of days starting with the Guarantee Agreement Date and ending on December 31, 2011).

 

(c)             The Borrower shall pay to FFB the fees payable to FFB from time to time in accordance with the FFB Documents.

 

(d)             The Borrower shall pay to DOE a DOE Modification Fee, if any, in the amount(s) and at the time(s) reasonably determined by DOE.

 

(e)             All Guaranteed Loan Fees and Periodic Expenses shall be paid on the dates due, in immediately available funds in Dollars, to DOE or FFB, as applicable. Once paid, the Guaranteed Loan Fees and Periodic Expenses shall not be refundable under any circumstances.

 

(f)             All amounts payable to DOE under this Section 3.5 shall be paid 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. 1229

 

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SECTION 3.6.     Evidence of Debt.

 

(a)           The Loan Servicer shall maintain, in accordance with its usual practice, internal records evidencing the amounts from time to time (i) advanced by FFB under the FFB Note Purchase Agreement, (ii) paid by DOE with respect to the DOE Guarantee and (iii) principal and interest amounts paid by the Borrower with respect to the foregoing.

 

(b)           In the event of any conflict among the records of the Loan Servicer and FFB, the records of FFB shall prevail.

 

ARTICLE 4
  CONDITIONS PRECEDENT

 

SECTION 4.1.     Conditions Precedent to Guarantee Agreement Date.

 

The obligation of DOE to issue the DOE Guarantee to FFB is subject to the prior satisfaction (or waiver), as determined by DOE, in its sole discretion, of each of the following conditions precedent (and of any deliverable, as to its form and substance) as of the Guarantee Agreement Date (or such other date specified in this Section 4.1).

 

4.1.1.  Transaction Documents.

 

(a)         Financing Documents. DOE has received fully executed originals in sufficient counterparts for each party to each of the following documents, each of which is in full force and effect and without amendment (other than those amendments previously disclosed by the Borrower and consented to by DOE), as certified by the Borrower (or, in the case of Section 4.1.1(a)(iii), certified by the relevant Borrower Entity):

 

(i)                    Loan Guarantee Agreement. This Loan Guarantee Agreement.

 

(ii)                   FFB Documents. The FFB Documents.

 

(iii)                  Equity Documents. Each of the following documents and all other contracts and documents required in connection with the Equity Commitments (the “Equity Documents”):

 

(A)                               the Equity Funding Agreement;

 

(B)          the Equity Letter(s) of Credit;

 

(C)          the Cash Collateral Security Agreement;

 

(D)          the Cash Collateral Accounts Control Agreement;

 

(E)                                if required by DOE in a writing delivered to Borrower prior to the Guarantee Agreement Date, an agreement between the Sponsor and DOE providing for various matters, such as management and support obligations for the Borrower

 

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and continuing ownership of the Borrower’s equity and control of management of the Borrower;

 

(F)                                 if required by DOE in a writing delivered to Borrower prior to the Guarantee Agreement Date, an agreement between SunPower and DOE providing for various matters, including support obligations for warranties and other obligations under the EPC Contract and other Project Documents; and

 

(iv)                  any other documents, certificates or instruments required to be delivered in connection with the foregoing.

 

(b)           Security Documents.           Each of the following documents (the “Security Documents”):

 

(i)                                                                  the Deed of Trust;

 

(ii)                                                               the Security Agreement;

 

(iii)                                                            the Accounts Agreement;

 

(iv)                                                           the Accounts Control Agreement;

 

(v)                                                              the Equity Pledge Agreement;

 

(vi)                                                           the Direct Agreements;

 

(vii)                                                        the Cash Collateral Security Agreement;

 

(viii)                                                     the Cash Collateral Accounts Control Agreement;

 

(ix)                                                           the HPR I Assignment;

 

(x)                                                              any other contract or document entered into on or prior to the Guarantee Agreement Date that provides any Lien, charge or security interest to the Secured Parties (or any of them); and

 

(xi)                                                           any other documents, certificates or instruments required to be delivered in connection with the foregoing.

 

(c)           Project Documents. DOE has received fully executed copies of each of the following documents (together with a fully executed consent to assignment related to each of the following documents), each certified by the Borrower that (x) such copy is a true, correct and complete copy of such document (including all schedules, exhibits, attachments, supplements and amendments thereto and any related protocols or side letters), (y) such document has been duly executed and delivered by the parties thereto and is in full force and effect and (z) to the 

 

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Borrower’s Knowledge, no party to such document is or, but for the passage of time or giving of notice or both, will be in breach of any obligation thereunder:

 

(i)                    the Land Lease Agreement;

 

(ii)                   each other contract or other document evidencing the Borrower’s ownership or control of land and rights to land for the Project, all easements, licenses, and covenants, conditions and restrictions in connection with the Project Site and any and all other documents (including estoppel certificates from landlords) affecting an interest in or right to use the Project Site;

 

(iii)                  the Construction Contracts and all consulting, engineering, equipment supply and construction agreements;

 

(iv)                  the Power Purchase Agreements;

 

(v)                   the Large Generator Interconnection Agreement and all ancillary transmission and interconnection agreements;

 

(vi)                  each other contract that is required for construction management, project administration and operation and maintenance of the Project;

 

(vii)                 intellectual property documents evidencing the Borrower’s right to use the intellectual property required to construct, operate and use the Project;

 

(viii)                the Delivery Term Security Maintenance Agreement;

 

(ix)                  the Mitigation Land Acquisition Agreement;

 

(x)                   the Purchase and Sale Agreement;

 

(xi)                  the Development Services Agreement;

 

(xii)                 the O&M Agreement;

 

(xiii)                the Master Services Agreement;

 

(xiv)                the Escrow Agreement;

 

(xv)                 other supply agreements, including all agreements relating to materials, utilities, engineering services, equipment supplies, transportation of raw materials, commodities, and other supplies required to operate the Project and the transmission of the output from the Project; and

 

(xvi)               any other documents or agreements including real property agreements, labor agreements, management services agreements, professional services agreements, and such other agreements reasonably required to construct, own, operate and maintain the Project, certificates or instruments required to be delivered in connection with any of the foregoing that have been entered into by the Borrower in connection with the Project

 

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prior to the Guarantee Agreement Date, in each case that DOE has designated as a “Project Document” in a writing delivered to the Borrower prior to the Guarantee Agreement Date.

 

(d)           Organizational Documents. The Organizational Documents of each Borrower Compliance Entity, accompanied, in each case, by the appropriate Officer’s Certificates, Secretary’s Certificates, good standing certificates, incumbency certificates, resolutions and any other documents as DOE reasonably requests (each effective as of the Guarantee Agreement Date), with respect to, inter alia, approval of (i) each such Borrower Compliance Entity’s participation in the Project, (ii) the financing therefor (including the Guaranteed Loans) and the granting of Liens and (iii) the execution, delivery and performance by each such Borrower Compliance Entity of the Transaction Documents to which it is party.

 

(e)           Merger Documents. The Merger Documents.

 

(f)            Other Documents. Any other documents and agreements as may be required under the Program Requirements or as otherwise required by DOE, including the Monitoring Table, substantially in the form attached hereto as Exhibit Q.

 

4.1.2.  Plans and Projections.

 

(a)           DOE has received, not later than the Ratings Package Delivery Date, the following items (which items will be certified on the Guarantee Agreement Date by an Officer’s Certificate of the Borrower substantially in the form of Exhibit C-1 and by the Independent Engineer on a certificate substantially in the form of Exhibit E), as to the Borrower’s best estimate of the information contained therein as of the Ratings Package Delivery Date:

 

(i)                    Construction Budget. A construction budget, setting forth, on a monthly basis, all Project Costs necessary to design, develop, construct and start-up the Project through the Project Completion Date (including the amount of any Project Costs previously funded by any Borrower Entity), which construction budget shall specify on an aggregate basis for all Project Costs: (I) the portions of any Project Costs that constitute Eligible Project Costs; and (II) the amount of contingencies, which Construction Budget shall have been reviewed by the Independent Engineer;

 

(ii)                   Project Plans. The detailed project plans for the design, development, financing, construction, implementation, operation and management of the Project, including updates and supplements to information submitted in response to “Attachment B” to the instructions for Application for a DOE Guarantee, approved by the Independent Engineer as being satisfactory and in form and substance acceptable to DOE and including, without limitation: (i) procurement strategy, supply chain management plan, vendor database, long-lead procurement plan and schedule of domestic content of purchased items; (ii) quality control plan, quality assurance flow-down requirements for major subcontractors and quality assurance plan for operations and maintenance; (iii) risk management plan and risk register; (iv) safety plan; and (v) operations and maintenance plan;

 

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(iii)                  Financial Plan. A financial plan setting forth all sources and uses of funds needed to pay Project Costs, as reviewed by the Independent Engineer;

 

(iv)                  Project Costs Report. A detailed description, with supporting documents as reasonably requested by DOE, (A) of Project Costs (including all development costs) incurred and paid to third parties prior to the Ratings Package Delivery Date prepared by the Borrower and reviewed by the Independent Engineer and (B) specifying those Project Costs for which the Borrower, the Sponsors or any Affiliate thereof seeks credit to be applied toward Base Equity and certifying that such amounts are Eligible Project Costs and have been applied in accordance with the Construction Budget;

 

(v)                   Advance Schedule. A schedule detailing the expected dates and amounts of proposed Advances and Equity Contributions to fund Eligible Project Costs consistent with the Project Plans, the Financial Plan, the Construction Budget and the Project Milestone Schedule, prepared by the Borrower and reviewed by the Independent Engineer;

 

(vi)                  Project Milestone Schedule. A schedule of significant development, construction and completion milestones for the Project provided by the Borrower and reviewed by the Independent Engineer, in form and substance acceptable to DOE, prepared by the EPC Contractor with respect to the EPC Contract; which will: (x) be prepared by the EPC Contractor with respect to the EPC Contract as a level 3 integrated Project schedule using Primavera 6 software; (y) reflect interdependencies among all project design, permitting, procurement and construction activities; and (z) be integrated with the Project work breakdown structure. The Project Milestone Schedule shall include, without limitation: (i) all design, procurement and construction activities, including subcontracted activities; (ii) interconnection activities, including activities related to the interim tap into PG&E’s transmission system; (iii) cost and resource loading information; (iv) major Power Purchase Agreements dates and requirements; (v) phased commissioning and start-up activities and (vi) a critical path analysis;

 

(vii)                Base Case Projections. A hard copy of, and a computer disk, CDROM or other customary computer storage media, containing projections of operating results reviewed by the Independent Engineer and DOE (which shall be finished in Excel file format) and the underlying models and assumptions and explanations thereto, on no less frequently than a semi-annual basis for the Project covering the period from the Ratings Package Delivery Date to a date falling no sooner than twelve months after the Maturity Date, showing, on a basis consistent with the Project Plans and the Transaction Documents, the Borrower’s good faith projections based on assumptions that are believed by the Borrower to be a reasonable operating forecast of revenues, expenses, cash flow, and sources and uses of revenues over the forecast period, which projections shall provide for a Projected Debt Service Coverage Ratio for each Payment Period that is equal to or greater than the Minimum DSCR;

 

(viii)               Initial Operating Budget. An Initial Operating Budget beginning on the Guaranteed Project Completion Date through the first anniversary of the Operational 

 

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Completion Date (the “Initial Operating Budget”), approved by the Independent Engineer;

 

(ix)                  Employment Projections. Projections for jobs created and maintained in the U.S. as a result of the Project for each calendar year occurring during the term of the Guaranteed Loans;

 

(x)                   Modified Tracker Components Data. Information with respect to modified elements of the tracker design utilized for the Project, including the torque-tube module-mounting saddles and torque-tube bearings (the “Modified Tracker Components”), including: (x) finite element analysis; and (y) a report including results of qualification testing of the Modified Tracker Components, which shall (i) confirm durability of the Modified Tracker Components sufficient for a 25-year lifetime, (ii) confirm adequacy of bearing design, and (iii) include seismic and wind qualification of the tracker system, including the Modified Tracker Components, approved by the Independent Engineer;

 

(xi)                  Project Design Package. A complete design package for the Project, in form and substance satisfactory to DOE, including, without limitation: (i) approved design basis documents; (ii) structural analysis for all major systems; (iii) specifications and data sheets for all major components; (iv) general plant arrangements and layout drawings; and (v) integrated design for the supervisory control and data acquisition system and the tracking monitoring and control systems, reviewed by the Independent Engineer; and

 

(xii)                 Risk Evaluation Documents. Copies of certain Project Documents and Financing Documents (if any) to be identified by DOE in a writing delivered to the Borrower prior to the Guarantee Agreement Date (the “Risk Evaluation Documents”).

 

(b)           On the Guarantee Agreement Date, DOE shall receive an Officer’s Certificate of the Borrower certifying that, as of the Guarantee Agreement Date, each of the items delivered pursuant to Section 4.1.2(a) has not changed in any material respect since the date of its delivery to DOE, excluding (i) with respect to item (iv) (Project Costs Report), costs incurred since the date of delivery of that item to DOE and (ii) any other changes as approved by DOE.

 

4.1.3.  Financial Statements. On or prior to the Guarantee Agreement Date, DOE has received (i) annual unaudited Financial Statements for the previous year and unaudited quarterly Financial Statements for the year to date of the Borrower; (ii) consolidated annual audited Financial Statements for the previous year and unaudited quarterly Financial Statements for the year to date of the Ultimate Parent; and (iii) the most recently available consolidated annual audited Financial Statements and unaudited quarterly Financial Statements for the year to date of SunPower Corporation and, as determined by DOE, each other Person whose credit is material to the making of the Guaranteed Loans; in each case together with an Officer’s Certificate in the form of Exhibit I-1 or Exhibit 1-2, as applicable, confirming that such Financial Statements fairly present the financial conditions of such Person.

 

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4.1.4.  Credit Rating. The Project has received a credit rating from Fitch dated at least thirty (30) Business Days prior to the Guarantee Agreement Date.

 

4.1.5.  Environmental. DOE has received a copy of (i) a “Phase I” environmental site assessment for the Project Site that conforms to applicable industry and regulatory standards, and any additional or follow-up site investigation or compliance-related audits or assessments (including, but not limited to, any “Phase II” environmental site assessments, compliance audits, or environmental site characterization studies), (ii) a Final Environmental Assessment and Finding of No Significant Impact with respect to the Project Site in accordance with the National Environmental Policy Act, and (iii) evidence of satisfaction of any additional environmental requirements (including, but not limited to, wetlands approvals, biological opinions, required mitigations, or other requirements) in accordance with applicable Environmental Laws, including all required National Environmental Policy Act documentation.

 

4.1.6.  Permits and Approvals.

 

(a)             All Required Approvals required for the Project as of the Guarantee Agreement Date are listed on Part I of Schedule 4.1.6, and DOE has received fully executed copies of each of the Required Approvals listed on Part I of such schedule, together with an Officer’s Certificate of the Borrower to the effect that: (i) the copies of such Required Approvals delivered pursuant to this Section 4.1.6 are true, correct and complete copies of such Required Approvals (including all schedules, exhibits, attachments, supplements and amendments thereto and any related protocols or side letters); (ii) no term or condition of any of such Required Approvals delivered pursuant to this Section 4.1.6 has been amended from the form thereof delivered pursuant to this Section 4.1.6; (iii) each such Required Approval delivered pursuant to this Section 4.1.6 has been validly issued, is in full force and effect and Non-Appealable; (iv) all conditions precedent to the effectiveness of such Required Approval delivered pursuant to this Section 4.1.6 have been satisfied (other than conditions not required to be satisfied as of the Guarantee Agreement Date that do not require the discretionary approval of a third party); (v) the Borrower has no reason to believe that any of such Required Approvals delivered pursuant to this Section 4.1.6 shall be revoked.

 

(b)             All Required Approvals not required for the Project as of the Guarantee Agreement Date are listed on Part II of Schedule 4.1.6, and DOE has received an Officer’s Certificate of the Borrower to the effect that the Borrower has no reason to believe that it or any other Borrower Entity or, to the Borrower’s Knowledge, any Major Project Participant (as applicable) shall fail to obtain the Required Approvals set forth on Part II of Schedule 4.1.6 in the ordinary course free of any unduly burdensome conditions or requirements at such time or times as may be required under the Transaction Documents or as is otherwise necessary to avoid any material delay in, or impairment to, the performance of the transactions as contemplated by the Transaction Documents.

 

4.1.7.  Receipt of Evidence. Each of the following conditions have occurred and DOE has determined (in its sole discretion) that it has received satisfactory evidence of such occurrence:

 

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(a)           Lobbying Certification. The Borrower has provided to DOE a Standard Form-LLL “Disclosure Form to Report Lobbying”.

 

(b)           Commencement of Construction. Commencement of Construction has occurred.

 

(c)           Cash Grant Eligibility. DOE shall have received:

 

(i)                    A cost eligibility study report from the Borrower’s Accountant, dated as of the Guarantee Agreement Date and in form and substance reasonably satisfactory to DOE, certifying the projected Project Costs that more likely than not will be included in the cost basis of the Project for purposes of determining the Cash Grant to be received in respect of the Project (determined in accordance with the Cash Grant Guidance, Cash Grant Terms and Conditions and other regulations or guidance issued with respect to the Cash Grant); provided,  however, that such cost eligibility study report shall in no event be reasonably satisfactory to DOE unless Borrower’s tax counsel shall have reviewed the material legal assumptions used in creating such report and determined that such legal assumptions should be correct a matter of law.

 

(ii)                   An Officer’s Certificate from the Sponsor dated as of the Guarantee Agreement Date and certifying (A) that the Project should be eligible for Cash Grants in accordance with Exhibit T, (B) that the commencement of construction within the meaning of the requirements of Section 1603 of Recovery Act with respect to the Project has occurred or will occur prior to the applicable deadline under such Section, (C) as to those factual matters (other than factual matters described in Section 4.1.7(c)(ii)(D)  hereof) as to which the Sponsor is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.1.12 hereof, and which will be relied upon in such opinion, and (D) in reliance upon the cost eligibility study report provided by the Borrower’s Accountant pursuant to Section 4.1.7(c)(i) hereof, as to the aggregate amount of the projected Project Costs that should be included in the cost basis of the Project for purposes of determining the Cash Grant to be received in respect of the Project (such aggregate amount, the “Projected Cash Grant Basis”) and confirming that such Projected Cash Grant Basis has been determined pursuant to a methodology consistent with the Cash Grant Guidance, Cash Grant Terms and Conditions and other regulations or guidance issued with respect to the Cash Grant.

 

(iii)                  An Officer’s Certificate from SunPower dated as of the Guarantee Agreement Date and certifying as to factual matters as to which SunPower is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.1.12 hereof, and which will be relied upon in such opinion.

 

(iv)                  An Officer’s Certificate from the Borrower dated as of the Guarantee Agreement Date and certifying as to factual matters as to which the Borrower is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.1.12 hereof, and which will be relied upon in such opinion.

 

(d)           Guaranteed Loan Fees. Receipt of payment of all Guaranteed Loan Fees from funds other than Advances.

 

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(e)                                       Fee Arrangements for Independent Consultants. The Periodic Expenses of any Independent Consultants incurred and invoiced prior to the Guarantee Agreement Date (i) have been paid in full or (ii) are to be paid by other arrangements satisfactory to DOE.

 

(f)                                        Prohibited Persons. No Borrower Entity or Borrower Entity Controlling Person or any Person that Controls any Borrower Entity or Borrower Entity Controlling Person is a Prohibited Person.

 

(g)                                       Davis-Bacon Requirements. DOE shall have received a certificate from the Borrower, dated as of the Guarantee Agreement Date, certifying that the Borrower has complied with all Davis-Bacon Requirements including any retroactive compliance. The Borrower has included, in each of its Davis-Bacon Act Covered Contracts, the Davis-Bacon Requirements.

 

4.1.8. Update of Conditional Commitment. DOE has determined that there are no material changes to the terms and conditions contained in the Term Sheet, other than any changes that have been agreed by DOE prior to the Guarantee Agreement Date.

 

4.1.9. No Judgment Liens. DOE has (a) received an Officer’s Certificate from the Borrower certifying that the Borrower does not have a judgment Lien against any of its Property for any Indebtedness owed to the U.S. or any other creditor; and (b) independently verified, to its satisfaction, the absence of any judgment Lien, as certified by the Borrower.

 

4.1.10. DOE Requirements.

 

(a)                                      Program Requirements. All Program Requirements required to have been satisfied as of the Guarantee Agreement Date have been satisfied.

 

(b)                                      Central Contractor Registration. The Borrower has registered in the CCR database.

 

(c)                                       Patriot Act. Each of DOE and FFB have received all documentation and other information required by regulatory authorities under the applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act, customarily delivered to financial institutions in connection with a transaction such as the issuance of the Guaranteed Loans.

 

4.1.11. Legal Opinions. DOE and the Collateral Agent have received legal opinions dated the Guarantee Agreement Date from legal counsel reasonably satisfactory to DOE, with respect to the laws of the jurisdictions governing any of the Transaction Documents required to be delivered as a condition to the Guarantee Agreement Date and the laws of the jurisdiction of organization of each Borrower Entity that is a party to a Transaction Document, which legal opinions shall address the following: (a) due authorization, execution, delivery and enforceability of the Transaction Documents to which each such Borrower Entity is a party; (b) creation and perfection of security interests under the Security Documents; (c) receipt and Non-Appealability of all Required Approvals then necessary; (d) absence of conflicts with law, agreements or Organizational Documents; (e) absence of material litigation; and (f) such other matters that DOE requests.

 

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4.1.12. Cash Grant Opinion. DOE shall have received a cash grant opinion dated as of the Guarantee Agreement Date from tax counsel reasonably satisfactory to DOE, in form and substance reasonably satisfactory to DOE, relying solely upon, with respect to factual matters, (a) the Transaction Documents, (b) the Merger Documents, (c) the Independent Engineer Report, and (d) the items delivered to DOE pursuant to Sections 4.1.7(c)(i), 4.1.7(c)(ii)(C), 4.1.7(c)(ii)(D), 4.1.7(c)(iii), and 4.1.7(c)(iv) hereof, and subject to qualifications, assumptions, representations and exceptions reasonably satisfactory to DOE, that the Project should qualify for Cash Grants in amounts not less than, and by the dates, set forth in Exhibit T.

 

4.1.13. Events of Default. No Event of Default or Potential Event of Default has occurred or is continuing.

 

4.1.14. Guarantee Agreement Date Certificates and Reports. DOE has received:

 

(a)                                           Borrower Certificate. An Officer’s Certificate of the Borrower substantially in the form of Exhibit C-1 and otherwise regarding the matters required to be certified by it as set forth in Section 4.1 and such other matters that DOE requests.

 

(b)                                           Borrower Accounting Systems Certification. A certification by a Financial Officer of the Borrower stating that the Borrower’s accounting systems, controls and management information systems and are satisfactory for purposes of providing information necessary for financial reporting in accordance with GAAP.

 

(c)                                            Sponsor Certificate. An Officer’s Certificate of the Sponsor, substantially in the form of Exhibit U, and addressing such other matters that DOE requests including that (i) the Borrower intends to treat the Guaranteed Loans as debt for federal income tax purposes and (ii) the Borrower is not and has not ever been a member of an affiliated or consolidated group for federal or state tax purposes.

 

(d)                                           Independent Engineer Certificate and Report. A certificate of the Independent Engineer substantially in the form of Exhibit E regarding the matters required to be certified by it in this Section 4.1 and such other matters that DOE requests, including a confirmation of the reasonableness and appropriateness of:

 

(i)                                                                  the Construction Budget;

 

(ii)                                                               the Project Plans;

 

(iii)                                                            the Financial Plans;

 

(iv)                                                           the Project Costs Report;

 

(v)                                                              the Initial Operating Budget;

 

(vi)                                                           the Advance Schedule;

 

(vii)                                                        the Project Milestone Schedule;

 

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(viii)                                                     the items described in Section 4.1.2(a)(x) and Section 4.1.2(a)(xi);

 

(ix)                                                           the Base Case Projections (and all the underlying operating assumptions); and

 

(x)                                                              certification of Commencement of Construction;

 

together with the Independent Engineer Report addressing such matters that DOE reasonably requests.

 

(e)                                       Insurance Advisor Certificate and Report. A report from the Insurance Advisor in respect of the Project and the proposed insurance for the Project (including the insurance required to be obtained by each Major Project Participant under the Major Project Documents) and such other related matters as DOE shall reasonably request, which report shall be in form and substance reasonably satisfactory to DOE, accompanied by an Officer’s Certificate of the Insurance Advisor substantially in the form of Exhibit F regarding the matters specified in Section 4.2.7(f) and addressing such other matters that DOE reasonably requests.

 

(f)                                        Accountant Letter. A certificate from the Borrower’s Accountant confirming the tax assumptions in the Base Case Projections, in form and substance satisfactory to the DOE.

 

4.1.15. DOE Approvals. DOE has received each of the following:

 

(a)                                      Action Memorandum. The action memorandum duly executed and delivered by the Secretary of Energy, authorizing the execution by DOE of the Financing Documents to which it is a party and the apportionment of the Credit Subsidy Cost.

 

(b)                                      Calculation of Credit Subsidy. Evidence that OMB has reviewed and approved DOE’s calculation of the Credit Subsidy Cost.

 

(c)                                       Apportionment. Evidence that the Form SF132 Apportionment Request has been approved by OMB and the apportionment has occurred.

 

4.1.16.  Additional Documents. Receipt of such other documents (including, for the avoidance of doubt, all consents to assignment to the Major Project Documents), certifications, consents, or other items relating to the Project, any Borrower Entity, any Major Project Participant, or the matters contemplated by the Transaction Documents as DOE reasonably requests. In particular, the consent and agreement between DOE and PG&E in respect of the HPR II PPA shall state, or PG&E shall otherwise affirm in writing, (i) that PG&E acknowledges that the milestone dates have been extended as per Annex 2 of the Developmental Delay Notice, (ii) that Section 3.9(c)(iii)(A)(I) thereof should be read to apply to time extensions of the Guaranteed Construction Start Date of each of Phase 1, Phase 2 and Phase 3, and (iii) that PG&E acknowledges that the requirements of each of Section 11.1(b) and Section 11.1(c) thereof have been met or waived in writing.

 

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4.1.17.  NRG Equity Immediately prior to the effectiveness of this Loan Guarantee Agreement, the Sponsor shall (directly or indirectly) acquire 100% of Equity Interests in the Borrower from SunPower under the Purchase and Sale Agreement on terms and conditions set forth in the Purchase and Sale Agreement.

 

4.1.18.  Litigation. Except as may be set forth on Schedule 4.1.18, there is no pending or, to the Borrower’s Knowledge, threatened Action (in writing) (i) that relates to the Project or to any transaction contemplated by any of the Transaction Documents, (ii) that relates to the legality, validity or enforceability of any of the Transaction Documents, or (iii) to which any Borrower Entity (other than any Action contemplated under clause (i) or clause (ii) above) or, to the Borrower’s Knowledge, any other Major Project Participant is a party, that (in the case of this clause (iii) only), either singly or in the aggregate, has, or could reasonably be expected to have, a Material Adverse Effect.

 

4.1.19.  Due Diligence Review. DOE has completed, to its satisfaction, its due diligence review of the Project and all other matters related thereto as DOE deems necessary for purposes of the execution of the FFB Documents to be executed and delivered on the Guarantee Agreement Date.

 

4.1.20.  Notice to Proceed. The Borrower (or, in the case of the EPC Subcontract, SunPower) has issued a “Full Notice to Proceed” (as such term is defined in the EPC Contract and the EPC Subcontract, as applicable) under the EPC Contract and the EPC Subcontract.

 

4.1.21.  SunPower’s Certification. A certificate from the chief financial officer of SunPower (i) confirming that the EPC Contract, the Master Services Agreement, the Materials and Equipment Supply Agreement, the Purchase and Sale Agreement, potential revenue from a sale of the fee interest in real property subject to the Land Lease Agreement and the Land Lease Agreement are the only sources of revenue for SunPower in the Project and (ii) setting forth the gross profit margin expected to be received by SunPower from the Project as of the Guarantee Agreement Date.

 

4.1.22.  Quality Assurance Plan. The Borrower has submitted the quality assurance plan.

 

4.1.23.  No Prejudice. The Borrower has provided an acknowledgement in an Officer’s Certificate, acknowledging on behalf of itself and each Borrower Entity, that the issuance of the DOE Guarantee, including the determination by DOE and the Loan Servicer as to whether Project Costs are Eligible Project Costs, shall not prejudice or otherwise have any binding effect with regard to any determination by the Internal Revenue Service, the U.S. Department of the Treasury, or a court of law as to the tax basis of the 

 

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Project or any part thereof under the Internal Revenue Code and under Section 1603 of the American Recovery and Reinvestment Act of 2009.

 

4.1.24.  Letters of Credit and Surety Bonds. DOE shall have received evidence that the Development Security, the Delivery Term Security, the EPC Contract Security, the Mitigation Land Security and the LGIA Surety Bonds shall have been posted in the form of Letters of Credit, in each case, in form and substance reasonably satisfactory to DOE.

 

4.1.25.  CEQA Litigation Support Instruments. DOE shall have received final forms of the CEQA Letter of Credit and the Total Guarantee, each in form and substance reasonably satisfactory to DOE.

 

4.1.26.  Cash Grant Shortfall Security. DOE shall have received (a) the NRG Cash Grant Shortfall Security and the SunPower Cash Grant Shortfall Security, each in form and substance reasonably satisfactory to DOE and (b) a legal opinion, in form and substance satisfactory to DOE, regarding the due execution, authorization, delivery and enforceability of the NRG Cash Grant Shortfall Security.

 

SECTION 4.2.               Conditions Precedent to First Advance.

 

The obligation of DOE to approve the first Advance is subject to the prior satisfaction (or waiver), as determined by DOE, of each of the following conditions precedent (and of any deliverable, as to its form and substance) as of the date of Master Advance Notice delivered with respect to the first Advance (or such other date specified in this Section 4.2).

 

4.2.1. Financing Documents. DOE has received fully executed originals in sufficient counterparts for each party to each of the following Financing Documents, each of which is in full force and effect and without amendment, as certified by the Borrower (or, in the case of Section 4.1.1(a)(iii), certified by the relevant Borrower Entity or Major Project Participant, as the case may be), other than any such amendments permitted under the terms of the Financing Documents and previously disclosed to DOE in writing:

 

(a)                                           Master Advance Notice. An executed Master Advance Notice together with all certificates and documentation required under this Section 4.2;

 

(b)                                           Other Financing Documents. The DOE Guarantee, the FFB Documents and any other documents or agreements designated as “Financing Documents” by DOE in a writing delivered to the Borrower prior to the Guarantee Agreement Date, to the extent not delivered pursuant to Section 4.1.1.

 

4.2.2.  Other Documents. DOE has received the following items, certified by the Borrower:

 

(a)                                           Borrower Compliance Entity Organizational Documents. Updated certified Organizational Documents of each Borrower Compliance Entity, to the extent any such document has been modified since the Guarantee Agreement Date, accompanied, in each case, 

 

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by Officer’s Certificates, Secretary’s Certificates, good standing certificates, incumbency certificates, resolutions and any other documents as DOE reasonably requests, with respect to, inter alia, approval of (i) each such Borrower Compliance Entity’s participation in the Project, (ii) the financing therefor (including the Guaranteed Loans) and the granting of Liens and (iii) the execution, delivery and performance by each such Borrower Compliance Entity of the Transaction Documents to which it is party.

 

(b)                                           Other Transaction Documents. Transaction Documents to the extent not delivered pursuant to Section 4.1.1.

 

(c)                                            Other Documents. Such other documents as DOE reasonably requests in a writing delivered to the Borrower prior to the Guarantee Agreement Date.

 

4.2.3. Plans and Projections.

 

DOE has received an update, if any, of each of the documents delivered pursuant to Section 4.1.2 or certification from the Borrower that no such update is required because such document has not changed since the date of its delivery to DOE.

 

4.2.4. Financial Statements.

 

DOE has received the most recent annual audited (if available) and unaudited quarterly Financial Statements of the Borrower, the Ultimate Parent and SunPower Corporation to the extent not delivered pursuant to Section 4.1.3 (whether it was then unavailable or otherwise), together in each case with an Officer’s Certificate from a Financial Officer of each of the Borrower, the Sponsor, or SunPower as applicable.

 

4.2.5. Permits and Approvals.

 

(a)                                           All Required Approvals required for the Project as of the First Advance Date are listed on Part I of Schedule 4.2.5 (as may have been amended by the Borrower since the Guarantee Agreement Date), and DOE has received fully executed copies of each of the Required Approvals listed on Part I of such schedule (as may have been amended by the Borrower since the Guarantee Agreement Date), together with an Officer’s Certificate of the Borrower to the effect that: (i) the copies of such Required Approvals delivered pursuant to this Section 4.2.5 are true, correct and complete copies of such Required Approvals (including all schedules, exhibits, attachments, supplements and amendments thereto and any related protocols or side letters); (ii) no term or condition of any of such Required Approvals delivered pursuant to this Section 4.2.5 has been amended from the form thereof delivered pursuant to this Section 4.2.5; (iii) each such Required Approval delivered pursuant to this Section 4.2.5 has been validly issued, is in full force and effect and Non-Appealable; (iv) all conditions precedent to the effectiveness of any such Required Approval delivered pursuant to this Section 4.2.5 have been satisfied (other than conditions not required to be satisfied as of the First Advance Date that do not require the discretionary approval of a third party); (v) the Borrower has no reason to believe that any of such Required Approvals delivered pursuant to this Section 4.2.5 shall be revoked; and (vi) the Required Approvals described in Part I of Schedule 4.2.5 (as may have been amended by the Borrower since the Guarantee Agreement Date) are all of the Required Approvals that are necessary or required to be obtained as of the First Advance Date under 

 

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Applicable Law or any agreement applicable to, or binding on, any Borrower Entity or any of their respective Properties or, to the Borrower’s Knowledge, any Project Participant or any of their respective Properties.

 

(b)                                           All Required Approvals not then required for the Project are listed on Part II of Schedule 4.2.5 (as may have been amended by the Borrower since the Guarantee Agreement Date), and DOE has received an Officer’s Certificate of the Borrower to the effect that the Borrower has no reason to believe that it or any other Borrower Entity or, to the Borrower’s Knowledge, any Major Project Participant (as applicable) shall fail to obtain the Required Approvals set forth on Part II of Schedule 4.2.5 (as may have been amended by the Borrower since the Guarantee Agreement Date) in the ordinary course free of any unduly burdensome conditions or requirements at such time or times as may be required under the Transaction Documents or as is otherwise necessary to avoid any material delay in, or impairment to, the performance of the transactions as contemplated by the Transaction Documents.

 

4.2.6. Advisors’ Certificates and Reports.

 

DOE has received bringdown certificates respectively from the Independent Engineer, Insurance Advisor and Borrower’s Accountant, each dated the date of the Master Advance Notice delivered with respect to the first Advance, of the reports delivered pursuant to Section 4.1.14(d), Section 4.1.14(e) and Section 4.1.14(f) and each confirming that the initially delivered report is true and correct in all material respects as of such date:

 

(a)                                      Independent Engineer Certificate. A certificate from the Independent Engineer, (i) confirming that its certificate and Independent Engineer Report delivered pursuant to Section 4.1.14(d) are true and correct in all material respects as of the date of the Master Advance Notice delivered with respect to the first Advance and, if any matter covered by such certificate or report has been updated since the Guarantee Agreement Date, confirming the reasonableness and appropriateness of any such update and (ii) providing an updated report addressing such matters as DOE reasonably requests.

 

(b)                                      Insurance Advisor Certificate. An Officer’s Certificate from the DOE Insurance Advisor, (i) confirming that its certificate and report delivered pursuant to Section 4.1.14(e) are true and correct in all material respects as of the date of the Master Advance Notice delivered with respect to the first Advance and, if any matter covered by such certificate or report has been updated since the Guarantee Agreement Date, confirming the reasonableness and appropriateness of any such update, (ii) addressing each of the matters contemplated by Section 4.2.7(f) and (iii) providing an updated report addressing such matters as DOE reasonably requests.

 

(c)                                       Accountant Letter. A certificate from the Borrower’s Accountant confirming that its certificate delivered pursuant to Section 4.1.14(f) is true and correct in all material respects as of the date of the Master Advance Notice delivered with respect to the first Advance or, if any matter covered by such certificate has been updated since the Guarantee Agreement Date, confirming the reasonableness and appropriateness of any such update.

 

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(d)                                           Pre-Closing Project Costs Report. An update to the report delivered pursuant to Section 4.1.2(a)(iv) which shall be a detailed description, with supporting documents as reasonably requested by DOE, (A) of Project Costs (including all development costs) incurred and paid to third parties prior to the date of the Master Advance Notice delivered with respect to the first Advance prepared by the Borrower and reviewed by the Independent Engineer for costs of a technical nature and (B) specifying those Project Costs for which the Borrower, the Sponsors or any Affiliate thereof seeks credit to be applied toward Base Equity and certifying that such amounts are Eligible Project Costs and have been applied in accordance with the Construction Budget.

 

4.2.7. Receipt of Evidence.

 

Each of the following conditions has occurred and DOE has received satisfactory evidence of such occurrence:

 

(a)                                      [Reserved.]

 

(b)                                      Project Accounts. Each of the Project Accounts has been established in

 

accordance with the provisions of the Accounts Agreement.

 

(c)                                       Security Interests.

 

(i)                                                             All security interests intended to be created by the Security Documents have been validly created and, where appropriate, have been registered or otherwise perfected to create a first priority perfected security interest and Lien, subject only to Permitted Liens, over the Collateral in favor of the Secured Parties.

 

(ii)                                                          Each of the Security Documents has been duly filed and registered or recorded in every jurisdiction in which such filing and registration or recording is necessary or advisable to make valid and effective the Liens intended to be created thereby and the rights of the Secured Parties thereunder and all fees and duties in connection with such filing, registration or recording have been paid in full.

 

(d)                                      Borrower Bankruptcy Remote. The Borrower’s Organizational Documents include bankruptcy remote provisions (including, but not limited to, a certificate of formation, which limits the organizational purpose to construction, operation, development, financing and maintenance of the Project and requires that, notwithstanding anything included therein or by any provision of law, the Borrower will not, without 100% approval by the outstanding membership interests, dissolve, liquidate, consolidate or merge into another entity or convey or transfer properties and assets or institute proceedings to be adjudicated in bankruptcy or insolvency or seek consent to reorganize or liquidate) and an independent director (who has not been, in the last five years, (i) a direct or indirect legal or beneficial owner of the Borrower, any Borrower Affiliate or SunPower, (ii) a creditor, supplier, employee, officer, director, family member, manager or contractor of the Borrower, any Borrower Affiliate or SunPower or (iii) a person who controls the Borrower, any Borrower Affiliate or SunPower or any creditor, supplier, employee, officer, director, family member, manager or contractor of the Borrower or any Borrower Affiliate or SunPower) has been appointed to the board (or equivalent governing body) of the Borrower.

 

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(e)                                       Taxes; Costs and Periodic Expenses. All Taxes and all other costs, fees and Periodic Expenses due in connection with the execution, delivery, filing, registration, recordation or performance of the Transaction Documents or the perfection of the security interests in the Collateral (i) have been paid in full, (ii) are to be paid with the proceeds of the requested Advance or (iii) are to be paid by other arrangements satisfactory to DOE.

 

(f)                                        Insurance. (i) All Required Insurance is in place, in good standing and in full force and effect without default and all premiums due thereon (A) have been paid in full, (B) are to be paid with the proceeds of the first Advance or (C) are to be paid by other arrangements satisfactory to DOE and (ii) the Loan Servicer has received certificates or policies with respect to such Required Insurance, designating the Collateral Agent as loss payee and the Secured Parties as additional insureds, as appropriate, certified by the Borrower and the DOE Insurance Advisor as being true, correct and complete.

 

(g)                                       Land Acquisition; Title to Project Site. (i) The Borrower owns or has procured such fee, leasehold, easement and other real property interests (subject only to Permitted Liens) in and to the Project Site as is necessary for the development, construction, ownership, operation and maintenance of the Project thereon, (ii) the ALTA Survey has been issued to the Borrower and to the DOE and (iii) the Title Policy has been issued to the DOE (or the Title Companies are irrevocably committed to issue such Title Policy upon recordation of the Deed of Trust and payment of the Title Companies’ premiums and charges).

 

(h)                                      Base Equity Commitment. (i) The Base Equity Commitment obligation has been fully funded, or the Base Equity Commitment Collateral for the remaining amount of the Base Equity Commitment has been provided as set forth in the Equity Funding Agreement and (ii) funding of the Base Equity Commitment was, or will be, applied towards Project Costs in accordance with the Equity Funding Agreement.

 

(i)                                          Intellectual Property. The Borrower owns or holds (or has available to it on commercially reasonable terms) a valid and enforceable license or right to use all Technology and Intellectual Property Rights necessary for the construction and operation of the Project through the Maturity Date (which includes all Intellectual Property Rights granted or conferred under the EPC Contract) subject to Bankruptcy Laws and general principles of equity regardless of whether enforcement is considered in a proceeding at law or in equity.

 

(j)                                         Payment and Performance Bonds. Any Support Instruments (including payment and performance bonds) required to be issued in respect of any Project Document have been delivered and are in full force and effect.

 

(k)                                      Debt Repayment. Any existing Indebtedness of the Borrower has been indefeasibly repaid in full in cash and any associated Liens encumbering any Collateral have been irrevocably released, other than Permitted Indebtedness and Permitted Liens.

 

(1)                                      Fees. Receipt of payment of all Guaranteed Loan Fees and fees of Independent Consultants then due from funds other than Advances.

 

(m)           Davis-Bacon Requirements. Each of the representations and warranties made by the Borrower in Section 5.25(a) are true and correct.

 

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4.2.8. Non-disturbance Agreements.

 

With respect to any portion of the Project Site consisting of a leasehold or easement interest, DOE and the Collateral Agent have received customary non-disturbance agreements from each applicable lessor or owner of the burdened parcel, and each of their respective mortgagees, each in form and substance satisfactory to DOE.

 

4.2.9. Program Requirements.

 

All Program Requirements required to have been satisfied as of the Guarantee Agreement Date have been satisfied.

 

4.2.10. Conditions Precedent in FFB Documents.

 

Each condition precedent to the first Advance under the FFB Documents has been satisfied in the sole determination of FFB and DOE, as applicable.

 

4.2.11. Conditions Precedent in Transaction Documents.

 

All conditions precedent to the obligations of any party under any Transaction Document to be performed as of the First Advance Date have been satisfied or waived.

 

4.2.12. Legal Opinions.

 

To the extent that (a) DOE and the Collateral Agent have not received legal opinions governing one or more of the Transaction Documents or (b) there have been any material amendments or changes to the Transaction Documents since the Guarantee Agreement Date, DOE and the Collateral Agent have received legal opinions dated the First Advance Date and from legal counsel satisfactory to DOE, with respect to the laws of the jurisdictions governing such Transaction Documents to which each Borrower Entity and each other Major Project Participant is a party and the laws of the jurisdictions of organization of each Borrower Entity and each other Major Project Participant that is a party to such Transaction Documents. Such legal opinions shall include the following: (i) due authorization, execution, delivery and enforceability of such Transaction Documents to which each such Borrower Entity and other Major Project Participant is a party; (ii) creation and perfection of security interests under the Security Documents (if applicable and solely with respect to such Transaction Documents); (iii) receipt and Non-Appealability of all Required Approvals necessary (if applicable and solely with respect to such Transaction Documents); (iv) absence of conflicts with law, agreements or Organizational Documents (solely with respect to such Transaction Documents); (v) absence of material litigation (solely with respect to such Transaction Documents); and (vi) such other matters that DOE reasonably requests.

 

4.2.13. No Judgment Liens.

 

DOE has received confirmation that the Borrower does not have a judgment Lien against any of its Property for any Indebtedness owed to the U.S. or any other creditor.

 

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4.2.14. Representations and Warranties.

 

As of the First Advance Date, each of the representations and warranties made (or deemed made) by any Major Project Participant in any Financing Document (including any Direct Agreement) in effect as of the First Advance Date is true and correct in all material respects (except to the extent any such representation and warranty itself is qualified by “materiality,” “Material Adverse Effect” or any similar qualifier, in which case, it shall be true and correct in all respects) as of such date except to the extent such representation or warranty is made only as of a specific date or time (in which event such representation or warranty shall be true and correct as of such date or time).

 

4.2.15. Transmission.

 

DOE has received evidence that there are adequate rights to firm transmission service for power generated by the Project in the amounts and during the periods required under the Power Purchase Agreements.

 

4.2.16. Due Diligence Review.

 

DOE has completed, to its satisfaction, its due diligence review of the Project and all other matters related thereto.

 

4.2.17. Litigation.

 

There is no pending or, to the Borrower’s Knowledge, threatened Action (a) that relates to the Project or to any transaction contemplated by any of the Transaction Documents or (b) that relates to the legality, validity or enforceability of any of the Transaction Documents or (c) to which any Borrower Entity (other than any Action contemplated under clause (a) above) or, to the Borrower’s Knowledge, any other Major Project Participant is a party, that (in the case of clauses (a) and (c) only) the Guarantor has determined has, or is reasonably expected to have, a Material Adverse Effect or may otherwise materially adversely affect the interests of the Guarantor, including in its capacity as an agency of the United States Government.

 

4.2.18. No Changes to Terms and Conditions of Risk Evaluation Documents.

 

Except as DOE may have approved, there shall have been no material changes to the terms and conditions of the Risk Evaluation Documents from and after the date such documents were delivered pursuant to Section 4.1.2(a)(xii).

 

4.2.19. First Advance Date Certificates.

 

DOE has received:

 

(a)                                      Borrower Certificate. An Officer’s Certificate, substantially in the form of Exhibit C-2, containing certifications of the Borrower regarding the matters required to be certified by it as set forth in this Section 4.2 and other matters that DOE reasonably requests.

 

(b)                                      Sponsor Certificate. An Officer’s Certificate of the Sponsor substantially in the form of Exhibit H addressing such other matters that DOE reasonably requests.

 

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(c)                                       Major Project Participant Certificates. A certificate from each Major Project Participant (other than PG&E, the California Independent System Operator, any Borrower Compliance Entity that is delivering the relevant certificate under other sections of this Loan Guarantee Agreement, Escrow Associates, LLC and any Person that is a Major Project Participant solely because it provides a Support Instrument in connection with a Major Project Document) substantially in the form of Exhibit K and addressing such other matters that DOE requests.

 

4.2.20. Contractor Subordination. DOE has received a subordination agreement from each of the contractors and suppliers identified on Schedule 4.2.20, pursuant to which such party subordinates its interest under the applicable contract identified on Schedule 4.2.20 to the lien of the Deed of Trust, which subordination agreement shall be in the form of Exhibit P or such other form as may be reasonably acceptable to DOE.

 

4.2.21. Additional Documents. DOE has received such other documents, certifications, or consents relating to the Project, any Borrower Entity, any Major Project Participant, or the matters contemplated by the Transaction Documents as DOE reasonably requests.

 

SECTION 4.3.               Quarterly Conditions Precedent to Advances.

 

The obligation of DOE to approve each Advance (other than the first Advance to the extent the First Advance Date occurs on or prior to the three (3) month anniversary of the Guarantee Agreement Date) is subject to the prior satisfaction (or waiver), as determined by DOE of each of the following conditions precedent (and of any deliverable, as to its form and substance) (the “Quarterly Conditions Precedent”) as of the most recent Quarterly Approval Date:

 

4.3.1. Construction Progress Report; Construction Budget.

 

DOE has received an Officer’s Certificate from each of the Borrower and the Independent Engineer certifying that as of such Quarterly Approval Date:

 

(a)                                           there is no reason to believe that anything is incorrect or misleading in any material respect in the most recent Construction Progress Report;

 

(b)                                           there have been no changes to the Construction Budget since (i) the Guarantee Agreement Date in respect of the first Quarterly Approval Date or (ii) the previous Quarterly Approval Date in respect of any succeeding Quarterly Approval Date, except for Approved Construction Changes;

 

(c)                                            construction of the Project is proceeding in accordance with the Project Plans, the Construction Budget, the Financial Plan and the Project Milestone Schedule, and the Project is expected to achieve Operational Completion by the Anticipated Operational Completion Date;

 

(d)                                           the Project is expected to achieve Project Completion by the Guaranteed Project Completion Date;

 

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(e)                                       nothing has occurred since the date of the most recent Construction Progress Report or the date of the Independent Engineer’s most recent site visit, whichever is later, that could reasonably be expected to prevent construction of the Project in accordance with the Project Milestone Schedule and the Construction Budget; and

 

(f)                                        the Borrower has achieved the targets projected in the Project Milestone Schedule to occur prior to such Quarterly Approval Date.

 

4.3.2. Base Case Projections.

 

DOE has received either (i) certification from the Borrower that there are no changes to the Base Case Projections that have had, or could reasonably be expected to have, a Material Adverse Effect and that there are no material changes to the assumptions therein or (ii) certified updated Base Case Projections that are acceptable to DOE.

 

4.3.3. Permits and Approvals.

 

(a)                                      All Required Approvals required for the Project as of the applicable Quarterly Approval Date are listed on Part I of Schedule 4.3.3 (as may have been amended by the Borrower since the previous Quarterly Approval Date), and DOE has received fully executed copies of each of the Required Approvals listed on Part I of such schedule (as may have been amended by the Borrower since the previous Quarterly Approval Date), together with an Officer’s Certificate of the Borrower to the effect that: (i) the copies of such Required Approvals delivered pursuant to this Section 4.3.3 are true, correct and complete copies of such Required Approvals (including all schedules, exhibits, attachments, supplements and amendments thereto and any related protocols or side letters); (ii) no term or condition of any of such Required Approvals delivered pursuant to this Section 4.3.3 has been amended from the form thereof delivered pursuant to this Section 4.3.3; (iii) each such Required Approval delivered pursuant to this Section 4.3.3 has been validly issued, is in full force and effect and Non-Appealable; (iv) all conditions precedent to the effectiveness of any such Required Approval delivered pursuant to this Section 4.3.3 have been satisfied (other than conditions not required to be satisfied as of the applicable Quarterly Approval Date that do not require the discretionary approval of a third party); (v) the Borrower has no reason to believe that any of such Required Approvals delivered pursuant to this Section 4.3.3 shall be revoked; and (vi) the Required Approvals described in Part I of Schedule 4.3.3 (as may have been amended by the Borrower since the previous Quarterly Approval Date) are all of the Required Approvals that are necessary or required to be obtained as of the applicable Quarterly Approval Date under Applicable Law or any agreement applicable to, or binding on, any Borrower Entity or any of their respective Properties or, to the Borrower’s Knowledge, any Project Participant or any of their respective Properties.

 

(b)                                      All Required Approvals not required for the Project as of the applicable Quarterly Approval Date are listed on Part II of Schedule 4.3.3 (as may have been amended by the Borrower since the previous Quarterly Approval Date), and DOE has received an Officer’s Certificate of the Borrower to the effect that the Borrower has no reason to believe that it or any other Borrower Entity or, to the Borrower’s Knowledge, any Major Project Participant (as applicable) shall fail to obtain the Required Approvals set forth on Part II of Schedule 4.3.3 (as may have been amended by the Borrower since the previous Quarterly Approval Date) in the

 

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ordinary course free of any unduly burdensome conditions or requirements at such time or times as may be required under the Transaction Documents or as is otherwise necessary to avoid any material delay in, or impairment to, the performance of the transactions as contemplated by the Transaction Documents.

 

4.3.4. Proceedings and Other Documents.

 

DOE has received (i) certification from the Borrower that all corporate and similar proceedings concluded since the last Quarterly Approval 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 Quarterly Approval Date and (iii) such other evidence as DOE reasonably requests in order to evidence the consummation of the transactions contemplated thereby and compliance with the Quarterly Conditions Precedent.

 

4.3.5. Cash Grant Eligibility. DOE shall have received:

 

(a)                                           An Officer’s Certificate from the Sponsor dated as of such Quarterly Advance Date and certifying (i) as to those factual matters (other than factual matters described in Section 4.3.5(a)(ii) hereof) as to which the Sponsor is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.3.6 hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent that (A) counsel to the Sponsor reasonably requests changes; (B) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (C) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (D) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and otherwise with respect to such opinion in Section 4.3.6); or (E) as the Sponsor, DOE and their respective counsel shall agree, and (ii) that the Projected Cash Grant Basis is not materially less than described in the cost eligibility study report delivered pursuant to Section 4.1.7(c)(i) hereof.

 

(b)                                           An Officer’s Certificate from SunPower dated as of such Quarterly Advance Date and certifying as to factual matters as to which SunPower is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.3.6 hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent that (i) counsel to SunPower reasonably requests changes; (ii) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (iii) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (iv) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and otherwise with respect to such opinion in Section 4.3.6); or (v) as SunPower, DOE and their respective counsel shall agree.

 

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(c)                                       An Officer’s Certificate from the Borrower dated as of such Quarterly Advance Date and certifying as to factual matters as to which the Borrower is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.3.6 hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent that (i) counsel to the Borrower reasonably requests changes; (ii) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (iii) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (iv) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and otherwise with respect to such opinion in Section 4.3.6); or (v) as the Borrower, DOE and their respective counsel shall agree.

 

4.3.6. Cash Grant Opinion. DOE shall have received a cash grant opinion dated as of such Quarterly Approval Date from tax counsel reasonably satisfactory to DOE, in form satisfactory to DOE and in substance reasonably satisfactory to DOE as to the matters discussed in the cash grant opinion provided pursuant to Section 4.1.12 hereof, relying solely upon, with respect to factual matters, (a) the Transaction Documents, (b) the Merger Documents, (c) the Independent Engineer Report, and (d) the items delivered to DOE pursuant to Sections 4.1.7(c)(i),  4.3.5(a), 4.3.5(b), and 4.3.5(c) hereof, and subject to qualifications, assumptions, representations and exceptions reasonably satisfactory to DOE, that there have been no changes in facts or Applicable Law that should adversely affect in any material manner the legal conclusions contained in the cash grant opinion provided pursuant to Section 4.1.12 hereof.

 

4.3.7.   Receipt of Evidence of Insurance. All required insurance is in place and in full force and effect, with all premiums due thereon paid in full, together with a certificate from the Borrower Insurance Advisor confirming the same.

 

4.3.8. Quarterly Certificates

 

DOE has received:

 

(a)                                      Borrower Certificate. An Officer’s Certificate of the Borrower regarding the matters required to be certified by it as set forth in this Section 4.3 and other matters that DOE reasonably requests. Matters requiring certification of the Borrower pursuant to this Section  4.3.8(a) may be included in the Quarterly Reporting Certificate substantially in the form of Exhibit L and otherwise delivered as part of the Quarterly Reporting Package pursuant to Section  6.1.5 hereof.

 

(b)                                      Sponsor Certificate. An Officer’s Certificate of the Sponsor substantially in the form of Exhibit H and otherwise regarding the matters that DOE reasonably requests.

 

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(c)                                       Independent Engineer Certificate. A certificate of the Independent Engineer and otherwise regarding the matters required to be certified by it as set forth in this Section 4.3 in substantially the form attached as Exhibit M.

 

4.3.9. Additional Documents.

 

DOE has received such other documents, certifications, or consents relating to the Project, any Borrower Entity, any Major Project Participant, or the matters contemplated by the Transaction Documents as DOE reasonably requests.

 

SECTION 4.4.               Conditions Precedent to Each Advance.

 

The obligation of DOE to approve any Advance (including the first Advance) is subject to the prior satisfaction (or waiver), as determined by DOE, of each of the following conditions precedent (and of any deliverable, as to its form and substance) as of the date of the relevant Master Advance Notice (or such other date specified in this Section 4.4).

 

4.4.1. Master Advance Notice and Invoices.

 

DOE has received an executed Master Advance Notice delivered in accordance with the terms of Section 2.2.1 hereunder, together with all certificates and documentation required under this Section 4.4 (and, in the case of the first Advance, Section 4.2).

 

4.4.2. Quarterly Conditions Precedent.

 

All Quarterly Conditions Precedent were satisfied on the immediately preceding Quarterly Approval Date.

 

4.4.3. Representations and Warranties.

 

Each of the representations and warranties made (or deemed made) by any Borrower Entity or Major Project Participant in any Transaction Document are true and correct in all material respects (except to the extent any such representation and warranty itself is qualified by “materiality,” “Material Adverse Effect” or a similar qualifier, in which case it shall be true and correct in all respects) as of such date, except to the extent such representation or warranty is made only as of a specific date or time (in which event such representation or warranty shall be true and correct as of such date or time).

 

4.4.4. Covenants.

 

Each Borrower Entity is in compliance in all material respects with its obligations under each Financing Document to which it is a party.

 

4.4.5. Events of Default.

 

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

 

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4.4.6. Material Adverse Effect.

 

Since the Guarantee Agreement Date, for the first Advance, and since the previous Advance Date, for each succeeding Advance, no event (including any legal, arbitral or other dispute review proceeding or any Change of Law) has occurred or could reasonably be expected to occur that has had or could reasonably be expected to have a Material Adverse Effect.

 

4.4.7. Debt to Equity Ratio.

 

Both before and after giving effect to the Advance and associated Equity Contributions, the Debt to Equity Ratio, has and will not exceed the Maximum Debt to Equity Ratio.

 

4.4.8. Permits and Approvals.

 

(a)                                 All Required Approvals required for the Project as of the date of the relevant Master Advance Notice are listed on Part I of Schedule 4.4.8 (as may have been amended by the Borrower since the delivery of the previous Master Advance Notice), and DOE has received fully executed copies of each of the Required Approvals listed on Part I such schedule (as may have been amended by the Borrower since the delivery of the previous Master Advance Notice), together with an Officer’s Certificate of the Borrower to the effect that: (i) the copies of such Required Approvals delivered pursuant to this Section 4.4.8 are true, correct and complete copies of such Required Approvals (including all schedules, exhibits, attachments, supplements and amendments thereto and any related protocols or side letters); (ii) no term or condition of any of such Required Approvals delivered pursuant to this Section 4.4.8 has been amended from the form thereof delivered pursuant to this Section 4.4.8; (iii) each such Required Approval delivered pursuant to this Section 4.4.8 has been validly issued, is in full force and effect and Non-Appealable; (iv) all conditions precedent to the effectiveness of any such Required Approval delivered pursuant to this Section 4.4.8 have been satisfied (other than conditions not required to be satisfied as of the date of the applicable Master Advance Notice that do not require discretionary approval of a third party); (v) the Borrower has no reason to believe that any of such Required Approvals delivered pursuant to this Section 4.4.8 shall be revoked; and (vi) the Required Approvals described in Part I of Schedule 4.4.8 (as may have been amended by the Borrower since the delivery of the previous Master Advance Notice) are all of the Required Approvals that are necessary or required to be obtained as of the applicable Quarterly Approval Date under Applicable Law or any agreement applicable to, or binding on, any Borrower Entity or any of their respective Properties or, to the Borrower’s Knowledge, any Project Participant or any of their respective Properties.

 

(b)                                 All Required Approvals not required for the Project as of the date of the relevant Master Advance Notice are listed on Part II of Schedule 4.4.8 (as may have been amended by the Borrower since the delivery of the previous Master Advance Notice), and DOE has received an Officer’s Certificate of the Borrower to the effect that the Borrower has no reason to believe that it or any other Borrower Entity or, to the Borrower’s Knowledge, any Major Project Participant (as applicable) shall fail to obtain the Required Approvals set forth on Part II of Schedule 4.4.8 (as may have been amended by the Borrower since the delivery of the previous Master Advance Notice) in the ordinary course free of any unduly burdensome conditions or requirements at such time or times as may be required under the Transaction Documents or as is otherwise necessary to avoid any material delay in, or impairment to, the performance of the transactions as contemplated by the Transaction Documents.

 

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4.4.9. Litigation.

 

There is no pending or, to the Borrower’s Knowledge, threatened Action (in writing) (i) that relates to the Project or to any transaction contemplated by any of the Transaction Documents, (ii) that relates to the legality, validity or enforceability of any of the Transaction Documents, or (iii) to which any Borrower Entity (other than any Action contemplated under clause (i) above) or, to the Borrower’s Knowledge, any other Major Project Participant is a party, that (in the case of clause (i) or (iii) above), either singly or in the aggregate, has, or could reasonably be expected to have, a Material Adverse Effect or would not, in DOE’s determination, have a Material Adverse Effect on DOE’s interest.

 

4.4.10. No Violation of Law.

 

The Borrower is in compliance with all Applicable Laws in all material respects and the making of the requested Advance will not result in a violation of any Applicable Law, Transaction Document, Governmental Approval, or any other agreement or consent to which the Borrower is a party or any judgment or approval to which it is subject.

 

4.4.11. Fees and Expenses; Taxes.

 

(a)                                      Fees. Receipt of payment of all Guaranteed Loan Fees and fees of Independent Consultants then due in connection with the Project.

 

(b)                                      Taxes; Costs and Periodic Expenses. All required Taxes and all other costs, fees and Periodic Expenses (other than fees payable to Independent Consultants) due in connection with the execution, delivery, filing, registration, recordation or performance of the Transaction Documents or the perfection of the security interests in the Collateral (i) have been paid in full, (ii) are to be paid with the proceeds of the requested Advance or (iii) are to be paid by other arrangements satisfactory to DOE.

 

4.4.12. Davis-Bacon Requirements.

 

DOE shall have received a certificate from the Borrower, dated as of the date of the relevant Master Advance Notice, certifying that the Borrower has complied with all Davis-Bacon Requirements including any retroactive compliance. The Borrower has included, in each of its Davis-Bacon Act Covered Contracts, the Davis-Bacon Requirements.

 

4.4.13. Program Requirements.

 

The Borrower is in compliance with the Program Requirements; provided, however, that the Borrower shall be required to comply with any changes to U.S. Department of Energy and Federal Financing Bank legal and financial requirements, policies, and procedures applicable to the Title XVII program that occur after the Guarantee Agreement Date only to the extent that such requirements, policies, and procedures and such changes have the force of law.

 

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4.4.14. Recovery Act Requirements.

 

DOE has received an Officer’s Certificate of the Borrower, substantially in the form of Exhibit W, dated as of a date not earlier than fifteen (15) Business Days prior to the relevant Requested Advance Date, stating that the Borrower has timely complied in all material respects with its reporting obligations under Section 6.24(a) with respect to the Recovery Act.

 

4.4.15. Certificates for Each Advance.

 

DOE has received:

 

(a)                                 Borrower Certificate. A Master Advance Notice containing certifications of the Borrower regarding (i) the matters required to be certified by it as set forth in this Section 4.4, (ii) reaffirming the certifications delivered pursuant to Section 4.2.19(a), as applicable, and (iii) other matters that DOE reasonably requests.

 

(b)                                 Sponsor Certificate. An Officer’s Certificate of the Sponsor, regarding the matters required to be certified by it as set forth in this Section 4.4, substantially similar to that delivered pursuant to Section 4.2.19(b) and addressing such other matters that DOE reasonably requests.

 

(c)                                  Independent Engineer’s Certificate. An Independent Engineer’s Certificate regarding the matters required to be certified by it as set forth in this Section 4.4 in substantially the form attached as Exhibit E.

 

(d)                                 Total Funding Certificate. A Borrower’s certificate certifying that Total Funding Available is sufficient to pay Total Project Costs (including Debt Service through Project Completion, Guaranteed Loan Fees, Periodic Expenses, any identified Cost Overruns and the funding of the Debt Service Reserve Account).

 

4.4.16. Construction Budget.

 

Certification from the Borrower and Independent Engineer that (a) there have been no changes to the Construction Budget since the date of the most recent Master Advance Notice, except for Approved Construction Changes, and (b) the aggregate amounts to be expended for each category of Project Costs do not exceed the aggregate amounts budgeted for such costs in the then-approved Construction Budget.

 

4.4.17. Independent Engineer’s Report.

 

Receipt of the Independent Engineer’s Report, certified as being true and accurate and reporting as to the following:

 

(a)                                      Construction Progress. Evaluation of progress of the construction of the Project in accordance with the Project Plan, the Construction Budget, and the Project Milestone Schedule;

 

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(b)                                 Expected completion dates. Expectation that the Project will achieve Operational Completion and Project Completion by the Guaranteed Operational Completion Date and Guaranteed Project Completion Date, as applicable;

 

(c)                                  Other Matters. Other matters reasonably requested by DOE. 

 

4.4.18. Receipt of Evidence.

 

Each of the following conditions has occurred and DOE has received satisfactory evidence of such occurrence:

 

(a)                                      Lien Waivers. (i) Each Construction Contractor and any Subcontractors (except those that have individual contract values less than Five Hundred Thousand Dollars ($500,000.00), but not to exceed Ten Million Dollars ($10,000,000) in the aggregate) have unconditionally and irrevocably waived and released all Liens, statutory or otherwise, that it may have or acquire on any portion of the Collateral or the Project with respect to work performed prior to the last submission for payment; (ii) each Construction Contractor and any Subcontractors (except those that have individual contract values less than Five Hundred Thousand Dollars ($500,000.00), but not to exceed Ten Million Dollars ($10,000,000) in the aggregate) have irrevocably waived and released all Liens, statutory or otherwise, that it may have or acquire on any portion of the Collateral or the Project with respect to work performed subsequent to the last submission for payment, conditioned only on receipt of payment for such work; and (iii) all unpaid balances that are due or unsettled claims with any Construction Contractor or any Subcontractor, if any, have been fully paid, other than any such claims that qualify under clause (iii) of the definition of Permitted Liens.

 

(b)                                      Title Continuation. DOE has received a a pending disbursements endorsement to the Title Policy in the form of attached Exhibit J (or such other form as may be reasonably acceptable to DOE) insuring as of the date of the relevant Master Advance Notice that Borrower owns, as applicable, good and marketable fee title, a valid leasehold interest or a valid easement in and to each element of the Project Site and that the lien of the Deed of Trust is a first and prior lien upon such Real Property as security for the Secured Obligations pursuant to the terms of this Loan Guarantee Agreement, subject only to the Permitted Liens.

 

(c)                                       Prime Contractor Indemnity. The applicable Construction Contractor has agreed to indemnify DOE, pursuant to a written agreement in form and substance satisfactory to DOE in its reasonable discretion, with respect to any Lien claims that may be made by any Subcontractor of such Construction Contractor from whom any lien waiver was not delivered to DOE pursuant to clauses (i) and (ii) of Section 4.4.18(a). For the avoidance of doubt, such Construction Contractor indemnity shall be required with respect to Lien claims by any Subcontractor from whom a lien waiver is not required to be delivered to DOE under the terms of Section 4.4.18(a) because the applicable contract value is less than Five Hundred Thousand Dollars ($500,000.00).

 

4.4.19. Subordination Agreements.

 

DOE has received each of the subordination agreements that Borrower is required to deliver pursuant to Section 6.19.

 

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4.4.20. Additional Documents.

 

DOE has received such other documents, certifications, or consents relating to the Project, any Borrower Entity, any Major Project Participant, or the matters contemplated by the Transaction Documents that DOE reasonably requests.

 

4.4.21. Cash Grant Eligibility and Cash Grant Opinion. If a notice described in Section 6.1.9 hereof shall have been provided to DOE at any time since the immediately preceding Advance Date, DOE shall have received:

 

(a)                                      An Officer’s Certificate from the Sponsor dated as of the date of the relevant Master Advance Notice and certifying (i) as to those factual matters (other than factual matters described in Section 4.4.21(a)(ii) hereof) as to which the Sponsor is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.4.21(d)  hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent that (A) counsel to the Sponsor reasonably requests changes; (B) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (C) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (D) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and otherwise with respect to such opinion in Section 4.4.21(d)); or (E) as the Sponsor, DOE and their respective counsel shall agree, and (ii) that the Projected Cash Grant Basis is not materially less than described in the cost eligibility study report delivered pursuant to Section 4.1.7(c)(i) hereof.

 

(b)                                      An Officer’s Certificate from SunPower dated as of the date of the relevant Master Advance Notice and certifying as to factual matters as to which SunPower is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.4.21(d) hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent that (i) counsel to SunPower reasonably requests changes; (ii) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (iii) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (iv) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and otherwise with respect to such opinion in Section 4.4.21(d)); or (v) as SunPower, DOE and their respective counsel shall agree.

 

(c)                                       An Officer’s Certificate from the Borrower dated as of the date of the relevant Master Advance Notice and certifying as to factual matters as to which the Borrower is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.4.21(d) hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent

 

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that (i) counsel to the Borrower reasonably requests changes; (ii) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (iii) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (iv) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and otherwise with respect to such opinion in Section 4.4.21(d)); or (v) as the Borrower, DOE and their respective counsel shall agree.

 

(d)                                 DOE shall have received a cash grant opinion dated as of the date of the relevant Master Advance Notice from tax counsel reasonably satisfactory to DOE, in form satisfactory to DOE and in substance reasonably satisfactory to DOE as to the matters discussed in the cash grant opinion provided pursuant to Section 4.1.12 hereof, relying solely upon, with respect to factual matters, (i) the Transaction Documents, (ii) the Merger Documents, (iii) the Independent Engineer Report, and (iv) the items delivered to DOE pursuant to Sections 4.1.7(c)(i),  4.4.21(a),  4.4.21(b), and 4.4.21(c) hereof, and subject to qualifications, assumptions, representations and exceptions reasonably satisfactory to DOE, that the Project should qualify for Cash Grants in amounts not less than, and by the dates, set forth in Exhibit T.

 

4.4.22. CEQA Litigation Support Instruments. Unless the Settlement has occurred in a manner satisfactory to DOE, DOE shall have received (a) satisfactory evidence, including the Borrower’s certification that any CEQA Litigation Support Instruments have been issued in the CEQA Support Required Amount and (b) if the CEQA Litigation Support Instruments include a Total Guarantee being delivered, or otherwise amended or modified, with respect to such Advance, a legal opinion, in form and substance satisfactory to the Collateral Agent, regarding the due execution, authorization, delivery and enforceability of the Total Guarantee; provided that, if the Total Guarantee guarantees all the Secured Obligations, then such legal opinion shall only be issued on the date of the issuance of the Total Guarantee and no bring-down of such legal opinion shall be required prior to each Advance so long as the Total Guarantee continuously remains in full force and effect.

 

4.4.23. CEQA Litigation Support Instruments. Unless the Settlement has occurred, DOE shall have received fully executed originals of one or more CEQA Litigation Support Instruments in the aggregate amount of not less than the CEQA Support Required Amount.

 

SECTION 4.5.               Semi-Annual Conditions Precedent to Advances.

 

The obligation of DOE to approve each Advance (other than any Advances occurring on or prior to the six (6) month anniversary of the Guarantee Agreement Date) is subject to the prior satisfaction (or waiver), as determined by DOE, of each of the following conditions precedent (and of any deliverable, as to its form and substance) as of the most recent Semi-Annual Approval Date:

 

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4.5.1. Cash Grant Eligibility.

 

(a)                                 An Officer’s Certificate from the Sponsor dated as of the most recent Semi- Annual Approval Date and certifying (i) as to those factual matters (other than factual matters described in Section 4.5.1(a)(ii) hereof) as to which the Sponsor is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.5.2  hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent that (A) counsel to the Sponsor reasonably requests changes; (B) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (C) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (D) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and otherwise with respect to such opinion in Section 4.5.2); or (E) as the Sponsor, DOE and their respective counsel shall agree, and (ii) that the Projected Cash Grant Basis is not materially less than described in the cost eligibility study report delivered pursuant to Section 4.1.7(c)(i) hereof.

 

(b)                                 An Officer’s Certificate from SunPower dated as of the most recent Semi-Annual Approval Date and certifying as to factual matters as to which SunPower is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.5.2  hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent that (i) counsel to SunPower reasonably requests changes; (ii) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (iii) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (iv) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and otherwise with respect to such opinion in Section 4.5.2); or (v) as SunPower, DOE and their respective counsel shall agree.

 

(c)                                  An Officer’s Certificate from the Borrower dated as of the most recent Semi- Annual Approval Date and certifying as to factual matters as to which the Borrower is required to make a representation under the cash grant opinion required to be provided pursuant to Section 4.5.2 hereof, and which will be relied upon in such opinion, substantially in the form of the corresponding certificate delivered on the Guarantee Agreement Date except to the extent that (i) counsel to the Borrower reasonably requests changes; (ii) the relevant facts or law (including administrative interpretations thereof) have, in the good faith opinion of DOE or DOE’s counsel, changed; (iii) DOE or DOE’s counsel requests in good faith reasonable changes to correct errors or omissions in the corresponding certificate delivered on the Guarantee Agreement Date, determined in their reasonable judgment; (iv) the scope of the conclusions in the cash grant opinion to be delivered differ from those of the corresponding opinion on the Guarantee Agreement Date (taking into account all of the requirements as to reasonableness and

 

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otherwise with respect to such opinion in Section 4.5.2); or (v) as the Borrower, DOE and their respective counsel shall agree.

 

4.5.2. Cash Grant Opinion.

 

DOE shall have received a cash grant opinion dated as of the most recent Semi-Annual Approval Date from tax counsel reasonably satisfactory to DOE, in form satisfactory to DOE and in substance reasonably satisfactory to DOE as to the matters discussed in the cash grant opinion provided pursuant to Section 4.1.12 hereof, relying solely upon, with respect to factual matters, (a) the Transaction Documents, (b) the Merger Documents, (c) the Independent Engineer Report, and (d) the items delivered to DOE pursuant to Sections 4.1.7(c)(i),  4.5.1(a),  4.5.1(b), and 4.5.1(c) hereof, and subject to qualifications, assumptions, representations and exceptions reasonably satisfactory to DOE, that the Project should qualify for Cash Grants in amounts not less than, and by the dates, set forth in Exhibit T.

 

SECTION 4.6.               Determination of Satisfaction of Conditions Precedent.

 

The satisfaction of any condition precedent to the Guarantee Agreement Date or to the making of any Advance or any Quarterly Approval Date shall be determined by DOE, and it shall be entitled (but not required) to consult with the Independent Engineer or any of its other Independent Consultants in making such determinations.

 

ARTICLE 5
  REPRESENTATIONS AND WARRANTIES

 

The Borrower makes all of the following representations and warranties to and in favor of DOE as of (i) the Guarantee Agreement Date, (ii) each Quarterly Approval 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 Guarantee Agreement Date:

 

SECTION 5.1.               Organization.

 

The Borrower (i) is a limited liability company organized, validly existing and in good standing under the laws of the State of Delaware, (ii) is duly qualified to do business in the State of California and in each other jurisdiction where the failure to so qualify could reasonably be expected to have a Material Adverse Effect and (iii) has all requisite limited liability company power and authority to (A) own or hold under lease and operate the property it purports to own or hold under lease; (B) carry on its business as now being conducted and as proposed to be conducted in respect of the Project; (C) incur Indebtedness and create Liens on all and any of its Properties; and (D) execute, deliver, perform and observe the terms and conditions of each of the Transaction Documents to which it is a party.

 

SECTION 5.2.               Authorization; No Conflict.

 

The Borrower has duly authorized, executed and delivered the Transaction Documents to which it is a party, and neither its execution and delivery thereof nor its consummation of the

 

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transactions contemplated hereby or thereby nor its compliance with the terms hereof or thereof does or will (i) contravene its Organizational Documents or any Applicable Laws, (ii) contravene or result in any breach or constitute any default under any Governmental Judgment, (iii) 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 Properties, under any agreement or instrument to which it is a party or by which it or any of its Properties may be bound, except for any Permitted Liens or (iv) require the consent or approval of any Person other than the Required Approvals and any other consents or approvals that have been obtained, which are in full force and effect.

 

SECTION 5.3.               Legality; Validity; Enforceability.

 

Each Transaction Document, each of the CEQA Litigation Support Instruments and each of the NRG Cash Grant Shortfall Security and the SunPower Cash Grant Shortfall Security is a legal, valid and binding obligation of each party thereto, 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.

 

SECTION 5.4.               Capitalization.

 

All of the Equity Interests of the Borrower have been duly authorized, validly issued, are fully paid and non-assessable and are owned by the Holding Company, free and clear of all Liens other than Liens created under the Equity Pledge Agreement. After giving effect to the condition precedent set forth in Section 4.1.17, 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. After giving effect to the condition precedent set forth in Section 4.1.17, the Borrower does not have outstanding (i) any securities convertible into or exchangeable for its Equity Interests or (ii) any rights to subscribe for or to purchase, or any option for the purchase of, or any agreement, arrangement or understanding providing for the issuance (contingent or otherwise) of, or any call, loan commitment or claims of any character relating to, its Equity Interests.

 

SECTION 5.5.               Title.

 

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

 

SECTION 5.6.               Real Property.

 

(a)                                 Each Lease for any portion of the Project Site is valid and subsisting; neither the Borrower nor, to the knowledge of Borrower, the applicable Project Participant is in default in any material respect under any such Lease, and no event has occurred which, with the giving of any applicable notice or passage of time or both, would result in such a default; and the Borrower enjoys peaceful and undisturbed possession of the portion of the Project Site that is the subject of any such Lease and the right to continue to enjoy such possession during the time when such Property is necessary or desirable for the development, construction, ownership, operation or maintenance of the Project subject to any Permitted Liens.

 

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(b)                                      Each easement used in connection with the Project is valid and subsisting; neither the Borrower nor, to the knowledge of Borrower, the applicable Project Participant is in default in any material respect under any such easement, and no event has occurred which, with the giving of any applicable notice and passage of time, could result in such a default; and the Borrower enjoys peaceful and undisturbed use of the portion of the real property that is the subject of any such easement and the right to continue to enjoy such use during the time when any such easement is necessary or desirable for the development, construction, ownership, operation or maintenance of the Project subject to any Permitted Liens.

 

(c)                                       No condemnation or eminent domain proceeding has been commenced with respect to all or any portion of any Real Property or for the relocation of roadways providing access to such Real Property except, in each case, as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(d)                                      Except for those disclosed in the Title Policy approved by DOE, there are no current or pending special or other assessments (other than for ad valorem taxes) for public improvements or otherwise affecting any Real Property that would reasonably be expected to result in a Material Adverse Effect.

 

(e)                                       The Borrower has not suffered, permitted or initiated the joint assessment of any Real Property with any other real property constituting a separate tax lot. The Real Property has been legally subdivided, and for all purposes the Real Property may be mortgaged, conveyed and otherwise dealt with as separate legal lots or parcels; provided that, easement parcels shall not be required to be separate legal lots or parcels.

 

(f)                                        There are no outstanding options to purchase or rights of first refusal or restrictions on transferability affecting any of the Borrower’s Real Property (other than those restrictions on transfer set forth in the Financing Documents or the Land Lease Agreement).

 

(g)                                       Other than as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, the Borrower reasonably expects, as and when necessary, for the development, construction, ownership, operation and maintenance of the Project, to have all utilities available at the title lines of the Project Site, and to the extent the same pass through adjoining private land, are located within valid public or unencumbered private easements which inure to the benefit of the Real Property or to the benefit of the Borrower and its successors and assigns and run with the land.

 

(h)                                      Other than as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, the Borrower reasonably expects, as and when necessary for the development, construction, ownership, operation and maintenance of the Project, to have all roads completed and dedicated to public use and accepted by all Governmental Authorities or the subject of access easements which inure to the benefit of the Real Property or to the benefit of the Borrower and its successors and assigns and run with the land.

 

SECTION 5.7.               Security Interests; Liens.

 

(a)                                      Pursuant to the Security Documents, the Collateral Agent (for the benefit of the Secured Parties) has a perfected first priority Lien in the Collateral, subject only to Permitted

 

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Liens. Such security interest in the Collateral is and, with respect to any subsequently acquired Property, when so subsequently acquired, will be superior and prior to the rights of all third Persons (other than Permitted Liens) now existing or hereafter arising, whether by way of deed of trust, mortgage, Lien, security interests, encumbrance, assignment or otherwise. All documents and instruments, including the Deeds of Trust and financing statements, have been recorded or filed for record in such manner and in such places as are required and all other action as is necessary or desirable have been taken to establish and perfect the Collateral Agent’s Lien in and to the Collateral (for the benefit of the Secured Parties) to the extent contemplated by the Security Documents. All Taxes and filing fees and Periodic Expenses that are due and payable in connection with the execution, delivery or recordation of the Deed of Trust and the financing statements, or the execution, issuance and delivery of the FFB Promissory Notes, or the mortgaging of the mortgaged property under the Deed of Trust, have been paid.

 

(b)                                      Except for Permitted Liens, the Borrower has not created or suffered to exist, and is not under any obligation to create, and has not entered into any transaction or agreement that would result in the imposition of, any Lien upon any of its revenues, properties or assets. There are no Liens on the Equity Interests of the Borrower, except for Permitted Liens.

 

SECTION 5.8.               Required Approvals.

 

(a)                                      All Required Approvals required for the Project as of each date on which this representation is made are listed on Part I of Schedule 4.1.6, 4.2.5, 4.3.3 or 4.4.8 (as such Schedules exist on each such date) and:

 

(i)                                              DOE has received fully executed copies of each of the Required Approvals listed on Part I of such schedules;

 

(ii)                                           the copies of such Required Approvals delivered to DOE as of the date on which this representation is made are true, correct and complete copies of such Required Approvals (including all schedules, exhibits, attachments, supplements and amendments thereto and any related protocols or side letters);

 

(iii)                                        no term or condition of any of such Required Approvals has been amended from the form delivered to DOE as of the date on which this representation is made;

 

(iv)                                       each such Required Approval has been validly issued, is in full force and effect and Non-Appealable;

 

(v)                                          all conditions precedent to the effectiveness of any such Required Approval have been satisfied (other than conditions not required to be satisfied as of the date on which this representation is made that do not require discretionary approval of a third party); and

 

(vi)                                       the Borrower has no reason to believe that any of such Required Approvals shall be revoked.

 

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(b)                                      All Required Approvals not required for the Project as of the date on which this representation is made are listed on Part II of Schedule 4.1.6, 4.2.5, 4.3.3 or 4.4.8 (as such Schedules exist on each such date), respectively, and the Borrower has no reason to believe that it or any other Borrower Entity or, to the Borrower’s Knowledge, any relevant Major Project Participant (as applicable) shall fail to obtain the Required Approvals set forth on Part II of such schedule in the ordinary course free of any unduly burdensome conditions or requirements at such time or times as may be required under the Transaction Documents or as is otherwise necessary to avoid any material delay in, or impairment to, the performance of the transactions as contemplated by the Transaction Documents.

 

(c)                                       The Required Approvals described in Section 5.8(a) are all of the Required Approvals that are necessary or required to be obtained as of the Guarantee Agreement Date and as of each date thereafter that this representation is made, as applicable, under Applicable Law or any agreement applicable to, or binding on, any Borrower Entity or any of their respective Properties or, to the Borrower’s Knowledge, any Project Participant or any of their respective Properties.

 

(d)                                      The Borrower, each Borrower Entity and, to the Borrower’s Knowledge, each other Major Project Participant is in compliance in all material respects with all Required Approvals that are, as of each date of this representation, required to be obtained by or are, as of the date of this representation, otherwise applicable to such Person.

 

SECTION 5.9.               Insurance.

 

All Required Insurance that is required to be in full force and effect as of the date this representation is made is in full force and effect.

 

SECTION 5.10.   Intellectual Property.

 

(a)                                      The Borrower owns or holds or can obtain at the appropriate time on terms that are commercially reasonable for the solar energy industry a valid and enforceable license, permit, certificate, franchise, or other authorization or right to use (subject to Bankruptcy Laws and general principles of equity regardless of whether enforcement is considered in a proceeding at law or in equity) the Technology and Intellectual Property Rights necessary to (i) design, construct, operate, use and maintain the Project in a commercially reasonable manner and as contemplated under the Major Project Documents in connection with the Project, and (ii) exercise its rights and perform its Obligations under the Major Project Documents and the EPC Contract in connection with the Project.

 

(b)                                      The Technology and the Intellectual Property Rights licensed to Borrower under the EPC Contract and the use thereof by Borrower in accordance with the terms of the EPC Contract does not infringe upon or misappropriate the Intellectual Property Rights or other rights of any other Person, and (ii) no process, method, substance, part or other material contemplated under the Major Project Documents or otherwise employed by the Borrower infringes, or will infringe, upon or misappropriates, or otherwise violates, the Intellectual Property Rights of any other Person. The Borrower shall indemnify DOE for the full amount of any damages from claims that may be asserted (whether or not validly asserted) against DOE by any Person in

 

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connection with the breach, misappropriation, or other violation of the Intellectual Property Rights of such Person in connection with the Project.

 

SECTION 5.11.        Litigation, Labor Disputes.

 

(a)                                      Except as set forth on Schedule 4.1.18, there is no pending or, to the Borrower’s Knowledge, threatened (in writing) Action that relates to (i) the Project or to any transaction contemplated by any of the Transaction Documents, (ii) the legality, validity or enforceability of any of the Transaction Documents, or (iii) any Borrower Entity or, to the Borrower’s Knowledge, any other Major Project Participant is a party to, that (excluding any Action contemplated under clause (i) or (ii) above) 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 Governmental Judgment 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 a Governmental Authority directing that any transactions contemplated by any of the Transaction Documents not be consummated as herein or therein provided.

 

(c)                                       No Governmental Judgment has been entered against the Borrower or any Borrower Entity that has, or could reasonably be expected to have, a Material Adverse Effect.

 

(d)                                      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 threatened in writing that have caused or could reasonably be expected to cause a Material Adverse Effect.

 

(e)                                       None of the Actions set forth on Schedule 4.1.18 has or could reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.12.        Tax.

 

(a)                                      The Borrower has filed all material tax returns required by Applicable Laws to be filed by it and has paid (i) all income Taxes payable by it and (ii) all other 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 and permitted by the Applicable Regulations).

 

(b)                                      Except for those items set forth on Schedule 5.12(b), no withholding Taxes are payable by the Borrower to any Governmental Authority in connection with any amounts payable by the Borrower under or in respect of the Financing Documents.

 

(c)                                       No Borrower Compliance Entity owes any delinquent Indebtedness to any Governmental Authority of the U.S., 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.

 

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SECTION 5.13.        Financial Statements.

 

Each of the Financial Statements of the Borrower and the Sponsor delivered to DOE has been prepared in accordance with GAAP and presents fairly, in all material respects, the financial condition of the Borrower or the Sponsor (as the case may be) as of the respective dates of the balance sheets included therein and the results of operations of the Borrower or the Sponsor for the respective periods covered by the statements of income included therein. Except as reflected in such Financial Statements, there are no material liabilities or obligations of the Borrower or the Sponsor, as applicable, of any nature whatsoever for the period to which such Financial Statements relate that are required to be disclosed in accordance with GAAP. Since the date of delivery of such Financial Statements, neither the Borrower nor the Sponsor has incurred or assumed any material liabilities or obligations that would be required to be disclosed in accordance with GAAP.

 

SECTION 5.14.        Business; Contracts; Powers of Attorney; Contingency Fees.

 

(a)                                      The Borrower has not conducted any business, other than the business contemplated by the Transaction Documents and such other business as may be related to the Project.

 

(b)                                      The Borrower is not a party to or bound by any contract other than those contracts permitted under the Financing Documents.

 

(c)                                       Except as provided for in the Financing Documents, the Borrower has not executed and delivered any powers of attorney.

 

(d)                                      No Borrower Entity has entered into any agreements with financial and/or other professional advisors that provide for payment of a contingent fee computed as a percentage of the amount of the FFB Commitment.

 

SECTION 5.15.        Transactions with Affiliates.

 

Except (i) as set forth on Schedule 5.15 and (ii) for Permitted Affiliate Transactions, the Borrower is not a party to any contract or agreement with, and does not have any other loan commitment to, any Borrower Affiliate or SunPower. The Borrower is not a party to any agreement requiring the payment of development fees, the Advances, the Guaranteed Loans or the Maximum Capitalized Interest Amount (other than fees payable to DOE and FFB in accordance with the Financing Documents).

 

SECTION 5.16.        No Additional Fees.

 

The Borrower has not paid or 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.

 

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SECTION 5.17.        Investments; Subsidiaries.

 

The Borrower has not made any Investments other than Permitted Investments. The Borrower has no subsidiaries and does not beneficially own any Equity Interests of any other Person.

 

SECTION 5.18.        Sufficiency of Project Documents.

 

(a)                                      All fee, leasehold, easement and other real property interests, utility and other services, means of transportation, facilities, and all other materials and rights that are or can reasonably be expected to be necessary for the development, construction, ownership, operation and maintenance of the Project in accordance with Applicable Laws and the Transaction Documents have been procured under the Project Documents or, at the time such rights or materials are required, will be commercially available to the Project at the Project Site on terms consistent with the Construction Budget and the Base Case Projections and, to the extent appropriate, arrangements therefor have been made on terms consistent with the Construction Budget and the Base Case Projections for all such interests, services, means of transportation, facilities, materials and rights.

 

(b)                                      As of any date on which this representation is made or deemed made, DOE has received a true, complete and correct copy of each of the Project Documents and any Support Instrument related thereto (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) that is in effect as of such date. Since the Guarantee Agreement Date, none of the Project Documents or Support Instruments have been amended or modified, except in accordance with this Loan Guarantee Agreement. Prior to the execution of each such Project Document, the Borrower believed, after having made a reasonable investigation with respect thereto, that each party to each such Project Document or Support Instrument would be able to carry out its Obligations in accordance therewith and nothing has come to the attention of the Borrower to cause it to believe that any such Person will not be able to carry out its Obligations in accordance therewith.

 

(c)                                       As of any date on which this representation is made or deemed made, (i) each Project Document and any Support Instrument related thereto that is necessary or desirable in connection with the construction, completion, operation or maintenance of the Project as of such date is in full force and effect and all conditions precedent to the Obligations of the respective parties under the Project Documents required to be performed as of such date have been satisfied (or, where required, with the written consent of DOE, waived); (ii) no event has occurred that gives the Borrower, or, to the Borrower’s Knowledge, any Project Participant, the right to terminate any Project Document or any related Support Instrument; (iii) the Borrower is not in default of any material term or provision of any Project Document or related Support Instrument; and (iv) to the Borrower’s Knowledge, no Project Participant is in default of any material term or provision of any Project Document or related Support Instrument.

 

(d)                                      (i) All representations, warranties and other factual statements made by the Borrower or any other Borrower Entity in any Project Document to which such entity is a party are true and correct in all material respects (except to the extent any such representation and warranty itself is qualified by “materiality,” “Material Adverse Effect” or a similar qualifier, in which case it shall be true and correct in all respects) as of any date on which this representation

 

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or warranty is made, except to the extent such representation or warranty is made only as of a specific date or time (in which event such representation or warranty shall be true and correct as of such date or time); and (ii) to the Borrower’s Knowledge, all representations, warranties and other factual statements made by each Project Participant in each Project Document (other than the Borrower and the Borrower Entities) are true and correct in all material respects (except to the extent any such representation and warranty itself is qualified by “materiality,” “Material Adverse Effect” or a similar qualifier, in which case it shall be true and correct in all respects) as of any date on which this representation or warranty is made, except to the extent such representation or warranty is made only as of a specific date or time (in which event such representation or warranty shall be true and correct as of such date or time).

 

(e)                                       The Borrower believes that it is technically feasible for the Project Facility to be constructed, completed, operated and maintained so as to fulfill in all material respects the design specifications and requirements contained in the Application.

 

SECTION 5.19.        Project Milestone Schedule and Construction Budget; Operating Forecasts and Base Case Projections.

 

(a)                                      As of the time at which this representation is made or deemed made (or in the case of the making of this representation solely on the Guarantee Agreement Date with respect to the Base Case Projections, as of the time such Base Case Projections were delivered pursuant to Section 4.1.2(a)(vii)), the Project Plans, the Construction Budget, the Financial Plan, the Project Milestone Schedule and the Base Case Projections, as amended or supplemented by Approved Construction Changes, (i) are complete and based on reasonable assumptions, (ii) are consistent with the provisions of the Project Documents, (iii) have been prepared in good faith and with due care and (iv) fairly represent the Borrower’s expectation as to the matters covered thereby.

 

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

 

(c)                                       As of the Guarantee Agreement Date, the Construction Budget represents the Borrower’s best estimate of Total Project Costs anticipated to be incurred to construct the Project Facility in the manner contemplated by the Transaction Documents. Since the Guarantee Agreement Date, the Construction Budget has not been amended or changed in any material respect other than with respect to Approved Construction Changes.

 

(d)                                      As of the Guarantee Agreement Date, the Advance Schedule represents the Borrower’s best estimate of the expected dates and amounts of proposed Advances and Equity Contributions to fund the Borrower’s Project Costs. Since the Guarantee Agreement Date, the Advance Schedule has not been amended or changed in any material respect other than with respect to Approved Construction Changes.

 

(e)                                       The Borrower’s good faith estimate and belief as of each date this representation is made is that (i) Project Completion will occur no later than the Guaranteed Project Completion Date and (ii) Total Funding Available is sufficient to achieve Project Completion.

 

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SECTION 5.20.        Sufficient Funds.

 

Total Funding Available will be sufficient to achieve Project Completion.

 

SECTION 5.21.        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 Financing Documents.

 

SECTION 5.22.        Fees and Enforcement.

 

Other than amounts that have been paid in full or with respect to which arrangements satisfactory to DOE have been made, no fees or Taxes, including documentary, stamp, transaction, registration, or similar Taxes are required to have been paid to ensure the legality, validity, enforceability, priority or admissibility in evidence in applicable jurisdictions of any Transaction Documents.

 

SECTION 5.23.        Compliance with Applicable Laws.

 

(a)                                 The Borrower is in compliance with, and has conducted (or caused to be conducted) its business and operations and the business and operations of the Project in compliance with all Environmental Laws and all other Applicable Laws in all material respects.

 

(b)                                 No notices of violation of any Applicable Law have been issued, entered or received by the Borrower that have not been cured with no remaining liability to the Borrower, other than those that are immaterial.

 

SECTION 5.24.        Environmental Laws.

 

(a)                                      All Required Approvals for the Project relating to (i) air emissions, (ii) discharges to surface water or ground water, (iii) noise emissions, (iv) solid or liquid waste disposal, or (v) the use, generation, storage, transportation or disposal of toxic or Hazardous Substances or wastes (vi) natural resources (including threatened and endangered species) or (vii) other environmental, health or safety matters have been obtained, and the Borrower has not received, nor is the Borrower aware of any facts or circumstances that could reasonably be expected to result in, any complaint, order, directive, claim, citation or notice by any Governmental Authority that is, or could reasonably be expected to become material and relates to its then-existing obligations with respect to the foregoing.

 

(b)                                      Except as set forth on Schedule 5.24(b), none of the Borrower, any Borrower Entity nor, to the Borrower’s Knowledge, any other Person, 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 form the basis of an Environmental Claim or cause the Project to be subject to any restrictions arising under Environmental Laws or otherwise result in material harm to human health or safety, natural resources or the environment.

 

(c)                                       Except as set forth on Schedule 4.1.18 (as in effect on the Guarantee Agreement Date, as may be updated with DOE’s prior written consent), there is no Environmental Claim pending or, to the Borrower’s Knowledge, threatened against the Borrower or any Borrower

 

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Entity, or against any Person whose liability for any Environmental Claim the Borrower or any Borrower Entity has retained or assumed either contractually or by operation of law. 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 be expected to form the basis of any violation of any Environmental Law or otherwise result in material harm to human health or safety, or natural resources or the environment.

 

(d)                                      The Borrower has provided to DOE all assessments, reports, data, results of investigations or audits, and other information that is in the possession of or reasonably available to the Borrower regarding environmental matters pertaining to the Project (other than those documents prepared directly by DOE pursuant to the National Environmental Policy Act), or the environmental condition of the Project or Project site, or the compliance (or noncompliance) by the Borrower or any Borrower Entity with any Environmental Laws.

 

SECTION 5.25.        U.S. Government Requirements.

 

(a)                                      Davis-Bacon Requirements. The Borrower has complied with all Davis-Bacon Requirements, including any retroactive compliance, and included in each of its Davis-Bacon Act Covered Contracts, the Davis-Bacon Requirements.

 

(b)                                      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 and, therefore, is not subject to the Buy American Provisions.

 

(c)                                       U.S. Preference. The Borrower has used good faith efforts to maximize U.S.- manufactured content in Project facilities and components, taking into account availability, cost, technical performance, reliability, efficiency, warranty coverage and related commercial terms.

 

(d)                                      Foreign Asset Control Regulations. Neither the making of any Advances nor the use of the proceeds thereof by the Borrower or at the direction of the Borrower will violate the Foreign Asset Control Regulations.

 

(e)                                       Prohibited Persons.

 

(i)                                              None of the Borrower Entities or Borrower Entity Controlling Persons is a Prohibited Person. No event has occurred and no condition exists that is likely to result in any Borrower Entity or Borrower Entity Controlling Person becoming a Prohibited Person.

 

(ii)                                           To the Borrower’s Knowledge, (A) none of the Major Project Participants or Persons that Control a Major Project Participant is a Prohibited Person and (B) no event has occurred and no condition exists that is likely to result in any Major Project Participant or Persons that Control a Major Project Participant becoming a Prohibited Person.

 

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(f)                                        Anti-Terrorism Order.

 

(i)                                              Each Borrower Entity and each Borrower Entity Controlling Person, is in compliance with the Anti-Terrorism Order and has not previously violated the Anti- Terrorism Order.

 

(ii)                                            To the Borrower’s Knowledge, each Major Project Participant and each Person that Controls a Major Project Participant is in compliance with the Anti-Terrorism Order and has not previously violated the Anti-Terrorism Order.

 

(g)                                       Corrupt Practices Laws; OFAC.

 

(i)                                              Each Borrower Entity, each Borrower Entity Controlling Person, and each of their respective employees and agents have complied with OFAC and all applicable Corrupt Practices Laws in obtaining any consents, licenses, approvals, authorizations, rights, or privileges with respect to the Project and, otherwise, conduct the Project in compliance with OFAC and all applicable Corrupt Practices Laws. The internal management and accounting practices and controls of each Borrower Entity and each Borrower Entity Controlling Person are adequate to ensure compliance with all Corrupt Practices Laws.

 

(ii)                                           To the Borrower’s Knowledge, each Major Project Participant, each Person that Controls a Major Project Participant, and each of their respective employees, and agents is in compliance with OFAC and all Corrupt Practices Laws in obtaining any consents, licenses, approvals, authorizations, rights, or privileges with respect to the Project and, otherwise, are conducting all activities in connection with the Project in compliance with OFAC and all applicable Corrupt Practices Laws.

 

(h)                                      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.

 

(i)                                          PUHCA. The Borrower is an “exempt wholesale generator” as defined in the Public Utility Holding Company Act. No Secured Party shall, solely by reason of its ownership or operation of the Project or the Borrower upon the exercise of remedies under the Security Documents (without regard to any other asset or entity owned or controlled by such Secured Party or its Affiliates), become subject to the provisions of 18 C.F.R. §§ 366.2, 366.21, 366.22 or 366.23.

 

(j)                                         Lobbying. No proceeds of the Advances have been or will be expended by the Borrower or any of its Affiliates 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.

 

(k)                                      ERISA.

 

(i)                                              The Borrower does not and has not operated or sponsored any Employee Benefit Plans. The ERISA Affiliates have (A) operated the Pension Plans in compliance with their terms and with all applicable provisions and requirements of the Internal

 

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Revenue Code, ERISA and other applicable Federal or state laws and (B) performed all their respective obligations under such plans in all material respects.

 

(ii)                                           No ERISA Event has occurred or is reasonably expected to occur that could reasonably be expected to give rise to any material liability to the Borrower or the ERISA Affiliates.

 

(iii)                                        Except to the extent required under Section 4980B of the Internal Revenue Code or comparable state law or as properly recognized in the Financial Statements most recently delivered to DOE pursuant to Section 6.1, 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 ERISA Affiliate.

 

(iv)                                       As of the most recent valuation date for any Pension Plan, (A) the amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually and in the aggregate for all Pension Plans (excluding for purposes of such computation any Pension Plans with respect to which assets exceed benefit liabilities), has not had and would not reasonably be expected to have a Material Adverse Effect and (B) no Pension Plan has been determined to be in “at risk” status within the meaning of Section 303(i) of ERISA or Section 430(i) of the Code.

 

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

 

(vi)                                       All liabilities under each Pension Plan are (A) 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 (B) provided for or recognized in the Financial Statements most recently delivered to DOE pursuant to Section 6.1 to the extent required by and in accordance with GAAP and (C) estimated in the formal notes to the Financial Statements most recently delivered to DOE pursuant to Section 6.1 to the extent required by and in accordance with GAAP.

 

(vii)                                    (A) The Borrower is not and will not be a “plan” within the meaning of Section 4975(e) of the Internal Revenue Code, (B) the assets of the Borrower do not and will not constitute “plan assets” within the meaning of Section 3(42) of ERISA and the United States Department of Labor Regulations set forth in 29 C.F.R. 2510.3-101, (C) the Borrower is not and will not be a “governmental plan” within the meaning of Section 3(32) of ERISA and (D) 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. The Borrower further agrees to deliver to the Loan Servicer such certifications or other evidence of compliance with the provisions of this Section 5.25(k) as the Loan Servicer or DOE may from time to time request.

 

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SECTION 5.26.        No Judgment Liens; No Indebtedness.

 

(a)                   The Borrower (i) 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 (ii) does not have any indebtedness owed to the U.S. or any Governmental Authority thereof that is in delinquent status, as the term “delinquent status” is defined in 31 C.F.R. Section 285.13(d), including any Tax liabilities, except to the extent such delinquency has been resolved with the appropriate Governmental Authority in accordance with the standards of the Debt Collection Improvement Act of 1996.

 

SECTION 5.27.        Insolvency Proceedings; Solvency.

 

(a)                   The Borrower is not insolvent and is not the subject of any pending, or to the Borrower’s Knowledge, threatened, Insolvency Proceedings.

 

(b)                   The Borrower is and, upon the incurrence of any Indebtedness under the Financing Documents and after giving effect to the transactions contemplated hereby, will be, solvent.

 

SECTION 5.28.        No Defaults; Material Adverse Effect.

 

(a)              No Event of Default or Potential Event of Default has occurred and is continuing. Neither the Borrower nor any Borrower Entity has (i) breached any of its material obligations under any Financing Document or (ii) issued, entered or received any notice of breach of any Financing Document that has not been cured or waived.

 

(b)              No Material Adverse Effect has occurred or could reasonably be expected to occur.

 

SECTION 5.29.        Certain Program Requirements.

 

(a)                   Eligibility. 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 Regulations) in service in the U.S.

 

(b)                   U.S. Nexus. The Project will be constructed and operated in the U.S., 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. The Maturity Date occurs prior to the end of the period equal to the lesser of (i) thirty (30) years or (ii) ninety percent (90%) of the projected useful life of the Project’s major physical assets.

 

(d)                   No Tax-Exempt Indebtedness. The Guaranteed Loans do not finance or refinance, either directly or indirectly, tax-exempt indebtedness obligations, consistent with the requirements of Section 149(b) of the Internal Revenue Code.

 

(e)                    Recovery Act Reporting. The Borrower has taken all necessary steps to be in compliance with its reporting obligations under Section 6.24(a) with respect to the Recovery Act.

 

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SECTION 5.30.        Full Disclosure.

 

(a)                   Other than Predictive Information, the statements and information of the Borrower contained in any certificate of the Borrower or FFB Document, taken together with all documents, reports or other written information pertaining to the Project, together with all updates of such information from time to time, that have, in each case, been furnished by or on behalf of the Borrower or any other Borrower Entity (including, without limitation, by the Sponsor) to DOE, the Loan Servicer or any Independent Consultant, are 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. For the avoidance of doubt, with respect to the deliverables furnished by the Borrower under Section 4.1.2, the representation contained in this Section 5.30(a) is made as of the date of the Ratings Delivery Package Date only.

 

(b)                   There is no fact known to the Borrower that has not been disclosed to DOE in writing that could reasonably be expected to be material to DOE’s decision to enter into this Loan Guarantee Agreement or the DOE Guarantee or to DOE’s decision to issue the DOE Guarantee or authorize any Advance or that could otherwise reasonably be expected to have a Material Adverse Effect.

 

(c)                    All existing documents and agreements known to the Borrower 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 have been disclosed to DOE in writing.

 

SECTION 5.31.        Cash Grant Application.

 

As of each Cash Grant Application Date, all factual information and the representations of the Borrower set forth in the applicable Cash Grant Application will be true, correct and complete in all material respects. No Federal tax credit under Section 45 or Section 48 of the Internal Revenue Code has been claimed or will be claimed by any Person with respect to any assets or property included in the Project or electricity produced by the Project. As of each Cash Grant Application Date, the Borrower will have made every election that is necessary to claim and apply for the applicable Cash Grant.

 

SECTION 5.32.        Cash Grant Compliance.

 

(a)                                      The Borrower will meet the standards for applicant and property eligibility set forth in the Cash Grant Guidance. The Borrower reasonably estimates that the aggregate Cash Grant proceeds will be sufficient to timely repay the Guaranteed Cash Grant Bridge Loan. Such estimate is, as of the Guarantee Agreement Date, (i) based on the Borrower’s good faith reasonable judgment (after due inquiry) as to the best available assumptions as to all factual matters material to such estimates, (ii) has been calculated in good faith and with due care and (iii) fairly represents the Borrower’s best expectations as to the amount of the Cash Grants.

 

(b)                                      From and after the filing of any Cash Grant Application for the Project, the factual information and the representations of the Borrower set forth in such Cash Grant Application are (i) true, correct and complete in all material respects, (ii) based on the Borrower’s good faith reasonable judgment (after due inquiry) as to the best available

 

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assumptions as to all factual matters material to the figures set forth therein, (iii) consistent with the provisions of the Financing Documents in all material respects, (iv) prepared in good faith and with due care and (v) fairly represent the Borrower’s good faith reasonable expectations (after due inquiry) as to the matters covered thereby. No federal tax credit has been or shall be claimed by any Person with respect to any asset or property included in the Project or any electricity produced by the Project.

 

SECTION 5.33.        Ownership by Disqualified Person.

 

As of the Guarantee Agreement Date and each Cash Grant Application Date, the Borrower is a Delaware limited liability company that is not treated as a corporation for U.S. federal income tax purposes.

 

SECTION 5.34.        Cargo Preference Act.

 

To the extent required by the United States Maritime Administration, Borrower is in compliance with the requirements of the Cargo Preference Act of 1954, as amended, and related regulations.

 

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 FFB Commitment has terminated, unless DOE waives compliance in writing:

 

SECTION 6.1.               Information Covenants.

 

At its own expense the Borrower shall furnish or cause to be furnished to DOE, in each case (x) in unalterable electronic format (except for the financial model, which shall be finished in Excel file format) with a reproduction of the signatures where required and (y) upon request by DOE, in other electronic format, the following items:

 

6.1.1.    Monthly Reports.

 

(a)                   Within fifteen (15) Business Days after the end of each month prior to the Project Completion Date, a Construction Progress Report certified by an Authorized Officer of the Borrower and the Independent Engineer as being accurate and complete in all material respects based upon the Borrower’s good faith reasonable estimates of information contained therein and certification that the Project is expected to achieve Operational Completion and Project Completion by the Guaranteed Operational Completion Date and Guaranteed Project Completion Date, as applicable; and

 

(b)                   Within fifteen (15) Business Days after the end of each month falling after the Operational Completion Date, an Operations Report covering the previous monthly period and certified by an Authorized Officer of the Borrower as being accurate and complete in all material respects based upon the Borrower’s good faith reasonable estimates of information contained therein;

 

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6.1.2.    Quarterly Financial Statements. Within forty five (45) days after the end of each fiscal quarter of the Borrower:

 

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

 

(b)                            a discussion and analysis by a Financial Officer of the Borrower of the business and operations of the Borrower with respect to such quarter, including (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 any other Borrower Entity (other than any such transaction under the O&M Agreement or the Delivery Term Security Maintenance Agreement), (B) for each such quarter that includes all or a portion of the Construction Period, calculations showing the Debt to Equity Ratio and (C) for each such quarter that includes all or a portion of the Operating Period, calculations showing compliance with the requirements of Section 6.16 and certification of such compliance

 

6.1.3.    Annual Financial Statements and Reports. As soon as available, but in any event within ninety (90) days after the end of each Fiscal Year:

 

(a)                                      audited Financial Statements of the Borrower for such Fiscal Year, accompanied by a report and opinion of the Borrower’s Accountant to the effect that such Financial Statements present fairly the financial condition, results of operations, shareholder’s equity and cash flows of the Borrower for such Fiscal Year, which report and opinion should be prepared in accordance with GAAP and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit;

 

(b)                                      a discussion and analysis by management of the Borrower of the Borrower’s business and operations at the end of such Fiscal Year, including with respect to the matters set forth in clause 6.1.2(b) above; and

 

(c)                                       a report detailing a comparison between the Operating Revenues, Operating Costs and Debt Service projected to be received or paid in such Fiscal Year pursuant to the applicable Operating Budget for such Fiscal Year and the Operating Revenues, Operating Costs and Debt Service actually received or paid in such Fiscal Year.

 

6.1.4.    Certification by Financial Officer.

 

Each time Financial Statements of the Borrower are delivered pursuant to clauses 6.1.2(a) and 6.1.3(a) hereof such Financial Statements shall be certified by a Financial Officer of the Borrower (in the case of Financial Statements delivered pursuant to clause 6.1.2(a), in a Quarterly Reporting Certificate, and in the case of Financial Statements delivered pursuant to clause 6.1.3(a) in an Officer’s Certificate of a Financial Officer of the Borrower in the form of Exhibit I-2) 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 and cash flows of the Borrower for the periods presented. Such certification also shall include a certification that the Person has made or caused to be made a review of the

 

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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 Event of Default exists, or if such certification cannot be made, the nature and period of existence of such Event of Default or Potential Event of Default and what corrective action the Borrower has taken or proposes to take with respect thereto.

 

6.1.5.             Quarterly Reporting Package. Within forty five (45) days after the end of each fiscal quarter of each Fiscal Year, each certified by an Officer’s Certificate of the Borrower:

 

(a)        for each fiscal quarter that includes all or a portion of the Construction Period: (i) a summary construction report, which shall include a detailed assessment of the Project’s performance in comparison with the Construction Budget and Project Milestone Schedule then in effect for such period, including (A) basic data relating to construction of the Project Facility, (B) a description and explanation of any Event of Loss, Actions or other material disputes between the Borrower and any Person and (C) any material non-compliance with any Required Approval then in effect and (ii) an updated Project Milestone Schedule and an updated Construction Budget, reflecting any Approved Construction Changes (or certification that no changes or updates are then required);

 

(b)        for each fiscal quarter that includes all or a portion of the Operating Period: (i) a summary operating report, which shall include a detailed assessment of the Project’s performance in comparison with the Project Plans 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, (ii) an updated Operating Plan for the next four fiscal quarters, an updated Operating Forecast for the next four fiscal quarters, and, if requested by DOE, updated Base Case Projections in form and substance satisfactory to DOE and (iii) upon the request of DOE, an Authorized Officer of the Borrower shall schedule a date to discuss any updated Operating Plan, updated Operating Forecast, updated Base Case Projections and such other matters relating to the Project as DOE reasonably requests; and

 

(c)        all other items indicated in Section 6.1.2 as being part of the Quarterly Reporting Package, together with a Quarterly Reporting Certificate;

 

6.1.6.             Financial Statements of Sponsor.

 

Promptly after the same become available, unaudited quarterly and audited annual Financial Statements of the Sponsor prepared in accordance with GAAP and certified by a Financial Officer of the Sponsor pursuant to an Officer’s Certificate in the form of Exhibit I-3 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

 

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date thereof and the results of operations and cash flows of the Sponsor for the periods presented.

 

6.1.7.             Management Letters.

 

Promptly, but in any event within five (5) Business Days, after the Borrower’s receipt thereof, a copy of any management letter or 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 (other than communications received in the ordinary course of business).

 

6.1.8.             Reporting Obligations. Promptly, but in any event within five (5) Business Days, after the Borrower obtains Knowledge thereof or information pertaining thereto, notice of:

 

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

 

(b)        any Action, pending or threatened in writing (i) against the Borrower or any of its property, (ii) with respect to the Project or any Transaction Document or (iii) against any other Project Participant that, in each case, either singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect and of any material developments with respect to any of the foregoing;

 

(c)        any proceeding or legislation by any Governmental Authority specifically affecting (i) the Project, the Borrower, any of its property or its Equity Interests or (ii) 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;

 

(d)        any change in the Authorized Officers 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;

 

(e)        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 or Required Approval; or any execution of any new material agreement, that is not otherwise approved, consented to or accepted pursuant to the terms of the Transaction Documents;

 

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

 

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(g)        any Lien (other than a Permitted Lien) being granted or established or becoming enforceable over any of the Borrower’s Properties or the Equity Interests in the Borrower, together with a description thereof;

 

(h)        any proposed material change in the nature or scope of the Project or the business or operations of the Borrower, together with a description thereof;

 

(i)         any casualty damage or loss to the Project (i) in excess of Five Million Dollars ($5,000,000) for a single event or in excess of Ten Million Dollars ($10,000,000) annually in the aggregate or (ii) affecting one or more transformers;

 

(j)         any notice of a delinquent payment owed by the Borrower to, or to the Borrower by, (i) any Major Project Participant if such payment is more than thirty (30) days delinquent or (ii) any other party under the Project Documents if such payment is more than ninety (90) days delinquent and in either case, if the amount of any such delinquent payment is in excess of Two Hundred Fifty Thousand Dollars ($250,000), in each case together with a copy of all correspondence received or sent by the Borrower with respect to such delinquent payment;

 

(k)        any material correspondence from any Major Project Participant relating to (i) any material delay in the completion of the Project or (ii) any event that could reasonably be expected to interrupt the operation of the Project for more than thirty (30) Business Days;

 

(l)         any notice of interruption of the ability of PG&E to receive material quantities of deliveries under the HPR II PPA or HPR III PPA or any event that could reasonably be expected to interrupt the ability of PG&E to receive material quantities of deliveries under the HPR II PPA or HPR III PPA for more than ten (10) consecutive Business Days;

 

(m)       any notice from PG&E regarding the payment of an invoice submitted to PG&E by the Borrower other than a notice given by PG&E in the ordinary course of business;

 

(n)        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, together with a description thereof;

 

(o)        any non-compliance of any 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 any issuer with the required criteria with respect thereto or the renewal thereof;

 

(p)        the occurrence of any Event of Force Majeure affecting, or that either the Borrower or any other Project Participant claims would affect, the performance by such Person of any obligation under any Transaction Document, together with copies of all

 

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notices, calculations, data and other correspondence between such Project Participant and the Borrower in respect of any such Event of Force Majeure;

 

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

 

(r)         upon request by DOE, copies of any data relating to the performance of tests under any Project Document;

 

(s)         the occurrence of any event that could reasonably be expected to cause a reduction in the Operating Revenues of the Borrower for any Fiscal Year by more than ten percent (10%) of the amount estimated therefor in the then applicable Operating Forecast;

 

(t)         any proposed cancellation or material change in any Required Insurance maintained by the Borrower or by any other Person for the benefit of the Borrower with respect to the Project and after Borrower obtains knowledge of any occurrence that has or could reasonably be expected to result in any premium increase in excess of ten percent (10%) over the cost then in effect for any insurance contract, 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 within thirty (30) days after an Authorized Officer obtains knowledge of such event, a report describing such event and the potential insurance-related impact thereof;

 

(u)        notice and a copy of any periodic reports submitted by the Borrower to PG&E pursuant to the HPR II PPA and HPR III PPA;

 

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

 

(w)       the occurrence of (i) an ERISA Event, (ii) 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), (iv) the commencement of contributions by the Borrower or any ERISA Affiliate to any Pension Plan that is subject to Title IV of ERISA or Section 412 of the Internal Revenue Code or (v) the receipt by the Borrower or any ERISA Affiliate of a notice from a Multiemployer Plan sponsor concerning an ERISA Event; and

 

(x)        the Borrower’s or Sponsor’s receipt of a written demand for Recapture Damages.

 

6.1.9.            Cash Grant Determination. As soon as possible, but in any event within five (5) Business Days, after either of the Sponsor or the Borrower obtains Knowledge regarding any change in facts or in Applicable Law which might reasonably be expected

 

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to adversely affect in any manner or way the eligibility of the Project to qualify for Cash Grants in the amounts, and by the dates, set forth in Exhibit T.

 

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

 

(a)      within seven (7) Business Days after any such report is submitted, a copy of any report required to be filed by the Borrower (or on behalf of the Borrower) with any Governmental Authority other than in the ordinary course of business;

 

(b)      within one (1) Business Day after the Borrower obtains Knowledge of any accident related to the Project having a material and adverse impact on the environment or on human health (including any accident resulting in the loss of life), notice thereof, and within twenty (20) Business Days thereafter a report describing such accident, the impact of such accident and the remedial efforts required and (as and when taken) implemented with respect thereto;

 

(c)       within twenty (20) Business Days after the close of each Fiscal Year, a report, satisfactory to DOE in its reasonable discretion, summarizing any actual or alleged violations of and the status of compliance with Environmental Laws in connection with the Project over the preceding year, with sufficient information (as determined by DOE) to allow DOE to monitor the Project’s performance with respect to the environment and its compliance with Environmental Laws, and including a narrative summary of the results of environmental monitoring or sampling activity, including, but not limited to, (A) copies of the annual compliance certification required under Title V of the Clean Air Act; (B) Discharge Monitoring Reports for the preceding calendar year submitted in accordance with the Clean Water Act; (C) a summary of any spills or releases required to be reported during the previous calendar year under applicable Environmental Laws; (D) any summaries relating to compliance with the federal Endangered Species Act and (E) a summary of any violations of Environmental Laws during the previous calendar year, together with a description of any remedial or corrective action taken with respect thereto;

 

(d)      within two (2) Business Days after the Borrower obtains Knowledge thereof, any pending or asserted Environmental Claim by any Governmental Authority or any other Person or Persons, and any threatened Environmental Claim that could materially impact the Project, 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;

 

(e)       unless otherwise required more quickly under Environmental Law, within two (2) Business Days after delivery thereof, any report, plan or other written communication required to be delivered to any Governmental Authority pursuant to: (i) the Biological Opinion; (ii) the SHPO Clearance Letter; and (iii) the Final Environmental Assessment, and any amendments, supplements or other modifications of any of the foregoing; and

 

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(f)       immediately, any proposed changes to the Project that would alter the implementation of the “Proposed Action” as described in the Final Environmental Assessment.

 

6.1.11.      Annual Safety Audit. Within twenty (20) Business Days after its completion, a copy of the report regarding the required annual safety audit pursuant to Section 6.17;

 

6.1.12.      Additional Project Documents and Governmental Approvals. As soon as available, but in no event later than ten (10) Business Days after the receipt thereof by the Borrower, copies of any Additional Project Documents obtained or entered into by the Borrower after the Guarantee Agreement Date;

 

6.1.13.      Additional Audit Reports. As soon as available, but in any event within ten (10) Business Days after the receipt thereof by the Borrower, copies of all other material annual or interim reports submitted to the Borrower by the Borrower’s Accountant;

 

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

 

6.1.15.  Insurance Certificate. On or before the tenth Business Day after renewal of the insurance policies in respect of the Required Insurance, an annual certificate with respect to Required Insurance (in form and substance reasonably satisfactory to DOE) conforming to the insurance requirements of Schedule 6.3(b);

 

6.1.16.  Other Information. Reasonably promptly upon request, such other information or documents as DOE reasonably requests; and

 

6.1.17.      Information Made Available.

 

(a)      In accordance with Section 609.10(d)(19) of the Applicable Regulations, (i) the information that will be made available to DOE is as set forth in the Financing Documents and (ii) any information will be made publicly available to the extent required by applicable federal law; and

 

(b)      without limiting the generality of clause (a) above, all correspondence, books, documents, papers and records relating to the structuring, negotiation and execution of this Loan Guarantee Agreement and the transactions contemplated herein, including this Loan Guarantee Agreement, the Financing Documents, the pre-application, the Application, the term sheet and all supporting documentation, Financial Statements, audit reports of independent accounting firms, permits and regulatory approvals furnished or otherwise made available to DOE, will be handled in accordance with all applicable federal laws, rules, or regulations, including the Trade Secrets Act, 18 U.S.C.

 

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Section 1905, and the Freedom of Information Act, 5 U.S.C. Section 552, and DOE’s implementing regulations at 10 C.F.R. 1004.

 

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

 

(a)             The Borrower shall (i) keep proper records and books of account in which full, true and correct entries in accordance with GAAP and all Applicable Laws are made in respect of all dealing and transactions relating to the business and activities of the Borrower, and (ii) maintain adequate management information and cost control systems and make arrangements reasonably satisfactory to DOE (A) for overseeing the financial operations of the Borrower, including its cash management, accounting and financial reporting, (B) for overseeing the Borrower’s relationship with DOE and the Borrower’s Accountant and (C) for facilitating the effective and accurate audit and performance evaluation of the Project pursuant to the Applicable Regulations 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;

 

(c)             The Borrower shall (i) consult and cooperate with DOE regarding the Project upon DOE’s request, (ii) upon reasonable notice (to be given not more than once in any calendar quarter unless an Event of Default or potential Event of Default has occurred and is continuing, in which case such frequency limitation shall not apply), permit officers and designated representatives of DOE, its agents, the Comptroller General and the Independent Consultants to visit and inspect the Project and any other facilities and Properties of the Borrower (provided that at all times during such visit and inspection, each such visiting Person will comply with all site safety rules disclosed by the Borrower or its representative), (iii) upon reasonable notice, provide to officers and designated representatives of DOE, its agents, the Comptroller General and the Independent Consultants access to any pertinent books, documents, papers and records of the Borrower for the purpose of audit, examination, inspection and monitoring upon reasonable notice and at reasonable times during normal business hours, to examine and discuss the affairs, finances and accounts of the Borrower with the representatives of the Borrower, (iv) afford proper facilities for such inspection, shall make copies (at the Borrower’s expense) of any records that are subject to such inspection, shall make available all information related to the Project, including all 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) exercise commercially reasonable efforts to cause each Major Project Participant to make available to DOE, its agents, the Comptroller General and the Independent Consultants the same rights of inspection and access to its books and records that such Major Project Participant makes available to the Borrower;

 

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(d)             The Borrower shall upon the request of DOE, with reasonable advance notice, make the Borrower’s Accountant available to communicate with DOE, the Comptroller General and the Independent Consultants and their representatives at any reasonable time regarding any of the Borrower’s accounts and operations;

 

(e)             In the event that the Borrower’s Accountant should cease to be the accountant 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

 

(f)             The Borrower shall retain all records relating to expenditures with respect to which Advances were made for five (5) years after the Advance was made with respect to such expenditure.

 

SECTION 6.3.     Maintenance of Existence, Property and Insurance.

 

(a)             The Borrower shall preserve and maintain (i) its legal existence and (ii) all of its licenses, rights, privileges and franchises material to the conduct of its business and the Project.

 

(b)             The Borrower shall keep its present and future Properties insured as required by and in accordance with the terms and provisions described on Schedule 6.3(b). The Borrower shall obtain and maintain and shall pursue any contractual remedies to cause other Persons required to provide Required Insurance, including any Construction Contractor and the Operator, to obtain and maintain such Required Insurance or alternate coverage provided for on Schedule 6.3(b) or in their respective Project Documents, as the case may be.

 

(c)             In the event that the Borrower fails to procure or maintain (or cause to be procured and maintained) the Required Insurance, DOE may (but shall not be obligated to) take out the Required Insurance and pay the premiums in connection therewith. All amounts so advanced for such purpose by DOE shall become an additional Secured Obligation owed by the Borrower to DOE and, within ten (10) days of demand by DOE, the Borrower shall pay any such amounts to DOE, together with interest on such amounts at the Late Charge Rate from the date reimbursement is due.

 

SECTION 6.4.     Compliance with Applicable Laws; Environmental Laws; Governmental Approvals.

 

(a)             The Borrower shall, with respect to the design, construction, operation and maintenance of the Project, pursue all contractual remedies available to it in a commercially reasonable manner to cause each Project Participant to (i) comply with and conduct its Property, business and operations in compliance with all Applicable Laws, including all Environmental Laws, in all material respects and (ii) procure, maintain and comply in all material respects with all Required Approvals.

 

(b)             Notwithstanding the foregoing, the Borrower shall fully comply in all respects with (i) the Biological Opinion; (ii) the SHPO Clearance Letter; and (iii) the Proposed Design Features and Proposed Action as described in the Final Environmental Assessment, and any

 

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amendments, supplements or other modifications to any of the foregoing including preparing and submitting all reports and other information and taking all actions required by such documents.

 

SECTION 6.5.     Taxes, Duties, Expenses and Liabilities.

 

(a)             The Borrower shall pay or arrange for the payment before they become overdue of all present and future (i) Taxes (including stamp taxes), duties, fees, Periodic Expenses, or other charges payable on or in connection with the execution, issue, delivery, registration, or notarization, or for the legality, validity, or enforceability, of this Loan Guarantee Agreement, any other Transaction Documents and any other documents related to this Loan Guarantee Agreement (other than those Taxes that it is contesting in good faith and by appropriate proceedings for which reserves have been established to the extent required by GAAP); provided that the Borrower shall promptly pay any valid, final judgment rendered upon the conclusion of any relevant Action enforcing any Tax and cause it to be satisfied of record and (ii) claims, levies, or liabilities (including claims for labor, services, materials and supplies), for sums that have become due and payable and that have or, if unpaid, might become a Lien (other than a Permitted Lien) upon the Property of the Borrower (or any part thereof).

 

(b)             The Borrower shall duly and punctually pay and discharge its Obligations in respect of any Indebtedness permitted under Section 7.1 when due, subject to the terms and conditions of this Loan Guarantee Agreement and the other Financing Documents.

 

(c)             From and after the creation of the Borrower, the Borrower has not been, is not and shall not be, a member of an affiliated or consolidated group for federal or state tax purposes (except as otherwise required by a Change of Law).

 

SECTION 6.6.     Proper Legal Form.

 

The Borrower shall take all action to ensure that each of the Transaction Documents is in proper legal form under the respective governing laws selected in such Transaction Document, without any further action required with respect to such legal form for the enforcement of such Transaction Documents.

 

SECTION 6.7.     Construction and Approved Construction Changes.

 

The Borrower shall apply the proceeds of the Advances exclusively to Eligible Project Costs (including reimbursement of Equity Contributions that fund Eligible Project Costs prior to the time such Equity Contributions are required) and shall use its commercially reasonable efforts to cause (i) Operational Completion to be achieved on or prior to the Anticipated Operational Completion Date and (ii) Project Completion to be achieved on or prior to the Guaranteed Project Completion Date, in each case within the Construction Budget.

 

The Borrower shall cause all Approved Construction Changes to be reflected in a revised Project Milestone Schedule or Construction Budget, as the case may be, and delivered to DOE as contemplated by Section 6.1.5.

 

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SECTION 6.8.     Diligent Construction of Project.

 

The Borrower shall construct and complete, or cause to be constructed and completed, the Project Facility diligently in accordance with the Project Plans, the Construction Contracts and the other Transaction Documents, Required Approvals, the Project Milestone Schedule and the Construction Budget.

 

SECTION 6.9.     Acceptance and Startup Testing.

 

The Borrower shall (a) consult with and provide, or cause to be provided, reasonable notice to the Loan Servicer and Independent Engineer regarding provisions related to startup and testing of facility and equipment pursuant to the Construction Contracts and the O&M Agreement; (b) provide the Independent Engineer with the opportunity to observe the startup and testing of the Project Facility and (c) at the request of DOE, provide DOE and the Independent Engineer with any data or reports received by the Borrower in connection with any of the startup testing of the Project Facility.

 

SECTION 6.10.   Operating Plan; Operations.

 

(a)              From and after the Operational Completion Date, the Borrower shall or shall cause the Project to operate in all material respects pursuant to the Operating Plan then in effect. The Borrower shall conduct, and shall cause the Operator to conduct, the operations of the Project on the basis of customary commercial practice and arm’s-length arrangements, or as otherwise set forth in the Project Documents, with due diligence and efficiency and under the supervision of qualified and experienced management.

 

(b)              The Borrower shall (i) keep (or cause to be kept) all its Properties 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 materially in accordance with the standards set forth in the O&M Agreement, manufacturer’s recommendations and Required Approvals, (iii) possess 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 or cause to be maintained at the Project Site a complete set of plans and specifications for the Project.

 

(c)               The Borrower shall maintain or cause to be maintained at the Project Site a complete set of plans and specifications for the Project.

 

SECTION 6.11.   Operating Budget.

 

6.11.1.                         Submission and Approval of Operating Budget.

 

(a)              For each Fiscal Year during the Operating Budget Period, as soon as it is available, but in any event at least forty-five (45) days prior to the commencement of the Operating Budget Period (and prior to the commencement of each Fiscal Year during the Operating Budget Period), the Borrower shall submit to DOE and the Independent Engineer for approval by DOE the Operating Budget for such Fiscal Year prepared by the Borrower. Each Operating Budget shall be consistent with the Base Case Projections and be accompanied by certification of an Authorized Officer of the Borrower that, to the best of such Authorized

 

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Officer’s Knowledge, the Operating Budget is a reasonable estimate for the period covered thereby and is in compliance with the requirements of this Section 6.11.

 

(b)                                           DOE will make commercially reasonable efforts to promptly review each proposed Operating Budget and, no later than ten (10) Business Days prior to the time the Operating Budget is scheduled to become effective, reasonably approve or disapprove each line item in the proposed Operating Budget.

 

(c)                                            A proposed Operating Budget shall become effective on the later of (i) the first day of the relevant Fiscal Year (or, for any Fiscal Year in which the Phase Operation Date for Phase 1 occurs, such date) and (ii) the date DOE or the Loan Servicer advises the Borrower that DOE has approved such Operating Budget. If DOE does not approve an Operating Budget, DOE shall advise the Borrower of the items that are disapproved and the reason for such disapproval.

 

(d)                                           If all or any part of an Operating Budget is disapproved, the Borrower shall comply with all approved aspects of such Operating Budget. With respect to those aspects of any Operating Budget that are not approved, the Borrower and DOE shall continue to discuss such aspects in good faith and the Operating Budget for the preceding Fiscal Year related to such disapproved items, adjusted for inflation as specified in the last sentence of this Section 6.11.1(d)  (or, in the case of any Operating Budget intended to be effective prior to the Project Completion Date, the amounts contemplated by Exhibit D-3 of the O&M Agreement), shall be applicable and for all purposes hereof be deemed to be part of the approved Operating Budget for the current Fiscal Year until such time as such aspects of the Operating Budget for the current Fiscal Year have been approved in writing by DOE. The inflation adjustment for any disapproved items shall be equal to the lesser of (i) the annual inflation adjustment assumed with respect to each such disapproved item in the Base Case Projections as of the Guarantee Agreement Date and (ii) the Borrower’s good faith estimate of the inflation increase (or decrease) with respect to each such disapproved item since the date of the Operating Budget for the preceding Fiscal Year.

 

(e)                                            Each Operating Budget shall (i) be prepared in good faith on the basis of all facts and circumstances then existing and known to the Borrower and written assumptions stated therein which the Borrower believes to be reasonable as to all factual and legal matters material to such estimates, and reflect the Borrower’s best estimate of the future results of the Borrower and the Project and (ii) except in the case of the Initial Operating Budget, be based on the same format and maintained substantially on the same basis as, and provide sufficient detail to permit a meaningful comparison to, previous years. Each Operating Budget shall include (A) fair and good faith reasonable estimates of Operating Revenues, Operating Costs (both fixed and variable) on an individual line item basis for the Project and projected Debt Service and pro forma cash flow projections for each period covered by such Operating Budget, (B) a summary of the Project’s major maintenance schedule to the end of the then current long term major maintenance cycle (and related scheduled outages), (C) the Borrower’s fair and good faith reasonable estimates of any Capital Expenditures (but excluding Project Costs) for the succeeding five (5) years and the envisioned effect of any contemplated major maintenance activities on the Project’s operations and (D) such other information as may be reasonably requested by DOE.

 

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6.11.2.                         Amendments to Operating Budget.

 

If at any time during any Fiscal Year (a) total Operating Costs to be paid during the balance of such Fiscal Year, exceed or are reasonably expected to exceed the allowance provisions of Section 7.16, then the Borrower shall deliver a proposed amendment to the then current Operating Budget to DOE and the Independent Engineer and such proposed amendment shall become effective on the date it is approved by DOE. At the time the Borrower submits such proposed amendment, the Borrower shall certify the purpose of such amendment and that such amendment is reasonably necessary or advisable for the operation and maintenance of the Project. The Borrower shall comply with the approved Operating Budget (subject to the allowance provisions of Section 7.16) until the proposed amendment is approved by DOE. For the avoidance of doubt, nothing in this Section 6.11.2 shall be interpreted to disallow the application of Loss Proceeds on terms and conditions set forth in Section 6.22, incurrence of capital expenditures on terms and conditions set forth in Section 7.5, incurrence of Major Maintenance Costs (as that term is defined in the Accounts Agreement) on terms and conditions set forth in the Accounts Agreement, the application of Performance Liquidated Damages on the terms and conditions set forth in Section 3.4.3(a), the application of proceeds from a Permitted Disposition on the terms and conditions set forth in Section 3.4.3(d), the application of Major Project Document Breach Damages or Major Project Document Termination Damages or the application of funds to settle disputes in accordance with the terms and conditions set forth in Section 7.19.

 

SECTION 6.12.        Performance of Obligations.

 

(a)                                           The Borrower shall maintain in full force and effect each of the FFB Documents and each of the other Financing Documents to which it is a party in accordance with the respective terms thereof.

 

(b)                                           The Borrower shall (i) perform and observe all of its covenants and obligations contained in any Transaction Document or Required Approval in all material respects, (ii) take all reasonable and necessary action to prevent the termination, suspension or cancellation of any Transaction Document or Required Approval (except for the expiration of any Transaction Document or Required Approval in accordance with its terms and not as a result of a breach or default thereunder by the Borrower) and (iii) enforce against the relevant Project Participant each material covenant or obligation under each Project Document to which such Person is a party in accordance with its terms.

 

SECTION 6.13.        Replacement of Certain Project Participants.

 

The Borrower shall, (after consulting with DOE and to the extent the Borrower deems such action prudent and commercially reasonable) exercise its rights (if any, which may include termination) against (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 and each other Transaction Document to which it is a party, (b) the EPC Contractor in accordance with and as permitted by the EPC Contract, if the EPC Contractor is not in compliance with the EPC Contract or other Transaction Documents to which it is a party or (c) any Person party to a Project Document in accordance with and as permitted by such Project Document if such Person is not in compliance with such Project Document. Prior to, or

 

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promptly after, any termination, the Borrower shall enter into a replacement agreement with a new operator, EPC contractor or other Person, as the case may be, on terms and conditions and with a counterparty reasonably acceptable to DOE.

 

SECTION 6.14.        Accounts; Cash Deposits.

 

The Borrower shall maintain, or cause to be maintained, in full force and effect each of the Project Accounts in accordance with the terms of the Accounts Agreement. 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 the Accounts Agreement and shall otherwise comply with the provisions thereof. The Borrower shall remit any amounts received by it or received by third parties on its behalf to the Collateral Agent for deposit in accordance with the terms of the Accounts Agreement.

 

SECTION 6.15.        Debt Service Reserve.

 

The Borrower shall establish and maintain in accordance with the provisions of the Accounts Agreement a reserve for Debt Service (the “Debt Service Reserve”). The Debt Service Reserve shall consist of any combination of cash and Reserve Letters of Credit. Beginning not later than the earlier of (i) the Operational Completion Date and (ii) the date that is six (6) months prior to the First Payment Date, the amount on deposit in or credited to the Debt Service Reserve shall at all times be no less than the Debt Service Reserve Requirement.

 

SECTION 6.16.        Debt to Equity Ratio.

 

The Borrower shall maintain, during the Availability Period, a Debt to Equity Ratio no greater than the Maximum Debt to Equity Ratio.

 

SECTION 6.17.        Safety Audit.

 

Not less frequently than annually, the Borrower shall cause the Operator to conduct, a safety audit of the Project in a manner reasonably satisfactory to DOE, including an analysis of whether the Project is in compliance with all Applicable Laws and Environmental Laws in all material respects and each such safety audit shall result in the prompt preparation of a written report with respect thereto that shall be delivered to DOE and the Independent Engineer for review and approval by DOE. 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.

 

SECTION 6.18.        Independent Consultants.

 

The Borrower (a) shall cooperate in all respects with each Independent Consultant and (b) shall ensure that each Independent Consultant is provided with all information reasonably requested by such Independent Consultant in fulfilling its duties to DOE and ensure that any information that it may supply to such Independent Consultant is accurate and not, by omission of information or otherwise, misleading in any material respect at the time such information is provided.

 

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SECTION 6.19.        Title; Rights to Land.

 

The Borrower shall preserve and maintain good and valid title to such Real Property interests as are necessary and sufficient to construct, operate and maintain the Project on the Project Site in accordance with the requirements of the Transaction Documents. The Borrower shall obtain and deliver to DOE a subordination agreement in the form of Exhibit P or such other form as may be reasonably acceptable to DOE from each Subcontractor with whom Borrower enters into a contract after the date of this Loan Guarantee Agreement that provides for aggregate payments to the contractor or supplier equal to or in excess of $25,000,000.

 

SECTION 6.20.        Creation and Perfection of Security Interests; Additional Documents; Filings and Recordings.

 

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

 

(b)                                           The Borrower shall, at its own expense, promptly take all actions that have been or shall be requested by the Loan Servicer, DOE, the Collateral Agent or that the Borrower knows are necessary to establish, maintain, protect, perfect and continue the perfection of the first priority (subject to Permitted Liens) security interests of the Secured Parties created by 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, (i) execute or cause to be executed and shall file or cause to be filed or register or cause to be registered such financing statements, continuation statements, fixture filings and mortgages or deeds of trust in all places necessary or advisable (in the opinion of counsel for the Loan Servicer, DOE or the Collateral Agent) to establish, maintain and perfect such security interests and in all other places that the Loan Servicer, DOE or the Collateral Agent shall reasonably request, (ii) discharge all other Liens (other than Permitted Liens) or other claims adversely affecting the rights of the Secured Parties in the Collateral; and (iii) 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.

 

(c)                                            The Borrower shall promptly do everything necessary or advisable in the judgment of the Loan Servicer, DOE or the Collateral Agent (including filing, registering and recording all necessary documents and paying all fees, taxes, levies, imposts and Periodic Expenses in connection therewith) to (i) create security arrangements, including, as 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 Applicable 

 

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Laws, or the law of any other jurisdiction, as applicable, (ii) 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 (iii) preserve and protect the Collateral and protect and enforce its rights and title, and the rights and title of the Secured Parties, to the security created by the Security Documents. Furthermore, the Borrower shall cause to be delivered to the Loan Servicer such opinions of counsel and other related documents as may be reasonably requested by the Loan Servicer, DOE or the Collateral Agent to assure compliance with this Section 6.20(c).

 

(d)                                           If the Borrower shall at any time acquire any interest in Property that is Collateral but is not covered by the Security Documents or enter into any Additional Project Document, the Borrower shall promptly (i) as applicable: (A) execute, deliver and record an amendment or supplement to the Security Documents, satisfactory in form and substance to DOE, or (B) enter into a Direct Agreement with the Collateral Agent, in each case, as necessary in order to grant the Collateral Agent a first priority lien or security interest (as applicable) in such Property, subject only to Permitted Liens, and otherwise in form and substance satisfactory to the Loan Servicer and the Collateral Agent and (ii) ensure that such lien or security interest shall be valid and effective.

 

SECTION 6.21.        Event of Loss.

 

If any material Event of Loss shall occur with respect to the Project or any part thereof, the Borrower shall (i) diligently pursue all of its rights to compensation against all relevant insurers, reinsurers and Governmental Authorities, as applicable, in respect of such event, (ii)  not, without the written consent of DOE compromise or settle any claim with respect to any Event of Loss involving an amount in excess of Ten Million Dollars ($10,000,000) per claim and (iii) pay or apply all Loss Proceeds received by the Borrower and stemming from such event in accordance with Section 3.4.3(b) and Section 6.22.

 

SECTION 6.22.        Application of Loss Proceeds.

 

(a)                                           All Loss Proceeds received by the Borrower shall be applied as provided in this Section 6.22. To the extent the Borrower is entitled to receive Loss Proceeds, Loss Proceeds shall be paid by the relevant insurers, reinsurers and Governmental Authorities, as applicable, directly to the Collateral Agent as loss payee and, if paid to the Borrower, such Loss Proceeds shall be received in trust and for the benefit of the Collateral Agent segregated from other funds of the Borrower, and shall be forthwith paid over to the Collateral Agent in the same form as received (with any necessary endorsement). Any Loss Proceeds received by either of the Collateral Agent or the Borrower shall promptly be deposited into, or credited to the Loss Proceeds Account.

 

(b)                                           Upon the occurrence of any Event of Loss, the Loss Proceeds from which are not reasonably expected to exceed Ten Million Dollars ($10,000,000) (such Event of Loss, a “Minimum Threshold Event of Loss”), the Borrower shall apply or cause to be applied such Loss Proceeds to the payment of the costs of repair or restoration of the portion of the Project lost or damaged, and the Parties shall deliver written instruction to the Collateral Agent to disburse such Loss Proceeds in accordance with this Section 6.22.

 

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(c)                                            Upon the occurrence of any event other than Minimum Threshold Event of Loss, disbursement of funds by the Collateral Agent to the Borrower shall be permitted if, and only if, DOE after consultation with the Independent Engineer determines 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 DOE shall, acting reasonably, consider appropriate in the circumstances.

 

(d)                                           Borrower’s Notice. In respect of any Event of Loss that is not a Minimum Threshold Event of Loss as to which DOE has consented to the repair and restoration in accordance with clause (b), 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 DOE 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 DOE with respect to such restoration or repair work; and

 

(ii)                                                     proposed Transfer/Withdrawal 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.

 

(e)                                            Upon the completion of any such restoration and repair work, or if restoration and repair work is not undertaken pursuant to this Section 6.22, the Loan Servicer shall deliver written instructions to the Collateral Agent, instructing the Collateral Agent to apply any amounts constituting Loss Proceeds on deposit in the Loss Proceeds Account to the prepayment of the Guaranteed Loans on the second Business Day following receipt of such instructions, in accordance with Section 3.4.3(b).

 

SECTION 6.23.        Technology.

 

(a)                                           The Borrower shall not take any action that would prevent it from exercising any Intellectual Property Rights granted to the Borrower under the EPC Contract, or that would otherwise materially conflict with or adversely affect such Intellectual Property Rights granted to the Borrower.

 

(b)                                           The Borrower shall take all commercially reasonable actions necessary to maintain and protect the Borrower’s rights and interests in the Technology and Intellectual Property Rights necessary to construct, operate, use and maintain the Project, including (i) protecting the secrecy and confidentiality of all confidential information and trade secrets having material value to the Project by having and enforcing a policy requiring all employees, consultants, licensees, vendors and contractors to execute appropriate confidentiality and, where 

 

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applicable, invention assignment agreements and (ii) taking all commercially reasonable actions necessary to protect the Technology that is a trade secret having a material value to the Project from falling into the public domain as a result of any action by the Borrower.

 

(c)                                            If the Borrower becomes aware of any matieral breach or violation of any of the terms or conditions of its intellectual property rights in connection with the Project, the Borrower shall take commercially reasonable actions necessary to protect such rights granted to the Borrower, including, if appropriate in Borrower’s reasonable determination, and provided the Borrower has standing, suing for an injunction against such violation or breach.

 

SECTION 6.24.        Compliance with Certain U.S. Government Requirements.

 

(a)                                           Recovery Act. The Borrower shall timely comply with the reporting requirements set out in Section 1512(c) of Title XV of Division A of the Recovery Act. Such reporting shall be made in accordance with the procedures set out or otherwise referenced in 2 C.F.R. Section 176.50 and the OMB Implementing Guidance and, in each case, any amendment, supplement or successor thereto. DOE may require in its notice that such reporting relate back to the date hereof. Accordingly, Borrower shall at all times maintain such records as may be necessary, in the event DOE issues such notice, to undertake such reporting obligations.

 

(b)                                           Lobbying Requirements. The Borrower shall comply with all requirements of 31 U.S.C. §1352, including (i) if any funds have been paid or will be paid to any Person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress (as defined for purposes of 31 U.S.C. §1352), an officer or employee of Congress, or an employee of a Member of Congress in connection with the Guaranteed Loans, the Borrower shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions and (ii) no proceeds of the Advances will be expended 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)                                            Environmental. The Borrower shall comply with Environmental Laws in all material respects. Notwithstanding the generality of the foregoing, the Borrower shall fully comply in all respects with (i) the Biological Opinion ; (ii) the SHPO Clearance Letter; and (iii) the Project Design Features and Proposed Action as described in the Final Environmental Assessment and any amendments, supplements or other modifications of any of the foregoing.

 

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

 

(e)                                            Program Requirements. The Borrower shall timely comply with all other Program Requirements and shall reasonably cooperate with DOE to achieve compliance with 

 

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any U.S. Department of Energy and FFB legal and financial requirements, policies, and procedures, and changes thereto, applicable to the Title XVII program that are not otherwise Program Requirements.

 

(f)                                             Prohibited Persons.

 

(i)                                                        The Borrower shall provide immediate written notice (including a brief description) to DOE if, at any time, it learns that the representations made with respect to Prohibited Persons (including the debarment regulations) were erroneous when made or have become erroneous by reason of changed circumstances.

 

(ii)                                                     If any Major Project Participant or any Person that Controls a Major Project Participant becomes (whether through a transfer or otherwise) a Prohibited Person, the Borrower shall, within thirty (30) days of Knowing that such Person has become a Prohibited Person, engage and continue to engage in constructive discussions with DOE regarding the removal or replacement of such Person or, if such removal or replacement is not reasonably feasible, the implementation of other migration measures.

 

(g)                                            Patriot Act. The Borrower shall establish and maintain an anti-money laundering compliance program if and as required by the Patriot Act.

 

(h)                                           Davis-Bacon Act.

 

(i)                                                        In accordance with Section 1702(k) of Title XVII, beginning on the Guarantee Agreement Date, all laborers and mechanics employed by contractors and subcontractors in the performance of construction work financed in whole or in part by the Guaranteed Loan shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, including but not limited to those wages set forth in Schedule 6.24(h). The contract clauses set forth in Exhibit N shall be incorporated into all Davis-Bacon Act Covered Contracts.

 

(ii)                                                     The Borrower shall, on DOE’s behalf and in accordance with subparagraph (b)(3)(i) of Exhibit N, maintain the payrolls described in such subparagraph (hereinafter “certified payrolls”) that shall be provided weekly by each DBA Contract Party and shall systematically review such certified payrolls for compliance with the Davis-Bacon Act. The Borrower shall promptly notify DOE in writing if it receives any complaint related to non-compliance with the Davis-Bacon Act, or discovers an incident that the Borrower reasonably believes to be a case of such non-compliance. In such instances, the Borrower shall forward to DOE (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, (3) a summary of the Borrower’s resolution (or proposed resolution) of the compliant or incident, (4) the relevant certified payrolls and (5) any other information requested by DOE regarding the complaint or incident. Certified payrolls shall be maintained by the Borrower for three (3) years after the date of completion of the Davis-Bacon Act Covered Contract. Copies of certified payrolls and basic payroll records shall be maintained by each DBA Contract Party for three (3) years 

 

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after the date of completion of the Davis-Bacon Act Covered Contract. Pursuant to the third sentence of subparagraph (b)(3)(ii)(A) of Exhibit N, DOE directs that the Borrower shall, in lieu of satisfying the requirement set forth therein (i) maintain such certified payrolls at a site designated by the Borrower and shall make such payrolls 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, and (ii) periodically report payroll information to DOE in such electronic or other form as DOE may require. Certified payrolls maintained by the Borrower shall be considered federal government records for the purposes of the Freedom of Information Act, 42 U.S.C. § 552.

 

(iii)                                                       If the Borrower, the Sponsor or any Affiliate of the Borrower or the Sponsor intends to enter into: (i) enter into a Davis-Bacon Act Covered Contract after the Financial Closing Date; (ii) materially change the scope of work of any Davis-Bacon Act Covered Contract; or (iii) exercise any option to extend the term of a Davis-Bacon Act Covered Contract to perform work for a period of time for which it was not obligated under the terms of the original contract (subsections (i), (ii) and (ii) collectively, “Davis- Bacon Actions”), the Borrower shall provide DOE: (A) a statement of the work for any DBA Contract Party that will perform construction, alteration, or repair of a building or work financed in whole or in part by the Guaranteed Loan; (B) notice of intent to exercise any option described in subsection (iii) above; and (C) any other information requested by DOE relating to such Davis-Bacon Action. This information shall be provided no less than ten Business Days prior to the occurrence of such Davis-Bacon Action. Promptly after execution of any Davis-Bacon Act Covered Contract, or other document evidencing a Davis-Bacon Action, a copy of such document shall be provided to DOE.

 

(i)                                               ERISA Covenants.

 

(i)                                                             The Borrower shall do, and shall cause each of its ERISA Affiliates to do, each of the following: (A) maintain each Pension Plan in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code or other federal or state law, (B) cause each Qualified Plan to maintain its qualified status under Section 401(a) of the Internal Revenue Code, (C) timely make all required contributions to any Pension Plan, (D) in the case of the Borrower, not become a party to any Multiemployer Plan and, in the case of any ERISA Affiliate, not become party to any Multiemployer Plan except as would not reasonably be expected to have a Material adverse Effect, (E) ensure that all liabilities under each Pension Plan are either (i) funded to at least the minimum level required by law or, if higher, to the level required by the terms governing such Pension Plan or (ii) provided for or recognized in the Financial Statements most recently delivered to the Loan Servicer under Section 6.1 and (F) 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.

 

(ii)                                                          The Borrower shall not, nor shall it permit any of ERISA Affiliate to, (A) terminate any Pension Plan so as to result in any material (in the opinion of DOE) liability to the Borrower or any ERISA Affiliate, (B) permit to exist any ERISA Event, or

 

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any other event or condition, that presents the risk of a material (in the opinion of DOE) liability to any ERISA Affiliate, (C) 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 DOE) liability to the Borrower or any ERISA Affiliate, (D) enter into any new Plan or modify any existing Plan so as to increase its obligations thereunder that could result in any material (in the opinion of DOE) liability to the Borrower or any ERISA Affiliate or (E) permit the present value of all nonforfeitable accrued benefits under any Pension Plan (using the actuarial assumptions utilized by the PBGC upon termination of an employee pension benefit plan subject to Title IV of ERISA) materially (in the opinion of DOE) to exceed the fair market value of the Pension Plan’s assets allocable to such benefits, all determined as of the most recent valuation date for each such Pension Plan.

 

(j)                                              CCR Registration. The Borrower shall maintain its CCR registration at all times.

 

(k)                                           Corrupt Practices Laws.

 

(i)                                                             All Borrower Entities and their respective officers, directors, employees and agents shall comply with all applicable Corrupt Practices Laws in obtaining any consents, licenses, approvals, authorizations, rights, or privileges with respect to the Project;

 

(ii)                                                          All Borrower Entities and their respective officers, directors, employees and agents shall otherwise conduct the Project and the Borrower’s business in compliance with all applicable Corrupt Practices Laws.

 

(iii)                                                       The internal management and accounting practices and controls of all Borrower Entities shall at all times be adequate to ensure compliance with all Corrupt Practices Laws.

 

(iv)                                                      If any Major Project Participant, person that Controls a Major Project Participant, or any of their respective employees or agents fail to comply with OFAC and all applicable Corrupt Practices Laws in obtaining any consents, licenses, approvals, authorizations, rights, or privileges with respect to the Project or, otherwise, in conducting activities in connection with the Project, the Borrower shall, within 30 days of Knowing that such Person has so failed to comply, engage and continue to engage in constructive discussions with DOE regarding the removal or replacement of such Person or, if such removal or replacement is not reasonably feasible, the implementation of other mitigation measures.

 

SECTION 6.25.        Anti-Terrorism Order.

 

If any Major Project Participant or Person that Controls a Major Project Participant fails to comply with the Anti-Terrorism Order, the Borrower shall, within 30 days of Knowing that such Person has so failed to comply, engage and continue to engage in constructive discussions with DOE regarding the removal or replacement of such Person or, if such removal or replacement is not reasonably feasible, the implementation of other mitigation measures.

 

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SECTION 6.26.        Borrower Bankruptcy Remote.

 

The Borrower shall do all things necessary to maintain its corporate existence separate and apart from any other Borrower Entity including:

 

(a)                                      maintaining at least one independent director who (i) is not currently and has not been during the five years preceding the date of this Loan Guarantee Agreement an officer, director, or employee of any other Borrower Entity or SunPower and (ii) is not a stockholder or member of any other Borrower Entity or SunPower;

 

(b)                                      conducting its business from an office separate from those of any other Borrower Entity (but which may be located in the same facility as any other Borrower Entity);

 

(c)                                       having stationery and other business forms and a telephone number separate from those of any other Borrower Entity;

 

(d)                                      being at all times adequately capitalized in light of its contemplated business;

 

(e)                                       providing at all times for its own operating expenses and liabilities from its own funds (including Advances and Equity Contributions);

 

(f)                                        maintaining its assets, funds and transactions separately from those of any other Borrower Entity, reflecting such assets and transactions in financial statements separate and distinct from those of any other Borrower Entity, and evidencing such assets and transactions by appropriate entries in books and records separate and distinct from those of any other Borrower Entity;

 

(g)                                       holding itself out to the public under the Borrower’s own name as a legal entity separate and distinct from any other Borrower Entity;

 

(h)                                      holding regular duly noticed meetings, or obtaining appropriate consents, of its board of directors (or equivalent governing body), and making and retaining minutes of such meetings, as are necessary or appropriate to authorize all of the Borrower’s actions required by law to be authorized by its board of directors (or equivalent governing body);

 

(i)                                          not engaging in any transaction with any other Borrower Entity, except as permitted by this Loan Guarantee Agreement;

 

(j)                                         not maintaining any joint account with any other Borrower Entity or becoming liable as a guarantor or otherwise with respect to any debt or contractual obligation of any other Borrower Entity (other than solely by reason of being a member of a unitary group for state tax purposes);

 

(k)                                      not directing or participating in the management of any other Borrower Entity;

 

(1)                                      not making any payment or distribution of assets with respect to any obligation of any other Borrower Entity or granting an adverse claim on any of its assets to secure any obligation of any other Borrower Entity;

 

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(m)                                  not making loans or advances or otherwise extending credit to any other Borrower Entity; and

 

(n)                                      not holding itself out as having agreed to pay, or as being liable (primarily or secondarily) for, any obligations of any other Borrower Entity (other than solely by reason of being a member of a unitary group for state tax purposes).

 

SECTION 6.27.        Internal Controls.

 

The Borrower, the Holding Company, NRG Solar Sunrise LLC, the Intermediate Parent Company and the Sponsor shall:

 

(a)                                      Maintain internal accounting controls, sufficient to provide reasonable assurances that:

 

(i)                                                             transactions will be executed in accordance with management’s general or specific authorizations,

 

(ii)                                                          transactions will be recorded as necessary to permit preparation of financial statements in conformity with GAAP, and to maintain accountability for assets,

 

(iii)                                                       access to assets will be permitted only in accordance with management’s general or specific authorization, and

 

(iv)                                                      the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

(b)                                      Establish internal controls and reporting systems that are reasonably expected to them to satisfy the reporting obligations under the Financing Documents and promptly identify any cost overruns.

 

(c)                                       Record, store, maintain, and operate their records, systems, controls, data and information using means (including any electronic, mechanical or photographic process, whether computerized or not) that are under their exclusive ownership and direct control (including all means of access thereto and therefrom).

 

(d)                                      Disclose in writing to their outside auditors and any audit committee:

 

(i)                                                             any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting that are reasonably likely to adversely affect their ability to record, process, summarize and report financial information,

 

(ii)                                                          any fraud, whether or not material, that involves management or other employees who have a significant role in such entity’s internal controls over financial reporting, and

 

(iii)                                                       promptly provide copies of any disclosures referred to in this clause (d) to DOE.

 

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SECTION 6.28.        Corporate Governance.

 

The Borrower, the Holding Company, NRG Solar Sunrise LLC, the Intermediate Parent Company and the Sponsor shall:

 

(a)                                      No later than six months after the Guarantee Agreement Date, adopt a written code of ethics that will be applicable to all employees and be consistent with the requirements of Item 406 of Regulation S-K, promulgated under the Securities Act of 1933 (as amended). Such code of ethics must be reasonably satisfactory to DOE, and copies thereof, and any amendments thereto, shall be provided promptly to DOE,

 

(b)                                      Cause each of their respective directors and officers to comply with the provisions of SEC Exchange Act Rule 13b2-2 in dealing with their auditors to assure their independence in the preparation of the reports required by the Financing Documents, as if such rules were otherwise applicable to them with respect to the preparation of such reports, and

 

(c)                                       Establish procedures, reasonably satisfactory to DOE, to insure that their auditors comply with the auditor independence rules established by the SEC pursuant to Section 10A of the Securities Exchange Act, as if applicable to such auditors with respect to any reports provided to DOE pursuant to the Financing Documents.

 

SECTION 6.29.        Cash Grant Application.

 

(a)                                      The Borrower shall comply with (i) all Cash Grant Application requirements (including any preliminary filing requirements), (ii) all obligations set forth in the Cash Grant Guidance, including all annual filing requirements and the delivery of all reports, certificates and other such documents as required thereunder, and (iii) all limitations set forth in the Cash Grant Guidance relating to (A) transfers to Disqualified Persons and (B) claims in respect of any Section 45 or Section 48 tax credits. The Borrower shall make every election that is necessary to claim and apply for the Cash Grant in accordance with the Cash Grant Guidance and Applicable Law.

 

(b)                                      As soon as practicable following, and in any case within sixty (60) days after the Placed in Service Date for a phase of the Project, the Borrower shall (i) prepare and file, or cause to be filed, a Cash Grant Application for such phase of the Project as a single property with the United States Treasury Department in a manner consistent with the Cash Grant Guidance and Applicable Law and otherwise true, correct and complete in all material respects; (ii) provide all supporting documentation required to be filed with such Cash Grant Application or subsequently thereto in accordance with the Cash Grant Guidance; (iii) promptly respond to all requests for further information with respect to such Cash Grant Application; and (iv) make other related filings that are necessary or advisable with regard to the Cash Grants.

 

SECTION 6.30.        Cash Grant Guidance Terms and Conditions.

 

(a)                                      During the Recapture Period for each respective Cash Grant Borrower shall comply with the Cash Grant Guidance and the Cash Grant Terms and Conditions, including all requirements to file annual performance reports, file annual certifications that neither the Project 

 

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nor interest therein has been disposed of to a Disqualified Person, and that the Project continues to qualify as “specified energy property” (as such terms are defined in the Cash Grant Terms and Conditions) and maintain proper project, financial and accounting records.

 

(b)                                      To the extent required by the Cash Grant Guidance and the Cash Grant Terms and Conditions during the Recapture Period for each respective Cash Grant, Borrower shall deliver to the U.S. Department of the Treasury (i) no later than twenty-one (21) days following the anniversary of the Placed in Service Date and for each successive anniversary of the Placed in Service Date for the next five years thereafter, an annual project performance report and a certification that no direct or indirect equity interests in the Project have been transferred to a Disqualified Person and (ii) the certification that the Project continues to qualify as “specified energy property” (as such terms are defined in the Cash Grant Terms and Conditions). During the Recapture Period Borrower shall cause maintain proper financial and accounting records with respect to the Qualifying Costs incurred with respect to the Project in accordance with the requirements of the Cash Grant Guidance and Cash Grant Terms and Conditions

 

SECTION 6.31.        Cargo Preference Act.

 

The Borrower shall comply at all times with all requirements (if any) of the Cargo Preference Act applicable to the Project.

 

SECTION 6.32.        Update of Required Approvals’ Schedules.

 

(a)                                      If, prior to the First Advance Date, Part I or Part II of Schedule 4.2.5 needs to be revised in accordance with Section 4.2.5 to accurately represent the status of any Required Approvals, the Borrower will promptly submit an updated Schedule 4.2.5 to the Loan Servicer reflecting such changes, together with the documentation relating to such changes; provided that no such update shall (i) without the consent of DOE, be deemed to cure the falsity of any certification, representation or warranty previously made to DOE under this Loan Guarantee Agreement or (ii) cause any certification, representation or warranty previously made to DOE under this Loan Guarantee Agreement that was true when made to be false.

 

(b)                                      If, prior to any Quarterly Approval Date or a date of each Advance (as applicable), Part I or Part II of Schedule 4.3.3 or Schedule 4.4.8 (as applicable) needs to be revised in accordance with Section 4.3.3 or Section 4.4.8 (as the case may be) to accurately represent the status of any Required Approvals, the Borrower will promptly submit an updated Schedule 4.3.3  and Schedule 4.4.8 to the Loan Servicer reflecting such changes, together with the documentation relating to such changes; provided that no such update shall (i) without the consent of DOE, be deemed to cure the falsity of any certification, representation or warranty previously made to DOE under this Loan Guarantee Agreement or (ii) cause any certification, representation or warranty previously made to DOE under this Loan Guarantee Agreement that was true when made to be false.

 

SECTION 6.33.        Interest Rate Swaption Agreements.

 

On or before the date that is thirty (30) days after the Guarantee Agreement Date, the Borrower shall deliver to the Loan Servicer fully executed copies of the Interest Rate Swaption 

 

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Agreements, each in form and substance reasonably satisfactory to DOE, and each Interest Rate Swaption Agreement shall have become effective pursuant to its terms.

 

SECTION 6.34.        Maintenance of the CEQA Litigation Support Instruments.

 

Until the date of the Settlement of all Project Claims (if any) filed or asserted prior to the date of Settlement of the Project Claims asserted in Carrizo Commons v. County of San Luis Obispo (San Luis Obispo Superior Court Case No. CV 110314) (the “CEQA Litigation Support Release Date”), the Borrower shall maintain (or cause to be maintained) the CEQA Litigation Support Instruments in full force and effect. Upon the CEQA Litigation Support Release Date, all CEQA Litigation Support Instruments shall be released by DOE. Any determination regarding the particular CEQA Litigation Support Instruments to be provided in order to meet the requirements of this Section 6.34 shall be made by SunPower on or before each CEQA Litigation Support Determination Date; provided that if SunPower fails to make any election on or before such CEQA Litigation Support Determination Date then the form(s) of CEQA Litigation Support Instruments last so elected by SunPower shall be deemed to also apply to the six-month period beginning on such CEQA Litigation Support Determination Date.

 

SECTION 6.35.        Maintenance of the Cash Grant Shortfall Security.

 

(a)                                      Until such time as the Cash Grant Bridge Loans have been repaid in full, the Borrower shall maintain (or cause to be maintained) the Cash Grant Shortfall Security in full force and effect.

 

(b)                                      All amounts of Pre-Completion Revenues that are on deposit in the Restricted Payment Account after the Cash Grant Support Release Date will, subject to the requirements of section 4.10 of the Accounts Agreement, reduce the Base Equity Commitment dollar for dollar.

 

(c)                                       On the Cash Grant Support Release Date, the Base Equity Commitment will, subject to the requirements of section 4.10 of the Accounts Agreement, be reduced dollar for dollar for each dollar on deposit in the Restricted Payment Account; provided that such reduction will not, in any event, exceed the positive difference, if any, between the Actual Aggregate Cash Grant Security Support and Phase 3 Cash Grant Support Amount.

 

(d)                                      On the Cash Grant Support Release Date, the Cash Grant Shortfall Security will be reduced dollar for dollar, pro rata (in a ratio reflective of the then current relative amounts of the NRG Cash Grant Shortfall Security and the SunPower Cash Grant Shortfall Security), in an amount equal to the positive difference, if any, between the Actual Cash Grant Security Support and the Phase 3 Cash Grant Support Amount. For the avoidance of doubt, no Cash Grant Shortfall Security will be released under this Section 6.35(d) unless all amounts then on deposit in the Restricted Payment Account shall have first been applied to reduce the Base Equity Commitment on the Cash Grant Support Release Date.

 

(e)                                       For the avoidance of doubt, there shall be no requirement to replenish or repost collateral released pursuant to Section 6.35(c) or Section 6.35(d).

 

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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 FFB Commitment has terminated, unless DOE waives compliance in writing:

 

SECTION 7.1.               Indebtedness.

 

The Borrower shall not, nor shall it agree to, incur, create, guarantee, assume, permit to exist or otherwise become liable for any Indebtedness, except for:

 

(a)                                      Indebtedness incurred under the Financing Documents;

 

(b)                                      Capital Leases and purchase money Indebtedness, in each case, incurred by the Borrower to finance the acquisition of Immaterial Equipment, in an aggregate amount at any time not in excess of $500,000, and any refinancings, renewals or extensions thereof; provided that any such Indebtedness (i) shall be secured only by the Immaterial Equipment acquired (and any accessions, additions and replacements, and any proceeds arising from the Disposition, of such Immaterial Equipment) in connection with the incurrence of such Indebtedness and (ii) shall not exceed an amount equal to one hundred percent (100%) of the aggregate consideration paid to acquire such asset; and

 

(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 ninety (90) days past the due date therefor.

 

SECTION 7.2.               Liens.

 

The Borrower shall not, nor shall it agree to, create, assume or otherwise permit to exist any Lien upon any of the Collateral or any of its other property, whether now owned or hereafter acquired, or in any proceeds or income therefrom, other than Permitted Liens.

 

SECTION 7.3.               Leases.

 

The Borrower shall not enter into any agreement or arrangement to acquire by Lease the use of any Property or equipment of any kind (including by sale-leaseback or otherwise), except for Permitted Leases in an amount not in excess of the amount budgeted therefor in the Construction Budget or Operating Forecast, as applicable.

 

SECTION 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 Guarantee Agreement Date.

 

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SECTION 7.5.               Capital Expenditures.

 

The Borrower shall not make any Capital Expenditure in any year except for (i) expenditures contemplated by the Construction Budget or any Operating Budget, (ii) expenditures made from the proceeds of insurance to the extent permitted by the Financing Documents, (iii) to the extent any required Major Maintenance Cost constitutes Capital Expenditures, such Capital Expenditures, but solely to the extent of funds on deposit in the Major Maintenance Reserve Account, (iv) expenditures from amounts that are available and could have been paid as Restricted Payments to the Sponsor under Section 7.10 and (v) other Capital Expenditures in an aggregate in any Fiscal Year not in excess of Five Million Dollars ($5,000,000), but solely to the extent any funds required for such Capital Expenditures are provided to the Borrower by the Sponsor (or its Affiliates) as equity contributions; provided that, in each case, in no event shall any Capital Expenditure permitted under this Section 7.5 expand the capacity of the Project in any material respect, change the nature or functional purpose of the Project or permit any activities that are prohibited under Section 7.21.

 

SECTION 7.6.               Subsidiaries; Partnerships.

 

The Borrower shall not: (i) form or have any Subsidiaries, (ii) enter into any partnership or a joint venture, (iii) acquire any Equity Interests in or make any capital contribution to any other Person, (iv) 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 (v) 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 or any other operating agreements executed by the Borrower with DOE’s consent.

 

SECTION 7.7.               Ordinary Course of Conduct; No Other Business.

 

The Borrower shall not: (i) 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, (ii) 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, (iii) change its name or take any other action that might adversely affect the Liens created by the Security Documents or (iv) fail to maintain its existence and its right to carry on its business.

 

SECTION 7.8.               Merger; Bankruptcy; Dissolution;  Transfer of Assets.

 

The Borrower shall not, nor shall it agree to:

 

(a)                                           enter into any transaction of merger or consolidation (other than pursuant to the Merger Documents);

 

(b)                                           liquidate, wind up or dissolve itself or otherwise commence any Insolvency Proceeding in respect of itself or file any petition or pass a resolution seeking the same;

 

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(c)                                            dispose of all or any part of its Property, including its interest in the Project (including leases or subleases related to the Project Site), whether now owned or hereafter acquired, except for Permitted Dispositions; or

 

(d)                                           acquire by purchase or otherwise the business, Property or fixed assets of, or Equity Interests or other evidence of beneficial ownership interests in any Person, other than (i) purchases or other acquisitions of inventory or materials or spare parts or Capital Expenditures each in the ordinary course of business in accordance with the applicable budget or (ii) purchases or other acquisitions permitted by the Transaction Documents; or

 

(e)                                            transfer or release (other than as permitted by clause (c) above) of the Collateral, or other similar actions.

 

SECTION 7.9.               Organizational Documents; Fiscal Year;  Legal Form; Capital Structure.

 

The Borrower shall not (i) amend or modify its Organizational Documents (other than to correct minor or technical errors that do not change any Person’s rights or obligations or to consummate transactions permitted by the Financing Documents) or (ii) amend or modify its legal form, its Fiscal Year or its capital structure (including the issuance of any options, warrants or other rights with respect thereto).

 

SECTION 7.10.        Restricted Payments.

 

(a)                                           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 investors on account of any Equity Interest (each of the foregoing a “Restricted Payment”) unless the Borrower satisfies each of the following conditions to DOE’s satisfaction:

 

(i)                                                                  the Borrower provides DOE and the Collateral Agent not less than ten (10) Business Days’ notice of its request to make a Restricted Payment;

 

(ii)                                                               such Restricted Payment is made within forty-five (45) days following a Payment Date;

 

(iii)                                                            no other Restricted Payment has been made during the then current semi-annual period;

 

(iv)                                                           the Project Completion Date has occurred;

 

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

 

(vi)                                                           all reserves in the Debt Service Reserve Account, the O&M Reserve Account and the Major Maintenance Reserve Account have been fully funded (or secured by Reserve Letters of Credit), both before and after the Restricted Payment is made;

 

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(vii)                                                        the Historical Debt Service Coverage Ratio for the immediately preceding rolling twelve (12) months (or the applicable shorter stub period) and the Projected Debt Service Coverage Ratio for the immediately succeeding rolling twelve (12) months, in each case measured from the Payment Date referred to in Section 7.10(a)(ii), is at least 1.20 to 1.00; and

 

(viii)                                                     at least one (1) scheduled principal payment has been made; 

 

provided that, notwithstanding the foregoing, if (x) no Event of Default or Potential Event of Default has occurred or is continuing, (y) the Project Completion Date has occurred and (z) all Guaranteed Cash Grant Bridge Loans have been, together with all fees and interest accrued thereon, fully repaid in accordance with Section 3.4.3(g) or otherwise, the Borrower may make a Restricted Payment, in an amount not to exceed the proceeds of the Cash Grants not used to repay all Guaranteed Cash Grant Bridge Loans, together with all fees and interest accrued thereon, in full, to the Holding Company for further distribution to the direct and indirect owners of the Holding Company (or as otherwise directed by the Sponsor); provided  further that, in the event that the Borrower receives Interest Rate Swaption Proceeds after the Project Completion Date and all Project Costs incurred during the Construction Period have been paid in full, then the Borrower may make a Restricted Payment in an amount not to exceed to (A) 100% of such Interest Rate Swaption Proceeds multiplied by (B) the percentage equal to (1) the Equity Contribution component of the Debt to Equity Ratio divided by (2) the sum of the Guaranteed Loan component of the Debt to Equity Ratio and the Equity Contribution component of the Debt to Equity Ratio, provided  further that the Borrower may make the payment contemplated by Section 6.1(d) of the Equity Funding Agreement and such payment shall not be deemed a Restricted Payment.

 

In all cases in accordance with Section 7.10(a) above and, in any event, Restricted Payments (other than Restricted Payments described in the proviso to Section 7.10(a)) cannot be made until all past due mandatory prepayments have been made pursuant to Section 3.4.3 and all such Restricted Payments permitted hereunder will only include Monies on deposit in or credited to the Restricted Payment Account on the Payment Date that coincides with the date of such Restricted Payment (or the immediately preceding Payment Date if such Restricted Payment is not made on a Payment Date).

 

(b)                                      For the avoidance of doubt:

 

(i)                                     Nothing in Section 7.10(a) shall preclude the Borrower from withdrawing cash on deposit in the Restricted Payment Account (without satisfying the conditions above) as long as such cash is used for the purposes of the Project and if the prior written consent of DOE has been obtained.

 

(ii)                                  Borrower may make up to three (3) reimbursements of Equity Contributions that shall have previously funded Eligible Project Costs, and such reimbursements shall not be deemed to be a Restricted Payment; provided that (A) the Debt to Equity Ratio after giving effect to such reimbursement would be no greater than the Maximum Debt to Equity 

 

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Ratio and (B) either (x) the Debt to Equity Ratio has previously reached the Maximum Debt to Equity Ratio at least once or (y) the aggregate Equity Contributions are in excess of the Base Equity Commitment.

 

(iii)                               Nothing in Section 7.10(a) shall preclude the Borrower from transferring funds in accordance with section 4.10 of the Accounts Agreement (A) prior to the Cash Collateral Support Release Date, with DOE’s consent, for the purposes of paying any Existing Cost Overruns and (B) after the Cash Collateral Support Release Date, for the purposes of paying any Existing Cost Overruns and to reduce any Base Equity Commitment, in accordance with section 4.10 of the Accounts Agreement; provided, however, that no such reduction of Base Equity Commitment shall occur until the DOE (in consultation with the Independent Engineer) has determined, to its reasonable satisfaction, that all Existing Cost Overruns have been fully funded.

 

SECTION 7.11.        Redemption or Issuance of Stock.

 

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

 

SECTION 7.12.        Other Transactions.

 

Except for the Transaction Documents in effect as of the Guarantee Agreement Date, the Borrower shall not, directly or indirectly, enter into any transaction or series of related transactions with any Person (including any Borrower Affiliate or SunPower) (i) other than in the ordinary course of business and on an arm’s-length basis or (ii) whereby the Borrower might pay more than the fair market value for the products of others.

 

SECTION 7.13.        Accounts.

 

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

 

SECTION 7.14.        Commissions.

 

The Borrower shall not pay:

 

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

 

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salaries, bonuses, commissions, management fees, consulting fees, and technical assistance fees other than as agreed in the O&M Agreement, the EPC Contract and other Transaction Documents as of the Guarantee Agreement Date.

 

SECTION 7.15.                         Amendment of and Notices Under Transaction Documents.

 

The Borrower shall not (other than to correct minor or technical errors that do not change any Person’s rights or obligations), except with the prior written consent of DOE:

 

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

 

(i)                                any Project Document, except for Change Orders under any Construction Contract that (A) do not change the Construction Budget or the Project Milestone Schedule, except for Approved Construction Changes, (B) could not reasonably be expected to delay the occurrence of Operational Completion beyond the Guaranteed Project Completion Date and (C) could not reasonably be expected to have a Material Adverse Effect; provided, that the Borrower shall give DOE and the Independent Engineer prompt written notice of such Change Orders;

 

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

 

(iii)                          any Financing Document; or

 

(iv)                         any agreement replacing the Operator;

 

For the avoidance of doubt, any increase in the amount of Development Term Security (as such term is defined in each Power Purchase Agreement) under any Power Purchase Agreement shall be a material amendment to such Power Purchase Agreement.

 

(b)                                 certify, consent to or otherwise permit through a Change Order or otherwise “Final Completion” to occur under the EPC Contract; provided that DOE will not unreasonably withhold or delay any request by Borrower to consent to such action;

 

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

 

(d)                                 amend or modify any of the CEQA Litigation Support Instruments, the NRG Cash Grant Support Security or the SunPower Cash Grant Support Security or consent to any amendment or modification thereof (except to amend, modify or replace the same, as permitted by the Loan Guarantee Agreement).

 

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SECTION 7.16.                           Operating Costs Expenditures; Approved Construction Changes; Amendments.

 

(a)                                 The Borrower shall not (i) without having first proposed an amendment to the then-current Operating Budget in accordance with Section 6.11.2 (and DOE having approved such amendment in accordance with such Section), incur or pay any Operating Costs that are not contemplated in such Operating Budget (other than application of Loss Proceeds on terms and conditions set forth in Section 6.22, incurrence of Capital Expenditures on terms and conditions set forth in Section 7.5, or incurrence of Major Maintenance Costs (as that term is defined in the Accounts Agreement) on terms and conditions set forth in the Accounts Agreement, the application of Performance Liquidated Damages on the terms and conditions set forth in Section 3.4.3(a), the application of proceeds from a Permitted Disposition on the terms and conditions set forth in Section 3.4.3(d), the application of Major Project Document Breach Damages or Major Project Document Termination Damages or the application of funds to settle disputes in accordance with the terms and conditions set forth in Section 7.19), except to the extent payment of such Operating Costs would not cause aggregate expenditures for the period covered by such Operating Budget to exceed 105% of the aggregate amount of expenditures contemplated in such Operating Budget for the period covered, (ii) without having notified DOE, incur or pay any Operating Costs if aggregate expenditures for any category of such Operating Budget for the applicable time period exceed 107.5% of the aggregate expenditures contemplated for such category in such Operating Budget for such period or (iii) fail to incur or pay any Operating Costs contemplated in such Operating Budget except to the extent that such unincurred or unpaid Operating Costs would not result in aggregate expenditures to be less than 90% of the aggregate amount of fixed Operating Costs contemplated for such period in such Operating Budget. The Borrower shall promptly (and in any event within five (5) Business Days) provide notice to DOE of any proposed expenditure in excess of such threshold.

 

(b)                                 The Borrower shall not materially change, reallocate, amend, modify, or supplement or permit or consent, directly or indirectly, to any material changes, reallocations, amendments, modifications, or supplements (each a “Construction Change”) of any of the provisions of any of the Project Plans, the Construction Budget, the Financial Plan, the Project Milestone Schedule or the Base Case Projections, except for the following Construction Changes (“Approved Construction Changes”):

 

(i)                           any Construction Change that (A) has been submitted in writing by the Borrower to DOE (including an explanation in reasonable detail of the reasons for such Construction Change) and (B) has received a written approval from DOE (such approval not to be unreasonably withheld or delayed); or

 

(ii)                        any Construction Change to (i) allocate contingencies to Borrower Project Costs set forth in the Construction Budget or (ii) change the Project Milestone Schedule; provided that such Construction Change (A) could not reasonably be expected to result in a material breach of either Power Purchase Agreement, (B) does not extend any Major Project Milestone or any critical path item that could reasonably be expected to result in a Major Project Milestone being missed, (C) could not reasonably be expected to cause the Operational Completion Date to occur later than the Guaranteed Operational Completion Date or (D) could not reasonably be expected to result in a Material Adverse Effect; provided further that the date of any Major Project Milestone may be moved as a result of an event that constitutes an Event of Force Majeure under the EPC Contract (as the EPC Contract is in effect on the Guarantee Agreement Date) to the extent such Event of Force

 

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Majeure affords the Borrower schedule relief under the related milestone in the Power Purchase Agreements and, in such case, the Borrower shall present to DOE for approval any mitigation or recovery plan necessitated by such Event of Force Majeure, which approval will not be unreasonably withheld, conditioned or delayed; provided,  further,  however that, with respect to any “Network Upgrades” listed on Schedule 1.1, the above proviso shall not apply and the date of any such Major Project Milestone may be moved as a result of any scheduling change with respect to such “Network Upgrade”; provided that, the Borrower, promptly after receiving notice thereof, notifies DOE of such scheduling change and, in such case, the Borrower shall present to DOE for approval any mitigation or recovery plan necessitated by such scheduling change, which approval will not be unreasonably withheld, conditioned or delayed.

 

SECTION 7.17.                         Other Agreements.

 

The Borrower shall not enter into or become a party to any agreement, contract or loan commitment outside the ordinary course of business other than (i) the Transaction Documents as in effect on the Guarantee Agreement Date (or amended with DOE’s consent), (ii) agreements, contracts or loan commitments expressly contemplated or permitted by the Transaction Documents as in effect on the Guarantee Agreement Date, (iii) the Interest Rate Swaption Agreements or (iv) as contemplated by the Construction Budget, Project Milestone Schedule, the Operating Plan or the Operating Forecast.

 

SECTION 7.18.                         Hedging Agreements.

 

The Borrower shall not enter into any Hedging Agreement, foreign currency trading or other speculative transactions other than (a) the Interest Rate Swaption Agreements and (b) any such Hedging Agreement consented to in writing by DOE.

 

SECTION 7.19.                         Compromise or Settlement of Disputes.

 

The Borrower shall not agree or otherwise consent to settle or compromise: (i) any single Action in excess of Ten Million Dollars ($10,000,000) net of any applicable insurance proceeds received or reasonably expected to be received by the Borrower, in each case without the prior written consent of DOE or (ii) any material dispute under any Project Document without the prior written consent of DOE.

 

SECTION 7.20.                         Abandonment or Suspension of Project.

 

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

 

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SECTION 7.21.                         Improper Use.

 

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

 

SECTION 7.22.                         Assignment.

 

Other than the assignment of the Project Documents and Governmental Approvals to the Collateral Agent as security for the benefit of the Secured Parties, the Borrower shall not assign or otherwise transfer its rights under any of the Transaction Documents or Required Approvals to any Person.

 

SECTION 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.

 

SECTION 7.24.                         Environmental Laws.

 

The Borrower shall not undertake any action or Release any Hazardous Substances in material violation of any Environmental Law and the Project shall not be operated in any manner that would pose a material hazard to public health or safety or to the environment.

 

SECTION 7.25.                         ERISA.

 

The Borrower shall not adopt, establish, participate in, or incur any obligation to contribute to, any Pension Plan or Multiemployer Plan or incur any liability to provide post- retirement welfare benefits other than as required under any Applicable Law. No ERISA Affiliate of Borrower shall adopt, establish, participate in, or incur any obligation to contribute to, any Pension Plan or Multiemployer Plan or incur any liability to provide post-retirement welfare benefits other than as required under any Applicable Law, except as would not reasonably be expected to have a Material Adverse Effect.

 

SECTION 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.

 

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SECTION 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 losing its status as an “exempt wholesale generator” as defined in the Public Utility Holding Company Act.

 

SECTION 7.28.                         Subordinated Debt.

 

The Borrower shall not incur any subordinated debt.

 

SECTION 7.29.                           Powers of Attorney.

 

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

 

ARTICLE 8
  EVENTS OF DEFAULT; REMEDIES

 

SECTION 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 Financing Documents. The Borrower shall fail to pay, in accordance with the terms of this Loan Guarantee Agreement, the FFB Documents or any other Financing Documents (whether at scheduled maturity, as a required prepayment, by acceleration or otherwise), (i) any principal amount of the Advances, any Capitalized Interest Amounts, interest otherwise due and payable in the respect of the Guaranteed Loans or any DOE Guarantee Payment on or before the date such amount is due or (ii) any scheduled fee, charge or other amount due under any Financing Document on or before the date such amount is due and, solely in the case of any amounts contemplated by this clause (ii), such failure to pay shall continue unremedied for a period of five (5) Business Days after the date on which such amount was due; provided that the Borrower shall not be in default under this Section 8.1(a) if it has timely remitted all such payments to the Loan Servicer but the Loan Servicer has failed to timely remit payments to FFB.

 

(b)                                      Misstatements; Omissions.

 

(i)                           Any representation or warranty confirmed or made in any Financing Document by or on behalf of the Borrower, any other Borrower Entity or in any certificate of the Borrower or any other Borrower Entity (or any Authorized Officer thereof), Financial Statement or other document provided by or on behalf of any such Person to DOE, the Collateral Agent, the Loan Servicer, or any 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 (other than a representation or a certification as to the amount (but not the timing of or eligibility for the Cash Grant).

 

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(ii)                        Any representation or warranty confirmed or made in any Financing Document by or on behalf of any Major Project Participant or in any certificate of a Major Project Participant (or any Authorized Officer thereof), Financial Statement or other document provided by or on behalf of any such Person to DOE, the Collateral Agent, the Loan Servicer, or any Independent Consultant in connection with the transactions contemplated by the Transaction Documents shall be found to have been incorrect, false or misleading when made or deemed to have been made, to the extent the same results in a Material Adverse Effect.

 

(c)                                       Covenants Without Cure Period. The Borrower or any Borrower Entity shall fail to perform or observe any of its obligations under (i) any term, covenant or agreement set forth in (i) Section 6.1.7, Section 6.1.8, Section 6.7, Section 6.20(b), Section 6.22, Section 6.29, Section 6.30 or Article 7 or (ii) any material term, covenant or agreement set forth in the Security Agreement or (iii) any negative covenants in any other Financing Document, in each case where default under the applicable term, covenant, agreement or negative covenant has not been remedied within the cure period, if any, specified for such negative covenant in such Financing Document.

 

(d)                                      Covenants and Other Agreements with Cure Period. The Borrower or any Borrower Entity shall fail to perform or observe any term, covenant or agreement in any Financing Document (other than those set forth in Section 8.1(c)), where such default has not been remedied within thirty (30) days after the Borrower Knew about such default or received notice from DOE that such default has occurred, in each case if such default is capable of being remedied within such time period. If the default described in this Section 8.1(d) is not reasonably capable of remedy within thirty (30) days after the Borrower receives notice of the default from DOE, the Borrower shall have an additional ninety (90) days to cure the default, as long as the Borrower commences a cure within thirty (30) days and diligently pursues such cure.

 

(e)                                       Environmental Matters. (i) Any Action under or relating to any Environmental Law or asserting any Environmental Claim is initiated, or (ii) any Governmental Judgment is issued relating to any Environmental Claim, Environmental Law or any Required Approval issued under any Environmental Law, in each case, that has, or could reasonably be expected to have, a Material Adverse Effect.

 

(f)                                        Breach or Default Under Project Documents. (i) Any Major Project Participant shall breach or default under any of its material agreements, conditions, terms or covenants contained in any Major 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 (ii) any other Project Participant (other than a Major Project Participant) shall breach or default under its material agreements, conditions, terms or covenants contained in any Major Project Document to which it is a party and (x) such breach or default shall continue unremedied beyond any applicable cure period set forth therein and (y) such Project Participant (and Project Document) is not replaced in accordance with Section 6.13.

 

(g)                                       Equity Funding Agreement. Any breach of or default under the Equity Funding Agreement occurs and such default or breach continues beyond the applicable grace period.

 

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(h)                                      Unenforceability, Termination, Repudiation or Transfer of Any Transaction Document. This Loan Guarantee Agreement, any other Financing Document or any Major Project Document or any material provision hereof or thereof at any time for any reason (i) is or becomes invalid, illegal, void or unenforceable or any party thereto has repudiated or disavowed or taken any action to challenge the validity or enforceability of such agreement, (ii) except as otherwise expressly permitted hereunder, ceases to be in full force and effect except at the stated termination date thereof or (iii) shall cease to give the Collateral Agent, FFB or DOE in any material respect the Liens, rights, powers and privileges purported to be created thereby or hereby.

 

(i)                                          Security Interests. Any of the Security Documents shall fail to provide the Liens, security interests, rights, titles, interests, remedies, powers or privileges intended to be created thereby (including the priority intended to be created thereby) or such Lien shall fail to have the priority contemplated therefor in such Security Documents, or any such Security Document or Lien shall cease to be in full force and effect, or the validity thereof or the applicability thereof to the Advances, the Secured Obligations or any other obligations purported to be secured or guaranteed thereby or any part thereof, shall be disaffirmed by or on behalf of the Borrower, the Sponsor or any other Person party thereto (other than DOE, the Loan Servicer or the Collateral Agent).

 

(j)                                         Default under Other Indebtedness. The Borrower shall default under any agreement or instrument evidencing Indebtedness for Borrowed Money (other than the Guaranted Loans) with an aggregate principal amount in excess of Five Million Dollars ($5,000,000), if the effect of such default is to accelerate, or to permit the acceleration of, the maturity of such Indebtedness for Borrowed Money.

 

(k)                                      Judgments. One or more Governmental Judgments shall be entered against (i) the Borrower and such Governmental Judgments shall not be vacated, discharged or stayed or bonded pending appeal for any period of thirty (30) days, and the aggregate amount of all such Governmental Judgments outstanding at any time (except to the extent any applicable insurer(s) have acknowledged liability and paid therefor) exceeds Ten Million Dollars ($10,000,000) or (ii) the Sponsor (prior to the Project Completion Date) or the EPC Contractor (prior to the Operational Completion Date), and such Governmental Judgments shall not be vacated, discharged or stayed or bonded pending appeal for any period of sixty (60) consecutive days and could reasonably be expected to have a Material Adverse Effect.

 

(1)                                           Bankruptcy; Insolvency; Dissolution.

 

(i)                           Involuntary Bankruptcy, Etc. An Insolvency Proceeding has been commenced against:

 

(A)                                    the Borrower if such proceeding continues undismissed for sixty (60) days;

 

(B)                                    the Sponsor (prior to the Project Completion Date) if such proceeding continues undismissed for sixty (60) days;

 

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(C)                               the EPC Guarantor (prior to the Operational Completion Date) if such proceeding continues undismissed for sixty (60) days; or

 

(D)                               or PG&E if (I) such proceeding continues undismissed for sixty (60) days and (II) could reasonably be expected to have a Material Adverse Effect.

 

(ii)                             Voluntary Bankruptcy, Etc.

 

(A)                               The institution by the Borrower of any Insolvency Proceeding with respect to itself, 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 action is taken by any such Person for the purpose of effecting any of the foregoing or any analogous proceeding.

 

(B)                               The institution by the Sponsor (prior to the Project Completion Date) of any Insolvency Proceeding with respect to itself, 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 action is taken by any such Person for the purpose of effecting any of the foregoing or any analogous proceeding.

 

(C)                               The institution by the EPC Guarantor (prior to the Operational Completion Date) of any Insolvency Proceeding with respect to itself, 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 action is taken by any such Person for the purpose of effecting any of the foregoing or any analogous proceeding.

 

(D)                               The institution by PG&E of any Insolvency Proceeding with respect to itself, 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 action is taken by any such Person for the purpose of effecting any of the foregoing or any analogous proceeding

 

(iii)                          Dissolution. The dissolution of the Borrower, the Sponsor (prior to the Project Completion Date), the EPC Guarantor (prior to the Operational Completion Date) or PG&E.

 

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(m)                                       Governmental Approvals and Required Approvals.

 

(i)                                The Borrower, any other Borrower Entity or any Major Project Participant shall fail to obtain, renew, maintain or comply in all material respects with any Required Approval at any time when such Required Approval is required to be obtained, renewed, maintained or complied with;

 

(ii)                             any Required Approval shall, at any time when such Required Approval is required for the Project, 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

 

(iii)                          any proceedings shall be commenced by or before any Governmental Authority for the purpose of rescinding, terminating, suspending, modifying, withdrawing or withholding any such Required Approval, and such proceedings could reasonably be expected to result in a Material Adverse Effect.

 

(n)                                           Use of Project Site. The Borrower shall cease to have the right to (i) possess and use the Project for the purpose of owning, constructing, maintaining and operating the Project in the manner contemplated by the Transaction Documents or (ii) sell or otherwise dispose of any of its leasehold or easement interest in the Project Site or its ownership of the Project other than as expressly permitted by Section 8.26 of the Deed of Trust.

 

(o)                                           Event of Loss. All or substantially all of the Project is destroyed or becomes permanently inoperative as a result of an Event of Loss whether because (i) it is not covered by insurance, (ii) the Loss Proceeds received from the insurance are insufficient to repair or restore the Project to allow it to operate as contemplated in the Transaction Documents or (iii) for whatever reason, the Project is not repaired or restored with the Loss Proceeds received within the time periods specified in the Transaction Documents.

 

(p)                                           Suspension of Construction. Prior to the Project Completion Date, construction of the Project shall be suspended, other than as a result of the occurrence of an Event of Force Majeure, for a period of sixty (60) consecutive days.

 

(q)                                           Suspension of Operation. From and after the Project Completion Date, the Project ceases to operate, other than as a result of the occurrence of an Event of Force Majeure, for a period of sixty (60) consecutive days; provided that, such period may be extended to up to one hundred eighty (180) consecutive days (or such longer period as the DOE may determine, in its sole discretion) from the date on which the Project ceased to operate if (a) the Project cannot be restored to operation within sixty (60) days due solely to the unavailability of the main 34.5kV to 230kV step-up transformer, (b) the Borrower has presented a reasonable plan for remediation of the issue to DOE and the Independent Engineer in the first sixty (60) days following the cessation of operation, (c) the Independent Engineer has confirmed the unavailability of the main 34.5kV to 230kV step-up transformer and the reasonableness of the mitigation plan in such sixty (60) day period and (d) such extension will not result in any counterparty to a Power Purchase Agreement having the right to terminate such Power Purchase Agreement. For the avoidance of doubt, the Borrower shall promptly provide to the Independent

 

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Engineer any such additional information and access to the Project Site as the Independent Engineer may request in order to make the determination required in this clause (q).

 

(r)                                              Failure of Completion to Occur; Insufficient Funding.

 

(i)                                Operational Completion shall not have occurred by the Guaranteed Operational Completion Date;

 

(ii)                             Project Completion shall not have occurred by the Guaranteed Project Completion Date; or

 

(iii)                          at any time prior to the Project Completion Date, in the reasonable opinion of DOE, the remaining Project Costs necessary to achieve Project Completion exceed the Total Funding Available to the Borrower and the Borrower fails within sixty (60) days after receiving notice thereof from DOE to arrange for the provision of the requisite funds (through additional equity contributions) to achieve Project Completion on terms and conditions and from parties reasonably acceptable to DOE.

 

(s)                                             ERISA. (i) There occurs one or more ERISA Events that individually or in the aggregate results in or otherwise is associated with liability of the Borrower or any of its ERISA Affiliates that would reasonably be expected to have a Material Adverse Effect during the term of this Loan Guarantee Agreement; (ii) the Borrower or any of its ERISA Affiliates request a minimum funding waiver or fails to meet any funding obligations with respect to any Pension Plan or Multiemployer Plan; or (iii) the imposition of a Lien or other security interest on any property of the Borrower pursuant to Section 303(k) of ERISA or Section 430(k) of the Code.

 

(t)                                              Force Majeure. An Event of Force Majeure shall occur and continue for a period of one hundred eighty (180) consecutive days.

 

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

 

(v)                                           Suspension and Debarment. The occurrence of any event or condition that has resulted in the debarment or suspension of the Borrower from contracting with the United States Government or any agency or instrumentality thereof under Debarment Regulations.

 

(w)                                         Compliance with Applicable Regulations; Program Requirements.

 

(i)                           The Borrower shall fail to comply with the provisions of Title XVII and such failure continues unremedied for any period of at least thirty (30) days or, in the case of a failure to comply with Section 1702(k) of Title XVII, such failure continues unremedied for ninety (90) days.

 

(ii)                        The Borrower fails to comply with the provisions of the Applicable Regulations; provided, however, that, if such failure is capable of being cured, and the Borrower is diligently pursuing such cure, such failure shall be an Event of Default if not remedied within ninety (90) days.

 

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(iii)                                                  The Borrower fails to comply in all material respects with (A) all other Applicable Laws and (B) all other Program Requirements (other than the provisions of Title XVII and the Applicable Regulations), where such failure continues unremedied for at least ninety (90) days (unless such failure cannot reasonably be cured within such period and the Borrower or the Operator, as applicable, is diligently working to cure such failure according to an applicable remediation plan); provided that the Borrower shall not be in default under this clause (iii) at any time it is contesting in good faith by appropriate legal proceedings each assertion by a Governmental Authority that the Borrower is not in compliance with such Program Requirements or other Applicable Laws.

 

Notwithstanding the foregoing, no Event of Default shall exist under this Section 8.1(w) where the Parties have specifically agreed elsewhere in this Loan Guarantee Agreement (including in Section 6.24(k), Section 6.25, Section 8.1(y), Section 8.1(z), Section 8.1(aa), and Section 8.1(cc)) on the terms of compliance with a provision Title XVII, Applicable Regulations, Applicable Laws or Program Requirements.

 

(x)                                 Foreign Asset Control Regulations. The making of any Advances or the use of the proceeds thereof violates the Foreign Asset Control Regulations.

 

(y)                                 Prohibited Person.

 

(i)                                                        Any Borrower Entity or Borrower Entity Controlling Person becomes (whether through a transfer or otherwise) a Prohibited Person; provided that if any such Person (other than a Borrower Entity) that becomes a Prohibited Person is removed or replaced with a Person reasonably acceptable to DOE within thirty (30) days from the date that the Borrower Knew that such Person became a Prohibited Person (or, if such removal or replacement is not reasonably feasible, the Borrower implements other mitigation measures to the reasonable satisfaction of DOE), no Event of Default shall be deemed to have occurred.

 

(ii)                                                     The Borrower Knowingly enters into a transaction with a Person who is a Prohibited Person.

 

(iii)                                                  The Borrower enters into a transaction with a Person who is a Prohibited Person and does not remove or replace such Prohibited Person with a Person who is reasonably acceptable to DOE (or, if such removal or replacement is not reasonably feasible, does not implement other mitigation measures to the reasonable satisfaction of DOE) within thirty (30) days from the date that the Borrower Knew that such Person was a Prohibited Person.

 

(iv)                                                 Any of the Collateral is traded or used, directly or indirectly, by a Prohibited Person or by a Person organized in a Prohibited Jurisdiction.

 

(v)                                                    For the avoidance of doubt, the representation and warranty set forth in Section 5.25(e) shall have the benefit of a cure period set forth in this Section 8.1(y).

 

(z)                                  OFAC; Corrupt Practices Laws. Any Borrower Entity, Borrower Entity Controlling Person, Major Project Participant or their respective employees or agents fail to

 

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comply with all applicable orders, rules and regulations of OFAC and all applicable Corrupt Practices Laws in obtaining any consents, licenses, approvals, authorizations, rights, or privileges with respect to the Project or, otherwise, fail to conduct the Project in compliance with all applicable orders, rules and regulations of OFAC and all applicable Corrupt Practices Law; provided that if the Borrower shall, within 30 days of Knowing that such Person has so failed to comply, engage or continue to engage in constructive discussions with DOE regarding the removal or replacement of such person or, if such removal or replacement is not reasonably feasible, implements other mitigation measures to the reasonable satisfaction of the Guarantor, no Event of Default shall be deemed to have occurred. For the avoidance of doubt, the representation and warranty set forth in Section 5.25(g) shall have the benefit of a cure period set forth in this Section 8.1(z).

 

(aa)                          Anti-Terrorism Order.

 

(i)                                                        Any Borrower Entity or Borrower Entity Controlling Person fails to comply with the Anti-Terrorism Order; provided that if the Borrower shall, within thirty (30) days from the date that the Borrower Knew that such Person so failed to comply, engage and continue to engage in constructive discussions with DOE regarding the removal or replacement of such Person or, if such removal or replacement is not reasonably feasible, implement other mitigation measures to the reasonable satisfaction of DOE, no Event of Default shall be deemed to have occurred.

 

(ii)                                                     Any Major Project Participant or any Person that Controls any Major Project Participant fails to comply with the Anti-Terrorism Order and such Major Project Participant or Controlling Person is not removed or replaced with a Person reasonably acceptable to DOE within twenty (20) Business Days from the date that the Borrower Knew that such Major Project Participant or Controlling Person failed to comply with the Anti-Terrorism Order.

 

(iii)                                                  For the avoidance of doubt, any alleged breach of the representation and warranty in Section 5.25(f) shall have the benefit of the cure period set forth in this Section 8.1(aa).

 

(bb)                          Equity Transfers. At any time prior to the Project Completion Date, the Sponsor fails to hold, directly or indirectly, greater than 50% of the Equity Interests of the Borrower.

 

(cc)                            Change in Control.

 

(i)                                                        Prohibited Direct Transfers. Any failure of the Holding Company to own one hundred percent (100%) of the Equity Interests in the Borrower; provided, however, that notwithstanding the foregoing, DOE shall not unreasonably withhold, condition or delay its consent to a transfer of Equity Interests in the Borrower to one or more Tax Equity Investors if (x) DOE has received a written request from the Borrower that DOE consent to such transfer pursuant to a proposal for tax equity financing and (y) all terms of such proposal and DOE’s consent thereto, including all required modifications to the Transaction Documents and all requirements of Section 609.18 of the Applicable Regulations, have been complied with.

 

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(ii)                                                     Prohibited Indirect Transfers. Subject to clause (AA) (Widely-Held Public Companies; Designated Private Companies), clause (BB) (Natural Persons), clause (CC) (Transfers Resulting in No New Person Holding a 10% or Greater Interest in Borrower), clause (DD) (Transfers Among Existing Investors), and clause (EE) (Portfolio Sales) in the proviso at the end of this Section 8.1(cc), any transfer of any Proportional Ownership Interest in the Borrower, unless DOE provides its prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed if (A) the proposed transferee is a Qualified Transferee and (B) not less than thirty (30) days prior written notice of such transfer is given to DOE and the transferee (x) represents and warrants to DOE and the Borrower that it is a Qualified Transferee, and (y) delivers to DOE an organizational chart showing ownership up to the Widely-Held Public Company level or the Designated Private Company level, as applicable;

 

(iii)                                                  Prohibited Change of Control of Borrower. Subject to clause (AA) (Widely-Held Public Companies; Designated Private Companies), and clause (BB) (Natural Persons) in the proviso at the end of this Section 8.1(cc),

 

(A)                               Prior to Project Completion. At any time prior to the Project Completion Date, any transfer or other event that results in a change of Control of the Borrower;

 

(B)                               After Project Completion. At any time on or after the Project Completion Date, any transfer or other event that results in a change of Control of the Borrower, unless DOE provides its prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed if the proposed transferee is a Qualified Transferee;

 

(iv)                                                 Prohibited Persons. Subject to clause (AA) (Widely-Held Public Companies; Designated Private Companies):

 

(A)                               Prohibited Person Transfer. The occurrence of any Prohibited Person Transfer;

 

(B)                               Designated Private Company or Widely-Held Public Company. Any Person that is (x) a Designated Private Company or a Widely-Held Public Company, or (y) an investor that Controls such Designated Private Company or Widely-Held Public Company, becomes a Prohibited Person; provided, that it shall not be an Event of Default under this Section 8.1(dd)(iv)(B) if (1) within 30 days from the date that the Borrower learns that a Person is a Prohibited Person the Borrower has provided to DOE a mitigation plan (which plan may include the exercise of applicable contractual rights and remedies) reasonably acceptable to DOE with respect to the removal, replacement or other arrangement regarding such Person

 

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and (2) thereafter the Borrower uses all commercially reasonable efforts to implement the agreed mitigation plan;

 

provided, however, that to the extent specified above in clauses (i) through (v) of this Section 8.1(cc), the following exceptions shall apply:

 

(AA)                      Widely-Held Public Companies; Designated Private Companies. Any transfer of an Equity Interest in a Widely- Held Public Company or a Designated Private Company is not an Event of Default and shall be disregarded in the calculation of Proportional Ownership Interests and the determination of the occurrence of a Prohibited Person Transfer;

 

(BB)                      Natural Persons. Any transfer of any Equity Interest by a natural Person is not an Event of Default if (x) such transfer is (1) in connection with bona fide estate planning, (2) upon death or disability of the transferor, (3) pursuant to a divorce decree respecting the transferor, (4) upon personal bankruptcy of the transferor, or (5) of Equity Interests issued pursuant to an equity incentive plan that qualifies under Rule 701 under the Securities Act of 1933, and (y) the transferee is not a Prohibited Person at the time of such transfer;

 

(CC)                      Transfers Resulting in No New Person Holding a 10% or Greater Interest in Borrower. Any transfer of any Proportional Ownership Interest in the Borrower is not an Event of Default if (1) after giving effect to such transfer no Person (including such Person’s Affiliates), other than (x) the Sponsor, and (y) any transferee to which DOE has expressly consented, owns or Controls ten percent (10%) or more of the Proportional Ownership Interests in the Borrower, and (2) the transferee is not directly or indirectly Controlled or owned, in any material respect, by any Governmental Authority;

 

(DD)                      Transfers Among Existing Investors. Any transfer of a Proportional Ownership Interest in the Borrower is not an Event of Default if the transferee either (1) had a Proportional Ownership Interest in the Borrower on the Guarantee Issuance Date, or (2) subsequently acquired a Proportional Ownership Interest with DOE’s express consent.

 

(EE)                        Portfolio Sales. Any transfer of a Proportional Ownership Interest in the Borrower is not an Event of Default if the

 

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transfer is to a Qualified Transferee in connection with a sale of (x) all or substantially all of the transferor’s interest in its Renewable Energy Portfolio, or (y) a non-Controlling interest in the transferor’s interest in its Renewable Energy Portfolio.

 

(dd)                          Transfer to a Disqualified Person. During the Recapture Period (if any), any Recapture Liability has arisen as a result of the Borrower or Sponsor (i) becoming a Disqualified Person, or (ii) causing, permitting, or consenting to any transfer of any direct or indirect ownership interest or other interest in the Borrower or in any Project assets to a Disqualified Person or (in the case of an interest in any Project assets) to a Person that has not agreed to be jointly liable with the Borrower for Cash Grant Recapture Liabilities, unless such Cash Grant Recapture Liability arises in connection with the Lender or DOE foreclosing on the Project or directing the foreclosure on the Project.

 

(ee)                            Cash Grant Recapture Liabilities. Any Cash Grant Recapture Liability has arisen with respect to any asset that is included in or part of the Project and has not been satisfied by the Borrower within fifteen (15) days, unless such Cash Grant Recapture Liability arises in connection with the Lender or DOE foreclosing on the Project or directing the foreclosure on the Project.

 

(ff)                              Failure to Maintain Project Document Letters of Credit and the LGIA Surety Bonds. At any time, Letters of Credit representing Development Security, the Delivery Term Security, the EPC Contract Security or the Mitigation Land Security or the LGIA Surety Bonds shall not be maintained in the amounts required pursuant to the terms of this Loan Guarantee Agreement (subject to the applicable reductions and releases under the Major Project Documents).

 

(gg)                            Failure to Maintain CEQA Litigation Support Instruments. At any time prior to the occurrence of the Settlement, any of the CEQA Litigation Support Instruments is not in full force and effect or a default under any such CEQA Litigation Support Instrument shall occur (which, for the avoidance of doubt shall not include any event or circumstance which gives rise to any such Letter of Credit becoming capable of being drawn, as long as such Letter of Credit has been or remains capable of being drawn), such that the aggregate amount of the CEQA Litigation Support Instruments (and any proceeds thereof) is less than the CEQA Support Required Amount.

 

(hh)                          Failure to Maintain Cash Grant Shortfall Security. At any time until the Cash Grant Bridge Loans have been repaid in full, any of the Cash Grant Shortfall Security fails to be in full force and effect or a default under any such Cash Grant Shortfall Security shall occur (which, for the avoidance of doubt shall not include any event or circumstance which gives rise to any such Letter of Credit becoming capable of being drawn, as long as such Letter of Credit has been, remains capable of, or is being drawn), except as each may be (i) drawn in accordance with section 4.12 of the Accounts Agreement, (ii) drawn or paid in accordance with Section 3.4.3(g) or any other provision of this Loan Guarantee Agreement or (iii) reduced on or after the Cash Grant Support Release Date in accordance with the terms of this Loan Guarantee Agreement.

 

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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.

 

SECTION 8.2.               Remedies for Events of Default.

 

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

 

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

 

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

 

(iii)                                                  declare and make all sums of outstanding principal and accrued but unpaid interest remaining under this Loan Guarantee Agreement and the other Financing Documents together with all unpaid fees, Periodic Expenses and charges due hereunder or under any other Financing 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), apply for and obtain the appointment of a receiver with respect to the Collateral or any portion thereof (and the Borrower hereby consents thereto) or otherwise foreclose upon or take possession of any 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 of the Guaranteed Loans, exceed the amount of the total FFB Commitment;

 

(v)                                                    otherwise foreclose upon or take possession and cause the sale or disposition of any Collateral;

 

(vi)                                                 set off and apply such amounts to the satisfaction of the Secured Obligations under all of the Financing Documents, including (A) all monies on deposit in any Project Account (including any Reserve Letter of Credit issued in lieu thereof); (B) any Account Proceeds; (C) any amounts paid under the Equity Funding Agreement including any Reserve Letters of Credit issued thereunder; or (D) any other moneys of the Borrower on deposit with the Collateral Agent or any other Secured Party;

 

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(vii)                                              prior to the Project Completion Date, require the Sponsor to make an accelerated Equity Contribution in accordance with the terms of the Equity Funding Agreement in an amount equal to the balance of the undrawn Base Equity Commitment;

 

(viii)                                           cure defaults;

 

(ix)                                                 charge interest at the Late Charge Rate on any amounts not paid when;

 

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

 

(xi)                                                 exercise any and all rights and remedies available to it under any of the Transaction Documents with respect to the Project, any Borrower Entity or any other Major Project Participant and under the Security Documents or otherwise under Applicable Laws;

 

(xii)                                              exercise any and all rights and remedies available to it under any of the CEQA Litigation Support Instruments and the Cash Grant Shortfall Security; and

 

(xiii)                                           take such other actions as DOE may reasonably require to provide for the care, preservation, protection, and maintenance of all Collateral so as to enable the United States to achieve maximum recovery upon default by the Borrower on the Guaranteed Loans.

 

SECTION 8.3.               Automatic Acceleration.

 

Upon the occurrence of an Event of Default referred to in Section 8.1(1) in respect of the Borrower, (a) the FFB Commitment and, to the extent permitted under the FFB Documents, the capitalization of interest owed in respect of the Advances pursuant to Section 7(b) of each of the FFB Promissory Notes shall automatically be terminated and (b) the Guaranteed Loans, together with interest accrued thereon and all other amounts due under the Guaranteed Loans and the other Financing 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.

 

SECTION 8.4.               Remedies.

 

At any time when an Event of Default exists, DOE (and the Loan Servicer on DOE’s behalf) shall be entitled to instruct 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 Loan Guarantee Agreement, any CEQA Litigation Support Instrument, the Cash Grant Shortfall Security, the Security Documents or any other Financing Document to which it is a party and direct the time, place and manner in which the Collateral Agent is to exercise any such right, remedy, power or privilege. DOE shall cause the Collateral Agent to comply with any such instruction as promptly as practicable.

 

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SECTION 8.5.               Appointment of a Receiver.

 

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

 

ARTICLE 9
  AGENTS AND ADVISORS

 

SECTION 9.1.               Appointment of Loan Servicer.

 

In connection with the Project, DOE hereby appoints the U.S. Department of Energy, an agency of the United States of America, acting through its Loan Guarantee Program Office, or its designee 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 Loan Guarantee Agreement and the other Financing Documents, together with all such rights, powers, authorities and discretions as are reasonably incidental thereto. The Loan Servicer, by its signature below, accepts such appointment.

 

SECTION 9.2.               Duties and Responsibilities.

 

(a)                                      The Loan Servicer shall not have any duties or responsibilities except those expressly set out in this Loan Guarantee Agreement or in the other Financing Documents. Notwithstanding anything to the contrary contained herein or in any other Financing Document, the Loan Servicer shall not be required to take any action that is contrary to any Applicable Law.

 

(b)                                      DOE, and any subsequent Person acting as Loan Servicer, or to whom any rights or responsibilities of the Loan Servicer are delegated, under the Financing Documents, shall comply with all requirements of the Applicable Regulations with respect to servicing the Advances, including:

 

(i)                                                        the Loan Servicer, with the assistance of the Collateral Agent, has taken and shall continue to take those actions necessary to perfect and maintain Liens on assets that are pledged as Collateral pursuant to the terms of the Security Documents;

 

(ii)                                                     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 Regulations and Program Requirements;

 

(iii)                                                  any assignment or transfer of the servicing, monitoring, tracking, and reporting functions performed by the Loan Servicer must be approved by DOE in writing in advance of such assignment or transfer; and

 

(iv)                                                 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 Guaranteed Loans.

 

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SECTION 9.3                    Rights and Obligations.  

 

(a)                                      The Loan Servicer 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 Event of 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 9.7, lawyers, accountants or other experts whose advice or services such Agent may reasonably determine are necessary, expedient or desirable, and 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)                                                 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;

 

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

 

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(viii)                                           seek instructions from DOE (or the Loan Servicer on DOE’s behalf) as to the exercise of any of its rights, powers, authorities or discretions hereunder, and in the event that it does so, it shall not be considered as having acted unreasonably 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)                                 The Loan Servicer shall:

 

(i)                                                        except as otherwise expressly provided in any Financing Document, perform its duties in accordance with any instructions given to it by DOE (or the Loan Servicer on DOE’s behalf); and

 

(ii)                                                     if so instructed by DOE (or the Loan Servicer on DOE’s behalf), refrain from exercising any right, power, authority or discretion vested in it as an Agent hereunder or under the other Financing Documents (other than rights arising under this Article 9 or Section 9.13). 

 

SECTION 9.4.               No Responsibility for Certain Conduct.

 

(a)                                 In connection with the Financing Documents, notwithstanding anything to the contrary expressed or implied herein or in the other Financing Documents, the Loan Servicer shall not:

 

(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 Event of 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 Financing 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 Applicable Law or be otherwise actionable at the suit of any Person; or

 

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

 

(b)                                 The Loan Servicer shall not 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

 

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Person contained in this Loan Guarantee Agreement or any other Transaction Document or in any certificate or other document referred to or provided for in, or received by such Agent, hereunder or thereunder.

 

(c)           The Loan Servicer and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of and generally engage in any kind of banking or other business with any Person, without any duty to account therefor to the Secured Parties.

 

SECTION 9.5.     Defaults.

 

The Loan Servicer shall not be deemed to have knowledge or notice of the occurrence of any Event of Default or Potential Event of Default unless the Loan Servicer has Knowledge of such Event of Default or Potential Event of Default or has received a notice from a Project Participant, referring to this Loan Guarantee Agreement, describing such Event of Default or Potential Event of Default and stating that such notice is a “notice of default.” If the Loan Servicer has Knowledge of an Event of Default or Potential Event of Default or receives such a notice of default, the Loan Servicert shall give prompt notice thereof to DOE. The Loan Servicer shall take such action with respect to such Event of Default or Potential Event of Default as is provided in Article 8 of this Loan Guarantee Agreement; provided, however, that unless and until the Loan Servicer receives direction from DOE, 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 Event of Default as it shall deem advisable and in the best interest of the Secured Parties.

 

SECTION 9.6.     No Liability.

 

Neither the Loan Servicer, nor any of its officers, directors, employees or agents shall be liable:

 

(a)           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; or

 

(b)           to any Borrower Entity, Project Participant or Independent Consultant for any action taken or omitted under this Loan Guarantee Agreement or under the other Financing Documents, or in connection therewith, except to the extent caused by the gross negligence or willful misconduct of the Loan Servicer, as determined by a court of competent jurisdiction in a final non-appealable Governmental Judgment. DOE (for itself and any Person claiming through it) hereby releases, waives, discharges and exculpates the Loan Servicer for any action taken or omitted by the Loan Servicer under this Loan Guarantee Agreement or under the other Financing Documents, or in connection therewith, except to the extent caused by the gross negligence or willful misconduct of the Loan Servicer as determined by a court of competent jurisdiction in a final non-appealable Governmental Judgment.

 

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SECTION 9.7.     Fees and Expenses of Loan Servicer.

 

(a)           The Borrower shall be responsible for paying the fees and expenses of the Loan Servicer in connection with the Project, the Transaction Documents and the Guaranteed Loans under all circumstances, pursuant to a separate written agreement with the Loan Servicer, without recourse to DOE by the Loan Servicer, any Borrower Entity or any other Person.

 

(b)           In accordance with a letter agreement to be entered into between the Borrower and the Loan Servicer, the Borrower shall (i) from time to time on demand by the Loan Servicer, indemnify the Loan Servicer against any and all costs, claims, losses, expenses (including reasonable legal fees and expenses) and liabilities, that the Loan Servicer may incur in acting in its capacity as the Loan Servicer hereunder, other than by reason of its own gross negligence or willful misconduct and (ii) without limitation of the foregoing, reimburse the Loan Servicer promptly upon demand for any out-of-pocket expenses (including reasonable legal fees and expenses) incurred by the Loan Servicer in connection with the preparation, execution, administration or enforcement of, or services provided in respect of rights or responsibilities under, the Transaction Documents.

 

(c)           All payments or reimbursements under this Section 9.7 shall be due and payable (i) not later than ten (10) Business Days after the Borrower’s receipt of the the Loan Servicer’s request therefor from time to time and (ii) whether or not this Loan Guarantee Agreement is terminated or any Advance is made.

 

(d)           The Borrower and the Loan Servicer expressly acknowledge and agree that:

 

(i)                      DOE shall not be financially liable to the Loan Servicer 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 the Loan Servicer to DOE with respect to the Project upon their periodic presentation thereof by the Loan Servicer, including prior to or on the Guarantee Agreement Date;

 

(iii)                    while the services provided by the Loan Servicer shall be rendered for the benefit of DOE in connection with the Project, the invoices of the Loan Servicer shall be the sole responsibility of the Borrower, notwithstanding that the Loan Servicer is an agent of DOE; and

 

(iv)                    the Borrower specifically disclaims any implication of confidential, fiduciary or other client relationship between the Borrower or any Borrower Entity and the Loan Servicer as a result of this Section 9.7 and shall not interfere with the relationship (including the ability to terminate the agency relationship) between the Loan Servicer and DOE.

 

The provisions of this Section 9.7 shall survive the termination of this Loan Guarantee Agreement and the other Financing Documents.

 

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SECTION 9.8.     Resignation and Removal.

 

(a)           Subject to Section 9.9, the Loan Servicer may resign its appointment hereunder at any time without providing any reason therefor by giving prior written notice to that effect to each of the other parties hereto.

 

(b)           Subject to Section 9.9, DOE may remove the Loan Servicer from its appointment hereunder with or without cause by giving prior written notice to that effect to each of the other parties hereto.

 

SECTION 9.9.     Successor Loan Servicer.

 

(a)           No resignation or removal pursuant to Section 9.8 shall be effective until:

 

(i)                      a successor for the Loan Servicer is appointed in accordance with (and subject to) the provisions of this Section 9.9;

 

(ii)                     the resigning or removed Loan Servicer has transferred to its successor all of its rights and obligations in its capacity as the Loan Servicer under this Loan Guarantee Agreement and the other Financing Documents; and

 

(iii)                    the successor Loan Servicer has executed and delivered an agreement to be bound by the terms of this Loan Guarantee Agreement and the other Financing Documents and to perform all duties required of the Loan Servicer hereunder and under the other Financing Documents.

 

(b)           If the Loan Servicer has given notice of its resignation pursuant to Section 9.8(a) or if DOE gives the Loan Servicer notice of removal pursuant to Section 9.8(b), then a successor to the Loan Servicer may be appointed by DOE (and, unless an Event of Default or Potential Event of Default has occurred and is continuing, with the written consent of the Borrower, which consent shall not be unreasonably withheld or delayed) during the ninety (90) day period beginning on the date of such notice in accordance with the terms of this Loan Guarantee Agreement but, if no such successor is so appointed within ninety (90) days after the above notice, the resigning or removed Loan Servicer may appoint such a successor. If a resigning or removed Loan Servicer appoints a successor, such successor shall (i) be authorized under all Applicable Law to exercise corporate trust powers and (ii) be acceptable to DOE (and, unless an Event of Default or Potential Event of Default has occurred and is continuing, the Borrower, approval by which shall not be unreasonably withheld or delayed); provided, that if DOE and the Borrower, as applicable, do not confirm such acceptance in writing within sixty (60) days following selection of such successor by the resigning or removed Loan Servicer or otherwise appoint a successor within such sixty (60) day period, then DOE and the Borrower, as the case may be, shall be deemed to have given such acceptance and such successor shall be deemed appointed as the successor to such resigning or removed Loan Servicer hereunder.

 

(c)           If a successor to the Loan Servicer is appointed under the provisions of this Section 9.9, then:

 

(i)                      the predecessor Loan Servicer shall be discharged from any further obligation hereunder (but without prejudice to any accrued liabilities);

 

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(ii)                     the resignation pursuant to Section 9.8(a) or removal pursuant to Section 9.8(b) of the predecessor Loan Servicer notwithstanding, the provisions of this Loan Guarantee Agreement shall inure to the predecessor Loan Servicer’s benefit as to any actions taken or omitted to be taken by it under this Loan Guarantee Agreement and the other Financing Documents while it was a Loan Servicer; and

 

(iii)                    the successor Loan Servicer and each of the other parties hereto shall have the same rights and obligations amongst themselves as they would have had if such successor Loan Servicer had been a party hereto beginning on the date of this Loan Guarantee Agreement.

 

SECTION 9.10.   Due Authorization; Execution; Delivery.

 

The  Loan Servicer is hereby authorized by DOE to execute, deliver and perform each of the Financing Documents to which the Loan Servicer is or is intended to be a party.

 

SECTION 9.11.   Actions.

 

Except as otherwise provided in this Article 9, and subject to the other provisions of this Loan Guarantee Agreement, the Loan Servicer shall take any action it requests in writing with respect to the Collateral, this Loan Guarantee Agreement or any other Financing Document to which it is a party, as applicable.

 

SECTION 9.12.   Delegation of Duties.

 

Subject to the provisions of Section 9.1 hereof, the Loan Servicer may execute any of the rights, remedies, powers, privileges, duties or obligations under this Loan Guarantee Agreement and the other Financing 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.

 

SECTION 9.13.   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 Loan Guarantee 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.

 

SECTION 9.14.   Authority of the Loan Servicer.

 

The Borrower acknowledges that the rights and responsibilities of the Loan Servicer under this Loan Guarantee Agreement with respect to any action taken by the Loan Servicer or the exercise or non-exercise by the Loan Servicer of any power, right or remedy provided for or resulting or arising out of this Loan Guarantee Agreement shall, as between the Loan Servicer and DOE, be governed by this Loan Guarantee Agreement and by such other agreements with

 

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respect thereto as may exist from time to time among them, but, as between the Loan Servicer, and the Borrower, the Loan Servicer shall be conclusively presumed to be acting as the Loan Servicer for DOE with full and valid authority so to act or refrain from acting, and the Borrower shall not be under any obligation or entitlement to make any inquiry respecting such authority.

 

SECTION 9.15.   Force Majeure.

 

In no event shall the Loan Servicer be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, it being understood that the Loan Servicer shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

SECTION 9.16.   Representations and Warranties of the Loan Servicer.

 

The Loan Servicer makes all of the following representations and warranties to and in favor of DOE as of the date hereof.

 

(a)           Power and Authority. The Loan Servicer has the requisite power and authority to (i) execute, deliver and perform each of the Financing Documents to which it is a party and (ii) carry on its business as now being conducted.

 

(b)           Legal, Valid and Binding. The obligations of the Loan Servicer under the Financing Documents to which it is a party are the legal, valid and binding obligations of the Loan Servicer 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).

 

(c)           No Consents. Neither the execution, delivery or performance by the Loan Servicer of any Financing Document to which it is a party, nor the performance by the Loan Servicer of the terms and conditions thereof requires the approval, consent or authorization of any Person other than (i) such approvals, consents and authorizations as have been obtained or (ii) as may be required from time to time in connection with the exercise of remedies provided for herein and in the other Financing Documents (as to which the Loan Servicer makes no representation or warranty).

 

(d)           Proceedings. There are no actions, suits or proceedings, claims or investigations pending or, to the actual knowledge of any officers of the Loan Servicer responsible for the administration of this Loan Guarantee Agreement, threatened against it that (i) challenge the validity or enforceability of any Financing Document to which it is a party or (ii) relate to the banking or trust powers of the Loan Servicer and that, individually or in the aggregate, if adversely determined would materially and adversely affect the ability of the Loan Servicer to perform its obligations under any Financing Document to which it is a party.

 

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(e)           No Liens. There are no Liens on or against the Collateral that result from (i) claims against the Loan Servicer unrelated to the transactions contemplated by this Loan Guarantee Agreement or the other Financing Documents or (ii) affirmative acts by the Loan Servicer creating a Lien other than as contemplated or permitted by this Loan Guarantee Agreement or the other Financing Documents.

 

SECTION 9.17.   Survival.

 

The provisions of this Article 9 shall survive the termination of this Loan Guarantee Agreement.

 

ARTICLE 10
  REIMBURSEMENT

 

SECTION 10.1.   Reimbursement Obligation.

 

If the Borrower defaults in any payment due to FFB (whether such payment is required to be made directly to FFB or to DOE for further payment to FFB) under the Guaranteed Loans or otherwise under any FFB Document, and as a result of such payment default by the Borrower, DOE becomes obligated to make any payments to FFB or otherwise makes any payments to FFB pursuant to the DOE Guarantee (a “DOE Guarantee Payment”), the Borrower shall become immediately obligated to reimburse DOE in an amount (the “DOE Guarantee Payment Amount”) equal to the sum of (i) all DOE Guarantee Payments paid by DOE to FFB and (ii) all fees, costs, expenses and other amounts incurred by DOE in connection therewith, whether by payment to FFB or otherwise; provided, however, that (A) any DOE Guarantee Payment shall not operate to satisfy the Borrower’s obligations to FFB under the Guaranteed Loan or otherwise under the FFB Documents and (B) to the extent of any DOE Guarantee Payment, DOE shall be deemed hereunder to have been granted a participation in any or all of FFB’s rights under the Financing Documents and with respect to the Collateral. Any DOE Guarantee Payment Amount shall be due and payable to DOE by the Borrower within two (2) days after Borrower’s receipt of notice from DOE.

 

SECTION 10.2.   Payments and Computations.

 

10.2.1. 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 the 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.

 

10.2.2. 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

 

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counterclaim or set-off, in Dollars and in immediately available funds on or before the fifth (5th) Business Day following a written demand by DOE or the Loan Servicer to the Borrower indicating the DOE Guarantee Payment Amount and the date it was paid or incurred by DOE, by wire transfer to the following account, or to such other account as may be specified by DOE or the Loan Servicer from time to time:

 

U.S. Treasury Department

ABA No. 0210-3000-4 TREASNYC/CTR/I3NF=D89000001
 OBI=LGPO Loan No. 1229 — Guarantee Reimbursement

 

10.2.3. Taxes.

 

All Borrower Reimbursement Payments by the Borrower hereunder shall be made in accordance with Section 3.1.2.

 

10.2.4. Calculations.

 

All computations of interest or fees under this Loan Guarantee Agreement shall be made by the Loan Servicer, on the same basis as payments under the FFB Note Purchase Agreement.

 

10.2.5. Determinations.

 

The Borrower and each other party hereto agrees that each determination by the Loan Servicer of an amount of interest or fees payable hereunder shall constitute prima facie evidence of the amount thereof and shall be conclusive absent manifest error.

 

SECTION 10.3.   Obligations Absolute.

 

To the fullest extent permitted by law, the Borrower Reimbursement Obligations are absolute, irrevocable and unconditional, and shall be paid strictly in accordance with the terms of this Loan Guarantee Agreement under all circumstances whatsoever, including the following circumstances, whether or not with notice to or the consent of the Borrower:

 

(a)           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 Event of Default under this Loan Guarantee Agreement or any default under any of the other Financing Documents;

 

(b)           the extension of the time for performance of any obligations, covenants or agreements of any Person under or arising out of any of the Financing Documents;

 

(c)           the existence of any claim set-off, counterclaim, defense or other rights of any kind or nature that (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 Financing Documents, the transactions contemplated therein or any unrelated transactions;

 

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(d)           any failure, omission or delay on the part of (A) DOE to assert a defense to a DOE Guarantee Payment Amount under the DOE Guarantee or to otherwise contest the DOE Guarantee or (B) DOE or any other Secured Party or the Borrower to enforce, assert or exercise any other right, power or remedy conferred by this Loan Guarantee Agreement or any of the Financing Documents;

 

(e)           the taking or the omission on the part of DOE or any other Secured Party or the Borrower of any other actions or remedies referred to in any of the Financing Documents;

 

(f)            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 Financing Documents;

 

(g)           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 Financing Documents;

 

(h)           the exchange, surrender, substitution or modification of any security for any of the Financing Documents;

 

(i)            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;

 

(j)            any release, irregularity, invalidity, illegality, lack of genuineness, unenforceability or modification affecting this Loan Guarantee Agreement, the DOE Guarantee, the Guaranteed Loans, or the other Financing Documents, or the transactions contemplated hereby or thereby;

 

(k)           the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets of, the marshalling 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 that affect the Borrower or any other Person party to any of the Financing Documents;

 

(1)           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 Financing Documents;

 

(m)          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;

 

(n)           any determination by a court or arbitrator, or any settlement of a disputed claim by any party hereto or other Person, relating to this Loan Guarantee Agreement, the DOE Guarantee, or the other Financing Documents, or the transactions contemplated hereby or thereby;

 

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(o)           any promptness, diligence, presentment, demand of payment, protest, notice of dishonor or nonpayment of any liabilities of the Borrower, suit or taking of other action by DOE or any other Secured Party against any party liable thereon; or

 

(p)           any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

 

SECTION 10.4.   Security.

 

10.4.1. Borrower Reimbursement Obligations Secured.

 

The parties expressly acknowledge that the Collateral pledged and assigned under the Security Documents is pledged and assigned to secure payment by the Borrower of the Borrower Reimbursement Obligations.

 

10.4.2. Actions.

 

The Borrower expressly acknowledges that DOE is free to litigate, settle or otherwise satisfy or discharge its obligation with respect to any DOE Guarantee Payment Amount, and take any action under the Security Documents or otherwise with respect to the Collateral, as it may from time to time deem appropriate, and any failure by DOE to advise, notify, or consult with the Borrower shall not be a defense to, or in any way diminish, discharge or derogate from the Borrower Reimbursement Obligations hereunder.

 

SECTION 10.5.   DOE Rights.

 

10.5.1. Rights Cumulative.

 

DOE’s right to reimbursement provided for in this Article 10 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.

 

10.5.2. Subrogation.

 

Without limiting the generality of Section 10.5.1, upon any DOE Guarantee Payment, DOE shall be subrogated to the rights of FFB or any subsequent holder of either Guaranteed Loan, including all related Liens and Collateral.

 

SECTION 10.6.   Further Assurances.

 

The Borrower shall cooperate with DOE in connection with the exercise of any of its rights under this Article 10 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 reasonably requests from time to time in order to carry out the purposes of this Article 10 or to enable DOE to exercise and enforce its rights and remedies hereunder.

 

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ARTICLE 11
  MISCELLANEOUS

 

SECTION 11.1.   Addresses.

 

Any communications, including any notices, between or among the parties to the Financing Document shall be given to the addresses listed in Schedule 11.1. All notices or other communications required or permitted to be given under the Financing 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 facsimile or 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 facsimile or telecopy or other direct written electronic means shall be deemed to have been validly and effectively given on the day (if a Business Day and, if not, on the next following Business Day) on which it is validly transmitted if 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 has the right to change its address for notice under any of the Financing Documents to any other location by giving prior written notice to the other parties in the manner set forth hereinabove.

 

SECTION 11.2.   Further Assurances.

 

The Borrower shall fully cooperate with all Persons as may be necessary to ensure that DOE receives any notices due to DOE 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 11.2 and Section 6.1.8 and agrees that in addition to all other remedies, any court or arbitrator may award specific performance or other equitable relief as a remedy for any such breach.

 

SECTION 11.3.   Delay and Waiver.

 

No delay or omission in exercising any right, power, privilege or remedy under this Loan Guarantee Agreement or any other Financing Document, including any rights and remedies in connection with the occurrence of an Event of Default or Potential Event of Default shall impair any such right, power, privilege or remedy of DOE or the other Secured 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 by DOE of any right, power, privilege or remedy including any rights and remedies in connection with the occurrence of an Event of Default or Potential Event of Default or of any other breach

 

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or default under this Loan Guarantee Agreement or any other Financing Document, or any waiver by DOE of any provision or condition of this Loan Guarantee Agreement or any other Transaction Document, must be in writing and shall be effective only to the extent in such writing specifically set forth. All rights, powers, privileges and remedies, either under this Loan Guarantee Agreement or any other Financing Document or by law or otherwise afforded to DOE, shall be cumulative and not alternative and not exclusive of any other rights, powers, privileges and remedies that DOE may otherwise have.

 

SECTION 11.4.   Right of Set-Off.

 

In addition to any rights now or hereafter granted under Applicable Laws 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 Secured 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 Secured Party (including by any branches and agencies of such Secured 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 Secured Party under this Loan Guarantee Agreement or any other Financing Document.

 

SECTION 11.5.   Amendment or Waiver.

 

Except as otherwise provided herein, neither this Loan Guarantee Agreement nor any of the terms hereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing and signed by the Borrower, and the Loan Servicer and, to the extent it effects their respective rights or obligations, the Collateral Agent or DOE. Any amendment to or waiver of this Loan Guarantee Agreement or any of the terms hereof that constitutes a ‘modification’ within the meaning set forth in Section 502(9) of the Federal Credit Reform Act of 1990 and OMB Circular A-11 may be subject to the availability to DOE of funds appropriated by Congress to meet an increase, if any, in the Credit Subsidy Cost.

 

SECTION 11.6.   Entire Agreement.

 

This Loan Guarantee Agreement, including any agreement, document or instrument attached hereto or referred to herein, integrates all the terms and conditions mentioned herein or incidental hereto and supersedes all oral negotiations and prior agreements and understandings of the parties hereto in respect to the subject matter hereof.

 

SECTION 11.7.   Governing Law.

 

This Loan Guarantee Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed and interpreted in accordance with, the Federal law of the United States of America. To the extent that Federal law does not specify the appropriate rule of decision for a particular matter at issue, it is the intention and agreement of the parties hereto that the law of the State of New York (without giving effect to its conflict of laws principles (except Section 5-1401 of the New York General Obligations Law) shall be adopted as the governing Federal rule of decision, provided, however that (i) documents to which FFB is a party shall be

 

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governed by the law required by FFB and (ii) the Security Documents shall by the law required to best perfect the relevant security interest.

 

SECTION 11.8.   Severability.

 

In case any one or more of the provisions contained in any Financing 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.

 

SECTION 11.9.   Calculations.

 

All financial data submitted pursuant to this Loan Guarantee Agreement and the other Financing 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.

 

SECTION 11.10 Borrower’s Disclaimers.

 

Certain information has been, or will be, provided by the Borrower to DOE, the Collateral Agent and their respective Independent Consultants, including the Construction Budget, Project Plans, Financial Plan, Advance Schedule, Project Milestone Schedule, Base Case Projections, Operating Budget, Operating Forecasts and Employment Projections, that is based on good faith or best estimates of events or circumstances that may exist in the future (“Predictive Information”). Such Predictive Information is not intended to be an assurance of the occurrence or non-occurrence of future events or circumstances. Notwithstanding anything to the contrary in this Loan Guarantee Agreement, except to the extent the Borrower has represented, warranted or covenanted as to the accuracy of any Predictive Information, Borrower shall have no liability for the inaccuracy of any Predictive Information provided in good faith.

 

SECTION 11.11.  Limitation on Liability.

 

No claim shall be made by the Borrower or any of its Affiliates against any Secured Party or any of their Affiliates, directors, employees, attorneys or agents, including the Agents and the Independent Consultants, for any special, indirect, consequential or punitive damages (whether or not the claim therefor is based on contract, tort or duty imposed by law), in connection with, arising out of or in any way related to the transactions contemplated by this Loan Guarantee Agreement or the other Transaction Documents or any act or omission or event occurring in connection therewith; and the Borrower hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor.

 

SECTION 11.12.  Waiver of Jury Trial.

 

Each of the parties hereto hereby knowingly, voluntarily, and intentionally waives any rights it may have to a trial by jury in respect of any litigation based hereon, or arising out of, under, or in connection with, this Loan Guarantee Agreement or any other Financing Document, or any course of conduct, course of dealing, statements (whether verbal or written), or actions of

 

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the Borrower. This provision is a material inducement for each party to enter into this Loan Guarantee Agreement and the other Financing Documents.

 

SECTION 11.13.  Consent to Jurisdiction.

 

By execution and delivery of this Loan Guarantee Agreement, the Borrower irrevocably and unconditionally:

 

(a)             submits for itself and its Property in any legal action or proceeding against it arising out of or in connection with this Loan Guarantee Agreement or any other Financing 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 in and 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 11.1 or at such other address that it shall notify the Loan Servicer hereunder;

 

(d)             agrees that nothing herein shall (i) affect the right of any Secured Party to effect service of process in any other manner permitted by law or (ii) limit the right of any Secured 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 Applicable Laws; 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.

 

SECTION 11.14.  Successors and Assigns.

 

(a)             The provisions of this Loan Guarantee Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

(b)             The Borrower may not assign or otherwise transfer any of its rights or obligations under this Loan Guarantee Agreement or under any Transaction Document without the prior written consent of DOE.

 

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(c)             FFB may assign any or all of its rights, benefits and obligations under the Financing Documents and with respect to the Collateral to any financial institution in accordance with the provisions of the FFB Documents.

 

(d)             The Loan Servicer, acting for this purpose as an agent of the Borrower shall maintain a register for the recordation of the names and addresses of each Person that acquires an interest in the Guaranteed Loans in accordance with the provisions of the FFB Documents and the principal amounts of the Advances owing to each such Person pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, any Agent and the Lenders may treat each Person whose name is recorded in the Register as a Lender for all purposes of this Loan Guarantee Agreement, notwithstanding notice to the contrary. The register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

 

SECTION 11.15.  Participations.

 

FFB may from time to time sell or otherwise grant participations in any or all of its rights and obligations under the Financing Documents and with respect to the Collateral without the consent of the Borrower. In such case, Borrower and any Agent shall continue to deal exclusively with FFB and the provisions of this Loan Guarantee Agreement shall apply as if no such participation had been sold or granted.

 

SECTION 11.16.  Reinstatement.

 

This Loan Guarantee Agreement shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Borrower’s obligations hereunder, or any part thereof, is, pursuant to Applicable Laws, rescinded or reduced in amount, or must otherwise be restored or returned by any Secured 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.

 

SECTION 11.17.  No Partnership; Etc.

 

DOE and the Borrower intend that the relationship between them shall be solely that of guarantor and debtor. Nothing contained in this Loan Guarantee Agreement or in any other Financing Document shall be deemed or construed to create a partnership, tenancy-in-common, joint tenancy, joint venture or co-ownership by, between or among DOE and the Borrower or any other Person. DOE shall not be in any way responsible or liable for the indebtedness, losses, obligations or duties of the Borrower or any other Person with respect to the Project or otherwise. All obligations to pay Real Property or other taxes, assessments, insurance premiums, and all other fees and Periodic Expenses arising from the ownership, operation or occupancy of the Project and to perform all obligations under the agreements and contracts relating to the Project shall be the sole responsibility of the Borrower.

 

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SECTION 11.18.  Payment of Costs and Expenses.

 

(a)             The Borrower shall, whether or not the transactions herein contemplated are consummated, pay or reimburse, without duplication: all reasonable out-of-pocket costs and expenses of each Secured 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 (i) the preparation, execution and delivery of the Term Sheet, (ii) the translation, negotiation, preparation, execution and delivery and, where appropriate, authentication, registration and recordation of this Loan Guarantee Agreement, the other Transaction Documents and any other documents and instruments related hereto or thereto (including legal opinions) and (iii) 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.

 

(b)             The Borrower also shall pay or reimburse, without duplication, all reasonable and reasonably documented out-of-pocket costs and expenses of DOE or any other Secured Party (including all commissions, charges, costs and expenses for the conversion of currencies and all other costs, charges and expenses including all fees and Periodic Expenses of the legal counsel, consultants and advisors for any of the foregoing) made, paid, suffered or incurred in connection with (A) any amendment or modification to, or the protection or preservation of any right or claim under, or consent or waiver in connection with, this Loan Guarantee Agreement or any other Transaction Document, any such other document or instrument related hereto or thereto or any Collateral, (B) the administration, preservation in full force and effect and enforcement (including with respect to a work out) of this Loan Guarantee Agreement, the other Transaction Documents and any other documents and instruments referred to herein or therein (including the fees and disbursements of counsel for DOE and travel costs) and (C) the fees and expenses of the Independent Engineer and other Independent Consultants from time to time retained pursuant to the Financing Documents.

 

(c)             The Borrower shall, whether or not the transactions herein contemplated are consummated, indemnify DOE, FFB, each other Secured Party and each of their respective officers, directors, employees, representatives, attorneys and agents (each an “Indemnified Person” and, collectively, the “Indemnified Parties”) 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) arising out of or related to (i) the preparation, execution and delivery of the Term Sheet and (ii) the entering into and performance of any Transaction Document or the disbursement of, or use of the proceeds of, any Advance or the consummation of any transactions contemplated herein or in any Transaction Document, and including without limitation, any pollution or threat to human health or the environment that is related in any way to the Project, and further including, without limitation, all on-site and off-site activities involving Hazardous Substances, whether or not any such matters are included in any schedule to this Loan Guarantee Agreement, and any Environmental Claim against any Person whose liability for such Environmental Claim the Borrower or any Borrower Entity has assumed or retained either contractually or by operation of law, including the fees and Periodic Expenses of counsel selected by such Indemnified Person incurred in connection with any such investigation, litigation or other proceeding or in connection with

 

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enforcing the provisions of this Section 11.18 (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”).

 

(i)                   Without limitation to the provisions of clause (b) above, the Borrower agrees to defend, indemnify and hold harmless each Indemnified Person and each of its respective directors, officers, shareholders, agents, employees, participants, successors and assigns, from and against any and all Indemnity Claims.

 

(ii)                  All sums paid and costs incurred by any Indemnified Person with respect to any matter indemnified hereunder shall bear interest at the Late Charge Rate applicable to the Advance 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 11.18.

 

(d)             Each Indemnified Person within seven (7) Business 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  11.18, 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.

 

(e)             To the extent that the undertaking in the preceding clauses of this Section 11.18 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 Applicable Laws to the payment and satisfaction of such undertakings.

 

(f)             The provisions of this Section 11.18 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.

 

(g)             Any amounts payable by the Borrower pursuant to this Section 11.18 shall be payable not later than the later of (i) ten (10) Business Days after the Borrower receives an invoice for such amounts from any applicable Indemnified Person and (ii) five (5) Business Days prior to the date on which such Indemnified Person expects to pay such costs on account of which the Borrower’s indemnity hereunder is payable, and if not paid by such applicable date shall bear interest at the Late Charge Rate from and after such applicable date until paid in full.

 

(h)             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

 

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Borrower’s expense, and such participation by the Borrower in the defense thereof shall not release the Borrower of any liability that it may have to such Indemnified Person. Any Indemnified Person against whom any Indemnity Claim is made shall be entitled, after consultation with the Borrower and upon consultation with legal counsel wherein such Indemnified Person is advised that such Indemnity Claim is meritorious, to compromise or settle any such Indemnity Claim. Any such compromise or settlement shall be binding upon the Borrower for purposes of this Section 11.18.

 

(i)              Upon payment of any Indemnity Claim by the Borrower pursuant to this Section 11.18, 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.

 

(j)              Notwithstanding any other provision of this Section 11.18, 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 11.18 with respect to any action, suit or proceeding against the Borrower, the Operator or the Sponsor.

 

SECTION 11.19.  Counterparts.

 

This Loan Guarantee Agreement may be executed in one or more duplicate counterparts and when signed by all of the parties shall constitute a single binding agreement.

 

SECTION 11.20.  Contest Rights.

 

In the event that the Department of the Treasury (i) requests any additional information from the Borrower or any other person after submission of the Cash Grant Application or (ii) indicates orally or in writing, formally or informally that the Department of the Treasury may or will delay or disallow the Cash Grant in whole or in part, Borrower shall provide DOE and its counsel with copies of any relevant correspondence between Borrower and the Department of the Treasury, including any additional information sent by Borrower to the Department of the Treasury in response to the Department of the Treasury’s request for such information.

 

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

 

	
 
    	
 
    
	
 
    	
HIGH PLAINS RANCH II, LLC
    
	
 
    	
 
    
	
 
    	
as  Borrower
    
	
 
    	
 
    
	
 
    	
By: 
    	
Richard Grosdidier
    
	
 
    	
 
    
	
 
    	
Its: 
    	
Vice President, Finance
    
	
 
    	
 
    
	
 
    	
 
    	
/s/ Richard Grasididier
    
	
 
    	
 
    	
Signature
    

 

[Signature Page to Loan Guarantee Agreement]

 

 

	
 
    	
U.S. DEPARTMENT OF ENERGY,
    
	
 
    	
as Guarantor
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ David G. Frantz
    
	
 
    	
Name: 
    	
David G. Frantz
    
	
 
    	
Title: 
    	
Director of the Loan Guarantee Origination Division, Loan Programs   Office
    
	
 
    	
 
    
	
 
    	
U.S. DEPARTMENT OF ENERGY,
    
	
 
    	
as Loan Servicer
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David G. Frantz
    
	
 
    	
Name: 
    	
David G. Frantz
    
	
 
    	
Title: 
    	
Director of the Loan Guarantee Origination Division, Loan Programs   Office
    

 

[Signature Page to Loan Guarantee Agreement]

 

 

Exhibit A

to Loan Guarantee Agreement

 

DEFINITIONS

 

“Account Proceeds” means interest or any other income arising out of the investment of amounts on deposit in the Project Accounts.

 

“Accounts Agreement” means the Collateral Agency and Accounts Agreement, dated as of the date hereof, among the Loan Servicer, the Collateral Agent and the Borrower, pursuant to which the Project Accounts are established and will be managed, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Accounts Control Agreement” means the Blocked Accounts Control Agreement, dated as of the date hereof, among the Borrower, PNC Bank, National Association and the Collateral Agent, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Action” means any (a) action, suit or proceeding of or before any Governmental Authority, (b) investigation by a Governmental Authority or (c) arbitral proceeding.

 

“Actual Aggregate Cash Grant Security Support” means, at any time, the sum of the Cash Grant Shortfall Security outstanding, plus the amount of funds on deposit in the Cash Grant Proceeds Account, plus the amount of funds on deposit in the Restricted Payment Account.

 

“Actual Cash Grant Security Support” means, at any time, the sum of the Cash Grant Shortfall Security outstanding, plus the amount of funds on deposit in the Cash Grant Proceeds Account.

 

“Additional Project Document” means all of the contracts necessary for or material to the construction and operation of the Project entered into by the Borrower subsequent to the Guarantee Agreement Date.

 

“Advance” means, collectively, any Cash Grant Bridge Loan Advance or Term Loan Advance, but in each case excluding any Capitalized Interest Amounts.

 

“Advance Date” means a Business Day on which FFB makes an Advance in accordance with Article 2.

 

“Advance Schedule” means the advance schedule delivered pursuant to Section 4.1.2(a)(v), as amended from time to time with DOE’s consent.

 

“Affiliate” means with respect to any Person, any other Person that directly or indirectly Controls, or is under common Control with, or is Controlled by, such Person; provided, however, that, in any event and for all purposes of the Financing Documents, the Sponsor or any Affiliate of the Sponsor shall be deemed an “Affiliate” of the Borrower.

 

Exhibit A - Page 1

 

“Agents” means collectively, the Loan Servicer and the Collateral Agent (and each, individually, an “Agent”).

 

“ALTA” means the American Land Title Association headquartered in Washington D.C.

 

“ALTA Survey” means a current ALTA/ACSM survey of the Project Site prepared by North Coast Engineering, Inc. or another licensed surveyor reasonably satisfactory to DOE in accordance with the 2011 Minimum Standard Detail Requirements for ATLA/ACSM Land Title Surveys , certified to the Collateral Agent and the Title Companies, and otherwise in form and substance satisfactory to DOE.

 

“Anticipated Operational Completion Date” means December 31, 2013; provided that such date may be moved as a result of an event that constitutes an Event of Force Majeure under the EPC Contract (as the EPC Contract is in effect on the Guarantee Agreement Date) to the extent such Event of Force Majeure affords the Borrower schedule relief for the last “Guaranteed Phase Operation Date” to occur under the Power Purchase Agreements and, in such case, the Borrower shall present to DOE for approval any mitigation or recovery plan necessitated by such Event of Force Majeure, which approval will not be unreasonably withheld, conditioned or delayed..

 

“Anti-Terrorism Order” means Executive Order No. 13,224, 66 Fed. Reg. 49,079 (2001), issued by the President of the United States of America (Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism).

 

“Applicable Law” means, with respect to any Person, any constitution, statute, law, rule, regulation, code, ordinance, treaty, judgment, order or any published directive, guideline, requirement or other governmental rule or restriction which has the force of law, by or from a court, arbitrator or other Governmental Authority having jurisdiction over such Person or any of its Properties, whether in effect as of the date hereof or as of any date hereafter.

 

“Applicable Regulations” means the final regulations located at 10 CFR Part 609 and any other applicable regulations from time to time promulgated by DOE to implement Title XVII.

 

“Application” means the Loan Guarantee Application of the Sponsor dated May 14, 2010, for a DOE Guarantee under Title XVII.

 

“Approved Construction Changes” is defined in Section 7.16(b).

 

“Approved Pre-Closing Equity Credit” means the sum of the Project Costs set forth in the Pre-Closing Project Costs Report.

 

“Authorized Officer” means, (a) with respect to any Person (i) that is a corporation, the chairman, chief executive officer, president, vice president, assistant vice president, treasurer, assistant treasurer, or any other Financial Officer of such Person, (ii) with respect to any Person that is a partnership, each general partner of such Person or the chairman, chief executive officer, president, a vice president, an assistant vice president, treasurer, an assistant treasurer or any other Financial Officer of a general partner of such Person or (iii) with respect to any Person that

 

Exhibit A - Page 2

 

is a limited liability company, the manager, managing partner or duly appointed officer of such Person, the individuals authorized to represent such Person pursuant to the Organization Documents of such Person, or the chairman, chief executive officer, president, vice president, assistant vice president, treasurer, assistant treasurer or any other Financial Officer of the manager or managing member of such Person and (b) with respect to any Borrower Entity, only those individuals holding any of the foregoing positions whose name appears on the certificate of incumbency delivered pursuant to Section 4.1.1(d), as such certificate of incumbency may be amended from time to time to identify names of the individuals then holding such offices and the capacity in which they are acting.

 

“Availability Period” means, collectively, the Term Loan Availability Period and the Cash Grant Bridge Loan Availability Periods.

 

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy.”

 

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors, conservatorship, bankruptcy, general assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of the U.S. or other applicable jurisdictions from time to time in effect and any similar federal, state or foreign law for the relief of debtors affecting the rights of creditors generally.

 

“Base Case Projections” are the projections delivered pursuant to Section 4.1.2(a)(vii), as amended from time to time with DOE’s consent.

 

“Base Equity” means the sum of (i) equity funding to be provided to the Borrower by the Sponsor under the Equity Funding Agreement and (ii) the Approved Pre-Closing Equity Credit, in an amount not less than the Base Equity Commitment.

 

“Base Equity Commitment” means the obligation of the Sponsor under the Equity Funding Agreement to fund an aggregate amount equal to the difference between (i) Base Project Costs less (ii) the Guaranteed Loan Amount.

 

“Base Equity Commitment Collateral” means the Equity Letter(s) of Credit and the cash pledged to the Collateral Agent under the Cash Collateral Security Agreement.

 

“Base Project Costs” means all Project Costs, including Eligible Project Costs, expected to be incurred to achieve Project Completion, as agreed to by the Borrower and DOE, and as set forth in the Base Case Projections as of the Guarantee Agreement Date.

 

“Biological Opinion” means the Biological Opinion issued by the United States Fish & Wildlife dated June 24, 2011 and any future amendments or modifications thereto and any documents incorporated therein, including but not limited to any biological assessments, amendments to biological assessments, and terms and conditions of any incidental take statements.

 

“Borrower” is defined in the preamble to the Loan Guarantee Agreement.

 

Exhibit A - Page 3

 

“Borrower Compliance Entity” means each of the Borrower, the Holding Company, NRG Solar Sunrise LLC and the Sponsor and each of their respective successors or assigns.

 

“Borrower Entity” means each of the Borrower, the Holding Company, NRG Solar Sunrise LLC, the Sponsor, the Intermediate Parent Company, the Ultimate Parent, any other Major Project Participant that is an Affiliate of the Borrower and each of their respective successors or assigns.

 

“Borrower Entity Controlling Person” means any Person that, directly or indirectly, Controls any Borrower Entity.

 

“Borrower Insurance Advisor” means Moore-McNeil, LLC or any other insurance advisor or expert appointed by the Borrower and reasonably acceptable to DOE.

 

“Borrower Reimbursement Obligations” is defined in Section 10.2.1.

 

“Borrower Reimbursement Payment” is defined in Section 10.2.2.

 

“Borrower’s Accountant” means KPMG LLP or such other firm of independent certified public accountants of nationally recognized standing as may be appointed by the Borrower from time to time with the approval of the Loan Servicer.

 

“Borrower Released Parties” means (i) the Borrower and all other owners or operators of the Project, (ii) and any other Person with responsibilities or obligations (including, without limitation, any Governmental Authorities, and specifically including the DOE) under the Current Entitlements.

 

“Business Day” means 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 amendment, supplement or successor thereto, including any relevant regulation or guidance that may be issued by DOE that has the force of law.

 

“Capital Expenditures” means all expenditures that should be capitalized in accordance with GAAP.

 

“Capital Lease” means, for any Person, any lease of (or other agreement conveying the right to use) any Property of such Person that would be required, in accordance with GAAP, to be capitalized and accounted for as a capital lease on a balance sheet of such Person.

 

“Capitalized Interest Amount” means, with respect to any Advance or any related Capitalized Interest Amount as of any date of determination, the actual amount of interest capitalized in respect of such Advance or Capitalized Interest Amount as of such date of determination in accordance with Section 7(b) of the applicable FFB Promissory Note (including

 

Exhibit A - Page 4

 

any interest to be capitalized in respect of the previous Advances or Capitalized Interest Amount as of such date of determination).

 

“Cash Collateral Security Agreement” means the Security Agreement, between the Sponsor and the Collateral Agent, dated as of the date hereof, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Cash Collateral Accounts Control Agreement” means the Accounts Control Agreement, between the Sponsor and the Collateral Agent, dated as of the date hereof, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Cash Flow Available for Debt Service” means for any period, the sum for such period of Project cash revenue (excluding extraordinary revenues, but including business interruption insurance proceeds received during such period for an event that occurred during such period and cash repayments received under the Large Generator Interconnection Agreement) received during such period, minus (i) cash operating and maintenance expenses to the extent not funded by withdrawals from the Major Maintenance Reserve Account; (ii) scheduled contributions to the Major Maintenance Reserve Account; (iii) taxes paid with cash; (iv) nondiscretionary Capital Expenditures; and (v) required periodic decommissioning or restoration contributions paid or payable as required under the Financing Documents.

 

“Cash Grant” means a grant provided for in Section 1603 of Division B of the Recovery Act.

 

“Cash Grant Application” means an “Application for Section 1603: Payments for Specified Renewable Energy Property in Lieu of Tax Credits” filed by the Borrower, as an applicant, for the Cash Grant with respect to the Project (or a phase thereof).

 

“Cash Grant Application Date” means the date on which the Borrower has filed a Cash Grant Application with respect to the Project (or a phase thereof).

 

“Cash Grant Bridge Loan Advance” means an advance or a borrowing of the Guaranteed Cash Grant Bridge Loan made pursuant to the Loan Guarantee Agreement and the FFB Documents.

 

“Cash Grant Bridge Loan Availability Period” means, individually, each of the Phase 1 Cash Grant Bridge Loan Availability Period, the Phase 2 and 4 Cash Grant Bridge Loan Availability Period and the Phase 3 Cash Grant Bridge Loan Availability Period, as applicable, and, collectively, the period commencing on the Guarantee Agreement Date and ending when the Phase 1 Cash Grant Bridge Loan Availability Period, the Phase 2 and 4 Cash Grant Bridge Loan Availability Period and the Phase 3 Cash Grant Bridge Loan Availability Period have all expired or terminated.

 

“Cash Grant Guidance” means the guidance issued on July 9, 2009 (as revised March 2010 and April 2011), by the U.S. Department of the Treasury for payments for specified energy property in lieu of tax credits under Section 1603 of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5), including (i) the paper entitled “Evaluating Cost Basis for Solar Photovoltaic Properties,”available on the U.S. Department of the Treasury’s website, and (ii) any

 

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clarification, amendment, addition or supplement to such guidance, such paper, or any other guidance or similar materials issued by the U.S. Department of the Treasury or any other Governmental Authority.

 

“Cash Grant Proceeds Account” has the meaning set forth in the Accounts Agreement.

 

“Cash Grant Recapture Liabilities” means any loss or liability resulting from all or any portion of a Cash Grant being “recaptured” as a result of the Project or any part thereof or any interest in the Borrower being disposed of, all or any portion of the Project ceasing to be specified energy property, or otherwise, including any interest or penalties related thereto as described in the Cash Grant Guidance.

 

“Cash Grant Shortfall Security” means the NRG Cash Grant Shortfall Security and the SunPower Cash Grant Shortfall Security and the unapplied proceeds of each such item.

 

“Cash Grant Support Release Date” means the earlier of the date that (i) each of the Phase 1 Cash Grant Bridge Loan and the Phase 2 and 4 Cash Grant Bridge Loan have been repaid in full and (ii) the balance of the Cash Grant Proceeds Account equals or exceeds the then current amount required to repay each of the Phase 1 Cash Grant Bridge Loan and the Phase 2 and 4 Cash Grant Bridge Loan in full.

 

“Cash Grant Terms and Conditions” means the “Payments for Specified Energy Property in Lieu of Tax Credits under the American Recovery and Reinvestment Act of 2009 — Terms and Conditions” issued by the U.S. Department of Treasury, as amended or supplemented.

 

“CCR” means the Central Contractor Registration database, established in accordance with the Federal Acquisition Streamlining Act of 1994.

 

“CEQA Letter of Credit” means a Letter of Credit that (a) names the Collateral Agent (acting for the benefit of the Secured Parties) as the beneficiary, (b) is non-recourse to the Borrower and (c) is substantially in the form of Exhibit CC or another form acceptable to DOE.

 

“CEQA Litigation” means Carrizo Commons v. County of San Luis Obispo (San Luis Obispo Superior Court Case No. CV 110314).

 

“CEQA Litigation Support Instrument” means one or more of the following instruments: (i) one or more CEQA Letters of Credit, (ii) the Total Guarantee or (iii) any combination of instruments in clauses (i) and (ii), which will be made available to DOE for the purpose of mitigating the risk of the CEQA Litigation; provided that any drawing under a CEQA Letter of Credit in accordance with its terms will not result in an Event of Default under Section 8.1(gg) if the proceeds from such draw are deposited into a Project Account in accordance with the Accounts Agreement.

 

“CEQA Litigation Support Determination Date” means (a) the date that immediately preceeds the date of the first Advance and (b) each six-month anniversary of such date, until the earlier to occur of (i) the Maturity Date and (ii) the Settlement.

 

Exhibit A - Page 6

 

“CEQA Support Required Amount” means, at such time, an amount equal to the aggregate principal amount of all Advances outstanding at such time (including the then requested Advance), plus the sum of (i) all accrued and unpaid interest on all Advances outstanding, and (ii) interest that is expected to become due and payable (through accrual or capitalization) in immediately following six (6) months on all outstanding Advances (including the then requested Advance).

 

“Change of Law” means any change in any Applicable Law or the application or requirements thereof, or required or directed compliance by any Person with any request or directive (whether or not having the force of law but if not having the force of law, being of a type with which they customarily comply) of any Governmental Authority issued after the Guarantee Agreement Date.

 

“Change Orders” means any change order or variation order, amendment, supplement or modification in respect of any Construction Contract.

 

“Claim” means any controversy, dispute, claim, action, cause of action, suit,proceeding (including judicial, regulatory and administrative proceeding, challenge or appeal), investigation, order, demand or notice by any person or entity.

 

“Collateral” means all Property (whether tangible or intangible) 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 to the Collateral Agent or otherwise for the benefit of DOE and the other Secured Parties under the Security Documents.

 

“Collateral Agent” means PNC Bank, National Association, doing business as Midland Loan Services, a division of PNC Bank, National Association, a national bankng association, or its successor, as appointed pursuant to the Accounts Agreement.

 

“Commencement of Construction” means (a) the Borrower has (i) completed all pre-construction engineering and design, (ii) received all necessary licenses, permits and local and national environmental clearances, (iii) engaged all contractors and ordered all essential equipment and supplies that, in each case, are reasonably necessary to begin (or, if previously interrupted or suspended, resume) physical work of a significant nature on the Project and to proceed to completion without foreseeable interruption of a material duration; and (b) the Borrower or relevant sub-contractor has begun (or resumed) such physical work.

 

“Comptroller General” means the Comptroller General of the United States.

 

“Construction Budget” is the budget delivered pursuant to Section 4.1.2(a)(i), as modified from time to time consistent with the terms of this Loan Guarantee Agreement.

 

“Construction Change” is defined in Section 7.16(b).

 

“Construction Contracts” means the EPC Contract, the EPC Subcontract, the Materials and Equipment Supply Agreement and the Preliminary Construction Agreement.

 

Exhibit A - Page 7

 

“Construction Contractor” means each of the EPC Contractor and the EPC Subcontractor.

 

“Construction Period” means the period prior to the Project Completion Date.

 

“Construction Progress Report” means a construction progress report prepared monthly by or on behalf of the Borrower, which shall include: (a) a detailed assessment of the progress of construction to date in comparison with the Project Plans, the Construction Budget, the Financial Plan and Project Milestone Schedule then in effect for such monthly period (along with an explanation of material delays, if any) and the expected progress of construction; (b) contingencies used or reasonably expected to be used to pay Project Costs; (c) any events that have occurred or are reasonably expected to occur that would materially affect the construction schedule or the Project’s ability to achieve Project Completion by the Guaranteed Project Completion Date; (d) a description and explanation of any (i) Events of Loss that have occurred or (ii) material casualty losses; and (e) material disputes or Actions between the Borrower and any Person.

 

“Contingent Obligations” means as to any Person, any obligation of such Person with respect to any Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, as a guarantee or otherwise:

 

(i)            for the purchase, payment or discharge of any such primary obligation;

 

(ii)           to purchase, repurchase or otherwise acquire such primary obligations or any property constituting direct or indirect security therefor, including the obligation to make take-or-pay or similar payments;

 

(iii)          to advance or supply funds;

 

(iv)          to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor;

 

(v)           to purchase Property, securities or services primarily for the purpose of assuring the holder of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation;

 

(vi)          otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof, including without limitation with respect to letter of credit obligations, swap agreements, foreign exchange contracts and other similar agreements (including agreements relating to derivative instruments);

 

Exhibit A - Page 8

 

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.

 

“Contract Party” is defined in Exhibit N.

 

“Control” (including with correlative meanings, the terms “Controlling,” “Controlled by” and “under common Control with”) The power, directly or indirectly, to direct or cause the direction of the management or business or policies of a Person, whether through the ownership of voting securities or partnership or other ownership interests, by contract, or otherwise (other than through super-majority rights or negative control rights of members).

 

“Corrupt Practices Laws” means (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 Applicable Law.

 

“Cost Overruns” means any Project Costs in excess of Project Costs set forth in the initial Base Case Projections, whether Eligible Project Costs or not, and including:

 

(i)            costs associated with the design, engineering, financing, construction, startup and commissioning 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 from contingencies

 

“Covered Taxes” is defined in Section 3.1.2(a).

 

“Credit Subsidy Cost” means the “cost of a loan guarantee”, as set forth in section 502(5)(C) of FCRA.

 

“Current Entitlement” means any Required Approval of a Governmental Authority under Environmental Laws, or other federal, state and local governmental determination, approval, decision, permit, authorization, environmental review, certification, waiver, finding, contract,

 

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modification, amendment or action relating to the design, engineering, construction, financing, operation, compliance, repair, maintenance, replacement, extension, decommission and reclamation activities related to the Project.

 

“Cutoff Date” means the date occurring 90 days after the Guarantee Agreement Date, as may be extended by DOE; provided that if Borrower funds initial Project Costs solely with Equity Contributions, the Cutoff Date shall be extended to a date that is up to 18 months after the Guarantee Agreement Date, which extension shall be allowed (as determined to DOE’s reasonable satisfaction) if, among other conditions to be agreed upon, the Sponsor has made necessary Equity Contributions in accordance with the Construction Budget and the construction is proceeding in accordance with the Construction Budget and the Project Milestone Schedule.

 

“Davis-Bacon Act” means 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.

 

“Davis-Bacon Act Covered Contract” means any contract, agreement or other arrangement related to the Project subject to Davis-Bacon Act requirements under Title XVII, including, but not limited to, those listed on Schedule 6.24(a).

 

“Davis-Bacon Actions” is defined in Section 6.24(h)(iii).

 

“Davis-Bacon Requirements” means the requirement that all laborers and mechanics employed by contractors and subcontractors in the performance of construction work financed in whole or in part by either Guaranteed Loan shall be paid wages at rates not less than those prevailing on projects similar in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, and all regulations related thereto, including those set forth in 29 CFR 5.5(a) (1) to (10), and all notice, reporting and other obligations related thereto as required by DOE, including the obligations under Section 6.24(h) and the inclusion of the provisions in Exhibit N and the appropriate wage determination(s) of the Secretary of Labor in each Davis-Bacon Act Covered Contract.

 

“DBA 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.

 

“Debarment Regulations” means all of the following:

 

(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

 

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(iii)          the revised Government-wide Debarment and Suspension (Non-procurement) regulations (Common Rule), 60 Fed. Reg. 33037 (June 26, 1995).

 

“Debt Collection Improvement Act” means the Debt Collection Improvement Act of 1996, as amended from time to time.

 

“Debt Service” means, with respect to any computation period, the sum of (i) scheduled principal, interest expense and financing fees to be paid under the FFB Documents during such period, (ii) other fees and amounts paid or scheduled to be payable to FFB or DOE during such period and (iii) all other payments with respect to other Indebtedness for Borrowed Money of the Borrower.

 

“Debt Service Reserve” is defined in Section 6.15.

 

“Debt Service Reserve Account” is defined in the Accounts Agreement.

 

“Debt Service Reserve Requirement” on any date, an amount equal to the highest total six (6) months of Debt Service scheduled to occur within the three (3) years period immediately following such date.

 

“Debt to Equity Ratio” means the ratio of (a) aggregate amounts outstanding under the Guaranteed Loans, including the amount of any capitalized interest to (b) aggregate Equity Contributions used by the Borrower to fund Eligible Project Costs (less reimbursement of Equity Contributions pursuant to Section 7.10(b)(ii).

 

“Deed of Trust” means the Construction and Permanent Leasehold Deed of Trust with Assignment of Rents and Fixture Filing made by the Borrower, as trustor, in favor of the Title Companies, as trustee, for the benefit of the Collateral Agent, as beneficiary, pursuant to which the Borrower grants for the benefit of DOE a lien on all of its right, title and interest in and to the Project Site and all Real Property improvements to the Project Site.

 

“Delivery Term Security” means the HPR II Delivery Term Security and the HPR III Delivery Term Security.

 

“Delivery Term Security Maintenance Agreement” means that certain Delivery Term Security Maintenance Agreement by and among SunPower Corporation, a Delaware corporation, NRG Energy, Inc., a Delaware corporation, and the Borrower dated as of the date hereof.

 

“Designated Private Company” means a Person that has been so designated by DOE, which designation shall not be unreasonably withheld, conditioned or delayed if such Person (x) is sufficiently capitalized, (y) has a sufficiently large number of investors that are not Affiliates of one another, and (z) is not a Prohibited Person. A Person may request that it be so designated in accordance with the following procedures:

 

(i) with respect to any investment fund, the fund manager shall represent to DOE that, at the time of such fund’s investment in the Project, (A) none of (1) such fund, (2) the fund manager of such fund, or (3) any investor that Controls such fund is a Prohibited Person, and (B)

 

Exhibit A - Page 11

 

such other information as may reasonably be required by DOE in light of the foregoing criteria for designation if a Person as a Designated Private Company, and

 

(ii) with respect to any other Person, such Person shall represent to DOE that, at the time of its investment in the Project, neither it nor to its knowledge any Person that directly or indirectly owns any Equity Interest in it is a Prohibited Person.

 

“Development Security” means the HPR II Development Security and the HPR III Development Security.

 

“Developmental Delay Notice” means a letter, dated December 17, 2010, given by the Borrower and acknowledged and agreed by PG&E.

 

“Development Services Agreement” means the Development Services Agreement, among the Borrower, the Sponsor and SunPower, dated as of September 23, 2010, as amended by the certain Amendment No. 1 to Development Services Agreement, dated as of the date hereof.

 

“Direct Agreement” means each consent and agreement required to be delivered pursuant to the Financing Documents in respect of any Major Project Document, each of which shall be in a form as may be reasonably acceptable to DOE and the Collateral Agent.

 

“Disposition” is defined in the definition of “Permitted Dispostion.”

 

“Disqualified Person” means (a) any federal, state, or local government (or any political subdivision, agency, or instrumentality thereof); (b) any organization described in Section 501(c) of the Internal Revenue Code and exempt from tax under Section 501(a) of the Internal Revenue Code; (c) any entity referred to in paragraph (4) of Section 54(j) of the Internal Revenue Code; (d) any real estate investment trust, as defined in Section 856(a) of the Internal Revenue Code; (e) any other Person that is ineligible to receive the Cash Grant under Section 1603(g) of the Recovery Act; and (f) any partnership or other pass-through entity (including a single-member disregarded entity), any partner (or other holder of an equity or profits interest) of which is a Disqualified Person; provided that a taxable C corporation, any (or all) of whose shareholders are ineligible to receive a Cash Grant by virtue of being described in clauses (a) through (f) above, will not be considered a Disqualified Person; provided, further, that if and to the extent the definition of “Disqualified Person” under Section 1603(g) of the Recovery Act is amended after the Guarantee Agreement Date, the definition of “Disqualified Person” provided in the Loan Guarantee Agreement shall be interpreted to conform to such amendment and any U.S. Department of the Treasury guidance with respect thereto.

 

“DOE” is defined in the preamble to the Loan Guarantee Agreement.

 

“DOE Guarantee” means the guarantee provided by DOE in favor of FFB pursuant to the FFB Documents.

 

“DOE Guarantee Payment” is defined in Section 10.1.

 

“DOE Guarantee Payment Amount” is defined in Section 10.1.

 

Exhibit A - Page 12

 

“DOE Insurance Advisor” means Moore-McNeil, LLC, acting as insurance advisor for DOE, or any successor insurance advisor or expert appointed by DOE.

 

“DOE Maintenance Fee” means a maintenance fee in respect of DOE’s administrative expenses in servicing and monitoring the Project and the Financing Documents during the construction, startup, commissioning and operation of the Project in an amount per year equal to $100,000, until the earlier of the date on which the principal amounts of each Guaranteed Loan have been fully paid and the FFB Commitment has been terminated or the Maturity Date, payable annually in advance, commencing on the Guarantee Agreement Date.

 

“DOE Modification Fee” means a fee payable to DOE in the event that the Project experiences technical, financial, legal or other events that require DOE to incur time or expenses (including third-party expenses) beyond standard monitoring and administration of the Financing Documents, reimbursing DOE in full for such amounts as DOE reasonably determines are its additional internal administrative costs, any costs associated in reviewing whether such events would alter the Credit Subsidy Cost, and related fees and expenses of its independent consultants and outside legal counsel, to the extent that such third parties are not paid directly by on or behalf of the Borrower.

 

“Dollars” or “ $” means the lawful currency of the United States of America.

 

“DSCR Restoration Cap Amount” means $0.00.

 

“Eligible Project Costs” means those portions of Project Costs that are eligible for funding as “Project Costs” as defined in the Applicable Regulations as reasonably determined by DOE (including interest amounts permitted to be capitalized pursuant to the Financing Documents).

 

“Employee Benefit Plan” means (i) all “employee benefit plans” (as defined in Section 3(3) of ERISA) other than any Multiemployer Plans that 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.

 

“Employment Projections” means the employment projections delivered pursuant to Section 4.1.2(a)(ix).

 

“Environmental Claim” means any and all obligations, liabilities, losses, administrative, regulatory or judicial actions, causes of action, suits, demands, decrees, claims, liens, judgments, notices of noncompliance or violation, investigations, orders, 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 Environmental Law including without limitation (a) any of the foregoing by any Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (b) any of the foregoing by any third party seeking damages,

 

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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, natural resources or the environment.

 

“Environmental Laws” means any Applicable Law in effect as of the Guarantee Agreement Date or thereafter, and in each case as amended, regulating or imposing obligations, liability or standards of conduct concerning or otherwise relating to (a) environmental impacts resulting from the use of the Project Site or environmental conditions present on, in or under the Project Site, (b) pollution, protection or preservation of human or animal health or safety or the environment, including flora and fauna, or mitigation of adverse effects on or to human health or the environment, including from Releases or threatened Releases of pollutants, contaminants, chemicals, radiation or industrial, toxic or Hazardous Substances, or (c) otherwise relating to the emission, discharge, release, generation, manufacture, processing, distribution, containment, use, treatment, storage, recycling, disposal, transport, or handling of, or exposure to, pollutants, contaminants, chemicals, or industrial, toxic or Hazardous Substances, (d) recordkeeping, notification, disclosure and reporting requirements regarding Hazardous Substances, (e) endangered or threatened species of fish, wildlife and plant and the management or use of natural resources, or (f) emissions or control of greenhouse gases.

 

“EPC Contract” means that certain Engineering, Procurement and Construction Agreement between the Borrower and the EPC Contractor dated as of the date hereof, as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“EPC Contract Security” means those certain Letter(s) of Credit posted by the EPC Guarantor, for the benefit of the Borrower, in a total aggregate amount of $220,000,000, to secure the EPC Contractor’s obligations under the EPC Contract.

 

“EPC Contractor” means SunPower or any assignee of SunPower consented to by DOE (in its sole discretion).

 

“EPC Guarantor” means the party guaranteeing the obligations of the EPC Contractor under the EPC Contract and any assignee or successor of such party, as approved by DOE in accordance with the terms of the Financing Documents.

 

“EPC Subcontract” means that certain Engineering, Procurement and Construction Subcontract between the EPC Contractor and the EPC Subcontractor dated August 19, 2011, as amended by Amendment No. 1 to Engineering, Procurement and Construction Subcontract, dated as of September 23, 2011, as further amended by Amendment No. 2, dated as of September 28, 2011, and as may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“EPC Subcontractor” means Bechtel Power Corporation.

 

“Equity Contribution” means equity contributed as Base Equity.

 

“Equity Documents” is defined in Section 4.1.1(a)(iii).

 

Exhibit A - Page 14

 

“Equity Funding Agreement” means the Equity Funding Agreement dated as of the Guarantee Agreement Date, among the Borrower, the Sponsor, the Collateral Agent, the Loan Servicer and DOE, as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, pursuant to which the Sponsor commits to provide the applicable Base Equity Commitment and will make certain additional undertakings for the duration of the Guaranteed Loans.

 

“Equity Interests” means 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 preference share capital of a Person, including partnership interests and limited liability company interests.

 

“Equity Letter of Credit” means one or more Letters of Credit, posted by the Sponsor for the benefit of the Collateral Agent, on behalf of itself and the other Secured Parties, to secure the Sponsor’s obligations to make Equity Contributions pursuant to the terms of the Equity Funding Agreement.

 

“Equity Pledge Agreement” means that certain Pledge and Security Agreement, dated as of the Guarantee Agreement Date, between the Holding Company and the Collateral Agent, as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“ERISA” means 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” means 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, or (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:

 

(i)            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 thirty (30) days of the occurrence of such event;

 

(ii)           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

 

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Pension Plan where an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such plan within the following thirty (30) days;

 

(iii)          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;

 

(iv)          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,

 

(v)           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 of an Employee Benefit Plan, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;

 

(vi)          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;

 

(vii)         the failure by the Borrower or an ERISA Affiliate to make any required contribution to an Employee Benefit 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(c) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan;

 

(viii)        an event or condition that 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;

 

(ix)          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;

 

(x)           an application for a funding waiver under Section 302 of ERISA with respect to any Pension Plan;

 

Exhibit A - Page 16

 

(xi)          the imposition of any lien on any of the rights, properties or assets of the Borrower or an ERISA Affiliate, or the posting of a bond or other security by of such entities, in either case pursuant to Title I or IV of ERISA or to Sections 412, 430 or 436 of the Internal Revenue Code;

 

(xii)         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;

 

(xiii)        the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Internal Revenue Code or Section 406 of ERISA) involving the assets of an Employee Benefit Plan;

 

(xiv)        the final determination that a Qualified Plan’s qualification or tax exempt status should be revoked;

 

(xv)         a determination that any Employee Benefit Plan is, or is expected to be, in “at risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Internal Revenue Code); or

 

(xvi)        the receipt by the Borrower or an ERISA Affiliate of any notice, of the imposition of withdrawal liability or of a determination that a Multiemployer Plan is, or is expected to be, in “endangered” or “critical” status, within the meaning of Section 305 of ERISA.

 

“Escrow Agreement” means that certain Escrow Agreement, dated as of the date hereof, by and among the Borrower, SunPower and SunPower Corporation, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Event of Default” means any of the events described in Section 8.1.

 

“Event of Force Majeure” means 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 (i) an Uncontrollable Cause and (ii) with respect to FFB, an “Uncontrollable Cause” as defined under the FFB Note Purchase Agreement.

 

“Event of Loss” means 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, casualty, condemnation or eminent domain or any other loss of such property.

 

“Excess Cash Grant Proceeds” means any Cash Grant proceeds deposited in the Cash Grant Proceeds Account in accordance with Section 3.4.3(g)(i).

 

Exhibit A - Page 17

 

“Excess Major Project Document Breach Damages” means any amounts paid to Borrower as a result of a material breach of a Major Project Document that are in excess of Major Project Document Breach Damages (if any); provided that Excess Major Project Document Breach Damages shall include any Major Project Document Breach Damages that are not used to cure the relevant breach within forty-five (45) days of receipt of the Major Project Document Breach Damages (or such longer period of time as DOE may approve at the request of the Borrower).

 

“Existing Cost Overruns” means any Cost Overruns existing or identified at that time.

 

“Excess Major Project Document Termination Damages” means any amounts paid to the Borrower as a result of a termination or repudiation of a Major Project Document that are in excess of Major Project Document Termination Damages (if any); provided that Excess Major Project Document Termination Damages shall include any Major Project Document Termination Damages that are not used to replace the relevant Major Project Document within sixty (60) days of receipt of the Major Project Document Termination Damages (or such longer period of time as DOE may approved at the request of the Borrower).

 

“FFB” means the Federal Financing Bank, a body corporate and instrumentality of the United States of America.

 

“FFB Advance Request” means a request for an Advance delivered to FFB pursuant to the FFB Note Purchase Agreement.

 

“FFB Advance Request Approval Notice” means an “Advance Request Approval Notice” as defined in the FFB Note Purchase Agreement, signed by DOE.

 

“FFB Cash Grant Bridge Loan Commitment” means, individually, the FFB Phase 1 Cash Grant Bridge Loan Commitment, the FFB Phase 2 and 4 Cash Grant Bridge Loan Commitment and the FFB Phase 3 Cash Grant Bridge Loan Commitment, as applicable, and, collectively, all of the FFB Phase 1 Cash Grant Bridge Loan Commitment, the FFB Phase 2 and 4 Cash Grant Bridge Loan Commitment and the FFB Phase 3 Cash Grant Bridge Loan Commitment.

 

“FFB Cash Grant Bridge Loan Promissory Notes” means, individually, each of the FFB Phase 1 Cash Grant Bridge Loan Promissory Note, the FFB Phase 2 and 4 Cash Grant Bridge Loan Promissory Note and the FFB Phase 3 Cash Grant Bridge Loan Promissory Note, as applicable, and, collectively, all of the FFB Phase 1 Cash Grant Bridge Loan Promissory Note, the FFB Phase 2 and 4 Cash Grant Bridge Loan Promissory Note and the FFB Phase 3 Cash Grant Bridge Loan Promissory Note.

 

“FFB Commitment” means, collectively, the FFB Term Loan Commitment and the FFB Cash Grant Bridge Loan Commitment.

 

“FFB Document” means:

 

(i)            the FFB Note Purchase Agreement;

 

Exhibit A - Page 18

 

(ii)           the FFB Promissory Notes; and

 

(iii)          any other documents, certificates or instruments required to be delivered in connection with the foregoing.

 

“FFB Note Purchase Agreement” means the Note Purchase Agreement dated as of the Guarantee Agreement Date, among the Borrower, FFB and DOE, as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“FFB Note Transfer” means any transfer pursuant to the FFB Note Purchase Agreement of all or any part of a FFB Promissory Note.

 

“FFB Phase 1 Cash Grant Bridge Loan Commitment” means the commitment of FFB to provide funds to the Borrower pursuant to the terms of the FFB Phase 1 Cash Grant Bridge Loan Promissory Note, in an amount not to exceed the Guaranteed Phase 1 Cash Grant Bridge Loan Amount.

 

“FFB Phase 1 Cash Grant Bridge Loan Promissory Note” means the promissory note to be entered into by the Borrower in favor of FFB and guaranteed by DOE evidencing the Guaranteed Phase 1 Cash Grant Bridge Loan Amount.

 

“FFB Phase 2 and 4 Cash Grant Bridge Loan Commitment” means the commitment of FFB to provide funds to the Borrower pursuant to the terms of the FFB Phase 2 and 4 Cash Grant Bridge Loan Promissory Note, in an amount not to exceed the Guaranteed Phase 2 and 4 Cash Grant Bridge Loan Amount.

 

“FFB Phase 2 and 4 Cash Grant Bridge Loan Promissory Note” means the promissory note to be entered into by the Borrower in favor of FFB and guaranteed by DOE evidencing the Guaranteed Phase 2 and 4 Cash Grant Bridge Loan Amount.

 

“FFB Phase 3 Cash Grant Bridge Loan Commitment” means the commitment of FFB to provide funds to the Borrower pursuant to the terms of the FFB Phase 3 Cash Grant Bridge Loan Promissory Note, in an amount not to exceed the Guaranteed Phase 3 Cash Grant Bridge Loan Amount.

 

“FFB Phase 3 Cash Grant Bridge Loan Promissory Note” means the promissory note to be entered into by the Borrower in favor of FFB and guaranteed by DOE evidencing the Guaranteed Phase 3 Cash Grant Bridge Loan Amount.

 

“FFB Promissory Notes” means, collectively, the FFB Term Loan Promissory Note and the FFB Cash Grant Bridge Loan Promissory Notes.

 

“FFB Term Loan Commitment” means the commitment of FFB to provide funds to the Borrower pursuant to the terms of the FFB Term Loan Promissory Note in an amount not to exceed the Guaranteed Term Loan Amount.

 

Exhibit A - Page 19

 

“FFB Term Loan Promissory Note” means the promissory note to be entered into by the Borrower in favor of FFB and guaranteed by DOE evidencing the Guaranteed Term Loan Amount.

 

“Final Environmental Assessment” means the Final Environmental Assessment prepared by DOE for the Project.

 

“Financial Officer” means with respect to any Person, the general manager, any director, the chief financial officer, the controller, the treasurer or any assistant treasurer, any vice president-finance or any assistant vice president-finance or any other vice president or assistant vice president with significant responsibility for the financial affairs of such Person.

 

“Financial Plan” means the financial plan delivered pursuant to Section 4.1.2(a)(iii), as amended from time to time with DOE’s consent.

 

“Financial Statements” means with respect to any Person, such Person’s quarterly or annual balance sheet and statements of income, retained earnings, and cash flow for such fiscal period, together with all notes thereto and, except for the first fiscal year, 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 Financing Documents (i) the Financial Statements of the Sponsor shall be prepared on a consolidated basis (including the Borrower) and (ii) separate Financial Statements of the Borrower shall be prepared and delivered.

 

“Financing Document” means the Loan Guarantee Agreement, the DOE Guarantee, the FFB Documents, the Equity Documents, the Security Documents and any documents and agreements delivered in connection therewith that are agreed in writing by DOE and the Borrower to be Financing Documents, but in all cases excluding any Project Documents.

 

“Finding of No Significant Impact” means a document under the Environmental Quality Improvement Act of 1970, as amended (42 U.S.C. 4371 et seq.), prepared by a Federal agency, briefly presenting the reasons why an action will not have a significant effect on the human environment and, therefore, for which an environmental impact statement will not be prepared.

 

“First Advance Date” means the date on which the first Advance occurs.

 

“First Payment Date” means August 5, 2014.

 

“Fiscal Year” means the accounting year of the Borrower beginning on January 1 and ending on December 31.

 

“Fitch” means Fitch, Inc., so long as it is a rating agency.

 

“Foreign Asset Control Regulations” means 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.

 

Exhibit A - Page 20

 

“Full Advance Prepayment” means the prepayment in full of one or more Advances as the Borrower shall select, with any amount that is insufficient to prepay any Advance in full (including any residual amount after prepaying one or more Advances in full) to be applied to the prepayment of outstanding Advances pro rata in inverse order of maturity.

 

“GAAP” means generally accepted accounting principles in the U.S. in effect from time to time including, where appropriate, generally accepted auditing standards, including the pronouncements and interpretations of appropriate accountancy administrative bodies (including the Financial Accounting Standards Board and any predecessor and successor thereto), applied on a consistent basis both as to classification of item and amounts, it being understood that unaudited Financial Statements will not include footnotes and will be subject to normal year-end adjustments.

 

“Governmental Approval” means 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 any of the foregoing that are or may be deemed given or withheld by failure to act within a specified time period.

 

“Governmental Authority” means any federal, state, county, municipal, or regional authority or agency, or any other entity of a similar nature, exercising any executive, legislative, judicial, taxing, regulatory, or administrative function of government.

 

“Governmental Judgment” means 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.

 

“Guarantee Agreement Date” means the date on which all the conditions set forth in Section 4.1 (except those that are required to be satisfied as of another date) have been satisfied or, in the sole discretion of DOE, waived.

 

“Guaranteed Cash Grant Bridge Loan” means, individually, each of the Phase 1 Cash Grant Bridge Loan, the Phase 2 and 4 Cash Grant Bridge Loan and the Phase 3 Cash Grant Bridge Loan, as applicable, and, collectively, all of the Phase 1 Cash Grant Bridge Loan, the Phase 2 and 4 Cash Grant Bridge Loan and the Phase 3 Cash Grant Bridge Loan.

 

“Guaranteed Cash Grant Bridge Loan Amount” means the maximum amount of the Guaranteed Cash Grant Bridge Loan (including principal and any capitalized interest), which amount shall be $380,800,200.

 

“Guaranteed Cash Grant Bridge Loan Maturity Date” means August 5, 2013 for the Phase 1 Cash Grant Bridge Loan, February 5, 2014 for the Phase 2 and 4 Cash Grant Bridge Loan and August 5, 2014 for Phase 3 Cash Grant Bridge Loan.

 

“Guaranteed Construction Start Date” has the meaning set forth in the HPR II PPA.

 

“Guaranteed Loan Amount” means, collectively, the Guaranteed Term Loan Amount and the Guaranteed Cash Grant Bridge Loan Amount.

 

Exhibit A - Page 21

 

“Guaranteed Loans” means, collectively, the Guaranteed Term Loan and the Guaranteed Cash Grant Bridge Loan and, individually, each of the Guaranteed Term Loan and the Guaranteed Cash Grant Bridge Loan.

 

“Guaranteed Loan Fees” means all fees payable by the Borrower or the Sponsor to DOE or FFB under the Loan Guarantee Agreement, the FFB Documents or related side letters, including the fees payable pursuant to Section 3.5.

 

“Guaranteed Operational Completion Date” means the date that is three (3) months after the “PV Power Plant Substantial Completion Guaranteed Date” Major Project Milestone.

 

“Guaranteed Phase 1 Cash Grant Bridge Loan Amount” means the portion of the Guaranteed Cash Grant Bridge Loan Amount that is allocated to the Phase 1 Cash Grant (including the applicable Maximum Capitalized Interest Amount), which amount shall be $34,154,000.

 

“Guaranteed Phase 2 and 4 Cash Grant Bridge Loan Amount” means the portion of the Guaranteed Cash Grant Bridge Loan Amount that is allocated to the Phase 2 and 4 Cash Grant (including the applicable Maximum Capitalized Interest Amount), which amount shall be $167,291,200.

 

“Guaranteed Phase 3 Cash Grant Bridge Loan Amount” means the portion of the Guaranteed Cash Grant Bridge Loan Amount that is allocated to the Phase 3 Cash Grant (including the applicable Maximum Capitalized Interest Amount), which amount shall be $179,355,000.

 

“Guaranteed Project Completion Date” means the date that is two (2) months after the Guaranteed Operational Completion Date.

 

“Guaranteed Term Loan” means the loans made by FFB and guaranteed by DOE pursuant to the FFB Documents in a maximum amount equal to the Guaranteed Term Loan Amount and, as the context requires, the principal amount of such loan outstanding from time to time.

 

“Guaranteed Term Loan Amount” means the maximum amount of the Guaranteed Term Loan (including principal and Maximum Capitalized Interest), which amount shall not exceed Eight Hundred Fifty-Six Million Three Hundred One Thousand Three Hundred Dollars ($856,301,300).

 

“Guarantor” is defined in the preamble to the Loan Guarantee Agreement.

 

“Hazardous Substance” means any hazardous or toxic substances, chemicals, materials, pollutants or wastes defined, listed, classified or regulated as such in or under any Environmental Laws, including (i) any petroleum or petroleum products (including gasoline, crude oil or any fraction thereof), flammable explosives, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation and polychlorinated biphenyls, lead or lead-based paints or materials, radon, fungus, mold, mycotoxins or other substances that may have an adverse effect on human health or the environment, (ii) any chemicals, materials or

 

Exhibit A - Page 22

 

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, including without limitation greenhouse gases, the import, storage, transport, use, Release or disposal of, or exposure to, which is prohibited, limited, governed or otherwise regulated under, or for which liability is imposed pursuant to, any Environmental Law.

 

“Hedging Agreement” means any agreement or instrument (including a cap, swap, collar, option, forward purchase agreement or other similar derivative instrument) relating to the hedging of any interest under any Indebtedness.

 

“Historical Debt Service Coverage Ratio” means, as of any date of calculation, the ratio of (a) actual Cash Flow Available for Debt Service for the immediately preceding twelve (12) month period to (b) aggregate Debt Service (disregarding clause (iii) of the definition of Debt Service) for such period.

 

“Holding Company” is defined in the recitals to the Loan Guarantee Agreement.

 

“HPR I Assignment” means the agreement between HPR I and the Borrower, dated as of the date hereof, pursuant to which HPR I collaterally assigns, as security for HPR I’s obligations under the Mitigation Land Acquisition Agreement, all of HPR I’s right, title and interest in, to and under any purchase agreements and option agreements (whether now existing or entered into after the date hereof) for the acquisition of Mitigation Land (as defined in the Mitigation Land Acquisition Agreement).

 

“HPR II Delivery Term” means the Delivery Term, as defined under the HPR II PPA.

 

“HPR II Delivery Term Security” means Letters of Credit, posted in accordance with the terms of the Delivery Term Security Maintenance Agreement (and any proceeds thereof), to satisfy the requirement of the Borrower to post “Delivery Term Security” as defined in the HPR II PPA, representing the total amount of “Delivery Term Security” required during the entire term of the HPR II PPA (and, for the avoidance of doubt, shall not include any other form of “Delivery Term Security” (as defined in the HPR II PPA) applicable in accordance with the terms of the HPR II PPA).

 

“HPR II Development Security” means Letters of Credit posted for the benefit of PG&E (and any proceeds thereof), to satisfy the requirement of the Borrower to post “Development Security” as defined in the HPR II PPA, representing the total amount of “Development Security” required during the entire term o fthe HPR II PPA.

 

“HPR II PPA” means the power purchase and sale agreement, dated as of July 23, 2008, between PG&E and the Borrower, as may be amended, restated, supplemented or modified from time to time until the Guarantee Agreement Date.

 

“HPR III Delivery Term” means the Delivery Term, as defined under the HPR III PPA.

 

Exhibit A - Page 23

 

“HPR III Delivery Term Security” means Letters of Credit, posted in accordance with the terms of the Delivery Term Security Maintenance Agreement (and any proceeds thereof), to satisfy the requirement of the Borrower to post “Delivery Term Security” as defined in the HPR III PPA, representing the total amount of “Delivery Term Security” required during the entire term of the HPR III PPA (and, for the avoidance of doubt, shall not include any other form of “Delivery Term Security” (as defined in the HPR III PPA) applicable in accordance with the terms of the HPR III PPA).

 

“HPR III Development Security” means Letters of Credit posted for the benefit of PG&E (and any proceeds thereof), to satisfy the requirement of the Borrower to post “Development Security” as defined in the HPR III PPA, representing the total amount of “Development Security” required during the entire term o fthe HPR III PPA.

 

“HPR III PPA” means the amended and restated power purchase and sale agreement, dated as of March 5, 2010, between HPR III and PG&E, as amended by the amendment entered into as of March 6, 2010, and as may be further amended, restated, supplemented or modified from time to time until the Guarantee Agreement Date.

 

“HPR III” means High Plains Ranch III, a Delaware limited liability company.

 

“Immaterial Equipment” means any equipment that is non-essential to the operation of the Project and the failure of which to be in place or operating could not reasonably be expected to have a Material Adverse Effect.

 

“Improvements” means the buildings, fixtures and other improvements to be situated on the Project Site.

 

“Indebtedness” means as to any Person, and at any date, without duplication:

 

(i)            all Indebtedness for Borrowed Money of such Person;

 

(ii)           all obligations of such Person evidenced by bonds, debentures, notes, letters of credit, or other similar instruments;

 

(iii)          all obligations of such Person to purchase securities (or other property) that arise out of or in connection with the sale or acquisition of the same or similar securities (or property);

 

(iv)          all obligations of such Person issued, undertaken or assumed as the deferred purchase price of property or services other than trade credit in the ordinary course of business;

 

Exhibit A - Page 24

 

(v)           all obligations of such Person under leases that are or should be, in accordance with GAAP, recorded as Capital Leases in respect of which such Person is liable;

 

(vi)          all deferred obligations of such Person to reimburse any bank or other Person in respect of amounts paid or advanced under a letter of credit or other instrument;

 

(vii)         the currently available amount of all surety bonds, performance bonds, letters of credit or other similar instruments issued for the account of such Person;

 

(viii)        all liabilities secured by (or for which the holder of such liabilities has an existing right, contingent, or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such liabilities;

 

(ix)          all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by such Person (even though the rights and remedies of the seller or bank under such agreement in the event of any default are limited to repossession or sale of such property);

 

(x)           obligations pursuant to any agreement to purchase materials, supplies or other property if such agreement provides that payment shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered;

 

(xi)          all obligations in respect of any Hedging Agreement or similar arrangement between such Person and a financial institution providing for the transfer or mitigation of interest risks either generally or under specific contingencies (but without regard to any notional principal amount relating thereto); and

 

(xii)         all Contingent Obligations of such Person with respect to Indebtedness of the types specified in clauses (i) through (xi) above.

 

For the avoidance of doubt, Indebtedness does not include amounts owed under any Permitted Lease.

 

“Indebtedness for Borrowed Money” means 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.

 

Exhibit A - Page 25

 

“Indemnified Parties” is defined in Section 11.18(c).

 

“Indemnified Person” is defined in Section 11.18(c).

 

“Indemnity Claims” is defined in Section 11.18(c).

 

“Independent Consultants” means, collectively, the Independent Engineer, the DOE Insurance Advisor, Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel to DOE, and any other advisor or consultant retained by DOE from time to time in connection with the Guaranteed Loans, the Project or the Transaction Documents.

 

“Independent Engineer” means Parsons Infrastructure & Technology Group Inc., acting as engineering advisor to DOE.

 

“Independent Engineer Report” means a report or reports of the Independent Engineer delivered (i) on or before the Guarantee Agreement Date, as to matters set forth in Section 4.1.14(d), (ii) on or before the First Advance Date, as to matters set forth in Section 4.2.6(a) (if required by DOE) and (iii) on or before the Project Completion Date as to matters set forth in the definition of Project Completion.

 

“Initial Operating Budget” is defined in Section 4.1.2(a)(viii).

 

“Insolvency Proceedings” means 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.

 

“Intellectual Property Rights” means any and all rights in, arising out of, or associated with the following, whether now or hereafter existing, created, acquired or held:

 

(i)            all United States and, as applicable to the Project, 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, as applicable to the Project, 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;

 

Exhibit A - Page 26

 

(v)           all rights in industrial designs and any registrations and applications therefor in the United States and, as applicable to the Project, 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;

 

(vii)         all rights to any databases and data collections;

 

(viii)        all moral and economic rights of authors and inventors, however denominated, as applicable to the Project, throughout the world; and

 

(ix)          any similar or equivalent rights to any of the foregoing, as applicable to the Project, anywhere in the world.

 

“Interest Rate Swaption Agreements” means forward-starting interest rate swap agreements, with a total upfront payment not to exceed $50,000,000 (such upfront payment to be the sole recourse to the Borrower) to be executed after the Guarantee Agreement Date in accordance with the terms of the Loan Guarantee Agreement, with seven scheduled settlement dates, that may occur at any time between April 30, 2012 and October 31, 2013, for an aggregate notional amount of at least 80% of the Guaranteed Term Loan Amount.

 

“Interest Rate Swaption Proceeds” means any proceeds received by the Borrower under the Interest Rate Swaption Agreement.

 

“Intermediate Parent Company” is defined in the recitals to the Loan Guarantee Agreement.

 

“Internal Revenue Code” means 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 Guarantee Agreement Date and any subsequent provisions of the Internal Revenue Code, amendatory thereof, supplemental thereto or substituted therefor.

 

“Investment” means 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.

 

Exhibit A - Page 27

 

“Investment Company Act” means The United States Investment Company Act of 1940, as amended from time to time.

 

“Knowledge” means: (i) with respect to the Borrower, the actual knowledge of any Principal Persons of the Borrower or any knowledge that should have been obtained by any Principal Person of the Borrower upon reasonable investigation and inquiry and (ii) with respect to any other Person, the actual knowledge of any such Person or any knowledge that should have been obtained by such Person upon reasonable investigation and inquiry.

 

“Land Lease Agreement” means that certain Solar Facility Ground Lease, dated as of September, 2011, by and between High Plains Ranch IV, LLC, as lessor, and the Borrower, as lessee, pursuant to which the Borrower leases all or a portion of the Project Site.

 

“Large Generator Interconnection Agreement” means the Large Generator Interconnection Agreement, between the Borrower, PG&E and the California Independent System Operator Corporation, dated as of February 11, 2011, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Late Charge Rate” means the interest rate applicable from time to time under the FFB Documents with respect to Overdue Amounts.

 

“Lease” means any agreement that would be characterized under GAAP as an operating lease.

 

“Lender” means any financial institution that acquires an interest in either Guaranteed Loan from time to time in accordance with Section 11.14.

 

“Letter of Credit” means an irrevocable standby letter of credit issued by a bank or trust company (i) with a combined capital surplus of at least $1.0 billion and (ii) whose senior unsecured obligations have a credit rating of at least A- from Standard & Poor’s or Fitch or A3 from Moody’s, or better.

 

“LGIA Surety Bonds” means, collectively, (i) that certain surety bond, dated as of September 29, 2011, in the amount $41,794,737, for the benefit of PG&E and (ii) that certain surety bond, dated as of September 29, 2011, in the amount of $300,000, for the benefit of PG&E, in each case, in form and substance satisfactory to PG&E.

 

“Lien” means any lien (statutory or other), pledge, mortgage, charge, security interest, deed of trust, assignment, hypothecation, title retention, fiduciary transfer, deposit arrangement, easement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever in respect of an asset, whether or not filed, recorded or otherwise perfected or effective under Applicable Law, as well as the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset, (including any conditional sale or other title retention agreement, any Capital Lease having substantially the same economic effect as any of the foregoing, or any preferential arrangement having the practical effect of constituting a security interest with respect to the payment of any obligation with, or from the proceeds of, any asset or revenue of any kind).

 

Exhibit A - Page 28

 

“Loan Guarantee Agreement” means this Loan Guarantee Agreement, dated as of the Guarantee Agreement Date, among the Borrower, DOE and the Collateral Agent, to which this Exhibit A is appended. The Loan Guarantee Agreement is the “Loan Guarantee Agreement” referred to in the Applicable Regulations. The Loan Guarantee Agreement is the “Common Agreement” referred to in the FFB Documents.

 

“Loan Servicer” is defined in the preamble to the Loan Guarantee Agreement, or its successor, as appointed pursuant to Section 9.1.

 

“Loss Proceeds” means all proceeds (other than any proceeds of business interruption insurance and proceeds covering liability of the Borrower to third parties) resulting from an Event of Loss or Minimum Threshold Event of Loss.

 

“Loss Proceeds Account” is defined in the Accounts Agreement.

 

“Major Maintenance Reserve Account” has the meaning set forth in the Accounts Agreement.

 

“Major Project Document” means each of the following: (a) the Master Services Agreement, (b) the O&M Agreement, (c) the Power Purchase Agreements, (d) the Land Lease Agreement, (e) each Construction Contract, (f) the Large Generator Interconnection Agreement, (g) the Delivery Term Security Maintenance Agreement, (h) the Mitigation Land Acquisition Agreement, (i) the Escrow Agreement and (j) any other contract or agreement entered into by the Borrower subsequent to the Guarantee Agreement Date and designated by DOE in a writing delivered to Borrower a “Major Project Document.”

 

“Major Project Document Breach Damages” means any damages paid to the Borrower as a result of a material breach by a counterparty of a Major Project Document that Borrower reasonably estimates, as soon as practicable but in any event within fifteen (15) days of the receipt of such damages, will be necessary to remedy the relevant breach (which amounts will be then deposited into the Construction Account (prior to the Project Completion Date) or the Operating Account (on and after the Project Completion Date), as applicable);

 

“Major Project Document Termination Damages” means any amounts paid to the Borrower as a result of the termination or repudiation by a counteprarty of a Major Project Document that Borrower reasonably estimates, as soon as practicable but in any event within fifteen (15) days of the receipt of such damages, will be necessary to compensate the Borrower for its reasonable out-of-pocket costs to replace such Major Project Document (which amounts will be then deposited into the Construction Account (prior to the Project Completion Date) or the Operating Account (on and after the Project Completion Date), as applicable).

 

“Major Project Milestone” means each major project milestone identified on Schedule 1.1.

 

“Major Project Participant” means any Person (other than the Borrower) party to any Major Project Document and each Person (other than the Borrower) party to any Support Instrument provided in connection with any Major Project Document.

 

Exhibit A - Page 29

 

“Master Advance Notice” means a notice of request for an Advance delivered by the Borrower pursuant to Section 4.2.1(a) or Section 4.4.1 in accordance with the terms of Section 2.2.1, which shall contain the certifications required of the Borrower pursuant to Section 4.2.19 and Section 4.4.15, as applicable.

 

“Master Services Agreement” means that certain Master Services Agreement, dated as of the date hereof, by and among NRG Energy Services LLC, as operator, and SunPower, as contractor, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Material Adverse Effect” means, 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 Document to which it is a party, (iii) the business, operations, condition (financial or otherwise), Property or prospects 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, (vi) the security or Lien of the Secured Parties on any of the Collateral under any Security Document, (vii) the eligibility of the Borrower to qualify for a Cash Grant in respect of any Phase of the Project equal to at least 90% of the amount set forth opposite such Phase on Exhibit T unless the sum (without duplication) of (a) the amount of the Cash Grant reasonably expected with respect to such Phase, (b) any unused equity funding that is committed to the Borrower and which is not necessary to fund Project Costs, (c) any retained earnings of the Borrower which are not necessary to fund Project Costs and (d) any Cash Grant Shortfall Security, equals or exceeds 100% of the amount set forth opposite such Phase on Exhibit T.

 

“Materials and Equipment Supply Agreement” means that certain Materials and Equipment Supply Agreement between the Borrower and the EPC Contractor dated as of the date hereof, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“Maximum Capitalized Interest Amount” has the meaning specified in Section 7(b) of the applicable FFB Promissory Note.

 

“Maximum Debt to Equity Ratio” means 78.8 : 21.2.

 

“Merger” is defined in the preamble to the Loan Guarantee Agreement.

 

“Merger Documents” means that certain Agreement and Plan of Merger, dated as of the date hereof, between the Borrower and High Plains Ranch III, LLC, a Delaware limited liability company, and all certificates, filings and instruments that are required to consummate the Merger.

 

“Minimum DSCR” means 1.35: 1.00.

 

“Minimum Threshold Event of Loss” is defined in Section 6.22.

 

Exhibit A - Page 30

 

“Mitigation Land Acquisition Agreement” means that certain Mitigation Land Agreement by and between High Plains Ranch I, LLC, a Delaware limited liability company, High Plains Ranch IV, LLC, a Delaware limited liability company, and the Borrower, dated as of the date hereof.

 

“Mitigation Land Security” means those certain Letter(s) of Credit posted by SunPower, for the benefit of the Borrower, in a total aggregate amount of $30,300,000 to secure the obligations of High Plains Ranch I, LLC and High Plains Ranch IV, LLC under the Mitigation Land Acquisition Agreement.

 

“Modified Tracker Components” is defined in Section 4.1.2(a)(x).

 

“Monitoring Table” means the plan describing the technical monitoring activities that will be conducted by DOE and the Independent Engineer until the Term Loan Maturity Date, including the methodology, processes and procedures relating to such technical monitoring activities, substantially in the form of Exhibit P.

 

“Monthly Transfer Date” has the meaning set forth in the Accounts Agreement.

 

“Moody’s” means Moody’s Investors Service, Inc., so long as it is a rating agency.

 

“Multiemployer Plan” means a “multiemployer plan” (within the meaning of Section 3(37) of ERISA) that the Borrower or any ERISA Affiliate contributes to or participates in, or with respect to which the Borrower or any ERISA Affiliate has any material liability or other obligation (whether accrued, absolute, contingent or otherwise).

 

“National Environmental Policy Act” means the National Environmental Policy Act of 1969 of the United States, as amended from time to time, and the regulations promulgated and any rulings or guidance issued thereunder.

 

“Non-Appealable” means, with respect to any Required Approval, unless otherwise agreed by DOE, (a) such Required Approval is not subject to any pending appeal, intervention or similar proceeding or any unsatisfied condition (other than conditions that (i) do not require the discretionary approval of a third party and (ii) are not, as of the date of determination, required to be satisfied for construction and operation of the Project to continue consistent with the Project Plans) which may result in material modification or revocation and (b) all applicable appeal periods have expired (except for any Required Approval which does not have any limit on an appeal period under Applicable Law).

 

“Notice of Cancellation” is defined in Section 2.3.2(a).

 

“NRG Cash Grant Shortfall Security” means a guarantee issued by the Ultimate Parent for the benefit of the Collateral Agent (acting on behalf of the Secured Parties), in the original aggregate amount of $50,000,000, as the same may be reduced consistent with Section 6.35(d) substantially in the form of Exhibit AA.

 

Exhibit A - Page 31

 

“O&M Agreement” means the Operation and Maintenance Agreement between the Operator and the Borrower, dated as of the date hereof, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

“O&M Reserve Account” has the meaning set forth in the Accounts Agreement.

 

“Obligation” means, with respect to any Person, any payment, performance or other obligation of such Person of any kind, including any liability of such Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any Insolvency Proceeding. Without limiting the generality of the foregoing, the Obligations of the Borrower under the Financing Documents include (a) the obligation to pay principal, interest, charges, expenses, fees, attorneys’ or other Independent Consultants’ fees and disbursements, indemnities and other amounts payable by the Borrower under any Financing Document and (b) the obligation of the Borrower to reimburse any amount in respect of any of the foregoing that DOE, in its sole discretion, may elect to pay or advance on behalf of the Borrower.

 

“OFAC” means the Office of Foreign Assets Control, agency of the U.S. Department of the Treasury under the auspices of the Under Secretary of the Treasury for Terrorism and Financial Intelligence.

 

“Officer’s Certificate” means an Officer’s Certificate of any Person, signed on behalf of such Person, by an Authorized Officer relating to the items or matters for which such Officer’s Certificate is required in form and substance reasonably acceptable to DOE.

 

“OMB” means the Office of Management and Budget of the Executive Office of the President of the United States of America.

 

“OMB Implementing Guidance” means the OMB’s Initial Implementing Guidance for the Recovery Act, M-09-10 (February 18, 2009), Updated Implementing Guidance for the Recovery Act, M-09-15 (April 3, 2009), Updated Implementing Guidance for the Recovery Act, M-09-21 (June 22, 2009) and, in each case, any amendment, supplement or successor thereto.

 

“Operating Budget” means the Operating Budget delivered in respect of such year pursuant to Section 6.11, in each case as amended from time to time in accordance with Section 6.11.2.

 

“Operating Budget Period” means the period beginning on the Phase Operation Date for Phase 1 and ending on the Term Loan Maturity Date.

 

“Operating Costs” means for any period with respect to which such Operating Costs are being calculated, all amounts paid (or projected to be paid) by the Borrower for the administration, management and operation and maintenance of the Project.

 

“Operating Forecast” means the periodic forecast prepared by the Borrower (on an aggregate and month-by-month basis) in connection with the operation of the Project, and

 

Exhibit A - Page 32

 

delivered from time to time pursuant to Section 6.1.5(b), which (i) shall be the Borrower’s good faith projections at such time taking into account all facts and circumstances then existing and assumptions believed by the Borrower to be reasonable on the date made, complete, fair and accurate estimates of all Operating Revenues reasonably expected to be received and all Operating Costs (by category) reasonably expected to be incurred, (ii) shall reflect Debt Service due during each period, and pro forma Cash Flow Available for Debt Service projections for each period, (iii) shall include such other information as may be reasonably requested by DOE or the Independent Engineer and (iv) shall be prepared on a basis consistent from period to period and consistent with the Operating Plan, in sufficient detail to permit meaningful comparisons, and shall include a statement of the assumptions on which it is based.

 

“Operating Period” means the period from the Operational Completion Date to the date on which the Secured Obligations are repaid in full.

 

“Operating Plan” means 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 6.1.5(b) that (i) shall describe the Project’s operating plan for the relevant period, (ii) shall summarize any changes in the Project’s maintenance plan, including the Project’s program for spare parts, inventory management and supply management, (iii) shall include such other information as may be reasonably requested by the Loan Servicer or the Independent 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, shall include a statement of the assumptions on which it is based.

 

“Operating Revenues” means all cash receipts (or projected receipts) of the Borrower deposited in the Project Accounts, including revenues from: (i) the sales under the Power Purchase Agreements, (ii) proceeds from business interruption and delay in start-up insurance policies, (iii) delay liquidated damages payable under the EPC Contract and (iv) interest and other income earned and received on the Project Accounts; provided, however, that Operating Revenues shall not include proceeds (x) from casualty and event of loss insurance or (y) that are subject to a mandatory prepayment pursuant to Section 3.4.3.

 

“Operational Completion” means satisfaction of the elements described in the clause (a) of the definition of Project Completion as set forth in Exhibit O.

 

“Operational Completion Date” means the date on which all the conditions for Operational Completion have been met, as confirmed by DOE in writing.

 

“Operations Report” means an operations report prepared monthly by the Borrower, which shall include (i) a detailed assessment of the operations to date in comparison with the Operating Plan and the Operating Forecast then in effect for such monthly period, (ii) any events that have occurred or are reasonably expected to occur that would materially affect the operation of the Project, (iii) a description and explanation of any material casualty losses and (iv) material disputes between the Operator and any Person.

 

“Operator” means NRG Energy Services LLC, a limited liability company organized and existing under the laws of the State of Delaware.

 

Exhibit A - Page 33

 

“Organizational Documents” means with respect to any Person, (a) to the extent such Person is a corporation, the certificate or articles of incorporation and the by-laws of such Person, (b) to the extent such Person is a limited liability company, the certificate of formation or articles of formation or organization and operating or limited liability company agreement of such Person and (c) to the extent such Person is a partnership, joint venture, trust or other form of business, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization or formation of such Person.

 

“Overdue Amount” means any amount owing under a FFB Promissory Note that is not paid when and as due.

 

“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, and all regulations promulgated thereunder.

 

“Payment Date” means each February 5 and August 5 of each year on and after the First Payment Date, or if not a Business Day, the next Business Day.

 

“Payment Period” means the period from the Project Completion Date to the First Payment Date after the Project Completion Date and each subsequent semi-annual period between Payment Dates through the Maturity Date.

 

“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” means all of the following amounts from time to time due under or in connection with the Financing Documents: (i) all recordation and other costs, fees and charges in connection with the execution, delivery, filing, registration, or performance of the Transaction Documents or the perfection of the security interests in the Collateral, (ii) all fees charges, and expenses of any Independent Consultants and (iii) all other fees, charges, expenses and other amounts from time to time due under or in connection with the Financing Documents, including fees payable to the Collateral Agent pursuant to a separate written agreement with the Collateral Agent, as the same may be amended from time to time.

 

“Permitted Affiliate Transactions” means (i) Borrower Affiliate transactions contemplated in the Financing Documents; or (ii) Borrower Affiliate transactions that could not reasonably be expected to have a Material Adverse Effect; provided that (A) with respect to each of (i) or (ii) above, such Affiliate transaction must be on an arm’s length basis or better; and (B)

 

Exhibit A - Page 34

 

with respect to (ii) above, each Affiliate transaction must be for an annual amount less than $2,000,000.

 

For the avoidance of doubt, for the purposes of the definition of “Permitted Affiliate Transactions”, SunPower will be deemed to be an Affiliate of the Borrower.

 

“Permitted Disposition” means any conveyance, sale, lease or sublease (as lessor or sublessor), exchange, transfer or other disposition (a “Disposition”), in any one transaction or a series of transactions, of all or any part of its ownership interests in the Project or any other part of the Borrower’s business or Property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, whether now or hereafter acquired that is:

 

(a)           a sale of energy under a Power Purchase Agreement;

 

(b)           a transfer of funds permitted under the Accounts Agreement, including transfers of funds between Project Accounts, payment of Project Costs and Operating Costs, distribution of Loss Proceeds, payment of obligations arising under the Financing Documents and the making of Restricted Payments;

 

(c)           the grant, attachment or perfection of security interests, liens and other interests that are (i) required by the Financing Documents or (ii) Permitted Liens;

 

(d)           a sale of equipment or Property of the Borrower that is (i) obsolete, (ii) no longer used or useful in the operation of the Project or (iii) is to be replaced by other equipment of equal value and utility, and in all cases for which the Borrower has received consideration reflecting in an amount equal to the 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); provided, in each case, that the proceeds thereof are, if Section 3.4.3 is applicable to the Disposition, applied in accordance with Section 3.4.3; provided, further, that, in the event that proceeds of a Permitted Disposition are to be applied to a replacement of equipment in accordance with sub-clause (iii) of this clause (d) and are not so applied within 180 days after the date of such Permitted Disposition, 100% of the amount of such proceeds shall be applied in accordance with Section 3.4.3;

 

(e)           a Disposition in the ordinary course of business for fair market value not in excess of One Million Dollars ($1,000,000) for a single transaction or Five Million Dollars ($5,000,000) in the aggregate for all such Dispositions occurring in any given Fiscal Year; provided that such Property is not material or necessary to the performance of the Project; or

 

(f)            a Disposition of Permitted Investments in accordance with the Accounts Agreement.

 

“Permitted Indebtedness” means any indebtedness permitted to be incurred by the Borrower pursuant to Section 7.1.

 

“Permitted Investments” means any of the following, to the extent owned by the Borrower free and clear of all liens other than liens created under the Collateral Documents:

 

Exhibit A - Page 35

 

(i)            direct obligations of the U.S. (including obligations issued or held in book-entry form on the books of the U.S. Department of the Treasury) or obligations, the timely payment of principal and interest of which is fully guaranteed by the U.S. maturing not more than one hundred eighty (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 U.S. maturing not more than one hundred eighty (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 “A-” by S&P or the equivalent rating by Moody’s, of a market value of no less than the amount of moneys so invested maturing not more than one hundred eighty (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 ninety (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 instructions of DOE, may from time to time approve.

 

“Permitted Leases” means (a) the Land Lease Agreement, (b) each other Lease pursuant to which the Borrower, as lessee, leases a portion of the Project Site and which has been approved by DOE in writing, (c) Leases of office space, office equipment or motor vehicles with respect to which the aggregate lease payments do not exceed $500,000 per Fiscal Year, and (d) licenses for Intellectual Property Rights, in each case as required in connection with the construction or operation of the Project; provided, that, for the avoidance of doubt, none of the foregoing shall be Capital Leases.

 

“Permitted Liens” means:

 

(i)            any rights and interests of the Secured Parties as provided in the Transaction Documents that could constitute a lien;

 

Exhibit A - Page 36

 

(ii)           Liens for any Tax, assessment or other governmental charge not yet due, or being diligently contested in good faith and by appropriate proceedings timely instituted, so long as (A) such proceedings shall not involve any danger of the sale, forfeiture or loss of the Project, or any easements, as the case may be, title thereto or any interest therein and shall not interfere with the use or disposition of the Project or any easements, (B) such Tax, assessment or other governmental charge is not more than sixty (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 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)           Liens identified in the Title Policy;

 

(vi)          zoning, entitlement, building and other land use regulations imposed by Governmental Authorities having jurisdiction over the Project Site that do not and will not materially impair the use, development or operation by Borrower of the Project Site for its intended purpose;

 

(vii)         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;

 

(viii)        Liens securing judgments for the payment of money for less than 30 days on terms and conditions set forth in Section 8.1(k);

 

(ix)         pledges or deposits or other Liens in the ordinary course of business in connection with worker’s compensation, unemployment insurance, social security and other Government Rules;

 

Exhibit A - Page 37

 

(x)           Liens securing purchase money obligations of the Borrower in an aggregate amount of less than $500,000; and

 

(xi)          deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business;

 

provided, however, that, notwithstanding the foregoing, Permitted Liens shall not include any Lien on any Equity Interests of the Borrower (other than any Lien in favor of the Secured Parties).

 

“Person” means 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.

 

“PG&E” means Pacific Gas and Electric Company.

 

“Phase” means, as applicable, Phase 1, Phase 2, Phase 3 or Phase 4.

 

“Phase 1” has the meaning set forth in the HPR II PPA.

 

“Phase 1 Cash Grant” means the Cash Grant received in connection with Phase 1 being placed in service for federal income tax purposes.

 

“Phase 1 Cash Grant Bridge Loan” means the loan made by FFB that is sized against the expected amount of the Phase 1 Cash Grant and guaranteed by DOE pursuant to the FFB Documents in a maximum amount equal to the Guaranteed Phase 1 Cash Grant Bridge Loan Amount and, as the context requires, the principal amount of such loan outstanding from time to time.

 

“Phase 1 Cash Grant Bridge Loan Availability Period” means the period between the Guarantee Agreement Date and the date that is the earlier to occur of (i) August 4, 2013 and (ii) the date upon which the Borrower receives Phase 1 Cash Grant proceeds.

 

“Phase I Environmental Report” means the Phase 1 environmental site assessment for the Project Site.

 

“Phase 2” has the meaning set forth in the HPR II PPA.

 

“Phase 2 Cash Grant” means the Cash Grant received in connection with Phase 2 being placed in service for federal income tax purposes.

 

“Phase 2 and 4 Cash Grant Bridge Loan” means the loan made by FFB that is sized against the expected amount of the Phase 2 Cash Grant and the Phase 4 Cash Grant and guaranteed by DOE pursuant to the FFB Documents in a maximum amount equal to the

 

Exhibit A - Page 38

 

Guaranteed Phase 2 and 4 Cash Grant Bridge Loan Amount and, as the context requires, the principal amount of such loan outstanding from time to time.

 

“Phase 2 and 4 Cash Grant Bridge Loan Availability Period” means the period between the Guarantee Agreement Date and the date that is the earlier to occur of (i) February 4, 2014 and (ii) the date upon which the Borrower has received both the Phase 2 Cash Grant and the Phase 4 Cash Grant.

 

“Phase 3” has the meaning set forth in the HPR II PPA.

 

“Phase 3 Cash Grant” means the Cash Grant received in connection with Phase 3 being placed in service for federal income tax purposes.

 

“Phase 3 Cash Grant Bridge Loan” means the loan made by FFB that is sized against the expected amount of the Phase 3 Cash Grant and guaranteed by DOE pursuant to the FFB Documents in a maximum amount equal to the Guaranteed Phase 3 Cash Grant Bridge Loan Amount and, as the context requires, the principal amount of such loan outstanding from time to time.

 

“Phase 3 Cash Grant Bridge Loan Availability Period” means the period between the Guarantee Agreement Date and the date that is the earlier to occur of (a) August 4, 2014 and (b) the date upon which the Borrower receives Phase 3 Cash Grant proceeds.

 

“Phase 3 Cash Grant Support Amount” means the product of (a) the outstanding amount of Guaranteed Cash Grant Bridge Loans multiplied by (b) .442.

 

“Phase 4” means the portion of the Project being developed to deliver energy under the HPR III PPA.

 

“Phase 4 Cash Grant” means the Cash Grant received in connection with Phase 4 being placed in service for federal income tax purposes.

 

“Phase Operation Date” has the meaning set forth in the HPR II PPA.

 

“Placed in Service Date” means the date on which the Project (or a Phase) is considered to be placed in service for federal income tax purposes.

 

“Potential Event of Default” means an event that, with the giving of notice or passage of time or both, would become an Event of Default.

 

“Power Purchase Agreements” means the HPR II PPA and the HPR III PPA.

 

“Pre-Closing Equity Credit” means those Project Costs set forth in the Pre-Closing Project Costs Report that DOE has approved for credit to be applied toward Base Equity.

 

“Pre-Closing Project Costs Report” means the report delivered by the Borrower pursuant to Section 4.2.6(d).

 

Exhibit A - Page 39

 

“Pre-Completion Revenues” means any revenues received by the Borrower prior to the earlier of the Project Completion Date and the First Payment Date.

 

“Preliminary Construction Agreement” means that certain Preliminary Construction Agreement, dated as of August 4, 2011, between the Borrower and SunPower Corporation, Systems.

 

“Predictive Information” has the meaning set forth in Section 11.10.

 

“Principal Persons” means any officer, director, owner, key employee or other Person with primary management or supervisory responsibilities with respect to the Borrower or the Operator, or any other Person (whether or not an employee) who has critical influence on or substantive control over the Project.

 

“Program Requirements” means all of the following:

 

(i)            the provisions of 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, that may be amended from time to time (“Title XVII”),

 

(ii)           the Applicable Regulations,

 

(iii)           all U.S. Department of Energy and Federal Financing Bank legal and financial requirements, policies, and procedures applicable to the Title XVII program in effect as of the Guarantee Agreement Date and (iv) any such requirements, policies, and procedures or changes thereto adopted after the Guarantee Agreement Date that have the force of law.

 

“Prohibited Jurisdiction” means any jurisdiction that:

 

(i)            is subject to U.S. or multilateral economic or trade sanctions in which the U.S. participates, including the trade sanctions and economic embargoes administered by OFAC;

 

(ii)           has been designated by the Secretary of the Treasury under Section 311 or 312 of the Patriot Act, as warranting special measures due to money laundering concerns; or

 

(iii)          has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization of which the U.S. is a member, such as the Financial Action Task Force on Money Laundering, and with which designation the U.S. representative to the group or organization continues to concur.

 

Exhibit A - Page 40

 

“Prohibited Person” means any person or entity that is:

 

(i)            named, identified, or described on the list of “Specially Designated Nationals and Blocked Persons” (Appendix A to 31 CFR 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;

 

(ii)           named, identified or described on any other 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 U.S. persons may not conduct business, including 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;

 

(iii)          debarred or suspended from contracting with the U.S. government or any agency or instrumentality thereof;

 

(iv)          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 contracting with any U.S. federal government department or any agency or instrumentality thereof or otherwise participating in procurement or nonprocurement transactions with any U.S. federal government department or agency pursuant to any of the Debarment Regulations;

 

(v)           indicted, convicted or had a Governmental Judgment rendered against it for any of the offenses listed in any of the Debarment Regulations;

 

(vi)          subject to U.S. or multilateral economic or trade sanctions in which the U.S. participates;

 

(vii)         owned or controlled by, or acting on behalf of, any governments, corporations, entities or individuals that are subject to U.S. or multilateral economic or trade sanctions in which the U.S. participates; or

 

(viii)        an Affiliate of a Person listed above.

 

“Prohibited Person Transfer” (i) any Borrower Entity, any of such Borrower Entity’s Principal Persons, or any Borrower Entity Covered Person becomes (whether through a transfer or otherwise) a Prohibited Person; provided, however, that if any such Principal Person or Borrower Entity Covered Person that is not a Borrower Entity that becomes a Prohibited Person is removed or replaced with a Person reasonably acceptable to DOE within 10 days from the date

 

Exhibit A - Page 41

 

that the Borrower Knew that such Principal Person or Borrower Entity Covered Person is a Prohibited Person, no Event of Default shall be deemed to have occurred; (ii) any Major Project Participant, any of such Major Project Participant’s Principal Persons, or any Person that Controls any Major Project Participant becomes (whether through a transfer or otherwise) a Prohibited Person and such Major Project Participant, Principal Person, or Controlling Person is not removed or replaced with a Person reasonably acceptable to DOE within 30 days from the date that the Borrower Knew that such Major Project Participant, Principal Person or Controlling Person is a Prohibited Person; (iii) the Borrower Knowingly enters into a transaction with a Person who is a Prohibited Person; (iv) the Borrower enters into a transaction with a Person who is a Prohibited Person and does not remove or replace such Prohibited Person with a Person reasonably acceptable to DOE within 30 days from the date that the Borrower Knew that such Person was a Prohibited Person; or (v) any of the Collateral is traded or used, directly or indirectly, by a Prohibited Person or by a Person organized in a Prohibited Jurisdiction.

 

“Project” means an approximately 250MW AC solar photovoltaic (PV) electricity generation facility, and associated infrastructure, located in San Luis Obispo County, California. For the avoidance of doubt, the term “Project” includes the Project Site, the Project Facility and all other Property comprising such facility and infrastructure.

 

“Project Accounts” is defined in the Accounts Agreement.

 

“Project Claims” means any material written (i) Claim filed or asserted by, with or before any Governmental Authority, or (ii) threatened Claim, in each case, relating to the Project and arising out of, based on, resulting from or relating to (a) any violation, or alleged violation, of any Environmental Law, or (b) any Current Entitlement, including without limitation any and all Claims asserted in the CEQA Litigation.

 

“Project Completion” is defined in Exhibit O.

 

“Project Completion Date” means the date on which all the conditions for Project Completion have been met, as confirmed by DOE in writing.

 

“Project Costs” means all costs incurred by the Borrower or by a Borrower Entity on behalf of the Borrower to acquire title or use rights to the Project Site and to develop, finance and construct the Project Facility, including:

 

(i)            amounts payable under any Construction Contract,

 

(ii)           interest, fees and expenses payable under the Financing Documents prior to the end of the Term Loan Availability Period;

 

(iii)          principal payments on the Guaranteed Loans occurring prior to the Project Completion Date;

 

Exhibit A - Page 42

 

(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 Secured Parties at or prior to the First Advance Date;

 

(vii)         funding of the Debt Service Reserve Account;

 

(viii)        development costs to the extent permitted to be paid under the Financing Documents;

 

(ix)          construction insurance premiums for coverage obtained prior to the Project Completion Date;

 

(x)           the Borrower’s labor costs and general and administration costs;

 

(xi)          costs incurred under the O&M Agreement and mobilization costs included in the Base Case Projections; and

 

(xii)         such other costs or expenses approved by the Loan Servicer.

 

“Project Costs Report” means the report required to be delivered pursuant to Section 4.1.2(a)(iv).

 

“Project Design Package” means the project design package delivered pursuant to Section 4.1.2(a)(xi).

 

“Project Document” means the Major Project Documents and the Additional Project Documents.

 

“Project Facility” means the 250MW AC solar photovoltaic (PV) electricity generation facility and related infrastructure and improvements located on the Project Site.

 

“Project Milestone Schedule” is the schedule delivered pursuant to Section 4.1.2(a)(vi), as amended from time to time consistent with the terms of the Loan Guarantee Agreement.

 

Exhibit A - Page 43

 

“Project Participant” means any party to a Major Project Document, and any party to a Financing Document other than the Secured Parties.

 

“Project Plans” means the project plans delivered pursuant to Section 4.1.2(a)(ii), in form and substance satisfactory to DOE for the design, development, financing, construction, implementation, operation and management of the Project, as amended from time to time with the written consent of DOE.

 

“Project Site” means all of the real property located in San Luis Obispo County, California on which the Project Facility will be located or that is otherwise necessary for the development, construction, ownership, operation and maintenance thereof.

 

“Projected Cash Grant Basis” has the meaning set forth in Section 4.1.7(c)(ii).

 

“Projected Debt Service Coverage Ratio” means, as of any date of determination, for any specified time period, the ratio of (i) projected Cash Flow Available for Debt Service during such specified time period, calculated using projections prepared by the Borrower in good faith based upon reasonable assumptions consistent in all material respects with the Transaction Documents, the then current Operating Budget and the Operating Plan and the P90 energy production forecast in the Base Case Projections, to (ii) Debt Service (disregarding clause (iii) of the definition of Debt Service) during the specified time period, calculated upon the assumption that there will be no early prepayment of either Guaranteed Loan.

 

“Property” means any right or interest in or to any asset or property of any kind whatsoever (including Equity Interests), whether real, personal or mixed and whether tangible or intangible.

 

“Proportional Ownership Interests” Equity Interests held by a Person in another Person either directly or indirectly through intermediate entities, expressed as a percentage on a fully-diluted basis. For example, if A holds a 50% Equity Interest in B, B holds a 40% Equity Interest in C, and C holds a 20% Equity Interest in D, then A holds a 4% Proportional Ownership Interest in D. In determining any Proportional Ownership Interest, all Equity Interests in Widely-Held Public Companies and in Designated Private Companies shall be disregarded.

 

“Public Utility Holding Company Act” or “PUHCA” means the United States Public Utility Holding Company Act of 2005, as amended from time to time.”

 

“Punch List Items” means items listed on the construction punch list that are approved by the Independent Engineer.

 

“Purchase and Sale Agreement” means the Amended and Restated Purchase and Sale Agreement, dated as of the date hereof, by and between SunPower, as seller, and the Holding Company (as assignee of the Sponsor), as purchaser.

 

“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

 

Exhibit A - Page 44

 

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.

 

“Qualified Transferee” means an entity that, together with its parent company, (i) either (A) has an investment-grade credit rating from Fitch, S&P or Moody’s, or (B) has a tangible net worth of not less than $100,000,000, and has certified to DOE that (x) it has the ability to pay its debts as they mature, (y) it is adequately capitalized to conduct its business, and (z) the fair value of its assets exceed the fair value of its liabilities, (ii) (A) with respect to any Person that has Control of the Borrower, and with respect to transfers at any time, is experienced in the ownership and (either directly or through the retention of a qualified operation and maintenance contractor) the operation of energy projects, or (B) with respect to any Person that does not have Control of the Borrower, and with respect to transfers prior to Project Completion only, is experienced in the ownership of energy projects, (iii) is not a Prohibited Person, and (iv) is not directly or indirectly Controlled or owned, in any material respect, by any national Governmental Authority.

 

“Qualifying Costs” means the actual, documented costs expended by the Borrower with respect to the Project (or any Phase thereof) for specified energy property that is an integral portion of the facility for purposes of Section 45 of the Internal Revenue Code and which is eligible to be included in the cost basis under Section 1603 of the Recovery Act, claimed in any Cash Grant Application consistent with the Cash Grant Guidance, Cash Grant Terms and Conditions and other regulations or guidance issued with respect to the Cash Grant.

 

“Quarterly Approval Date” means each date on which the items required pursant to Sections 4.3 are delivered to DOE; provided that, each Quarterly Approval Date shall be no later than the date that is 45 days after the end of each fiscal quarter of the Borrower, or if such date is not a Business Day, the next Business Day.

 

“Quarterly Conditions Precedent” is defined in Section 4.3.

 

“Quarterly Reporting Certificate” means a certificate executed by an Authorized Officer of the Borrower delivered pursuant to Sections 4.3.8(a) or 6.1.5, substantially in the form attached as Exhibit L.

 

“Quarterly Reporting Package” means the items specified in Section 6.1.5 as being delivered quarterly under cover of a Quarterly Reporting Certificate.

 

“Ratings Package Delivery Date” means, with respect to any items delivered pursuant to Section 4.1.2, (i) the date such item was delivered to DOE, which shall be on or before the date falling not less than sixty (60) days prior to the Guarantee Agreement Date, unless otherwise agreed by DOE.

 

“Real Property” means, with respect to any Person, all right, title and interest of such Person in and to any and all parcels of real property owned, leased or encumbered by such Person, together with all improvements and appurtenant fixtures, easements and other real property and rights and interests incidental to the ownership, lease or operation thereof, including the Project Site and the Improvements.

 

Exhibit A - Page 45

 

“Recapture Damages” means any loss or liability of the Borrower resulting from all or any portion of a Cash Grant being required to be repaid to the U.S. Department of the Treasury or any Governmental Authority, including any interest and penalties related thereto as described in the Cash Grant Guidance.

 

“Recapture Period” means the period from the Placed in Service Date until the fifth (5th) anniversary thereof, or such longer period during which a Cash Grant may be required to be repaid to the U.S. Department of Treasury pursuant to the Cash Grant Guidance.

 

“Recovery Act” means The American Recovery and Reinvestment Act of 2009, P.L. No. 111-5.

 

“Register” is defined in Section 11.14(d).

 

“Release” means disposing, discharging, injecting, spilling, leaking, leaching, dumping, pumping, pouring, emitting, escaping, emptying, seeping, migrating or placing, into or upon any land or water or air, whether indoor or outdoor, intentional or accidental, above or below ground, or otherwise entering into the environment in any manner.

 

“Renewable Energy Portfolio” means, with respect to any Person, a group of investments each of which is made by such Person (x) in a renewable energy project or a renewable energy company, or (y) in the solar electrical generation division or sector of an energy company, where (i) such group of investments includes a Proportional Ownership Interest in the Project, (ii) such group of investments constitutes not less than 20% of such Person’s total investment in renewable energy, and (iii) such Person’s investment in the Project constitutes not more than 35% of the aggregate of such group of investments. For purposes of this definition, the amount of an “investment” shall be measured (A) either (1) with respect to an investment in a renewable energy project or a renewable energy company, based on reasonably estimated market value, or (2) with respect to an investment in the solar electrical generation division or sector of an energy company, based on nameplate power output, and (B) in all cases, based on Proportional Ownership Interests.

 

“Requested Advance Date” is defined in the FFB Note Purchase Agreement.

 

“Required Approvals” means all material, discretionary Governmental Approvals and other consents and approvals of third parties (other than corporate governance matters) necessary or required under Applicable Law or any Contractual Obligation for (a) the due execution, delivery recordation, filing or performance by any Borrower Entity or Major Project Participant of any Transaction Document to which such Borrower Entity or Major Project Participant is or is to be a party; (b) the grant by the Borrower and the Holding Company of the Liens granted pursuant to the Security Documents; (c) the perfection or maintenance of the Liens created under the Security Documents (including the first priority nature thereof); (d) the exercise by any Secured Party of its rights under any of the Financing Documents or the remedies in respect of the Collateral pursuant to the Security Documents; (e) the development, construction, operation or maintenance of the Project; or (f) the Borrower’s ownership of the Project.

 

“Required Insurance” means insurance coverage for the Project satisfying the requirements set forth in Schedule 6.3(b).

 

Exhibit A - Page 46

 

“Reserve Letter of Credit” means an unconditional, irrevocable, direct-pay, letter of credit that is denominated in Dollars, that is issued in favor of the Collateral Agent by a bank with a branch or representative office in New York, New York and that is organized under or licensed as a branch or agency under the laws of the United States or any state thereof that has (i) outstanding unguaranteed and unsecured long-term Indebtedness that is rated “A-” or better by S&P and/or “A3” or better by Moody’s (and if the applicable rating is “A-” by S&P or “A3” by Moody’s, such rating is not on negative watch) that meets each of the following requirements and is otherwise in form and substance satisfactory to DOE:

 

(i)            the initial expiration date thereof shall be at least twelve (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 forty five (45) days prior to any such expiration, the issuer shall provide the Collateral Agent with a notice of non-renewal of such letter of credit;

 

(ii)           upon any failure to renew such Reserve Letter of Credit at least thirty (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 Collateral Agent (unless the Collateral Agent received a replacement letter of credit meeting the conditions herein imposed or amounts 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 the relevant Project Account);

 

(iii)          such Reserve Letter of Credit shall additionally be drawable in all cases in which the Accounts Agreement provides for a transfer of funds from the applicable Project Account and there are insufficient funds on hand for such transfer and there shall be no conditions to any drawing thereunder other than the submission of a drawing request substantially in the form attached to such Reserve Letter of Credit; and

 

(iv)          no agreement, instrument or document executed in connection with such Reserve Letter of Credit shall provide the issuer thereof or any other Person with any claim against the Borrower, the Collateral Agent, the Loan Servicer or any other Secured Party, or against any Collateral, whether for costs of maintenance, reimbursement of amounts drawn under such letter of credit or otherwise.

 

“Restricted Payment” is defined in Section 7.10.

 

“Restricted Payment Account” is defined in the Accounts Agreement.

 

“Risk Evaluation Documents” is defined in Section 4.1.2(a)(xii).

 

Exhibit A - Page 47

 

“S&P” means Standard & Poor’s Financial Services LLC, so long as it is a rating agency.

 

“Secured Obligations” means all amounts owing to the Secured Parties under the Financing Documents, including:

 

(i)            all loans, advances, debts, liabilities, and obligations, howsoever arising, owed by the Borrower under the FFB Documents, the Loan Guarantee Agreement or otherwise to the Secured Parties (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, pursuant to any of the Transaction Documents, including 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 or preserve the Secured Parties’ security interest in the Collateral; and

 

(iii)          in the event of any proceeding for the collection or enforcement of the obligations after an Event of Default has occurred and is continuing, the expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by any Secured Party of its rights under the Security Documents, together with any Periodic Expenses, including attorney’s fees and court costs.

 

“Secured Parties” means DOE, FFB, the Collateral Agent and the Loan Servicer or their successors or assigns, as their respective interests may appear (including as provided in Section 20 of each FFB Promissory Note).

 

“Security Agreement” means the Security Agreement between the Borrower and the Collateral Agent dated as of the date hereof.

 

“Security Documents” is defined in Section 4.1.1(b) and includes any other contract or document entered into after the Guarantee Agreement Date which provides a Lien, charge or security interest to the Secured Parties (or any of them).

 

“Semi-Annual Approval Date” means each six month anniversary of the Guarantee Agreement Date, or if not a Business Day, the next Business Day.

 

“Settlement” means with respect to any Project Claim: (i) entry of a final order or judgment denying or rejecting all such Project Claims with prejudice, and the time period for all appeals or further appellate review has expired; (ii) a dismissal with prejudice, not pursuant to a settlement, of all such Project Claims; (iii) the unconditional release, acquittal and discharge of the Borrower Released Parties from all Claims relating to the Project, including all related damages, expenses, fees, interest, costs, punitive damages, loss of profit, and liabilities whatsoever of every kind and nature, and including release, acquittal and discharge of all related

 

Exhibit A - Page 48

 

Claims, whether in personam or in rem, known, or unknown, asserted or unasserted, contingent or non-contingent, matured or not yet accrued, past, present or future, suspected or claimed, material or immaterial, concealed or hidden, liquidated or unliquidated, which any person or entity who has asserted or threatened any such Project Claim ever had, now has, or hereafter can, shall, or may have, whether in law, or equity, against the Borrower Released Parties, including without limitation waivers of the application of California Civil Code Section 1542; (iv) a settlement agreement relating to such Project Claim that does not meet the terms of (iii) above, but which is satisfactory to DOE in its sole discretion, provided that in the case of item (iv) DOE agrees to respond to a request to approve a proposed settlement within a reasonable period of time; or (v) written acknowledgement from DOE (to be provided in DOE’s sole discretion) that, notwithstanding the existence of any Project Claims, the CEQA Litigation Support Instruments may be released; provided that the CEQA Litigation has been resolved in accordance with one of the provisions of (i)-(iv) above.

 

“SHPO Clearance Letter” means the California Office of Historic Preservation Letter to DOE, dated June 23, 2011, and any modifications or amendments thereto.

 

“Sponsor” means NRG Solar LLC, a Delaware limited liability company.

 

“Subcontractors” means all subcontractors and materials suppliers that have (or may have) lien rights respecting the Project under the California mechanics lien laws.

 

“SunPower” is defined in the recitals to the Loan Guarantee Agreement.

 

“SunPower Cash Grant Shortfall Security” means a Letter of Credit posted by SunPower for the benefit of the Collateral Agent (acting on behalf of the Secured Parties) that is non-recourse to the Borrower, in the original aggregate principal amount of $75,000,000 (and any proceeds of the same drawn in accordance with section 4.12 of the Accounts Agreement), as the same may be reduced consistent with Section 6.35(d), substantially in the form of Exhibit Y.

 

“Support Instrument” means, with respect to any Project Document, any guarantee, letter of credit, surety, payment or performance bond or other agreement or instrument relating to the performance by any Person of its obligations under such Project Document.

 

“Tax Equity Investor” means a Person that owns Equity Interests in the Borrower in the form of interests in a class of common equity established solely for tax investors and that (i) either (A) has an investment-grade credit rating from Fitch, S&P or Moody’s or (B) has a tangible net worth of not less than $100,000,000 or (C) has certified to DOE that (x) it has the ability to pay its debts as they mature, (y) it is adequately capitalized to conduct its business, and (z) the fair value of its assets exceeds the fair value of its liabilities and (ii) is experienced in holding tax equity investments, (iii) is not a Prohibited Person, and (iv) is not directly or indirectly Controlled or owned, in any material respect, by any national Governmental Authority.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, penalties or additions thereto imposed in respect thereof.

 

Exhibit A - Page 49

 

“Technology” means regardless of form, any invention (whether or not patentable or reduced to practice), discovery, proprietary information, work of authorship, articles of manufacture, machines, proprietary methods, processes, models, protocols, designs, diagrams, drawings, flow charts, network configurations and architectures, schematics, specifications, algorithms, formulas, know-how, and techniques, software code, including all source code, object code, firmware, development tools and application programming interfaces (APIs), marketing and development plans, and other forms of technology and all media on which any of the foregoing is recorded.

 

“Term Loan Advance” means an advance or a borrowing of the Guaranteed Term Loan made pursuant to the Loan Guarantee Agreement and the FFB Documents.

 

“Term Loan Availability Period” means the period between the Guarantee Agreement Date and the date that is the earlier to occur of (a) August 4, 2014 and b) the Project Completion Date.

 

“Term Loan Maturity Date” means February 5, 2037.

 

“Term Sheet” means the Detailed Terms and Conditions for a Loan Guarantee, dated as of April 11, 2011, among DOE, SunPower Corporation, Systems and the Borrower.

 

“Title Companies” means, collectively, First American Title Insurance Company and Fidelity National Title Insurance Company, as equal co-insurers.

 

“Title Policy” means an ALTA extended coverage mortgagee’s title insurance policy (ALTA Loan Policy 2006 Loan Policy of Title Insurance, or equivalent) or other form satisfactory to DOE) issued by the Title Companies in the amount of the Guaranteed Loans insuring as of the Guarantee Agreement Date that Borrower owns, as applicable, good and marketable fee title, a valid leasehold interest or a valid easement in and to each element of the Project Site and that the lien of the Deed of Trust is a first and prior lien upon such Real Property as security for the Secured Obligations pursuant to the terms of this Agreement, subject only to the Permitted Liens, and otherwise in form and substance satisfactory to DOE and including, without limitation, all endorsements as required by DOE and such coinsurance agreements with such coinsurers as may be reasonably acceptable to DOE.

 

“Title XVII” means 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 Funding Available” means the aggregate of all funds that are (i) undrawn but committed, or reasonably expected to be available, under the FFB Commitment and the Base Equity Commitment, (ii) received or receivable delay payments and Loss Proceeds and (iii) any other unused equity funding that is committed or reasonably expected to be available.

 

“Total Guarantee” means a guarantee by Total S.A., organized under the laws of France, in favor of the Collateral Agent (acting for the benefit of the Secured Parties), substantially in the form of Exhibit BB or other form acceptable to DOE.

 

Exhibit A - Page 50

 

“Total Project Costs” means, as of any date of determination, the total amount of Project Costs reasonably likely to be needed to be required by the Borrower to achieve Project Completion.

 

“Transaction Documents” means the Project Documents and the Financing Documents.

 

“Transfer/Withdrawal Instructions” means instructions, in substantially the form of Exhibit A to the Accounts Agreement, for disbursements, transfers and payments from the Project Accounts in accordance with the Accounts Agreement.

 

“Ultimate Parent” means NRG Energy, Inc.

 

“Uniform Commercial Code” means the Uniform Commercial Code of the jurisdiction, the law of which governs the document in which such term is used.

 

“Uncontrollable Cause” means an unforeseeable cause beyond the control and without the fault of DOE, including an act of God, fire, flood, severe weather, epidemic, quarantine restriction, explosion, sabotage, act of war, act of terrorism, riot, civil commotion, disruption or failure of the DOE communications systems, closure of the U.S. government, or an unforeseen or unscheduled closure or evacuation of DOE’s offices.

 

“U.S.” means the United States of America.

 

“Widely-Held Public Company” means a Person that (i) has a class of common equity securities listed and registered on a national securities exchange, (ii) with respect to such class of common equity securities, immediately upon the issuance thereof $75,000,000 or more in aggregate worldwide market value of such common equity securities is held by non-Affiliates of such Person, and (iii) non-Affiliates of such Person own in excess of 75% of the outstanding capital stock of such Person.

 

Exhibit A - Page 51

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