EX-10.26 5 a2200589zex-10_26.htm EX-10.26

Exhibit 10.26

 

Execution Version

 

FINANCING AGREEMENT

 

among

 

STETSON HOLDINGS, LLC

 

a Delaware limited liability company

 

(Borrower);

 

BNP PARIBAS

 

(Joint Lead Arranger, Joint Bookrunner, Administrative Agent for the Lenders, and as Issuing Bank)

 

HSH NORDBANK AG, NEW YORK BRANCH

 

(Joint Lead Arranger, Joint Bookrunner, Co-Syndication Agent);

 

BNP PARIBAS

 

(Security Agent for the Secured Parties);

 

and

 

THE LENDERS PARTIES HERETO

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 1. DEFINITIONS

1

1.1

Definitions

1

1.2

Rules of Interpretation

1

 

 

 

ARTICLE 2. THE LOAN FACILITY

1

2.1

Loan Facility

1

2.2

Letters of Credit

4

2.3

Use of Loan Proceeds

12

2.4

Total Commitment

12

2.5

Notice of Borrowing of Loans

13

2.6

Defaulting Lenders

13

 

 

 

ARTICLE 3. GENERAL PROVISIONS RELATED TO CREDIT FACILITIES

15

3.1

Loan Funding

15

3.2

Prepayments

16

3.3

Fees

18

3.4

Other Payment Terms

20

3.5

Pro Rata Treatment

25

3.6

Change of Circumstances

26

3.7

Funding Losses

28

3.8

Alternate Office; Minimization of Costs

29

3.9

Interest Rate Protection

29

 

 

 

ARTICLE 4. COLLATERAL DOCUMENTS

30

4.1

Security

30

 

 

 

ARTICLE 5. CONDITIONS PRECEDENT

32

5.1

Conditions Precedent to the Closing Date; Issuance of Letters of Credit

32

5.2

Conditions Precedent to each Borrowing

39

 

 

 

ARTICLE 6. REPRESENTATIONS AND WARRANTIES

40

6.1

Organization

40

6.2

Authorization; No Conflict

41

6.3

Enforceability

41

6.4

ERISA

42

6.5

Taxes

42

6.6

Business, Debt, Contracts, Etc.

42

6.7

Private Offering by Borrower

43

6.8

Filings

43

6.9

Investment Company, Holding Company Act

43

6.10

Governmental Regulation

43

6.11

Margin Stock

43

6.12

Financial Statements

44

6.13

Partnerships and Joint Ventures

44

 

i



 

TABLE OF CONTENTS

(Continued)

 

 

 

Page

 

 

 

6.14

Existing Defaults

44

6.15

No Default

44

6.16

Permits

44

6.17

Offices, Location of Collateral

45

6.18

No Material Adverse Effect

46

6.19

Environmental Matters

46

6.20

Litigation

47

6.21

Title and Liens

47

6.22

Utilities

48

6.23

Roads/Feeder Lines

48

6.24

Sufficiency of Project Documents

49

6.25

Project Documents

49

6.26

Representations and Warranties of Affiliated Participants

49

6.27

EWG

49

6.28

Labor Disputes and Acts of God

50

6.29

Disclosure

50

6.30

Base Case Project Projections

50

6.31

Collateral

50

6.32

Intellectual Property

51

6.33

Proper Subdivision

51

6.34

Land Not in Flood Zone

51

6.35

Insurance

52

6.36

Bankruptcy Event

52

6.37

Construction of Projects

52

6.38

Construction Contracts

52

6.39

Warranty Period

52

6.40

OFAC and Related Matters

52

6.41

OFAC Restrictions

53

6.42

Line Outage Costs

53

 

 

 

ARTICLE 7. COVENANTS OF BORROWER

53

7.1

Use of Loan Proceeds and Project Revenues

54

7.2

Payment

54

7.3

Notices and Deliveries

54

7.4

Financial Statements

57

7.5

Reports

58

7.6

Additional Permits and Project Documents; Additional Consents

59

7.7

Compliance with Environmental Report Recommendations

59

7.8

Existence, Conduct of Business, Properties, Etc.

60

7.9

Obligations

60

7.10

Books, Records, Access

60

7.11

EWG and Rate Approval

61

7.12

Operation of Projects

61

 

ii



 

TABLE OF CONTENTS

(Continued)

 

 

 

Page

 

 

 

7.13

Preservation of Rights; Further Assurances

62

7.14

Taxes, Other Government Charges and Utility Charges

63

7.15

Compliance With Laws; Permits

63

7.16

Compliance with Anti-Money Laundering and OFAC Laws

64

7.17

Separateness Provisions

65

7.18

Enforcement of Remedies

65

7.19

O&M Service Agreement

65

7.20

Maintenance of Insurance

65

7.21

Maintenance of Title

72

7.22

Event of Eminent Domain

72

7.23

Indemnification

72

7.24

Replacement of Operator

75

7.25

Government Grant

75

7.26

Further Assurances

75

7.27

Upwind Array Effect

75

7.28

Capacity Revenues

76

7.29

Survey — Stetson II Project

76

 

 

 

ARTICLE 8. NEGATIVE COVENANTS OF BORROWER

77

8.1

Contingent Liabilities

77

8.2

Limitations on Lien

77

8.3

Indebtedness

77

8.4

Sale or Lease of Assets

77

8.5

Changes

78

8.6

Distributions

78

8.7

Investments

78

8.8

Transactions With Affiliates

78

8.9

Margin Stock Regulations

79

8.10

Partnerships

79

8.11

Dissolution

79

8.12

Amendments; Change Orders

79

8.13

Compliance With Operative Documents

80

8.14

Name and Location; Fiscal Year

80

8.15

Use of Project Site

80

8.16

Assignment

80

8.17

Transfer of Interest

80

8.18

Abandonment of Projects

80

8.19

Environmental Matters

81

 

 

 

ARTICLE 9. COLLATERAL ACCOUNTS

81

9.1

Establishment of Collateral Accounts

81

9.2

Permitted Investments

81

9.3

Foreclosure

82

 

iii



 

TABLE OF CONTENTS

(Continued)

 

 

 

Page

 

 

 

ARTICLE 10. EVENTS OF DEFAULT; REMEDIES

82

10.1

Events of Default

82

10.2

Remedies

88

 

 

 

ARTICLE 11. SCOPE OF LIABILITY

89

 

 

 

ARTICLE 12. AGENTS

90

12.1

Appointment, Powers and Immunities

90

12.2

Duties, Responsibilities, Powers and Immunities of Agents

91

12.3

Reliance by Agents

92

12.4

Non-Reliance

92

12.5

Defaults

92

12.6

Indemnification

93

12.7

Successor Agents

93

12.8

Authorization

94

12.9

Other Rights and Powers of Agents

94

12.10

Security Agent to Hold in Trust.

95

12.11

Amendments and Decision Making

95

12.12

Withholding Tax

96

12.13

Substitution of Lender

97

12.14

Participations

97

12.15

Transfer of Loans; Commitments

98

12.16

Laws

99

12.17

Assignability to Federal Reserve Bank

99

12.18

Response to Borrower Requests

99

 

 

 

ARTICLE 13. INDEPENDENT CONSULTANTS

100

13.1

Removal and Fees

100

13.2

Duties

100

13.3

Independent Consultants’ Certificates

100

13.4

Certification of Dates

100

 

 

 

ARTICLE 14. MISCELLANEOUS

101

14.1

Addresses

101

14.2

Additional Security; Right to-Set Off

102

14.3

Delay and Waiver

102

14.4

Costs, Expenses and Attorneys’ Fees

103

14.5

Attorney-In-Fact

103

14.6

Entire Agreement; Amendments

103

14.7

Governing Law

104

14.8

Severability

104

14.9

Headings

104

14.10

Accounting Terms

104

 

iv



 

TABLE OF CONTENTS

(Continued)

 

 

 

Page

 

 

 

14.11

Additional Financing

104

14.12

No Partnership, Etc.

105

14.13

Mortgage Documents/Collateral Documents

105

14.14

Limitation on Liability

105

14.15

Waiver of Jury Trial

105

14.16

Consent to Jurisdiction

106

14.17

Usury

106

14.18

Successors and Assigns

107

14.19

Confidentiality

107

14.20

Counterparts

108

14.21

Patriot Act Compliance

108

 

v



 

INDEX OF EXHIBITS AND SCHEDULES

 

Exhibit A

 

Definitions and Rules of Interpretation

 

 

 

Exhibit B-1

 

Form of Note

 

 

 

Exhibit C

 

[Reserved]

 

 

 

 

 

Disbursement Procedures

 

 

 

Exhibit D-1

 

[Reserved]

Exhibit D-2

 

[Reserved]

Exhibit D-3

 

Form of Confirmation of Interest Period Selection

Exhibit D-4

 

Form of Notice of Borrowing

Exhibit D-5

 

Form of Pending Disbursements Clause

 

 

 

 

 

Security-Related Documents

 

 

 

Exhibit E-1

 

Form of Mortgage Documents

Exhibit E-2

 

Form of Borrower Pledge and Security Agreement

Exhibit E-3

 

Form of Guaranty and Security Agreement

Exhibit E-4

 

Form of Account Control Agreement

Exhibit E-5

 

Schedule of Permitted Encumbrances

Exhibit E-6

 

Schedule of Security Filings

Exhibit E-7

 

Form of Member Pledge and Security Agreement

 

 

 

 

 

Consents

 

 

 

Exhibit F-1

 

 

Exhibit F-2

 

Form of Consent of BOP Contractor

Exhibit F-3

 

Form of Consent of Energy Hedge Provider

Exhibit F-4

 

Form of Consent of Energy Hedge Guarantor

Exhibit F-5

 

[Reserved]

Exhibit F-6

 

Form of Landowner Estoppel

Exhibit F-7

 

Form of Consent of Contracting Party

Exhibit F-8

 

Form of Consent of Turbine Supplier and Turbine Operator

Exhibit F-9

 

[Reserved]

Exhibit F-10

 

Form of Consent of Operator

Exhibit F-11

 

Form of Shared Facilities Consent

Exhibit F-12

 

Form of Project Administration Agreement Consent

 

 

 

 

 

Closing Certificates

 

 

 

Exhibit G-1

 

Form of Borrower’s Closing Certificate

Exhibit G-2

 

Form of Insurance Consultant’s Certificate

Exhibit G-3

 

Form of Environmental Consultant’s Certificate

 

vi



 

Exhibit G-4

 

Form of Independent Engineer’s Closing Certificate and Report

 

 

 

 

 

Project Description Exhibits

 

 

 

Exhibit H-1

 

[Reserved]

Exhibit H-2A

 

Schedule of Borrower Permit Exceptions— Environmental, Permitting, Real Property, Maine Regulatory Matters and FERC

Exhibit H-2B

 

Schedule of Applicable Permits — Environmental, Permitting, Real Property, Maine Regulatory Matters and FERC

Exhibit H-3

 

Governmental Regulations

Exhibit H-4

 

[Reserved]

Exhibit H-5

 

Pending Litigation

Exhibit H-6

 

Environmental Matters Disclosure

Exhibit H-7

 

Chief Executive Office of Borrower

Exhibit H-8A

 

Description of Stetson I Real Property Interests

Exhibit H-8B

 

Description of Stetson II Real Property Interests

Exhibit H-9

 

Description of Transmission Line Real Property Interests

 

 

 

Other Exhibits

 

 

 

 

 

Exhibit I

 

Lenders/Lending Offices

Exhibit J

 

Schedule of Lender Proportionate Shares

Exhibit K

 

Amortization Schedule

Exhibit L-1

 

Form of Withholding Certificate (Treaty)

Exhibit L-2

 

Form of Withholding Certificate (Effectively Connected)

Exhibit L-3

 

Form of Withholding Certificate (Portfolio Interest)

Exhibit M

 

Form of Subordination Agreement

Exhibit N

 

Form of Assignment Agreement

Exhibit O

 

Form of O&M Reserve LC

Exhibit P

 

Form of Debt Service Reserve LC

Exhibit Q-1

 

Form of Energy Hedge LC

Exhibit Q-2

 

Form of REC Contract LC

Exhibit R

 

Form of Working Capital LC

Exhibit S

 

Form of Notice of LC Activity

 

vii



 

FINANCING AGREEMENT

 

This FINANCING AGREEMENT (this “Financing Agreement”), dated as of December 22, 2009, is entered into by and among STETSON HOLDINGS, LLC, a Delaware limited liability company, as Borrower; the financial institutions listed on Exhibit I or who later become a party hereto, as Lenders; BNP PARIBAS, as a Joint Lead Arranger, as Administrative Agent for the Lenders, Security Agent for the Secured Parties, and as Issuing Bank; and HSH NORDBANK AG, NEW YORK BRANCH, as a Joint Lead Arranger.

 

AGREEMENT

 

In consideration of the agreements herein and in the other Financing Documents and in reliance upon the representations and warranties set forth herein and therein, the parties agree as follows:

 

ARTICLE 1.

DEFINITIONS

 

1.1           Definitions.

 

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

 

1.2           Rules of Interpretation.

 

Except as otherwise expressly provided, the rules of interpretation set forth in Exhibit A shall apply to this Financing Agreement and the other Financing Documents.

 

ARTICLE 2.

THE LOAN FACILITY

 

2.1                                 Loan Facility.

 

(a)                                  Availability.

 

(i)                                     Term Loan.  Subject to the terms and conditions set forth in this Financing Agreement, each Lender severally agrees to make to Borrower one or more loans as Borrower may request during the Availability Period under Section 2.5 (individually, a “Term Loan” and, collectively, the “Term Loans”), in an aggregate principal amount not to exceed such Lender’s Proportionate Share of the Total Term Loan Commitment.  Borrower may request Base Rate Loans or LIBO Rate Loans, in each case, pursuant to the Notice of Borrowing under Section 2.5.  Each Lender shall make its Term Loan, in an amount not in excess of its Total Term Loan Commitment, pursuant to Section 3.1(c).

 

(ii)                                  Bridge Loan.  Subject to the terms and conditions set forth in this Financing Agreement, each Lender severally agrees to make to Borrower

 



 

one or more loans as Borrower may request during the Availability Period under Section 2.5 (individually, a “Bridge Loan” and, collectively, the “Bridge Loans”), in an aggregate principal amount not to exceed such Lender’s Proportionate Share of the Total Bridge Loan Commitment.  Borrower may request Base Rate Loans or LIBO Rate Loans, in each case, pursuant to the Notice of Borrowing under Section 2.5.  Each Lender shall make its Bridge Loan, in an amount not in excess of its Total Bridge Loan Commitment, pursuant to Section 3.1(c).

 

(b)                                 Interest Provisions.

 

(i)                                     Interest Rate.  Each Loan shall bear interest on the unpaid principal amount thereof from the date of the funding of such Loan until the repayment or prepayment thereof at a rate determined by reference to the LIBO Rate or Base Rate, as applicable.  In respect of Term Loans and Bridge Loans, the applicable basis for determining the rate of interest with respect to any LIBO Rate Loan shall be selected by Borrower initially at the time the Notice of Borrowing is given with respect to such LIBO Rate Loan pursuant to Section 2.5, and, thereafter, the basis for determining the interest rate with respect to such LIBO Rate Loan may be changed from time to time pursuant to Section 2.1(c).

 

Borrower shall pay interest (including interest accruing after the commencement of an insolvency proceeding under applicable Bankruptcy Law) on the unpaid principal amount of each LIBO Rate Loan from the date of the funding of such LIBO Rate Loan until the repayment or prepayment thereof, at a rate per annum in effect during each Interest Period for such LIBO Rate Loan, equal to the LIBO Rate for the relevant Interest Period plus the Applicable Margin.  Borrower shall pay interest (including interest accruing after the commencement of an insolvency proceeding under applicable Bankruptcy Law) on the unpaid principal amount of each Base Rate Loan from the date of the funding of such Base Rate Loan until the repayment or prepayment thereof, at a rate per annum equal to the Base Rate in effect during such period plus the Applicable Base Rate Margin.  In the event that an Event of Default shall have occurred and be continuing, the applicable Default Rate shall apply to all then outstanding Loans and shall be payable on demand or otherwise pursuant to Section 3.4(c)(ii).

 

(ii)                                  Interest Payment Dates.  Borrower shall pay accrued interest on the unpaid principal amount of each outstanding Loan (a) on each Payment Date and (b) upon prepayment (to the extent thereof) and at maturity of each Loan (each an “Interest Payment Date”).

 

2


 

(c)           Interest Periods.

 

(i)            Solely with respect to Term Loans and Bridge Loans and in connection with each LIBO Rate Loan, Borrower shall, pursuant to the Notice of Borrowing or a Confirmation of Interest Period Selection select an Interest Period to be applicable to such LIBO Rate Loans, which Interest Periods shall be a six (6) month period ending in each case on a Payment Date or, solely with respect to the initial LIBO Rate Loans, any shorter Interest Period ending on the first Payment Date, as requested by Borrower and approved by Administrative Agent (any such period, an “Interest Period”); provided, however, that (1) with the exception of any shorter Interest Period ending on the first Payment Date, the selection of any Interest Period other than the six (6) month Interest Period shall be subject to availability of such Interest Period from each Lender; (2) any Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless that day falls in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business Day; (3) any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and (4) no Interest Period shall extend beyond the Term Loan Maturity Date or Bridge Loan Maturity Date, as applicable.  If Borrower fails to notify Administrative Agent of the next Interest Period for any LIBO Rate Loan in accordance with this Section 2.1(c)(i), such Term Loan or Bridge Loan, as applicable, shall automatically continue as a new LIBO Rate Loan with the same Interest Period as such prior LIBO Rate Loan; provided, however, that in the event that the Interest Period of such new LIBO Rate Loan would extend beyond the applicable Maturity Date, then such Loan shall automatically convert to a Base Rate Loan.

 

(d)           Interest Account and Interest Computations.  Borrower authorizes Administrative Agent to record in an account or accounts maintained by Administrative Agent on its books (1) the interest rates applicable to all Loans and the effective dates of all changes thereto; (2) the Interest Period for each LIBO Rate Loan; (3) the date and amount of each principal and interest payment on each outstanding Loan; and (4) such other information as Administrative Agent may determine is necessary for the computation of interest payable by Borrower hereunder consistent with this Financing Agreement.  Borrower agrees that all computations of interest made by Administrative Agent shall be conclusive in the absence of demonstrable error.  Administrative Agent shall, at the request of Borrower, deliver to Borrower a statement detailing such computations of interest.  All computations of interest on LIBO Rate Loans shall be based upon a year of 360 days and the actual days elapsed (including the first day but excluding the last day of the applicable Interest Period).  All computations of interest on Base Rate Loans hereunder shall be based upon a year of 365 days (or 366 days in a leap year) and the actual days

 

3



 

elapsed (including the first day but excluding the last day of the applicable interest period).

 

(e)           Principal Payments.  On each Payment Date, Borrower shall repay to Administrative Agent for the account of each Lender, an amount equal to the Scheduled Repayment Amount for such Payment Date.  Any unpaid principal, interest, fees, costs and all other Obligations with respect to the Loans shall be due and payable on the Bridge Loan Maturity Date, LC Loan Maturity Date or Term Loan Maturity Date, as applicable.   Notwithstanding the foregoing, in no event shall the principal amount of the Loans to be repaid by Borrower on any Payment Date exceed the aggregate principal amount of the Loans then outstanding.

 

(f)            Promissory Notes.  The obligation of Borrower to repay the Loans made by each Lender and to pay all interest thereon at the rates provided herein and all other Obligations with respect to such Loans under this Financing Agreement shall be irrevocable, absolute and unconditional under any and all circumstances and shall be evidenced by promissory notes substantially in the form of Exhibit B-1 (individually, a “Note” and, collectively, the “Notes”), each payable to the order of such Lender and in the principal amount of such Lender’s Proportionate Share of Loans requested to be made as of the Closing Date.  Such Notes shall be duly executed by Borrower and delivered to each Lender on or prior to the Closing Date.

 

2.2     Letters of Credit.

 

(a)           Issuance and Availability.

 

(i)            O&M Reserve LC.  Subject to the terms and conditions contained in this Financing Agreement, the Issuing Bank irrevocably agrees to issue on the Closing Date, the O&M Reserve LC for the account of Borrower and in favor of the Administrative Agent (on behalf of the Lenders) as beneficiary in support of O&M Costs.  The O&M Reserve LC shall be in an initial Stated Amount equal to $2,570,000 and shall be substantially in the form attached hereto as Exhibit O.

 

(ii)           Debt Service Reserve LC.  Subject to the terms and conditions contained in this Financing Agreement, Issuing Bank irrevocably agrees to issue on the Closing Date, the Debt Service Reserve LC for the account of Borrower and in favor of the Administrative Agent (on behalf of the Lenders) as beneficiary in support of the Debt Service Reserve Requirement.  The Debt Service Reserve LC shall be in an initial Stated Amount equal to $6,630,000 and shall be substantially in the form attached hereto as Exhibit P.

 

(iii)          Energy Hedge LCs and REC Contract LCs.  Subject to the terms and conditions contained in this Financing Agreement, Issuing Bank

 

4



 

irrevocably agrees to issue, during the LC Issuance Period, one or more Energy Hedge LCs for the account of Borrower and in favor of the applicable counterparty under the applicable Energy Hedge and one or more REC Contract LCs for the account of Borrower and in favor of the applicable counterparty under the applicable REC Contract.  Each Energy Hedge LC shall be substantially in the form attached hereto as Exhibit Q-1.  Each REC Contract LC shall be substantially in the form attached hereto as Exhibit Q-2.

 

(iv)          Working Capital LCs.  Subject to the terms and conditions contained in this Financing Agreement, Issuing Bank irrevocably agrees to issue, during the LC Issuance Period, one or more Working Capital LCs for the account of Borrower and in favor of the applicable counterparty under the applicable Project Documents.  Each Working Capital LC shall be substantially in the form attached hereto as Exhibit R.

 

(b)           Letter of Credit Commitments and Adjustments.

 

(i)            The Total LC Commitment shall be a separate revolving working capital facility provided by Issuing Bank and its participants and permitted assignees pursuant to Sections 12.14 and 12.15 of the Financing Agreement, respectively, as Lender in respect of any LC Loans, and the issuance of the Letters of Credit shall be deemed to reduce, in an amount equal to the aggregate Stated Amount of such Letters of Credit, the Available LC Commitment.

 

(ii)           Any Drawing Payment with respect to the O&M Reserve LC shall reduce the available Stated Amount thereof pursuant to this Financing Agreement and the Total LC Commitment applicable thereto shall be reduced, each in an amount equal to such Drawing Payment.  Any Drawing Payment with respect to the Debt Service Reserve LC shall reduce the available Stated Amount thereof pursuant to this Financing Agreement and the Total LC Commitment applicable thereto shall be reduced, each in an amount equal to such Drawing Payment.  Any Drawing Payment with respect to any Hedge LC shall reduce the available Stated Amount thereof pursuant to this Financing Agreement and the Total LC Commitment applicable thereto shall be reduced, each in an amount equal to such Drawing Payment.  Any Drawing Payment with respect to any Working Capital LC shall reduce the available Stated Amount thereof pursuant to this Financing Agreement and the Total LC Commitment applicable thereto shall be reduced, each in an amount equal to such Drawing Payment.

 

(iii)          Subject to Section 2.2(b)(iv), the Stated Amount of any Letter of Credit may, upon request by Borrower pursuant to Section 2.2(c), be reinstated to its original Stated Amount; provided, that (A) the applicable Reimbursement Obligation or LC Loan is paid in full; (B) no Inchoate Default or Event of Default has occurred and is continuing; (C) each

 

5



 

representation and warranty set forth in Article 6 shall be true and correct in all material respects as of such date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date); and (D) all applicable terms and conditions set forth in the applicable Letter of Credit are satisfied in accordance therewith.

 

(iv)          Notwithstanding anything to the contrary provided in this Financing Agreement, the sum of the Stated Amounts of any Letters of Credit issued, or requested but not yet issued, hereunder at any time, any Reimbursement Obligations remaining unpaid at any time and LC Loans outstanding at any time shall not exceed the Total LC Commitment.

 

(c)           Notice of LC Activity. Subject to the terms and conditions contained in this Financing Agreement (including the satisfaction of the requirements in Section 2.2(b)) and so long as no Inchoate Default or Event of Default has occurred and is continuing, Borrower shall request (x) the issuance or extension of any Letter of Credit, or (y) any reinstatement, increase or decrease in the Stated Amount thereof, in each case, by delivering to Administrative Agent and Issuing Bank an irrevocable written notice in the form of Exhibit S, appropriately completed (a “Notice of LC Activity”), which specifies, among other things:

 

(i)            the particulars of any Letters of Credit to be issued, extended or amended, including the then-current Stated Amount of such Letters of Credit (which shall not exceed the then Available LC Commitment applicable to such Letters of Credit); and

 

(ii)           with respect to any Hedge LC or Working Capital LC, if a reinstatement, increase or decrease to the Stated Amount of such Letter of Credit is requested, the amount by which such Stated Amount is to be reinstated, increased or decreased, as applicable.

 

In the case of any Hedge LC or Working Capital LC, Borrower shall deliver the Notice of LC Activity to Administrative Agent (with a copy to Issuing Bank) at least five (5) Business Days before the date of issuance, reinstatement, increase or decrease of the Stated Amount of such Letter of Credit.  Upon the adjustment date specified in such Notice of LC Activity, subject to the terms and conditions set forth in this Financing Agreement, Issuing Bank shall, by amendment or adjustment to the Letter of Credit, adjust the Stated Amount thereof to reflect the change specified in such Notice of LC Activity.  From the effective date of any such adjustment, the LC Fees payable pursuant to Section 3.3(e) shall be computed on the basis of the Stated Amount as so adjusted.

 

(d)           Drawings; LC Loans.

 

(i)            Drawings.  Subject to the terms and conditions of this Financing Agreement, each Lender in respect of the LC Loans, and its participants and permitted assignees pursuant to Sections 12.14 and 12.15 of the

 

6



 

Financing Agreement, respectively, severally agrees to advance to Issuing Bank, for the account of Borrower, such Lender’s Proportionate Share of the full amount of any Drawing Payment under any Letter of Credit.  Upon the making of any Drawing Payment, Borrower shall be obligated to reimburse Issuing Bank for such Drawing Payment as provided below.

 

(ii)           Lender Participation.  Upon a Drawing Payment on any Letter of Credit, each Lender in respect of the LC Loans, and its participants and permitted assignees pursuant to Sections 12.14 and 12.15 of the Financing Agreement, respectively, hereby severally agrees that it shall forthwith purchase from Issuing Bank a participation interest in the unreimbursed Drawing Payment made by Issuing Bank under such Letter of Credit, in an amount equal to such Lender’s Proportionate Share of such unreimbursed Drawing Payment.

 

(iii)          Reimbursement of O&M Reserve LC.

 

Borrower hereby agrees to repay any Drawing Payment and to pay all fees and interest thereon at the rates provided herein, which obligation shall be irrevocable, absolute and unconditional; provided, that as long as an Event of Default (other than an Event of Default that will be cured with the proceeds of the proposed draw on the O&M Reserve LC) has not occurred and is continuing and unless Borrower has repaid the full amount of such Drawing Payment on the next Business Day, the amount of such Drawing Payment shall be converted to a loan made pursuant to this Section 2.2(d)(iii) (an “O&M Reserve LC Loan”).  Each O&M Reserve LC Loan, if any, shall be due and payable in full on the LC Loan Maturity Date.  Borrower shall pay interest on the unpaid amount of the O&M Reserve LC Loan calculated from the date of such O&M Reserve LC Loan until such O&M Reserve LC Loan is repaid in full at a rate per annum equal to the Base Rate plus the Applicable Base Rate Margin.

 

(iv)          Reimbursement of Debt Service Reserve LC.

 

Borrower hereby agrees to repay any Drawing Payment and to pay all fees and interest thereon at the rates provided herein, which obligation shall be irrevocable, absolute and unconditional; provided, that as long as an Event of Default (other than an Event of Default that will be cured with the proceeds of the proposed draw on the Debt Service Reserve LC) has not occurred and is continuing and unless Borrower has repaid the full amount of such Drawing Payment on the next Business Day, the amount of such Drawing Payment shall be converted to a loan made pursuant to this Section 2.2(d)(iv) (a “Debt Service Reserve LC Loan”).  Each Debt Service Reserve LC Loan, if any, shall be due and payable in full on the LC Loan Maturity Date.  Borrower shall pay interest on the unpaid amount of the Debt Service Reserve LC Loan calculated from the date of such Debt Service Reserve LC Loan until such Debt Service Reserve LC

 

7



 

Loan is repaid in full at a rate per annum equal to the Base Rate plus the Applicable Base Rate Margin.

 

(v)           Reimbursement of Hedge LC.

 

Borrower hereby agrees to repay any Drawing Payment and to pay all fees and interest thereon at the rates provided herein, which obligation shall be irrevocable, absolute and unconditional; provided, that as long as an Event of Default (other than an Event of Default that will be cured with the proceeds of the proposed draw on the applicable Hedge LC) has not occurred and is continuing and unless Borrower has repaid the full amount of such Drawing Payment on the next Business Day, the amount of the applicable Drawing Payment in respect of any Hedge LC shall be converted to a loan made pursuant to this Section 2.2(d)(v) (a “Hedge LC Loan”).  Each Hedge LC Loan, if any, shall be due and payable in full on the LC Loan Maturity Date.  Borrower shall pay interest on the unpaid amount of each Hedge LC Loan calculated from the date of such Hedge LC Loan until such Hedge LC Loan is repaid in full at a rate per annum equal to the Base Rate plus the Applicable Base Rate Margin.

 

(vi)          Reimbursement of Working Capital LC.

 

Borrower hereby agrees to repay any Drawing Payment and to pay all fees and interest thereon at the rates provided herein, which obligation shall be irrevocable, absolute and unconditional; provided, that as long as an Event of Default (other than an Event of Default that will be cured with the proceeds of the proposed draw on the applicable Working Capital LC) has not occurred and is continuing and unless Borrower has repaid the full amount of such Drawing Payment on the next Business Day, the amount of the applicable Drawing Payment in respect of any Working Capital LC shall be converted to a loan made pursuant to this Section 2.2(d)(vi) (a “Working Capital LC Loan”).  Each Working Capital LC Loan, if any, shall be due and payable in full on the LC Loan Maturity Date.  Borrower shall pay interest on the unpaid amount of each Working Capital LC Loan calculated from the date of such Working Capital LC Loan until such Working Capital LC Loan is repaid in full at a rate per annum equal to the Base Rate plus the Applicable Base Rate Margin.

 

(vii)         Interim Interest.  Without limiting the Borrower’s obligation to reimburse Drawing Payments pursuant to this Section 2.2(d), if the Issuing Bank makes any Drawing Payment, then, unless the Borrower reimburses that Drawing Payment in full on the date that such Drawing Payment is made, the unreimbursed amount of that Drawing Payment shall bear interest, for each day from and including the date that such Drawing Payment is made to but excluding the date that the Borrower reimburses that Drawing Payment at the rate per annum equal to the Base Rate in effect during such period plus the Applicable Base Rate Margin.

 

8



 

(e)           Adjustments to Stated Amount; Cancellation.

 

(i)            Adjustments to Stated Amount.  The Stated Amount of each Letter of Credit (i) shall be adjusted as provided in Section 2.2(b) and (ii) may be adjusted as provided in Section 2.2(c).

 

(ii)           Cancellation Upon Acceleration.  At such time as, pursuant to the terms hereof, Administrative Agent and the Lenders have accelerated the Obligations and unless Borrower has provided Issuing Bank with cash collateral on terms and conditions reasonably satisfactory to Issuing Bank in an amount equal to 103% of the Stated Amount of each Letter of Credit then outstanding and all Reimbursement Obligations of Borrower then outstanding, Issuing Bank shall be entitled to cancel each Letter of Credit at any time at least thirty (30) days after delivery to Administrative Agent, the beneficiary of such Letter of Credit and Borrower of a written notice of such intent to cancel.

 

(iii)          Expiration.  The Letters of Credit shall expire on their respective Expiration Dates which shall in no event be later than the LC Loan Maturity Date, or on such earlier date if terminated pursuant to the terms of this Financing Agreement or the applicable Letter of Credit.

 

(iv)          Lender Participation.  The several obligations of (x) each Lender, and its participants and permitted assignees pursuant to Sections 12.14 and 12.15 of the Financing Agreement, who have purchased a participation in the Letters of Credit in such Lender’s Proportionate Share of the maximum amount which is or at any time may become available to be drawn thereunder, and (y) each Lender, and its participants and permitted assignees pursuant to Sections 12.14 and 12.15 of the Financing Agreement, to make LC Loans in accordance with Section 2.2(d) shall be absolute, irrevocable and unconditional under any and all circumstances whatsoever and shall not be affected by any circumstance, including, without limitation, (A) any set-off, counterclaim, recoupment, defense or other right which any such Lender or any other Person may have against the Administrative Agent, the Issuing Bank, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, an Event of Default or the termination of the Commitments, the acceleration of the Term Loans, Bridge Loans or the termination of such Letter of Credit; (C) any adverse change in the condition (financial or otherwise) of the Borrower or any other Person; (D) any breach of any Financing Document by any party thereto; (E) the fact that any condition precedent to (1) the issuance of, or the making of any payment under, such Letter of Credit or (2) the making of LC Loans, was not met; (F) any violation or asserted violation of law by any Lender or any Affiliate thereof; or (G) to the extent permitted under applicable law, any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.  Immediately upon the issuance of any Letter of

 

9



 

Credit, Issuing Bank shall be deemed to have sold and transferred to such Lender, and such Lender shall be deemed to have purchased and received from Issuing Bank, in each case irrevocably and without any further action by any party, an undivided interest and participation in the Letter of Credit, each Drawing and the other obligations in respect thereof in an amount equal to such Lender’s Proportionate Share referenced above.  Each payment by each such Lender or other Person to the Issuing Bank for its own account shall be made without any offset, abatement, withholding or reduction whatsoever.  If the Issuing Bank is required at any time to return to the Borrower or to a trustee, receiver, liquidator, custodian or other similar official any portion of the payments made by the Borrower to such Issuing Bank in payment of any Reimbursement Obligation or interest thereon upon the insolvency of the Borrower, or the commencement of any case or proceeding under any bankruptcy, insolvency or other similar law with respect to the Borrower, each applicable Lender or other Person shall, on demand of the Issuing Bank, forthwith return to the Issuing Bank any amounts transferred to such Lender or other Person by the Issuing Bank in respect thereof pursuant to this subsection plus such Lender’s or other Person’s pro rata share of any interest on such payments required to be paid to the Person recovering such payments plus interest on the amount so demanded from the day such demand is made, if such demand is made by 2:00 p.m., New York time, or from the next following Business Day, if such demand is made after 2:00 p.m., New York time, to but not including the day such amounts are returned by such Lender or other Person to the Issuing Bank at a rate per annum for each day equal to (A) the Federal Funds Effective Rate for the day of such demand and (B) the Federal Funds Effective Rate plus 3.00% for each day thereafter.

 

(v)           Draw Procedures.  Issuing Bank shall require each Lender in respect of the LC Loans, and its participants and permitted assignees pursuant to Sections 12.14 and 12.15 of the Financing Agreement, respectively, to severally pay to Issuing Bank its respective Proportionate Share of all or any portion of any Drawing Payment made or to be made by Issuing Bank under any Letter of Credit by contacting Administrative Agent telephonically (promptly confirmed in writing) at any time after Issuing Bank has received notice of or request for such Drawing, and specifying the amount of such Drawing, such Lender’s Proportionate Share thereof, and the date on which such Drawing is to be made or was made and Administrative Agent shall promptly notify each Lender thereof; provided, however, that Issuing Bank shall not request such Lenders to make any payment in connection with any portion of a Drawing for which Issuing Bank has received a Reimbursement Payment from Borrower.  Upon receipt of any such request for payment from Issuing Bank, such Lender shall pay to Issuing Bank such Lender’s Proportionate Share of the unreimbursed portion of such Drawing, together with interest thereon at a per annum rate equal to the Federal Funds Effective Rate from the date of

 

10



 

such Drawing to the date on which such Lender makes payment.  Such Lender’s obligation to make each such payment to Issuing Bank shall be absolute, unconditional and irrevocable, and shall not be affected by any circumstance whatsoever, including the occurrence or continuance of any Inchoate Default or Event of Default, or the failure of any other Lender to make any payment hereunder, and such Lender further agrees that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  In the event that any Lender fails to make available to Issuing Bank the amount of its Proportionate Share in such LC Loan, Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest thereon at the Federal Funds Effective Rate plus 3.00% (without any right to indemnification by such Lender from Borrower in respect of such interest).  If any Reimbursement Payment is made by Borrower to Issuing Bank, Issuing Bank shall pay to such Lender which has paid its Proportionate Share of the Drawing such Lender’s Proportionate Share of the Reimbursement Payment and then retain the balance of such Reimbursement Payment.

 

(f)            Commercial Practices.  Borrower agrees that none of Issuing Bank, Administrative Agent, nor any Lender (nor any of their respective directors, officers or employees) shall be liable or responsible for, and the Reimbursement Obligations of Borrower and Borrower’s obligations to repay the O&M Reserve LC Loan, Debt Service Reserve LC Loan, Hedge LC Loans and the Working Capital LC Loans pursuant to the terms of this Financing Agreement shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Financing Agreement regardless of (i) the use of any Letter of Credit or for any acts or omissions of any beneficiary or transferee in connection therewith; (ii) payment by Issuing Bank against presentation of documents which do not strictly comply with the terms of any Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit so long as such documents substantially comply with the terms of such Letter of Credit and Issuing Bank has not acted with gross negligence or willful misconduct; (iii) any amendment or waiver of or any consent to departure from all or any terms of any of the Financing Documents agreed by Borrower; (iv) the existence of any claim, setoff, defense or other right which Borrower may have at any time against any beneficiary or transferee of any Letter of Credit (or any Persons for whom any such beneficiary or transferee may be acting), Administrative Agent, Issuing Bank, any Lender or any other Person, whether in connection with this Financing Agreement, the transactions contemplated herein or in the other Financing Documents, or in any unrelated transaction; (v) any demand, statement, certificate, draft or other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (vi) any extension of time for or delay, renewal or compromise of or other indulgence or modification to the Drawing Payment granted or agreed to by Administrative Agent, Issuing Bank or any Lender; (vii) any failure of the relevant Project Document under which the relevant Letter of Credit is issued or

 

11



 

any other Operative Document to be in full force and effect, (viii) any failure to perfect or preserve the perfection of any Lien thereon, or the release of any of the Collateral securing the performance or observance of the terms of this Financing Agreement or any of the other Financing Documents, or (ix) any other circumstances whatsoever in making or failing to make payment under any Letter of Credit, except, in each case, that Issuing Bank shall be liable to Borrower for acts or events described in clauses (i) through (ix) above to the extent suffered by Borrower which Borrower provides evidence that such acts or events were caused by (A) Issuing Bank’s willful misconduct or gross negligence in determining whether a drawing made under any Letter of Credit complies with the terms and conditions stated therein or (B) Issuing Bank’s willful failure to pay under any Letter of Credit after a drawing by the beneficiary strictly complying with the terms and conditions stated therein.  Without limiting the foregoing, Issuing Bank may accept any document that appears on its face to be in order, without responsibility for further investigation.  Borrower hereby waives any right to object to any payment made under any Letter of Credit with regard to a drawing that is in the form provided in such Letter of Credit but which varies with respect to punctuation (except punctuation with respect to any Dollar amount specified therein), capitalization, spelling or similar administrative matters of form that do not change meaning.

 

(g)           On the earlier of (i) the day when each Letter of Credit expires by its terms and (ii) the LC Loan Maturity Date, Borrower shall cause each Letter of Credit to be irrevocably terminated by the beneficiary thereof (pursuant to documentation acceptable to the Issuing Bank) and surrendered to the Issuing Bank for cancellation.

 

2.3     Use of Loan Proceeds.

 

Borrower shall use the proceeds of the Loans solely for the purposes and in the order and manner provided in Section 7.1.

 

2.4     Total Commitment.

 

(a)           Working Capital Letters of Credit.  The sum of the maximum aggregate Stated Amount of all Letters of Credit outstanding at any time, the Stated Amount of any requested but not yet issued Letters of Credit, any Reimbursement Obligations remaining unpaid at any time and LC Loans outstanding at any time shall not exceed $26,700,000 (such amount, as reduced from time to time, the “Total LC Commitment”).  The maximum Stated Amount of the O&M Reserve LC outstanding and the Stated Amount of any requested but not yet issued O&M Reserve LC at any time shall not exceed $2,570,000.  The maximum Stated Amount of the Debt Service Reserve LC outstanding at any time and the Stated Amount of any requested but not yet issued Debt Service Reserve LC shall not exceed $6,630,000.  The maximum Stated Amount of all Hedge LCs outstanding at any time shall not exceed $16,500,000.  The maximum Stated Amount of all Working Capital LCs outstanding at any time shall not exceed $1,000,000.

 

12


 

(b)           Term Loans.  The Total Term Loan Commitment on the Closing Date is $71,000,000.

 

(c)           Bridge Loans.  The Total Bridge Loan Commitment on the Closing Date is $18,632,891.16.

 

(d)           Total Commitment.  The Total Commitment on the Closing Date is $116,332,891.16.  The Total Commitment shall terminate without any further action from Borrower, the Agents and the Lenders upon the disbursement of Term Loans and the Bridge Loans, and the issuance of Letters of Credit in the amount of the Total Commitment pursuant to Section 2.1 and Section 2.2, as applicable.  Borrower may from time to time upon two (2) Business Days notice to Administrative Agent, permanently reduce (without premium or penalty), by an amount of $500,000 or integral multiples of $100,000 in excess thereof or cancel in its entirety the Total LC Commitment, the Total Term Loan Commitment or the Total Bridge Loan Commitment.

 

2.5     Notice of Borrowing of Loans.

 

Borrower shall request the Term Loans and Bridge Loans by delivering to Administrative Agent an initial irrevocable written notice in the form of Exhibit D-4 (the “Notice of Borrowing”).  Borrower shall give the Notice of Borrowing to Administrative Agent not later than 12:00 p.m., New York time, at least three (3) Business Days before the proposed Borrowing (or as otherwise agreed among Administrative Agent, the Lenders and Borrower).

 

2.6     Defaulting Lenders.

 

Notwithstanding any provision of this Financing Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such lender is a Defaulting Lender:

 

(a)           fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 3.3;

 

(b)           the Commitment of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver); provided, that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender;

 

(c)           if any LC Exposure exists at the time a Lender with an LC Commitment and/or LC Loan becomes a Defaulting Lender then:

 

(i)            all or any part of such LC Exposure shall be reallocated among the non-Defaulting Lenders in accordance with their respective Proportionate Share but only to the extent the sum of all non-Defaulting Lenders LC

 

13



 

Exposure plus such Defaulting Lender’s LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments;

 

(ii)           if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall, within one (1) Business Day following notice by the Administrative Agent, cash collateralize such defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.2(e) for so long as such LC Exposure is outstanding;

 

(iii)          if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to this Section 2.6(c), the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 3.3(e) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

 

(iv)          if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to this Section 2.6(c), then the fees payable to the Lenders pursuant to Section 3.3(e) shall be adjusted in accordance with each such non-Defaulting Lender’s Proportionate Share; and

 

(v)           if any Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.6, then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all participation fees payable under Section 3.3 with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized and/or reallocated.

 

(d)           so long as any Lender with an LC Commitment and/or LC Loan is a Defaulting Lender, the Issuing Bank shall not be required to issue, amend, renew or extend any Letter of Credit, unless it is satisfied that the related LC Exposure will be 100% covered by the LC Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with this Section 2.6;

 

(e)           any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender shall, in lieu of being distributed to such Defaulting Lender, be retained by the Administrative Agent in a segregated account and, subject to any applicable requirements of law, be applied at such time or times as may be determined by the Administrative Agent (i) first, to the payments of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second to the payment of any amounts owing by such Defaulting Lender to the Issuing Bank hereunder, (iii) third, to the funding of any Loan or the funding or cash collateralization of any participating

 

14



 

interest in any Letter of Credit in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent, (iv) fourth, if so determined by the Administrative Agent and the Borrower, held in such account as cash collateral for future funding obligations of any Defaulting Lender under this Agreement, (v) fifth, pro rata, to the payment of any amounts owing to the Borrower or any Lender as a result of any judgment of a court of competent jurisdiction obtained by the Borrower or any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement and (vi) sixth, to such Defaulting Lender’s or as otherwise directed by a court of competent jurisdiction; provided, that if such payment is a prepayment of the principal amount of any Loans or Reimbursement Obligations in respect of Drawing Payments which a Defaulting Lender has funded in accordance with its participation obligations, such payment shall be applied solely to prepay the Loans of, and Reimbursement Obligations owed to, all non-Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans, or Reimbursement Obligations owed to, any Defaulting Lender; and

 

(f)            so long as any Lender with an LC Commitment and/or LC Loan is a Defaulting Lender for longer than thirty (30) days, the Issuing Bank may resign by giving thirty (30) days’ written notice thereof to the Lenders and Borrower, such resignation to be effective only upon the acceptance of a successor Issuing Bank (reasonably satisfactory to the Majority Lenders who are non-Defaulting Lenders and the Borrower) and the replacement of all Letters of Credit issued hereunder (and the parties have executed in conjunction therewith all necessary documentation).

 

In the event that the Administrative. Agent, the Borrower and the Issuing Bank each agrees that a Defaulting Lender has adequately remedied all maters that caused such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders as the Administrative Agent shall determine may necessary in order for such Lender to hold such Loans in accordance with its Proportionate Share.

 

ARTICLE 3.

GENERAL PROVISIONS RELATED TO CREDIT FACILITIES

 

3.1     Loan Funding.

 

(a)           Notice.  The Notice of Borrowing and each Confirmation of Interest Period Selection shall be delivered to Administrative Agent in accordance with Section 14.1.  Administrative Agent shall promptly notify each Lender of the contents of such notices.

 

15



 

(b)           Pro Rata Loans.  All Loans shall be made on a pro rata basis by the Lenders in accordance with their respective Proportionate Shares of such Loans, with the Borrowing of Loans to be comprised of the applicable Loan by each Lender equal to such Lender’s Proportionate Share of the Borrowing.

 

(c)           Lender Funding.  No later than 11:00 a.m., New York time, on the proposed date set forth in the Notice of Borrowing subject to the satisfaction of the conditions precedent set forth in Section 5.1, each Lender shall make available its Term Loans and/or Bridge Loans, as applicable, requested in each Notice of Borrowing in Dollars in immediately available funds by transferring such funds into the Disbursement Account; provided, that, in connection with the initial Notice of Borrowing delivered in connection with the Closing Date, each Lender shall make available its Term Loans and/or Bridge Loans, as applicable, by transferring such funds into an account designated by the Administrative Agent.  The failure of any Lender to make the Term Loan and/or Bridge Loan, as applicable, to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation hereunder to make its Term Loan and/or Bridge Loan, as applicable.  No Lender shall have any obligation or liability in respect of the failure of any other Lender to make the Term Loan and/or Bridge Loan, as applicable, to be made by it as part of any Borrowing made under this Financing Agreement.

 

(d)           Disbursement of Funds.  Funds in the Disbursement Account shall be disbursed in accordance with Section 6(a) of the Account Control Agreement.  No Agent shall have any obligation or liability in respect of any disbursement of the Loans to the extent funds in respect of such disbursements are not received from the Lenders in accordance with Section 3.1(c).  Funds in all other Collateral Accounts shall be disbursed in accordance with Article 9 of the Financing Agreement and the Account Control Agreement.

 

3.2     Prepayments.

 

Loans, subject to the terms and conditions of this Financing Agreement, are prepayable in accordance with the following terms:

 

(a)           Terms of All Prepayments.  Upon the prepayment of any Loan (whether such prepayment is an Optional Prepayment or a Mandatory Prepayment), Borrower shall pay to Administrative Agent for the account of each Lender owed such Loan, as applicable, (A) all accrued interest to the date of such prepayment on the amount prepaid; (B) all accrued fees, if any, to the date of such prepayment corresponding to the amount being prepaid; (C) if such prepayment is the prepayment of a Loan on a day other than the last day of an Interest Period for such Loan, all Liquidation Costs, if any, incurred by such Lender as a result of such prepayment; and (D) if such prepayment is a prepayment of the Fixed Portion resulting in an early termination of an Interest Rate Agreement, the Interest Fix Fees, with respect to such prepayment, if applicable.  All Mandatory Prepayments and Optional Prepayments shall be applied to reduce the remaining

 

16



 

Scheduled Repayment Amounts in the inverse order of maturity of the Loan then outstanding.  Loans prepaid may not be re-borrowed.

 

(b)           Optional Prepayments.  Subject to Section 3.2(a), Borrower may, at its option upon five (5) Business Days’ irrevocable notice to Administrative Agent, prepay (i) any Term Loans or Bridge Loans in whole or in part in a minimum amount of $1,000,000, or (ii) any Term Loans pursuant to the Stetson II Prepayment.  Each such notice of Optional Prepayment shall specify such date, the aggregate principal amount of the Term Loans or Bridge Loans, as applicable, to be prepaid on such date and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of Borrower as to the estimated Liquidation Costs (if any) and Interest Fix Fees (if any) due in connection with such Optional Prepayment (calculated as if the date of such notice were the date of the Optional Prepayment) setting forth the details of such computation.  Within two (2) Business Days after the date of such Optional Prepayment, Administrative Agent shall deliver to Borrower and each applicable Lender a certificate of Administrative Agent confirming the calculation of such Liquidation Costs (if any) or Interest Fix Fees (if any) as of the specified prepayment date.  Borrower may make an Optional Prepayment with respect to all Term Loans or Bridge Loans then outstanding at any time, without any premium or penalty, except for Liquidation Costs or Interest Fix Fees, if any.

 

(c)           Mandatory Prepayments.  Subject to Section 3.2(a), Borrower shall prepay: (i) within seven (7) Business Days after the Closing Date an amount equal to $3,000,000 with respect to the Term Loans, which amount shall be paid from amounts on deposit in the Stetson I Holding Account, (ii) on the date that is earlier to occur of (A) the achievement of Final Completion (as defined in the Stetson II Reed Agreement) and (B) the date of submission of the Government Grant application in respect of the Stetson II Project, an amount equal to the difference between $18,632,891.16 and the aggregate amount of paid construction costs that constitute the eligible basis for the Government Grant pursuant to Section 1603 of the American Recovery and Reinvestment Act of 2009 (as determined by the Administrative Agent in consultation with the Independent Engineer), which amount shall be applied as a prepayment of Bridge Loans, (iii) the Loans in an amount required in respect of an Upwind Array Event pursuant to Section 7.27, (iv) the Loans in an amount equal to the lesser of (A) 100% of Excess Cash and (B) the amount required pursuant to Section 7.28, and (v) to the extent otherwise provided by the terms of this Financing Agreement, including pursuant to Section 6 of the Account Control Agreement.

 

(d)           Pro Rata Treatment of Lenders.  Except as expressly set forth in this Section 3.2(d), all prepayments of Loans shall be applied among the Lenders pro rata, according to their respective Proportionate Shares of Loans at the time of the applicable prepayment.  Prepayments of Loans in accordance with Section 3.6(a) and Section 3.6(b) shall be applied in accordance with the requirements set forth in those Sections.

 

17



 

(e)           Funding of Prepayment Costs.  Borrower shall fund Optional Prepayments solely from Borrower Equity.  Except as otherwise provided in this Financing Agreement or the Account Control Agreement, all Mandatory Prepayments shall be funded pursuant to Section 6(b) of the Account Control Agreement.

 

(f)            Prepayment or Reduction of Interest Rate Agreements.  Any amount being prepaid in respect of the Term Loans and/or Bridge Loans under this Financing Agreement (except for prepayments under Sections 3.6(a) and 3.6(b)) may, at the option of Borrower (i) be first applied to the Floating Portion and then to the Fixed Portion or (ii) may be applied to the Floating Portion and the Fixed Portion on a pro rata basis.  Any prepayment of the Fixed Portion of the Term Loans under this Financing Agreement shall be accompanied by a concurrent reduction or prepayment by Borrower of its exposure and obligations under the Interest Rate Agreements then in effect as provided in Section 3.9(b).

 

3.3     Fees.

 

(a)           Structuring Fees.  On the Closing Date, Borrower shall pay to the Joint Lead Arrangers solely for each Joint Lead Arranger’s account the structuring fees in the amount set forth in the Lender Fee Side Agreement.

 

(b)           Annual Agency Fee.  Borrower shall pay to Administrative Agent on the Closing Date, solely for the account of Administrative Agent, an administrative agency fee payable in advance in an amount set forth in the Agency Fee Side Agreement.

 

(c)           Securities Intermediary Fees.  Borrower shall pay to the Securities Intermediary on the Closing Date, solely for the account of the Securities Intermediary, a fee in the amount and on terms and conditions set forth in the Account Control Agreement.

 

(d)           Commitment Fees.

 

(i)            On each Payment Date during the Availability Period (where all or any portion of such semi-annual period occurs on or after the Closing Date)and on the last day of the Availability Period, Borrower shall pay to Administrative Agent, for the benefit of the Lenders, accruing from the Closing Date or the first day of such Payment Date, as the case may be, Term Loan commitment fees (the “Term Loan Commitment Fees”) for such period (or portion thereof) then ending equal to the product of (x) 1.00% times (y) the daily average Total Term Loan Commitment for such semi-annual period (or portion thereof) times (z) a fraction, the numerator of which is the number of days in such period (or portion thereof) and the denominator of which is 360.

 

(ii)           On each Payment Date during the Availability Period (where all or any portion of such semi-annual period occurs on or after the Closing Date) and on the Bridge Loan Maturity Date, Borrower shall pay to Administrative Agent, for the benefit of the Lenders, accruing from the

 

18



 

Closing Date or the first day of such Payment Date, as the case may be, Bridge Loan commitment fees (the “Bridge Loan Commitment Fees”) for such period (or portion thereof) then ending equal to the product of (x) 1.00% times (y) the daily average Bridge Loan Commitment for such semi-annual period (or portion thereof) times (z) a fraction, the numerator of which is the number of days in such period (or portion thereof) and the denominator of which is 360.

 

(e)           Letter of Credit Fees.

 

(i)            With respect to any portion of the Available LC Commitment that has not been cancelled, reduced or utilized by the issuance of the Letters of Credit, on each Payment Date commencing from the Closing Date and ending on the LC Loan Maturity Date and on any date on which a Letter of Credit is issued, Borrower shall pay to Administrative Agent, for the benefit of the Issuing Bank and the Lenders, accruing from the Closing Date or the first day of such semi-annual period, as the case may be, a commitment fee (the “LC Commitment Fee”) for such six (6) month period (or portion thereof) then ending equal to the product of (i) 1.00% times (ii) the daily average Available LC Commitment for such six (6) month period (or portion thereof) times (iii) a fraction, the numerator of which is the number of days in such six (6) month period (or portion thereof) and the denominator of which is 360.

 

(ii)           Upon the issuance of any Letter of Credit, on each Payment Date prior to the Expiration Date of such Letter of Credit (where all or any portion of such six (6) month period occurs on or after the date of such issuance) and on the date of such Expiration Date when such Letter of Credit is returned to the Issuing Bank for cancellation (or, if such Letter of Credit is reduced or canceled prior to such date, on the date of such reduction or cancellation), Borrower shall pay to Administrative Agent, for the benefit of the Issuing Bank and the Lenders, accruing from the date of such issuance, a letter of credit fee (the “Letter of Credit Fee”) for such six (6) month period (or portion thereof) then ending equal to the product of (A) the Applicable Margin times (B) the daily average Stated Amount of such Letter of Credit for such six (6) month period (or portion thereof) times (C) a fraction, the numerator of which is the number of days in such six (6) month period (or portion thereof) and the denominator of which is 360.

 

(iii)          As a condition precedent to the issuance of each Letter of Credit, Borrower shall pay to the Administrative Agent for the account of the Issuing Bank, an upfront letter of credit fee (the “LC Fronting Fee”) in the amount set forth in the Lender Fee Side Agreement.

 

19



 

3.4     Other Payment Terms.

 

(a)           Place and Manner.  Borrower shall make all payments due to each Lender, Issuing Bank and Administrative Agent hereunder to the Administrative Agent Account for the account of each Lender, Issuing Bank or Administrative Agent (as the case may be) in Dollars and in immediately available funds not later than 12:00 p.m., New York time, on the date on which such payment is due.  Any payment made after such time on any day shall be deemed received on the next Business Day after such payment is received.  Upon receipt of any payment hereunder on behalf of any Lender or the Issuing Bank, as applicable, Administrative Agent shall remit such payment to such Lender or Issuing Bank, as applicable, no later than 3:00 p.m., New York time, on the date of receipt if received prior to 12:30 p.m., New York time, on such day, or otherwise on the next Business Day.

 

(b)           Date.  Unless otherwise specified in this Financing Agreement, whenever any payment due hereunder shall fall due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall be included in the computation of interest or fees, as the case may be.

 

(c)           Late Payments; Conversion to Base Rate Loans.

 

(i)            If any amounts required to be paid by Borrower under this Financing Agreement or the other Financing Documents (including principal or interest payable on any Loan, and any fees or other amounts otherwise payable by Borrower to Administrative Agent, Issuing Bank or any Lender) remain unpaid after such amounts are due, subject to the applicable cure periods, if any, set forth in Sections 10.1(a) or 10.1(d), Borrower shall pay interest on the aggregate, outstanding balance of such amounts from the date due until those amounts are paid in full at a per annum rate equal to the Default Rate until the earlier of (A) the date when such Event of Default has been cured by Borrower to the satisfaction of Administrative Agent (acting with the consent of the Majority Lenders and the Issuing Bank) or (B) the date when any and all Obligations of Borrower under this Financing Agreement and all other Financing Documents have been indefeasibly paid in full in cash and performed as required hereunder and thereunder.

 

(ii)           Without limiting any rights or remedies of the Agents under Article 10 or other Financing Documents, as long as any Event of Default shall have occurred and be continuing: (A) Administrative Agent shall suspend the continuation of any Loan (if any) on the basis of a LIBO Rate, in which event all Loans then outstanding shall be automatically converted on the last Business Day of the respective Interest Periods therefor into Base Rate Loans; (B) prior to such conversion, if an Event of Default shall have occurred and is continuing, the then outstanding LIBO Rate Loans (if any) shall accrue interest at the LIBO Rate Default Rate that shall be due and

 

20



 

payable on the last Business Day of the applicable Interest Period; and (C) upon such conversion to Base Rate Loans, the resulting Base Rate Loans shall accrue interest at a rate per annum equal to the Base Rate Default Rate.  The interest accruing at the Base Rate Default Rate, shall be payable on demand and/or on each Payment Date thereafter, as applicable, commencing on the date of such conversion.  All computations of the LIBO Rate Default Rate shall be based on a year of 360 days and the actual days elapsed (including the first day, but excluding the last day of the applicable Interest Period).  All computations of the Base Rate Default Rate shall be based on a 365 day year (or 366 day year during a leap year) with respect to the actual days elapsed when such Base Rate Default Rate is payable.  Interest accruing at the Base Rate Default Rate shall include the first day, but exclude the last day of the period for which such interest is payable.

 

(d)           Net of Taxes, Etc.

 

(i)            Taxes.  Any and all payments to or for the benefit of any Lender or the Issuing Bank by Borrower hereunder or under any other Financing Document shall be made free and clear of and without deduction, setoff or counterclaim of any kind whatsoever and in such amounts as may be necessary in order that all such payments, after deduction for or on account of liabilities of any Lender or the Issuing Bank with respect to any present or future taxes, levies, imposts, deductions, charges or withholdings arising from or relating to such Lender’s (or the Issuing Bank’s) Loans made under this Financing Agreement, excluding (i) taxes imposed on or measured by the income or capital of any Lender or the Issuing Bank by any jurisdiction or any political subdivision or taxing authority thereof or therein as a result of a connection between such Lender or the Issuing Bank and such jurisdiction or political subdivision, other than a connection resulting solely from executing, delivering or performing its obligations or receiving a payment under, or enforcing, this Financing Agreement or any Note, (ii) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which such Lender or the Issuing Bank is located, or (iii) any withholding tax that is imposed on amounts payable to any Lender or the Issuing Bank that is attributable to such Lender’s or the Issuing Bank’s failure to comply with Section 3.4(e) or to the inaccuracy of any certification made pursuant to Section 3.4(e) unless such inaccuracy arose as the result of a change in applicable law or the interpretation or administration thereof by any Governmental Authority after the date such certification was made (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”), shall be not less than the amounts otherwise specified to be paid under this Financing Agreement and the other Financing Documents.  If Borrower shall be required by law to withhold or deduct any Taxes imposed by the United States or any political subdivision thereof from or

 

21



 

in respect of any sum payable hereunder or under any other Financing Document to any Lender or the Issuing Bank, and if such Lender or the Issuing Bank shall have complied with its obligations set forth in Section 3.4(e), (A) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.4(d)), such Lender or the Issuing Bank receives an amount equal to the sum it would have received had no such deductions been made; (B) Borrower shall make such deductions; and (C) Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.  If Borrower shall make any payment under this Section 3.4(d) to or for the benefit of any Lender or the Issuing Bank with respect to Taxes and if such Lender or the Issuing Bank determines in its discretion, exercised in good faith, that it has received the benefit of any credit or deduction for such Taxes, then such Lender or the Issuing Bank shall pay to Borrower an amount equal to the amount of such credit or deduction actually received by the Lender or the Issuing Bank; provided, however, that the aggregate amount payable by such Lender or the Issuing Bank pursuant to this sentence shall not exceed the aggregate amount previously paid by Borrower with respect to such Taxes.  In addition, and without duplication of other taxes or charges addressed herein, Borrower agrees to pay any present or future stamp, recording or documentary taxes and any other excise or property taxes, charges or similar levies that arise under the laws of the United States of America or the State of New York from any payment made hereunder or under any other Financing Document or from the execution or delivery or otherwise with respect to this Financing Agreement or any other Financing Document (hereinafter referred to as “Other Taxes”).

 

(ii)           Indemnity.  Borrower shall indemnify each Lender and the Issuing Bank for the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 3.4(d)) arising from the execution, delivery or performance of its obligations or from receiving a payment hereunder, or enforcing this Financing Agreement or any Financing Document, paid by any Lender or the Issuing Bank, or any liability (including penalties, interest and reasonable and reasonably documented expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted; provided that Borrower shall not be obligated to indemnify any Lender or the Issuing Bank for any penalties, interest or expenses relating to Taxes or Other Taxes arising from the indemnitee’s gross negligence, willful misconduct or unexcused breach of this Financing Agreement as determined by a final non-appealable judgment of a court of competent jurisdiction.  Each Lender and the Issuing Bank agrees to give notice to Borrower of the assertion of any claim against such Lender or the Issuing Bank relating to such Taxes or Other Taxes as promptly as is practicable, and in no event later than ten (10) days prior to

 

22


 

the final expiration of any period available to such Lender or the Issuing Bank under applicable law for challenging such a claim; provided, however, that any Lender’s or the Issuing Bank’s failure to notify Borrower within such period shall not relieve Borrower of its obligation under this Section 3.4(d) with respect to claims arising prior to such time as Borrower receives notice from the indemnitee as provided herein, but shall relieve Borrower of its obligations under this Section 3.4(d) with respect to interest and penalties between the end of the period and such time as Borrower receives notice from such Lender or the Issuing Bank as provided herein.  Payments by Borrower pursuant to this indemnification shall be made within thirty (30) days from the date such Lender or the Issuing Bank makes written demand therefor (submitted through Administrative Agent), which demand shall be accompanied by documentation establishing, in reasonable detail, the basis and calculation thereof and certifying that the method used to calculate such amount is fair and reasonable.  Following a written request by Borrower setting forth in reasonable detail the basis therefor, each Lender and the Issuing Bank agrees either (i) in good faith to contest Taxes or Other Taxes with respect to which such Lender or the Issuing Bank has received an indemnity payment pursuant to this Section 3.4(d)(ii), or (ii) to permit Borrower to contest such Taxes or Other Taxes if such Lender’s or the Issuing Bank’s permission would be required and to cooperate with Borrower in such contest, in each case at Borrower’s sole cost and expense, provided that nothing in the foregoing sentence shall oblige such Lender or the Issuing Bank to disclose to Borrower its tax returns or other information it reasonably considers to be confidential or proprietary or to take other actions that in the reasonable judgment of such Lender or the Issuing Bank would be adverse to its commercial interests.  Each Lender and the Issuing Bank agrees to repay to Borrower any refund (including that portion of any interest that was included as part of such refund with respect to Taxes or Other Taxes paid by Borrower pursuant to this Section 3.4(d)), as soon as commercially practicable after receipt of such refund, received by such Lender or the Issuing Bank for Taxes or Other Taxes that were paid by Borrower pursuant to this Section 3.4(d).

 

(iii)          Notice.  Within thirty (30) days after the date of any payment of Taxes or Other Taxes by Borrower, Borrower shall furnish to Administrative Agent, at the address referred to in Section 14.1, the original or a certified copy of a receipt evidencing payment thereof, a certified copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Administrative Agent, in either instance, certified by an Authorized Officer of Borrower.  Administrative Agent shall promptly provide a copy of such receipt, return or other evidence of payment to each Lender and the Issuing Bank.  Borrower shall compensate Administrative Agent, Issuing Bank and each Lender for all reasonable losses and expenses sustained by Administrative Agent, Issuing Bank or Lender, as the case may be, as a result of any failure by Borrower to so

 

23



 

furnish the original or certified copy of such receipt, return or other evidence of payment.

 

(iv)                              Survival of Obligations.  The obligations of Borrower under this Section 3.4(d) shall survive the termination of this Financing Agreement and the repayment of the Obligations for a period of two (2) years.

 

(e)                                                                                  Withholding Exemption Certificates.  Administrative Agent, on the Closing Date, and each Lender, upon becoming a Lender hereunder, and each Person to which any Lender grants a participation (or otherwise transfers its interest in this Financing Agreement), agrees that it will deliver, as soon as commercially practicable, to Borrower and Administrative Agent (and Administrative Agent agrees that it will promptly deliver to Borrower) (i) in the case of Administrative Agent, Form W-8IMY (together with any withholding statement required by applicable law) in respect of amounts to be received for or on account of the Lenders and Form W-8ECI in respect of amounts to be received for its own account, each duly completed; (ii) in the case of a Lender or Person that is a United States person (as defined in Section 7701(a)(30) of the Code), a copy of a United States Internal Revenue Service Form W-9, duly completed; or (iii) in the case of a Lender or Person that is not a United States person, a duly completed and executed letter in the form of Exhibit L-1, Exhibit L-2 or Exhibit L-3 (Forms of “Withholding Certificate (Treaty)”, “Withholding Certificate (Effectively Connected)” and “Withholding Certificate (Portfolio Interest)”) as appropriate, and two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as the case may be, certifying in each case that Administrative Agent or Lender is entitled to receive payments under this Financing Agreement without deduction or withholding of any United States federal income or withholding taxes and including, in each case, a U.S. taxpayer identification number (“TIN”) if required by such form or otherwise necessary to obtain the benefits being claimed.  Each Lender which delivers to Borrower and Administrative Agent a Form W-8BEN or W-8ECI pursuant to the preceding sentence further undertakes to deliver to Borrower and to Administrative Agent further copies of the said letter and Form W-8BEN or W-8ECI, or successor applicable forms, or other manner of certification or procedure, as the case may be, on or before the date that any such letter or form expires or becomes obsolete or within a reasonable time after gaining knowledge of the occurrence of any event requiring a change in the most recent letter and forms previously delivered by it to Borrower and Administrative Agent, and such extensions or renewals thereof as may reasonably be requested by Borrower or Administrative Agent, certifying in the case of a Form W-8BEN or W-8ECI that such Lender is entitled to receive payments under this Financing Agreement and the other Financing Documents without deduction or withholding of any United States federal income or withholding taxes, unless a change in applicable law or the

 

24



 

interpretation or administration thereof by any Governmental Authority has occurred prior to the date on which any such delivery would otherwise be required, which change renders all such forms inapplicable or which change would prevent a Lender from duly completing and delivering any such letter or form with respect to it and such Lender advises Borrower that it is not capable of receiving payments without any deduction or withholding of United States federal income or withholding tax.  Borrower shall not be obligated to pay any additional amounts in respect of United States Federal income tax pursuant to Section 3.4(d) (or make an indemnification payment pursuant to Section 3.4(d)) to any Lender (including any Person to which any Lender sells, assigns, grants a participation in, or otherwise transfers its rights under this Financing Agreement) if the obligation to pay such additional amounts (or such indemnification) would not have arisen but for a failure of such Lender to comply with its obligations under this Section 3.4(e).  In the event that any Lender fails or is unable to satisfy the provisions of this Section 3.4(e), Borrower, Administrative Agent and such Lender shall cooperate to find another Person to be substituted for such Lender in the manner provided in Section 12.13 hereof.

 

3.5                                 Pro Rata Treatment.

 

(a)                                  Borrowing, Etc.  Except as otherwise provided in this Financing Agreement, (i) each Loan and each reduction of the applicable Commitments shall be made or allocated among the Lenders pro rata according to their respective Proportionate Shares of such Loans or Commitments and (ii) each payment of principal of and interest on Loans shall be made or shared among the Lenders holding such Loans pro rata according to the Proportionate Shares of such Loans.

 

(b)                                 Sharing of Payments, Etc.  If any Lender or the Issuing Bank (a “Benefited Lender”) shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on account of Loans (or interest thereon) owed to it, other than pursuant to Sections 3.6(a) or (b), in excess of its ratable share of payments on account of such Loans obtained by all Lenders entitled to such payments, such Lender shall forthwith purchase from the other Lenders such participations in the Loans, as the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; and if after taking into account such participations the Benefited Lender continues to have access to additional funds of Borrower for application on account of its debt, then the Benefited Lender shall use such funds to reduce indebtedness of Borrower under the Financing Documents held by it and share such payments with the other Lenders; provided, however, that, if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from such Lender shall be rescinded and each other Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery together with an amount equal to such other Lender’s ratable share (according to the proportion of (i) the amount of such other Lender’s required

 

25



 

repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered.  Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 3.5(b) may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor of Borrower in the amount of such participation; provided that Borrower shall have no liability to the Lenders or the Issuing Bank hereunder to the extent that it has made all payments to the Lenders, Issuing Bank and Administrative Agent required to be made by Borrower hereunder.

 

3.6                                 Change of Circumstances.

 

(a)                                  Inability to Determine Rates.  If, on or before the first day of any Interest Period for any LIBO Rate Loan (i) Administrative Agent determines that the LIBO Rate for such Interest Period with respect to the LIBO Rate Loans cannot be adequately and reasonably determined due to the unavailability of funds in or other circumstances affecting the London interbank market (in respect of a change of circumstances compared to the totality of the circumstances that existed on the Closing Date), or (ii) Lenders holding in the aggregate at least 33.33% of the then outstanding and unpaid principal amount of LIBO Rate Loans shall advise Administrative Agent that (x) the rates of interest for such LIBO Rate Loans do not adequately and fairly reflect the cost to such Lenders of maintaining or continuing such LIBO Rate Loans (compared to the totality of the circumstances that existed on the Closing Date) or (y) deposits in Dollars in the London interbank market are not available to such Lenders (as conclusively certified by each such Lender in good faith in writing to Administrative Agent and to Borrower) in the ordinary course of business in sufficient amounts to maintain or continue their LIBO Rate Loans, then Administrative Agent shall immediately give notice of such condition to Borrower (the “Notice of Inability to Determine Rates”).  After the giving of any such Notice of Inability to Determine Rates and until Administrative Agent shall otherwise notify Borrower and the Lenders that the circumstances giving rise to such condition no longer exist, Borrower’s right to request the continuation of LIBO Rate Loans shall be suspended.  Any Loan outstanding at the commencement of any such suspension shall be converted at the end of the then current Interest Period for such Loans into Base Rate Loans.  Loans converted into Base Rate Loans shall accrue interest at the rate per annum equal to the Base Rate then in effect plus the Applicable Base Rate Margin.  All computations with respect to such Base Rate Loan shall be made as set forth in the last sentence of Section 2.1(d).

 

(b)                                 Illegality.  If, after the date of this Financing Agreement, the adoption of any Governmental Rule, any change in any Governmental Rule or the application or requirements thereof (whether such change occurs in accordance with the terms of such Governmental Rule as enacted, as a result of amendment, or otherwise), any change in the interpretation or administration of any Governmental Rule by any Governmental Authority, or compliance by any Lender or Borrower with any

 

26



 

request or directive (whether or not having the force of law) of any Governmental Authority (a “Change of Law”) shall make it unlawful or impossible for any Lender to maintain or continue any LIBO Rate Loan, such Lender shall immediately notify Administrative Agent and Borrower of such Change of Law (“Notice of Change of Law”).  Upon receipt of such notice (i) Borrower’s right to request the continuation of LIBO Rate Loans and the obligations of Lenders to maintain or continue LIBO Rate Loans shall be suspended for so long as such condition shall exist; and (ii) Borrower shall, at the request of such Lender, either (y) immediately repay such Loans pursuant to Section 3.2 or (z) convert such outstanding Loans into Base Rate Loans, if such Lender shall notify Borrower that such Lender may not lawfully maintain or continue such Loans.  Any conversion or prepayment of Loans made pursuant to the preceding sentence prior to the last day of an Interest Period for such Loans shall be deemed a prepayment thereof for purposes of Section 3.7.  Upon the giving of any such Notice of Change of Law, such Base Rate Loans shall accrue interest equal to the Base Rate then in effect plus the Applicable Base Rate Margin.  All computations with respect to such Base Rate Loans shall be made as set forth in the last sentence of Section 2.1(d).

 

(c)                                  Increased Costs.  If, after the date of this Financing Agreement, any Change of Law:

 

(i)            shall, without duplication with amounts payable under Section 3.4(d), subject any Lender to any tax, duty or other charge with respect to any Loan, or shall change the basis of taxation of payments by Borrower to any Lender on such a Loan (except for Taxes, Other Taxes, or changes in the rate of taxation on the overall net income of any Lender);

 

(ii)           shall impose, modify or require any reserve, special deposit or similar requirement (including any modification of a Reserve Requirement) against assets held by, deposits in or other liabilities for the account of, advances or loans by, or any other acquisition of funds by, any Lender for any Loan; or

 

(iii)          shall impose on any Lender any other requirement directly related to any Loan;

 

and the effect of any of the foregoing is to increase the cost to such Lender of renewing, participating in or maintaining any such Loan or to reduce any amount receivable by such Lender hereunder or under the Notes; then Borrower shall from time to time, upon demand by Administrative Agent (accompanied by a certificate from such Lender setting forth in reasonable detail the amount of such increased costs or reduced amounts and the basis for determination of such amount), pay to Administrative Agent on behalf of such Lender additional amounts sufficient to reimburse such Lender for such increased costs or to compensate such Lender for such reduced amounts.  Thereafter, Borrower may replace any such Lender so affected pursuant to Section 12.13.

 

27



 

(d)                                 Capital Requirements.  If any Lender determines that (i) any Change of Law after the date of this Financing Agreement increases the amount of capital required or expected to be maintained by such Lender or the Lending Office of such Lender (a “Capital Adequacy Requirement”) and (ii) the amount of capital maintained by such Lender or such Lending Office which is attributable to, or based upon, the Loans, or this Financing Agreement must be increased as a result of such Capital Adequacy Requirement (taking into account such Lender’s policies with respect to capital adequacy), Borrower shall pay to Administrative Agent on behalf of such Lender or such Person, upon demand of Administrative Agent (accompanied by a certificate from such Lender setting forth in reasonable detail the computation of any such increased costs), such amounts as such Lender or such Person shall reasonably determine are necessary to compensate such Lender or such Person for such reasonably increased costs to such Lender or Person of such increased capital.  Thereafter, Borrower may replace any such Lender so affected pursuant to Section 12.13.

 

(e)                                  Notice.  Each Lender will notify Administrative Agent of any event occurring after the date of this Financing Agreement that will entitle such Lender to compensation pursuant to this Section 3.6, as promptly as is practicable and in no event later than 120 days after the principal officer or other representative of such Lender responsible for administering this Financing Agreement obtains knowledge thereof, and Administrative Agent shall promptly notify Borrower of such event; provided that any Lender’s failure to notify Administrative Agent within such 120-day period shall not relieve Borrower of its obligation under this Section 3.6 with respect to claims arising prior to such time as Borrower receives notice as provided herein but shall relieve Borrower of its obligations under this Section 3.6 with respect to interest and penalties between the end of such 120-day period and such time as Borrower receives notice from such Lender as provided herein.  No Person purchasing from a Lender a participation in any Loan shall be entitled to any payment from or on behalf of Borrower pursuant to Section 3.6(c) or 3.6(d) which would be in excess of the applicable proportionate amount (based on the portion of the Loan in which such Person is participating) which would then be payable to such Lender if such Lender had not sold a participation in that portion of the Loan.

 

3.7                                 Funding Losses.

 

If Borrower shall (a) repay or prepay any Loans on any day other than the last day of an Interest Period for such Loans (whether an Optional Prepayment or a Mandatory Prepayment); (b) fail to borrow any Loans in accordance with the Notice of Borrowing delivered to Administrative Agent (whether as a result of the failure to satisfy any applicable conditions or otherwise other than a default by a Lender); or (c) fail to make any prepayment of any Loan in accordance with any notice of prepayment delivered to Administrative Agent; then Borrower shall, upon demand by any Lender, reimburse such Lender (by payment to Administrative Agent for the account of such Lender) for all documented and reasonable costs and losses incurred by such Lender as a result of such repayment, prepayment or failure (but such costs and losses shall not include any compensation for lost profit or lost opportunity) (“Liquidation Costs”) together

 

28



 

with any Interest Fix Fees.  Borrower understands that such Liquidation Costs may include losses incurred by a Lender as a result of funding and other contracts entered into by such Lender to fund Loans.  Each Lender demanding payment under this Section 3.7 shall deliver to Administrative Agent a certificate setting forth in reasonable detail the basis for and amount of costs and losses for which demand is made, and Administrative Agent shall promptly provide such certificate to Borrower.

 

3.8                                 Alternate Office; Minimization of Costs.

 

(a)                                  To the extent reasonably possible, each Lender shall designate an alternative Lending Office with respect to its Loans and otherwise take any reasonable actions to reduce any liability of Borrower to such Lender under Section 3.4(d), 3.6(c) or 3.6(d), or to avoid the unavailability of Loans or the determination of the interest rate under Section 3.6(a) or Section 3.6(b) so long as such Lender, in its sole discretion, determines that such designation is not materially disadvantageous to such Lender.

 

(b)                                 Any Lender may designate a Lending Office other than that set forth on Exhibit I and may assign all of its interests under the Financing Documents, and its Notes, to such Lending Office, provided that such designation and assignment do not at the time of such designation and assignment increase the reasonably foreseeable liability of Borrower under Sections 3.4(d), 3.6(c), or 3.6(d) or make Loans or an interest rate option unavailable pursuant to Section 3.6(a) or Section 3.6(b).

 

(c)                                  Each Lender shall use reasonable efforts to avoid or minimize any additional costs, taxes, expense or obligation which might otherwise be imposed on Borrower pursuant to Sections 3.4(d), 3.6(c) or 3.6(d) or as a result of such Lender being subject to a Reserve Requirement or to avoid the unavailability of Loans or the determination of the interest rate under Section 3.6(a) or Section 3.6(b); provided, however, that such efforts shall not cause the imposition on any Lender of any additional costs or legal or regulatory burdens unless Borrower shall provide such Lender with an indemnification for such additional costs in form and substance reasonably satisfactory to such Lender.

 

3.9                                 Interest Rate Protection.

 

(a)                                  Interest Rate Agreement.  No later than five (5) Business Days after the Closing Date, Borrower shall have entered into, and shall maintain in full force and effect, one or more LIBO Rate cap agreements and/or interest rate swaps with schedules and confirmations thereto (collectively, the “Interest Rate Agreements”) with respect to a minimum of 75% of the aggregate outstanding principal of the Term Loans on the Closing Date, on terms and conditions reasonably satisfactory to the Borrower and the counterparty to each such Interest Rate Agreement.  Borrower may substitute one type of Interest Rate Agreement for another type of Interest Rate Agreement, which substitution shall not otherwise constitute an Event of Default.

 

29



 

(b)                                 Interest Fix Fees.  Borrower shall pay all reasonable costs, fees and expenses incurred by each counterparty providing the Interest Rate Agreements that Borrower enters into hereunder, including any reasonable costs, fees or expenses (including increased interest payments) incurred in connection with any unwinding, breach or termination of such Interest Rate Agreements (“Interest Fix Fees”).

 

(c)                                  Security.  The obligations of Borrower under each Interest Rate Agreement, and all associated Interest Fix Fees shall be secured by the Collateral Documents and shall rank pari passu with the obligations of Borrower under the other Financing Documents.

 

ARTICLE 4.
COLLATERAL DOCUMENTS

 

4.1                                 Security.

 

(a)                                  Mortgage Documents, Security Agreements, Etc.  The Obligations shall be secured by, and Borrower shall deliver or cause to be delivered the following to Administrative Agent and Security Agent at the times required pursuant to Article 7:

 

(i)                                     (A) A mortgage, in the form of the Leasehold Mortgage, Assignment Of Rents, Security Agreement And Fixture Filing shown on Exhibit E-1, duly executed by Evergreen Wind Power V, LLC in a recordable form, in favor of Security Agent, with respect to the Stetson I Lease; (B) a mortgage, in the form of the Mortgage, Assignment Of Rents, Security Agreement And Fixture Filing shown on Exhibit E-1, duly executed by Evergreen Wind Power V, LLC in a recordable form, in favor of Security Agent, with respect to the Transmission Line Real Property Interests; and (C) a mortgage, in the form of the Leasehold Mortgage, Assignment Of Rents, Security Agreement And Fixture Filing shown on Exhibit E-1, duly executed by Stetson Wind II, LLC in a recordable form, in favor of Security Agent, with respect to the Stetson II Lease (together, the “Mortgage Documents”);

 

(ii)                                  A Pledge and Security Agreement in the form of Exhibit E-2, duly executed by the Borrower, in favor of Security Agent (the “Borrower Pledge and Security Agreement”);

 

(iii)                               A Pledge and Security Agreement in the form of Exhibit E-7, duly executed by Member in favor of Security Agent (the “Member Pledge and Security Agreement”);

 

30



 

(iv)                              A Guaranty and Security Agreement in the form of Exhibit E-3, duly executed by each Project Company, in each case, in favor of Security Agent (each, a “Guaranty and Security Agreement”);

 

(v)                                 The Account Control Agreement;

 

(vi)                              The Consents from the counterparties in respect of the following Material Project Documents, in favor of Security Agent:

 

A.                                   the Energy Hedge;

 

B.                                     the Citigroup REC Contract;

 

C.                                     the PPA;

 

D.                                    the BOP Agreement;

 

E.                                      the Turbine Supply Agreement;

 

F.                                      the Turbine Service Agreement;

 

G.                                     the Shared Facilities Agreement;

 

H.                                    the Equipment Purchase Agreement;

 

I.                                         the O&M Service Agreement; and

 

J.                                        the Project Administration Agreement.

 

(vii)         The Estoppel Agreements in favor of Security Agent;

 

(viii)        Such other documents, instruments and agreements as Security Agent may request to ensure that it has first-priority perfected Liens in all assets of Borrower and each Project Company, all the issued and outstanding membership interests in each Project Company and all the issued and outstanding membership interests in the Borrower (other than Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the liens granted to the Security Agent pursuant to the Collateral Documents).

 

(b)                                 Further Assurances.  Borrower shall deliver to Security Agent each of the foregoing and such other instruments, agreements, certificates, opinions and documents (including UCC financing statements and fixture filings and landlord waivers) as Security Agent may reasonably request to perfect and maintain the Liens granted to Security Agent by the foregoing prior to the Liens or other interests of any Person other than Security Agent (other than Permitted Liens that, pursuant to applicable law, are entitled to a higher priority than the liens granted to the Security Agent pursuant to the Collateral Documents).  Borrower shall fully

 

31



 

cooperate with Security Agent and perform all additional acts necessary or reasonably requested by Security Agent or Administrative Agent to effect the purposes of the foregoing.

 

ARTICLE 5.
CONDITIONS PRECEDENT

 

5.1                                 Conditions Precedent to the Closing Date; Issuance of Letters of Credit.

 

The obligation of the Lenders to make the Loans hereunder and the Issuing Bank to issue the Letters of Credit is subject to the prior satisfaction by Borrower of each of the following conditions to the satisfaction of Administrative Agent, Issuing Bank and the Lenders (unless waived in writing by Administrative Agent with consent of all Lenders and the Issuing Bank):

 

(a)                                  All Sponsor Equity shall have been deposited into the Disbursement Account or otherwise contributed in respect of the Projects by or on behalf of the Sponsor.

 

(b)                                 Each representation and warranty set forth in Article 6 is true and correct in all material respects on the Closing Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date).

 

(c)                                  No Event of Default or Inchoate Default with respect to any Affiliated Participant has occurred and is continuing as of the Closing Date and to the knowledge of Borrower, no Inchoate Default with respect to any Major Project Participant that is not an Affiliated Participant has occurred and is continuing as of the Closing Date.

 

(d)                                 Delivery to Administrative Agent of a copy of one or more resolutions or other authorizations of Borrower, the Member, and each Affiliated Participant, certified by the appropriate officers of each such entity as being in full force and effect on the Closing Date, authorizing, in respect of Borrower, the Borrowing herein provided for and the execution, delivery and performance of this Financing Agreement, and in respect of Borrower and each Affiliated Participant, the other Operative Documents and any instruments or agreements required hereunder or thereunder and in each case to which Borrower or such Affiliated Participant is a party.

 

(e)                                  Delivery to Administrative Agent of a certificate satisfactory in form and substance to Administrative Agent from Borrower and each Affiliated Participant, signed by the appropriate Authorized Officer of each such entity and dated the Closing Date, as to the incumbency of the natural persons authorized, in respect of Borrower, to execute and deliver this Financing Agreement, and in respect of Borrower and each Affiliated Participant, the other Operative Documents and any instruments or agreements required hereunder or thereunder and in each case to which Borrower or such Affiliated Participant is a party.

 

32


 

(f)                                    Delivery to Administrative Agent of (i) a copy of the Certificate of Formation of Borrower, certified by the Secretary of State of the State of Delaware, a copy of the Borrower LLC Agreement and any agreements or certificates related to the Borrower LLC Agreement filed in accordance with applicable state law; (ii) copies of the Certificates of Formation of each Affiliated Participant, certified by the Secretary of State of the State of formation of each Affiliated Participant; and (iii) copies of the limited liability company agreement of each Affiliated Participant, as applicable, in each case, certified by an Authorized Officer thereof.

 

(g)                                 Delivery to Administrative Agent of certificates issued by the Secretary of State of the State or any other jurisdiction of organization of each Major Project Participant (other than the individual counterparties to the Real Property Agreements) certifying that each such Major Project Participant exists under the laws of such State and has paid all taxes due to such State, if such certificates are reasonably available in such State or jurisdiction.

 

(h)                                 Delivery to Administrative Agent of certificates issued by the Secretary of State of the State of Maine certifying that each Major Project Participant (other than individual counterparties to the Real Property Agreements), is in good standing and is qualified to do business in and has paid all taxes due to such state, if reasonably available; provided, however, that no such certificate shall be required if such Major Project Participant is not required to qualify to do business in such state in order to perform its obligations under the Project Documents to which it is a party or where such Major Project Participant is not the type of Person for which a good standing certificate or certification as to payment of taxes is reasonably available.

 

(i)                                     Delivery to Administrative Agent of (i) executed originals of each Financing Document required as of the Closing Date, and (ii) certified true and correct execution copies of each Material Project Document and any existing supplements or amendments thereto, all of which Financing Documents, Material Project Documents and supplements or amendments thereto shall, in all material respects, be satisfactory in form and substance to Administrative Agent, Issuing Bank, the Lenders and the Independent Engineer.  Receipt by Security Agent of evidence reasonably satisfactory to it that all appropriate financing statements, fixture filings and the Mortgage Documents were or will be promptly in connection with the funding of the Loans filed and/or recorded as required hereunder or by law.  The Member shall have delivered to Security Agent the original certificates or other instruments, along with a blank membership interest transfer power, evidencing the Member’s 100% ownership interest in all of the issued and outstanding membership interests of the Borrower.  The Borrower shall have delivered to Security Agent the original certificates or other instruments, along with blank membership interest transfer powers, evidencing the Borrower’s 100% ownership interest in all of the issued and outstanding membership interests of each Project Company.

 

33



 

(j)                                     Delivery to Administrative Agent, Issuing Bank and each Lender, as applicable, of all requested information pursuant to the Patriot Act and Know-Your-Customer regulatory requirements.

 

(k)                                  Execution and delivery to Administrative Agent by Sponsor of the Sponsor Indemnity, in form and substance satisfactory to Administrative Agent.

 

(l)                                     Each Financing Document, Material Project Document and Applicable Permit shall be in full force and effect in accordance with its terms and, to the knowledge of Borrower, no material defaults shall have occurred thereunder.

 

(m)                               Administrative Agent shall have received a certificate, dated as of the Closing Date, signed on behalf of Borrower by an Authorized Officer of the Borrower, in substantially the form of Exhibit G-1.

 

(n)                                 Delivery to Administrative Agent of the Insurance Consultant’s certificate, in substantially the form of Exhibit G-2, with the Insurance Consultant’s report, in form and substance satisfactory to Administrative Agent, attached thereto.

 

(o)                                 Delivery to Administrative Agent of the Environmental Consultant’s certificate, in substantially the form of Exhibit G-3, with the Environmental Report, in form and substance satisfactory to Administrative Agent, attached thereto.

 

(p)                                 Delivery to Administrative Agent of the Independent Engineer’s Closing Certificate, in the form of Exhibit G-4, and otherwise satisfactory to Administrative Agent and the Lenders along with a copy of the Independent Engineer’s report in form and substance satisfactory to the Administrative Agent and the Lenders regarding its satisfactory technical review of the Projects, such report confirming (i) the reasonableness of the Projects’ production, revenue, operating cost and major maintenance assumptions; (ii) the adequacy of the Projects’ overall wind farm design including the proposed civil and electrical works, the interconnection facilities and grid functionality; (iii) the adequacy of the Base Case Project Projections, including power production forecasts; and (iv) the status and progress of the construction and development of the Stetson II Project, and the adequacy of the aggregate estimated costs (and reasonableness of the related assumptions) necessary for the achievement of Substantial Completion (as defined in the Stetson II Reed Agreement) of the Stetson II Project (the “Independent Engineer’s Closing Certificate and Report”).

 

(q)                                 Delivery to Administrative Agent of a report prepared by the Power Market Consultant, satisfactory in form and substance to Administrative Agent and the Lenders, and demonstration that Borrower has complied in all material respects with all relevant recommendations set forth in such report.

 

(r)                                    Delivery to Administrative Agent of the transmission report prepared by the Transmission Consultant, satisfactory in form and substance to Administrative Agent and the Lenders.

 

34



 

(s)                                  Delivery to Administrative Agent of a report prepared by the Wind Consultant, which shall include a wind and associated power production gross and net forecast based on the turbine power curve specifications, expected availability of Turbines and actual site and resource characteristics (such review including 50%, 75%, 90% and 99% confidence levels for one and ten year probability forecasts), in each case, satisfactory in form and substance to Administrative Agent, Issuing Bank, the Lenders and the Independent Engineer, along with a reliance certificate from the Wind Consultant dated as of the Closing Date, addressed to Administrative Agent, with respect to such report confirming that the Administrative Agent and the Lenders may rely on such report as of the Closing Date.

 

(t)                                    Delivery to the Administrative Agent, Transmission Owner and the ISO of a duly executed notice by the Borrower to the Transmission Owner and the ISO, in form and substance acceptable to the Administrative Agent, notifying the ISO and the Transmission Owner of the collateral assignment of the Interconnection Agreement to the Lenders as required pursuant to Section 19.1 of the Interconnection Agreement.

 

(u)                                 Delivery to Administrative Agent of the Annual Operating Plan, satisfactory in form and substance to Administrative Agent and the Lenders.

 

(v)                                 Delivery to Administrative Agent of an opinion, each dated the Closing Date, of:

 

(i)                                     Morgan, Lewis & Bockius LLP, special counsel for Borrower, Member and each other Affiliated Participant, in form and substance acceptable to Administrative Agent (including certain federal permitting matters);

 

(ii)           Verrill Dana, LLP, special real estate counsel for Borrower, Member and each Project Company (including certain state and local permitting matters);

 

(iii)          Bernstein, Shur, Sawyer & Nelson, P.A., special counsel for Borrower and the Project Companies with respect to Maine energy regulatory matters

 

(iv)                              McDermott, Will & Emery, LLP, special counsel for Borrower with respect to the Energy Hedge;

 

(v)                                 in-house counsel for Borrower, Member and each other Affiliated Participant, in form and substance acceptable to Administrative Agent; and

 

(vi)                              counsel for the Turbine Supplier and Turbine Operator, in form and substance acceptable to Administrative Agent.

 

(w)                               Insurance complying with Section 7.20 shall be in full force and effect as of the Closing Date and Administrative Agent shall have received (i) a certificate of Borrower signed by an Authorized Officer responsible for insurance matters or

 

35



 

Borrower’s authorized insurance representative, dated as of the Closing Date, and identifying underwriters, type of insurance, insurance limits and policy terms, listing the special provisions required as set forth in Section 7.20, describing the insurance obtained and stating that such insurance is in full force and effect and that all premiums then due thereon have been paid and that, in the opinion of such Person, such insurance complies with Section 7.20, and (ii) certified copies of all policies evidencing such insurance (or a binder, commitment or certificates signed by the insurer or a broker authorized to bind the insurer), in form and substance satisfactory to Administrative Agent.

 

(x)                                   Delivery to Administrative Agent of (i) Exhibit H-2B, the schedule of Applicable Permits, in form and substance satisfactory to Administrative Agent; and (ii) true and correct copies of all Applicable Permits, which Permits shall be in form and substance satisfactory to Administrative Agent and shall be in the name of, or assigned to, the Project Companies or the Borrower, together with a certificate of Borrower signed by an Authorized Officer certifying that all such Applicable Permits under (ii) hereof have been obtained and that such Applicable Permits are in full force and effect and are not subject to appeal, further procedures or any unsatisfied conditions that may allow material modification or revocation.

 

(y)                                 Except as set forth in Exhibit H-5 and Exhibit H-6, no material action, suit, proceeding, Environmental Claim or investigation shall have been instituted or, to the knowledge of Borrower, threatened against Borrower, any Affiliated Participant or the Project, which action, suit, proceeding, Environmental Claim or investigation could reasonably be expected to have a Material Adverse Effect.

 

(z)                                   No action, suit, proceeding or investigation shall have been instituted, or to the knowledge of Borrower, threatened, nor shall any rule, regulation, order, judgment or decree have been issued or proposed to be issued by any Governmental Authority that, solely as a result of the ownership or operation of the Project, the generation or sale of electricity therefrom or the entering into of any Operative Document or any transaction contemplated hereby or thereby, would cause or deem (i) Administrative Agent, Issuing Bank, Security Agent, or the Lenders or any Affiliate of any of them to be subject to, or not exempted from, regulation under PUHCA, any financial, organizational or rate regulation as a “public utility” or “electric utility” or terms of similar effect under Maine law, or under any other state laws and regulations respecting the rates or the financial or organizational regulation of electric utilities; or (ii) Borrower, any Project Company or the Member to be subject to, or not exempted from, regulation (A) under any financial, organizational or rate regulation as a “public utility” or “electric utility” or terms of similar effect under Maine law, (B) under any other state laws and regulations respecting the rates or the financial or organizational regulation of electric utilities except, with respect to the Member, any such state laws or regulations that could not be reasonably expected to have a Material Adverse Effect, and (C) under PUHCA, other than (x) compliance with Section 1265 of PUHCA required with respect to Borrower, the Member or the Project Companies; and (y) regulation under PUHCA with respect to any Affiliate of

 

36



 

Borrower (including Member and the Project Companies) if such regulation could not be reasonably expected to have a Material Adverse Effect.

 

(aa)                            All amounts required to be paid to or deposited with Administrative Agent, Security Agent, Issuing Bank or any Lender, and all taxes, fees and other costs payable in connection with the execution, delivery, recordation and filing of the documents and instruments required to be filed under this Section 5.1, shall have been paid in full or provided for.

 

(bb)                          Delivery to Administrative Agent of the (i) audited financial statements for the Sponsor for fiscal year 2008 and (ii) unaudited financial statements of each of Borrower and each Project Company, on a consolidated basis, and Member, including its respective balance sheet and an income and expense statement, as of September 30, 2009, together with certificates from the appropriate Authorized Officers of the Borrower stating that such financial statements fairly present, in all material respects, the financial position of Borrower and each Project Company (on a consolidated basis), Member and Sponsor, as applicable, at the date thereof, subject to changes resulting from audit and normal year-end adjustments.

 

(cc)                            Delivery to Administrative Agent of a UCC search report with respect to Borrower, Member and each Project Company dated as of the Closing Date or an earlier date satisfactory to Administrative Agent for each of the jurisdictions in which the UCC-1 financing statements, the fixture filings and the Mortgage Documents are intended to be filed in respect of the Collateral.

 

(dd)                          Delivery to Administrative Agent of:  (i) the Construction Budget and Schedule, (ii) Annual Operating Plan, (iii) the Base Case Project Projections and (iv) the Debt Sizing Base Case, reflecting, among other things, a Projected Debt Service Coverage Ratio of not less than 1.00 to 1.00 when applying the P99 Production Level and a Projected Debt Service Coverage Ratio of not less than 1.30 to 1.00 when applying the P50 Production Level.

 

(ee)                            Administrative Agent shall have received a title insurance policy or policies in an ALTA Loan Policy Form (6-17-06), together with such endorsements as are required by Administrative Agent, or Title Insurer’s irrevocable, unconditional commitment to issue such policy (such policy and endorsements being hereinafter referred to as the “Title Policy”), each policy in an amount equal to the Total Commitment issued by the Title Insurer, in form and substance and with such reinsurance as is available on commercially reasonable terms and reasonably satisfactory to Administrative Agent, and insuring (or agreeing to insure) Administrative Agent that:

 

(i)                                     The applicable Project Company has a good and marketable title to or right to control, occupy and use the Project Site and the Transmission Line Real Property Interests, free and clear of liens, encumbrances or other exceptions to title except those exceptions specified on Exhibit E-5 (the “Permitted Encumbrances”);

 

37



 

(ii)           the Mortgage Documents constitute a valid first priority Lien on the Mortgaged Property, free and clear of all Liens, encumbrances and exceptions to title, other than Permitted Encumbrances.  The Title Policy shall effect full coverage against losses arising out of encroachments on boundary and other losses with respect to which Administrative Agent may request coverage, which shall include an endorsement deleting creditor’s rights and arbitration provisions, an endorsement covering pending disbursements, and an affirmative mechanic’s lien endorsement; and

 

(iii)          such other matters as Administrative Agent may reasonably request, and containing only Permitted Encumbrances and any other exceptions relating to the boundaries of the Project Site, encroachments and matters disclosed or discoverable by a survey or inspection as are reasonably acceptable to Administrative Agent and containing no exception for mechanics’ or materialmen’s liens.

 

(ff)                                Administrative Agent shall have received an as-built ALTA/ASCM survey of the Project Site with respect to the Stetson I Project and an ALTA/ASCM survey of the Project Site with respect to the Stetson II Project, in each case, satisfactory in form and substance to Administrative Agent and Title Insurer, current within thirty (30) days of the Closing Date and certified to Administrative Agent and Title Insurer by a licensed surveyor in form satisfactory to Administrative Agent.

 

(gg)                          Each Project Company is an “exempt wholesale generator” within the meaning of Section 1262(6) of PUHCA and Borrower shall have delivered to Administrative Agent, (i) in respect of the Stetson I Project, the FERC notice Acknowledging Effectiveness of Evergreen Wind Power V, LLC’s Exempt Wholesale Generator Status, dated May 27, 2009, and the FERC Order Granting Market-Based Rate Authority to Evergreen Wind Power V, LLC, dated January 15, 2009; and (ii) in respect of the Stetson II Project, a copy of the Notice of Self-Certification of Exempt Wholesale Generator Status with respect to Stetson Wind II, LLC, properly filed with the FERC and any responsive orders issued by FERC or the FERC staff, acting under delegated authority, copies of all applications for market-based rate authorization with respect to Stetson Wind II, LLC, properly filed with FERC pursuant to Section 205 of the FPA, and any responsive orders issued by FERC, or the FERC staff acting under delegated authority, granting such authorizations.

 

(hh)                          Borrower shall have delivered to Administrative Agent satisfactory evidence of the establishment of the Collateral Accounts.  All Reserve Accounts have been fully funded as required under Section 6 of the Account Control Agreement.

 

(ii)                                  Borrower shall have delivered to Administrative Agent a certificate of Borrower or other evidence that the output of the Projects will qualify for RECs.

 

38



 

(jj)           Receipt of all fees under the Fee Side Agreement by all applicable Persons thereunder.

 

(kk)         No event, condition or circumstance that could be reasonably expected to have a Material Adverse Effect shall have occurred and be continuing.

 

(ll)           Borrower shall have deposited Project Revenues from the Stetson I Project (i) in an amount equal to $3,000,000 into the Stetson I Holding Account, and (ii) all remaining Project Revenues into the Revenue Account, in each case prior to the Closing Date.

 

(mm)       Borrower shall have delivered evidence reasonably satisfactory to Administrative Agent that all work that has been performed at the Stetson II Project by the Closing Date requiring inspection by any Governmental Authorities having jurisdiction has been duly inspected and approved by such authorities and that any certificates or notices required to be issued in connection therewith have been issued by such Governmental Authorities, that all parties performing such work have been or will be paid for such work, and that no mechanics’ and/or materialmen’s liens or applications therefor have been filed and either lien waivers have been obtained or all applicable filing periods for any such mechanics’ and/or materialmen’s liens have expired.

 

5.2                                 Conditions Precedent to each Borrowing.

 

The obligation of the Lenders to effect or permit any Borrowing (including the first Borrowing of a Term Loan and the first Borrowing of a Bridge Loan) is subject to the prior satisfaction by Borrower of each of the following conditions to the satisfaction of Administrative Agent, Issuing Bank and the Lenders (unless waived in writing by Administrative Agent with consent of all Lenders and the Issuing Bank):

 

(a)                                  Borrower shall have requested the Term Loans and/or Bridge Loans pursuant to a Notice of Borrowing delivered to Administrative Agent in accordance with Section 2.5.

 

(b)                                 [Intentionally Omitted].

 

(c)                                  Each representation and warranty set forth in Article 6 is true and correct in all material respects on such date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been true and correct in all material respects as of such earlier date).

 

(d)                                 No Event of Default or Inchoate Default with respect to any Affiliated Participant has occurred and is continuing or will result from the funding of the Loans and to the knowledge of Borrower, no Inchoate Default with respect to any Major Project Participant that is not an Affiliated Participant has occurred and is continuing or will result from the funding of the Loans.

 

39



 

(e)                                  Administrative Agent shall have received (i) a continuation report and an endorsement to the Title Policy with respect to the Stetson II Project to the date of such Borrowing in the form reasonably approved by the Administrative Agent conforming to the pending disbursement requirements set forth in Exhibit D-5 and setting forth no additional exceptions (including without limitation survey exceptions for the Stetson II Project) except those approved by the Administrative Agent, and (ii) a continuation report and endorsement to each Title Policy with respect to the Stetson I Project and the Transmission Line Real Property Interests to the date of such Borrowing in the form reasonably approved by the Administrative Agent, which continuation report and endorsements shall: (A) update the date of each Title Policy and all endorsements attached thereto to the date of such Borrowing, (B) show no additional exceptions to each Title Policy (including without limitation survey exceptions for the Stetson I Project or the Transmission Line Real Property Interest) except those approved by the Administrative Agent, and (C) shall state the amount of the Loans advanced to date.

 

(f)                                    Except as set forth in Exhibit H-5 and Exhibit H-6, no material action, suit, proceeding, Environmental Claim or investigation shall have been instituted or, to the knowledge of Borrower, threatened against Borrower, any Affiliated Participant or the Project, which action, suit, proceeding, Environmental Claim or investigation could reasonably be expected to have a Material Adverse Effect.

 

(g)                                 Each Financing Document, Material Project Document and Applicable Permit shall be in full force and effect in accordance with its terms and, to the knowledge of Borrower, no material defaults shall have occurred thereunder.

 

(h)                                 No event, condition or circumstance that could be reasonably expected to have a Material Adverse Effect shall have occurred and be continuing.

 

ARTICLE 6.
REPRESENTATIONS AND WARRANTIES

 

Borrower makes the following representations and warranties to and in favor of Administrative Agent, Issuing Bank and the Lenders as of the Closing Date.

 

6.1                                 Organization.

 

(a)                                  Borrower (i) is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and in each other jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary.  Borrower has all requisite limited liability company power and authority to own or hold under lease and/or easement and operate the property it purports to own or hold under lease and/or easement and to carry on its business as now being conducted and as proposed to be conducted under the Operative Documents in respect of the Project and Borrower has the requisite limited liability power and authority to execute, deliver and perform its

 

40



 

obligations under each Operative Document to which it is a party.  The Member is the sole member of Borrower holding all of the issued and outstanding membership interests in Borrower.

 

(b)                                 Each Affiliated Participant (i) is duly formed and validly existing and in good standing under the laws of the State of its organization with all requisite organizational or other power and authority under the laws of such State to enter into the Operative Documents to which it is a party and to perform its obligations thereunder and to consummate the transactions contemplated thereby; (ii) is duly qualified, authorized to do business and in good standing in such State and each other material jurisdiction where the character of its properties or the nature of its activities makes such qualification necessary, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; (iii) has the requisite limited liability company or corporate power (A) to carry on its business as now being conducted and as proposed to be conducted by it, (B) to execute, deliver and perform its obligations under each Operative Document to which it is a party, in its individual capacity, and (C) to provide guaranties and grant the Liens and security interests provided for in the Financing Documents to which it is a party; and (iv) has the requisite limited liability company or corporate authority to execute, deliver and perform its obligations under each Operative Document to which it is a party.

 

6.2                                 Authorization; No Conflict.

 

Borrower and each Affiliated Participant has duly authorized, executed and delivered each Operative Document to which Borrower or such Affiliated Participant is a party (or such Operative Documents have been duly and validly assigned to Borrower and Borrower has assumed the obligations thereunder by operation of law or otherwise), and none of the execution and delivery thereof by Borrower or such Affiliated Participant, the consummation of the transactions contemplated thereby or the compliance with the terms thereof or performance of its obligations thereunder (i) does or will contravene (A) the Borrower LLC Agreement or any organizational document of such Affiliated Participant or (B) any other Legal Requirement applicable to or binding on Borrower, such Affiliated Participant or any of their respective properties, except for any such contravention of a Legal Requirement that could not be reasonably expected to have a Material Adverse Effect; (ii) does or will contravene or result in any material breach of or constitute any material default under, or result in or require the creation of any Lien (other than Permitted Liens) upon any of their respective properties under, any agreement or instrument to which Borrower or any Affiliated Participant is a party or by which any of them or any of their respective properties may be bound or affected; or (iii) does or will require the consent or approval of any Person, which has not already been obtained.

 

6.3                                 Enforceability.

 

Assuming the due authorization, execution and delivery thereof by each other party thereto, each Operative Document to which Borrower or any Affiliated Participant is a party is a legal, valid and binding obligation of Borrower or such Affiliated Participant, enforceable against Borrower or such Affiliated Participant in accordance with its terms, except

 

41



 

to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting the enforcement of creditors’ rights and subject to general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).  None of the Operative Documents to which Borrower or any Affiliated Participant is a party has been amended or modified except in accordance with this Financing Agreement or as disclosed.  Each Operative Document has been duly executed and delivered by Borrower and each Affiliated Participant, and to the knowledge of Borrower, by each other party thereto.  Each Operative Document (other than any Additional Project Documents) is in effect as of the Closing Date.  As of each date referenced in Section 7.4(b), each Operative Document remains in effect except for those Operative Documents that have expired in accordance with their respective terms as of such date.

 

6.4                                 ERISA.

 

There are no ERISA Plans for Borrower, Member or the Project Companies or ERISA Plans that provide benefits to any employee of Borrower, Member or the Project Companies, and none of Borrower, Member or any Project Company has maintained, contributed, or been obligated to contribute to any ERISA Plan at any time within the five (5) years preceding the Closing Date.

 

6.5                                 Taxes.

 

(a)                                  Each of Borrower, Member and each Project Company has filed, or has caused to be filed, all federal, state, local and foreign tax returns that it is required to file, has paid or has caused to be paid all taxes it is required to pay to the extent due (other than those taxes that it is contesting in good faith and by appropriate proceedings in accordance with Section 7.14).

 

(b)                                 For United States federal and Maine income tax purposes, Member and Evergreen Wind Power V, LLC each have elected to be treated as a corporation, and Borrower and Stetson Wind II, LLC will each be treated as a disregarded entity.  Neither the execution and delivery of the Operative Documents nor the consummation of any of the transactions contemplated by the Operative Documents will affect such status of Member, Borrower or any Project Company.  Member, Borrower and each Project Company has made such elections and taken such other actions, and agrees and warrants that it shall at all times make such elections and take such other actions, as would permit Member, Borrower and each Project Company, as applicable, to maintain the status as a disregarded entity or corporation, as applicable, for U.S. Federal and Maine income tax purposes, to the maximum extent permitted by applicable Governmental Rules.

 

6.6                                 Business, Debt, Contracts, Etc.

 

Each of Borrower and each Project Company has not conducted any business other than the business contemplated by the Operative Documents.  Except as reflected in the financial statements delivered to Administrative Agent pursuant to Article 5, none of Borrower nor any Project Company has any outstanding Debt or other material liabilities other than

 

42


 

pursuant to or allowed by the Operative Documents.  Except as otherwise disclosed, neither Borrower nor any Project Company is a party to or bound by any material contract obligating Borrower or any Project Company, as applicable, to pay more than $100,000 in any fiscal year or $250,000 in the aggregate over the term of such contract other than the Operative Documents and the Financing Documents to which it is a party.

 

6.7                                 Private Offering by Borrower.

 

Assuming the Lenders are acquiring the Notes for investment purposes only, and not for purposes of resale or distribution thereof except for assignments or participations as provided in Sections 12.14 and 12.15, no registration of the Notes under the Securities Act of 1933, as amended, or under the securities laws of any applicable jurisdiction is required in connection with the offering, issuance and sale of the Notes hereunder.

 

6.8                                 Filings.

 

No filing, recording, re-filing or rerecording other than those listed on Exhibit E-6 is necessary to perfect and maintain the perfection and priority of the interest, title or Liens referred to in Section 6.21 relating to personal property set forth in the Member Pledge and Security Agreement, Borrower Pledge and Security Agreement and each Guaranty and Security Agreement, and on or prior to the Closing Date all such filings or recordings (other than those that are required to be made only at a later date, which are so indicated on Exhibit E-6) will have been made.  No filing or recording other than the recording of the Mortgage Documents in the office of the clerk of Washington County and Penobscot County of the State of Maine is necessary to create Liens on the real property interests referred to in Section 6.21, and on or promptly after the Closing Date such filing will be made.

 

6.9                                 Investment Company, Holding Company Act.

 

None of Borrower, the Member or any Affiliated Participant that is a party to an Operative Document is an investment company or a company controlled by an investment company within the meaning of the Investment Company Act of 1940, as amended.  Borrower and Member have made any required filing with FERC, pursuant to PUHCA.  No Affiliate of Borrower (including the Member) is subject to, or not exempt from, regulation under PUHCA other than regulation under PUHCA that would not reasonably be expected to constitute a Material Adverse Effect.  Each Project Company satisfies the requirements of Section 1262(6) of PUHCA and the regulations thereunder to be an “exempt wholesale generator.”

 

6.10                           Governmental Regulation.

 

Except as set forth in Exhibit H-3, neither Borrower nor the Project Companies will be deemed by MPUC to be subject to financial, organizational or rate regulation as a “public utility” under any applicable Maine law or under any other state or other law, rule or regulation.

 

6.11                           Margin Stock.

 

Borrower is not engaged principally, or as one of its principal activities, in the business of extending credit for the purpose of “buying,” “carrying” or “purchasing” margin

 

43



 

stock (as defined or used in Regulation T, U or X of the Federal Reserve Board), and no part of the proceeds of the Loans or the Project Revenues will be used by Borrower to buy, purchase or carry any such margin stock or to extend credit to others for the purpose of buying, purchasing or carrying any such margin stock or otherwise in violation of Regulation T, U or X of the Federal Reserve Board.

 

6.12                           Financial Statements.

 

The consolidated financial statements of Borrower delivered pursuant to Section 5.1(bb) fairly present, in all material respects, the financial position of Borrower and the Project Companies, on a combined basis, as of the respective dates thereof and (except as specified in Section 5.1(bb)) the results of operations and cash flows of Borrower and each Project Company, on a combined basis, for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year-end adjustments.  Except for obligations under the Operative Documents to which it is a party, none of Borrower nor any Project Company has (and will not following the funding of the Loans have) any contingent obligations, unmatured liabilities, contingent liability or liability for taxes, long-term lease or forward or long-term commitment that are not reflected in the foregoing financial statements or the notes thereto and which in any such case are material in relation to the business, operations, properties, assets, financial condition or prospects of Borrower and the Project Companies.

 

6.13                           Partnerships and Joint Ventures.

 

Neither Borrower nor any Project Company is a general partner or a limited partner in any general or limited partnership, a joint venturer in any joint venture or a member in any limited liability company (except for Borrower’s ownership of the Project Companies).  Borrower’s sole subsidiaries are the Project Companies.  Neither Project Company has any subsidiaries.

 

6.14                           Existing Defaults.

 

Neither Borrower nor any Project Company is in default under any material term of any Operative Document or any other agreement or instrument relating to any obligation of Borrower and each Project Company for or with respect to borrowed money, as applicable.

 

6.15                           No Default.

 

No Event of Default or Inchoate Default with respect to any Affiliated Participant has occurred and is continuing.

 

6.16                           Permits.

 

(a)                                  Except as set forth in Exhibit H-2A, there are no Permits under existing Legal Requirements, including all Environmental Laws, applicable to Borrower, each Project Company and the Project as it is currently designed that are or will become Applicable Permits other than the Permits described in Exhibit H-2B (including all Permits needed to enable the Borrower and each Project Company

 

44



 

to execute, deliver and perform its obligations under the Financing Documents and each Project Document).  Each Permit described in Part I of Exhibit H-2B is in full force and effect and is not subject to any current legal proceeding or to any unsatisfied condition that may allow material modification or revocation or that could reasonably be expected to have a Material Adverse Effect, and all applicable appeal periods with respect thereto have expired.  None of the Permits described in Part I of Exhibit H-2B has been modified, amended or supplemented in a manner that could be reasonably expected to have a Material Adverse Effect.  Except as set forth on Exhibit H-6, Borrower and each Project Company is in compliance in all material respects with all Applicable Permits set forth in Part I of  Exhibit H-2B.

 

(b)                                 Each Permit described in Part II of Exhibit H-2B is of a type that is routinely granted on application and Borrower believes that each Permit so indicated on Part II of Exhibit H-2B will be obtained before it becomes an Applicable Permit.

 

(c)                                  To Borrower’s knowledge, each other Major Project Participant is in compliance in all material respects with its respective applicable third party Permits, each other Major Project Participant possesses all Permits, licenses, franchises, patents, copyrights, trademarks and trade names, or rights thereto necessary to perform its duties under the Operative Documents to which it is a party, and such Person is not in violation of any valid rights of others with respect to any of the foregoing that could be reasonably expected to have a Material Adverse Effect.

 

(d)                                 Neither Borrower nor any Project Company has entered into any stipulations with any Governmental Authority issuing any Applicable Permit(s) which are not expressly set forth in such Permit(s).

 

6.17                           Offices, Location of Collateral.

 

(a)                                  The chief executive office, if it has more than one place of business, or place of business, if it has only one place of business (as such terms are used in Section 9-307 of the Uniform Commercial Code as in effect in each State where the Collateral is located and the State of New York from time to time) of Borrower and each Project Company is set forth in Exhibit H-7 hereto (as such Exhibit may be supplemented from time to time by 30 days’ notice to Administrative Agent).

 

(b)                                 All of the tangible Collateral (excluding the Collateral Accounts, the membership interests in the Borrower and each Project Company and general intangibles and other possessory security interests) and the Mortgaged Property is, or when acquired and installed pursuant to the Project Documents will be, located at or on the Project Site or on the real property the subject of the Transmission Line Real Property Interests.

 

45



 

6.18                           No Material Adverse Effect

 

To Borrower’s knowledge, since September 30, 2009 no event, condition or circumstance that could reasonably be expected to have a Material Adverse Effect has occurred or is continuing.

 

6.19                           Environmental Matters.

 

(a)                                  Except as set forth in Exhibit H-6, none of Borrower, Member or any Project Company (the “Subject Companies”) is or has in the past been in violation of any Environmental Law which violation could reasonably be expected to give rise to a material liability to any of the Subject Companies or have a Material Adverse Effect.

 

(b)                                 Except as set forth in Exhibit H-6, (i) the Subject Companies have obtained all material Permits required under any Environmental Laws for the construction and operation of the Projects, or the occupation and operation of the Project Site, the Improvements or other Mortgaged Property, (ii) the Subject Companies and the Projects comply and have complied with all such material Permits in such a manner that no Material Adverse Effect has been caused or created and (iii) no actions are pending, or to the knowledge of Borrower, threatened, to revoke, terminate, cancel, modify, amend, appeal or otherwise challenge any such Permits.

 

(c)                                  Except as set forth in Exhibit H-6, none of the Subject Companies nor, to the knowledge of Borrower, any other Person has used, Released, discharged, generated, manufactured, produced, stored, or disposed of, in, on, under, or about the Project Site, the Improvements or other Mortgaged Property, or transported, arranged or permitted the disposal thereto or therefrom, of any Hazardous Substances that could reasonably be expected to subject Administrative Agent, Issuing Bank, the Lenders or the Subject Companies to a material liability under any Environmental Law or that could reasonably be expected to have a Material Adverse Effect.

 

(d)                                 Except as set forth in Exhibit H-6, there are no aboveground or, to Borrower’s knowledge, underground tanks, whether operative or temporarily or permanently closed, located on the Project Site, the Improvements or other Mortgaged Property, the presence of which could reasonably be expected to have a Material Adverse Effect.

 

(e)                                  Except as set forth in Exhibit H-6, there are no Hazardous Substances used, stored or present at, on or near the Project Site, the Improvements or other Mortgaged Property that could reasonably be expected to give rise to a material liability of any of the Subject Companies under any Environmental Law or that could reasonably be expected to have a Material Adverse Effect.

 

(f)                                    Except as set forth in Exhibit H-6, there is or has been no condition, circumstance, action, activity or event that could reasonably form the basis of any material

 

46



 

violation of any Environmental Law or give rise to any material liability of any of the Subject Companies under any Environmental Law that could reasonably be expected to have a Material Adverse Effect.

 

(g)                                 Except as set forth in Exhibit H-6, there is no Environmental Claim pending or, to the knowledge of Borrower, threatened with respect to the Project Site, the Improvements or other Mortgaged Property or any of the Subject Companies with respect to the Projects, which Environmental Claim could be reasonably expected to have a Material Adverse Effect.

 

(h)                                 Borrower has provided to Administrative Agent all reports and other documents relating to environmental investigations and environmental matters concerning the Projects in Borrower’s possession or control.

 

6.20                           Litigation.

 

(a)                                  Except as set forth on Exhibit H-5 or Exhibit H-6, as applicable, there are no pending or, to Borrower’s knowledge, actions threatened in writing against Borrower, Member or any Project Company or proceedings of any kind, including actions or proceedings of or before any Governmental Authority or any Environmental Claims to which Borrower, Member or any Project Company is a party or is subject, or by which any of them or any of their properties are bound that, if adversely determined against Borrower, Member or any Project Company could be reasonably expected to have a Material Adverse Effect.

 

(b)                                 Except as set forth on Exhibit H-5, there are no pending or, to Borrower’s knowledge, actions threatened in writing against Borrower, Member or any Project Company or proceedings of any kind, including any actions, complaints or proceedings of, or before, any Governmental Authority or any Environmental Claims to which the Project or any of the Affiliated Participants is a party or is subject, or by which any of them or any of their properties or the Project are bound that, if adversely determined against any such Affiliated Participants or the Project, could be reasonably expected to have a Material Adverse Effect.

 

6.21                           Title and Liens.

 

(a)                                  Borrower or each Project Company, as applicable, has good and marketable title to all personal property comprising the Projects, a good and marketable, undivided leasehold estate under the Stetson I Real Property Interests and the Stetson II Real Property Interests that are leases and a good and marketable, undivided easement estate under the Transmission Line Real Property Interests and the Stetson II Real Property Interests that are easements.  Each of the Stetson I Real Property Interests, the Stetson II Real Property Interests and the Transmission Line Real Property Interests are free and clear of all Liens, encumbrances or other exceptions to title other than Permitted Liens.  No written notice has been given to Borrower or any Project Company by any lessor or easement grantor under any of the Stetson I Real Property Interests, Stetson II

 

47



 

Real Property Interests and the Transmission Line Real Property Interests as to any rights of third parties that are not disclosed in the Title Policy.  To the knowledge of Borrower, except as disclosed in the Title Policy, each lessor or easement grantor under each Real Property Agreement has a good and marketable fee simple estate in the respective portion of the Project Site, in each case free and clear of all Liens, encumbrances or other exceptions to title other than Permitted Liens.  Subject to the provisions of the Mortgage Documents, the Lien of the Mortgage Documents constitutes a valid and subsisting first priority Lien of record on all the Mortgaged Property described in the Mortgage Documents, and the Lien of the Collateral Documents constitutes a first priority perfected security interest in all of the personal property included in the Collateral described in the Collateral Documents, subject to no other Liens except, in the case of Collateral not constituting pledged shares, member interests or other ownership interests in any Person, Permitted Liens.

 

(b)                                 None of the Permitted Liens:

 

(i)                                     Materially interferes with the completion or operation of the Projects on the Project Site or, unless otherwise obtained, requires any consents, approvals, permits, easements, licenses or other rights from or notices to the parties thereto for the completion or operation of the Projects or for the granting of the security contemplated by the Collateral Documents;

 

(ii)                                  provides for any rights in favor of the parties thereto that could materially interfere with the realization of the security granted to the Secured Parties by the Collateral Documents.

 

6.22                           Utilities.

 

All utility services necessary for the completion and operation of the Projects for its intended purposes are available at the Project Site or will be so available when required.

 

6.23                           Roads/Feeder Lines.

 

(a)                                  All roads necessary for the completion and full utilization of the Projects for their intended purposes under the Project Documents have either been completed or the necessary rights of way therefor have been acquired.

 

(b)                                 All necessary easements, rights of way, agreements and other rights for the completion, interconnection and utilization of the feeder lines for the Projects have been acquired.

 

(c)                                  All of the easements, rights of way, agreements and other rights referred to in paragraphs (a) and (b) are good, valid and subsisting and are held by Borrower or the Project Companies, as applicable, with a good and marketable title thereto free and clear of all Liens, encumbrances or other exceptions to title other than Permitted Liens.

 

48



 

6.24                           Sufficiency of Project Documents.

 

(a)                                  Other than those that can be reasonably expected to be commercially available when and as required, the services to be performed, the materials to be supplied and the real property interests and the other rights granted to Borrower and the Project Companies pursuant to the Project Documents:

 

(i)                                     comprise all of the property interests necessary to secure any right material to the completion, operation and maintenance of the Projects in accordance with all Legal Requirements, all without reference to any proprietary information not owned by or available to Borrower or any Project Company under the Project Documents;

 

(ii)                                  are sufficient to enable each Project to be located, completed, operated and routinely maintained on the respective Project Site; and

 

(iii)                               provide adequate ingress and egress for any reasonable purpose in connection with the completion, operation and routine maintenance of each Project under the Project Documents.

 

(b)                                 There are no material services, materials or rights required for the completion, operation or routine maintenance of the Projects in accordance with the Energy Hedge, Turbine Supply Agreement, BOP Agreement, the Turbine Service Agreement, the O&M Service Agreement, the Plans and Specifications and the Base Case Project Projections other than those available under the Project Documents or that can reasonably be expected to be commercially available at the Project Site on commercially reasonable terms.  The Material Project Documents are the only material agreements in effect as of the Closing Date for the completion and operation of the Projects.

 

6.25                           Project Documents.

 

Except as otherwise disclosed in writing to Administrative Agent, to Borrower’s knowledge, no default by any Major Project Participant to a Material Project Document to which it is a party has occurred and is continuing, which default could be reasonably expected to have a Material Adverse Effect.

 

6.26                           Representations and Warranties of Affiliated Participants.

 

The representations and warranties of the Affiliated Participants contained in the Operative Documents other than this Financing Agreement are true and correct in all material respects as made therein as of the time made or deemed to have been made.

 

6.27                           EWG.

 

Each Project Company qualifies as an EWG.

 

49



 

6.28                           Labor Disputes and Acts of God.

 

Neither the business nor the properties of each of Borrower and each Project Company or, to the knowledge of Borrower, any of the other Major Project Participants are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy, or other casualty (whether or not covered by insurance), that could be reasonably expected to have a Material Adverse Effect.

 

6.29                           Disclosure.

 

Neither this Financing Agreement nor any other Financing Document or certificate furnished to Administrative Agent, by or, to the knowledge of Borrower, on behalf of Borrower, in connection with the transactions contemplated by this Financing Agreement or the Project Documents or the design, description, testing or operation of the Project, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make statements made therein (in light of the circumstances in which they were made) not misleading.  As of the Closing Date, there is no fact known to Borrower which Borrower has not disclosed to Administrative Agent or the Independent Consultants that has or could be reasonably expected to have a Material Adverse Effect which has not been set forth in this Financing Agreement or in the other documents, certificates and written statements furnished to Administrative Agent and/or the Independent Consultants, by or on behalf of Borrower in connection with the Projects.  No material adverse change has occurred with respect to the financial condition, properties or business of any Affiliated Participant that could be reasonably expected to have a Material Adverse Effect.  To the knowledge of Borrower, no material adverse change has occurred with respect to the financial condition, properties or business of any Major Project Participant that is not an Affiliated Participant that constitutes a Material Adverse Effect.

 

6.30                           Base Case Project Projections.

 

The Base Case Project Projections (a) are based on reasonable assumptions as to all legal and factual matters material to the estimates set forth therein, (b) are consistent, in all material respects, with the provisions of the Project Documents, and (c) to Borrower’s knowledge, accurately represent the anticipated financial performance of the Projects based on the assumptions set forth in the Base Case Project Projections.

 

6.31                           Collateral.

 

The security interests in the Collateral granted to Security Agent, for the benefit of the Secured Parties, pursuant to the Collateral Documents (a) constitute as to personal property included in the Collateral and, with respect to subsequently acquired personal property included in the Collateral, will constitute, a perfected security interest under the UCC to the extent a security interest can be perfected by filing or, in the case of the Collateral Accounts and the Pledged Equity Interests (the Pledged Equity Interests being “certificated securities” as defined in Article 8 of the UCC), by control or possession by or on behalf of the secured party; and (b) are, and, with respect to such subsequently acquired property, will be, as to Collateral perfected under the UCC as aforesaid, superior and prior to the rights of all third Persons now existing or hereafter arising whether by way of mortgage, lien, security interests, encumbrance,

 

50



 

assignment or otherwise, except, in the case of Collateral not constituting Pledged Equity Interests, for Permitted Liens.  Except to the extent possession of portions of such Collateral is required for perfection, all such action as is necessary has been taken to establish and perfect for the benefit of Security Agent rights in and to such Collateral to the extent Security Agent’s security interest can be perfected by recording, filing, registration, giving of notice or other similar action.  No filing, recordation, re-filing or re-recording other than those listed on Exhibit E-6 (as the same may be supplemented from time to time) is necessary to maintain the perfection of the security interest in or Liens on the Collateral comprising personal property set forth in the Member Pledge and Security Agreement, the Borrower Pledge and Security Agreement and each Guaranty and Security Agreement, and all such filings will have been made to the extent Security Agent’s security interest (for the benefit of the Secured Parties) can be perfected by filing.  Security Agent has received all original certificates representing all issued and outstanding membership interests in Borrower and each Project Company.  Borrower has taken the steps necessary pursuant to the Account Control Agreement to give “control” (as that term is defined in Section 8-106(d) of the UCC of New York) to Security Agent over the Collateral Accounts.

 

6.32                           Intellectual Property.

 

Borrower owns or has the right to use all material patents, trademarks, service marks, trade names, copyrights, licenses, know-how and other rights, which are necessary for the completion and operation of the Projects.  Neither Borrower nor any Project Company has received notice that (a) any material product, process, method, substance, part or other material presently contemplated to be sold by or employed by Borrower or any Project Company, as applicable, in connection with the Projects will infringe in any material manner upon any patent, trademark, service mark, trade name, copyright, license or other right owned by any other Person; (b) there is any pending or threatened claim or litigation against or affecting Borrower or any Project Company, as applicable, contesting its right to sell or use any such product, process, method, substance, part or other material; or (c) there is, or there is pending or proposed, any patent, invention, device, application or principle or any statute, law, rule, regulation, standard or code relating to intellectual property that could reasonably be expected to have a Material Adverse Effect.

 

6.33                           Proper Subdivision.

 

The Project Site does not have to be subdivided from larger tracts of land in order to be made subject to a Lien without regard to any other real property, and may be mortgaged, conveyed, made subject to a Lien subject to the extent and limitations of Borrower’s and each Project Company’s, as applicable,  rights, title and interest therein and thereto.

 

6.34                           Land Not in Flood Zone.

 

Except as reflected on the as-built ALTA/ACSM survey delivered by Borrower pursuant to Section 5.1(ff), to Borrower’s knowledge, none of the Collateral at the Project Site includes improved real estate that 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 and in

 

51



 

which flood insurance has been made available under the National Flood Insurance Act of 1968, as amended.

 

6.35                           Insurance.

 

All insurance policies required to be maintained by Borrower and each Project Company, as applicable, under Section 7.20    and represented by insurance policies, binders, commitments or certificates signed by the insurer or a broker authorized to bind the insurer provided to Administrative Agent pursuant to Section 5.1    (w) are in full force and effect and neither Borrower nor any Project Company has received any notice of cancellation from the relevant insurers.

 

6.36                           Bankruptcy Event.

 

No Bankruptcy Event has occurred and is continuing with respect to Borrower, the Member or any Affiliated Participant or, to the knowledge of Borrower, with respect to any Major Project Participant.

 

6.37                           Construction of Projects.

 

To the knowledge of Borrower, all work done on the Projects has been done in a good and workmanlike manner in all material respects and in accordance with the Turbine Supply Agreement, BOP Agreement and Prudent Utility Practices in all material respects.  Neither Borrower nor any Project Company has, except as permitted by the Project Documents, permitted the use of any temporary components or used parts in the construction of the Projects.

 

6.38                           Construction Contracts.

 

Borrower and each Project Company has paid and discharged or caused to be paid or discharged all material liabilities and obligations for payments of any amounts required to be paid to the Turbine Supplier and the BOP Contractor as of the date hereof.

 

6.39                           Warranty Period.

 

The Warranty Period (as defined in the Turbine Supply Agreement) has commenced with respect to the Turbines.  Borrower and each Project Company, as applicable, has paid and discharged or caused to be paid or discharged all material liabilities and obligations due and payable as of the Closing Date, if any, to Turbine Supplier under the Turbine Supply Agreement.

 

6.40                           OFAC and Related Matters.

 

(a)                                  Except to the extent any violation would be due solely to the identity or nationality of one or more parties hereto other than the Sponsor, Borrower, the Member or any Project Company,

 

(i)                                     None of the transactions contemplated hereby will violate (w) the United States Trading with the Enemy Act, as amended, (x) any of the foreign

 

52


 

assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto (as amended, the “Department of Treasury Rule”), (y) Executive Order No. 13,224, 66 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) (as amended, the Terrorism Order”)) or (z) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, Public Law 107-56 (October 26, 2001), as amended (the “Patriot Act”).

 

(ii)           None of the Member, Sponsor, the Borrower nor any Project Company is a “blocked person” as described in Section 1 of the Terrorism Order or a Person described in the Department of the Treasury Rule.

 

(iii)          None of the Member, Sponsor, the Borrower nor any Project Company knowingly engages in any dealings or transactions, or is otherwise associated, with any such blocked person or any such Person.

 

6.41                           OFAC Restrictions.

 

Neither the Borrower nor any Project Company, nor, to the Borrower’s knowledge, any Person holding any legal or beneficial interest whatsoever in the Borrower or any Project Company (whether directly or indirectly): (i) appear on the OFAC SDN List; (ii) are included in, owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship, or services of any kind to, or otherwise associated with any of the Persons referred to or described in the OFAC SDN List; or (iii) have conducted business with or engaged in any transaction with any Person named on any of the OFAC SDN List or any Person included in, owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship, or services of any kind to, or otherwise associated with any of the Persons referred to or described in the OFAC SDN List.

 

6.42                           Line Outage Costs.

 

Neither the Borrower nor any Project Company incurred any line outage costs under and pursuant to the Interconnection Agreement.

 

ARTICLE 7.

COVENANTS OF BORROWER

 

Borrower covenants and agrees that until all of the Loans and Obligations have been paid and performed in full and as long as Commitments remain in effect, Borrower shall, unless Administrative Agent (on instructions of the Majority Lenders and Issuing Bank) waives compliance in writing, perform all of the covenants set forth in this Article 7:

 

53



 

7.1                                 Use of Loan Proceeds and Project Revenues.

 

(a)                                  Proceeds of Loans; Letter of Credit.  Unless otherwise applied by Administrative Agent pursuant to this Financing Agreement, proceeds of the Loans shall be applied by Security Agent and the Securities Intermediary in the order and manner set forth in more detail in Article 9 and the Account Control Agreement.  The proceeds of the Term Loans and the Bridge Loans shall be used solely for (i) the payment in full to the lenders under the Existing Stetson I Facilities, (ii) the payment in full to the lenders of the loans corresponding to each Stetson II Project Turbine under the Stetson II Turbine Supply Loan, (iii) payment of construction costs in accordance with the Construction Budget and Schedule, and (iv) payment of transaction costs, fees and expenses related to this Financing Agreement.  The Letters of Credit and the proceeds of the LC Loans shall be used solely in the manner set forth in this Financing Agreement.

 

(b)                                 Revenues.  Unless otherwise applied by Administrative Agent pursuant to this Financing Agreement, Borrower shall (and Borrower shall cause each Project Company to) deposit all Project Revenues in the Revenue Account pursuant to Article 9 hereof and the Account Control Agreement, for application solely for the purposes and in the order and manner provided in Article 9 hereof and the Account Control Agreement.

 

7.2                                 Payment.

 

Borrower shall promptly pay all amounts due under this Financing Agreement and the other Financing Documents to which it is a party according to the terms hereof and thereof.

 

7.3                                 Notices and Deliveries.

 

Borrower shall promptly upon acquiring notice or giving notice, as the case may be, or obtaining knowledge thereof, give written notice to Administrative Agent of:

 

(a)                                  Any litigation pending or, to the knowledge of Borrower, threatened against Borrower or any Project Company involving claims against Borrower, any Project Company or the Project in excess of $200,000 in the aggregate in any fiscal year of Borrower or any Project Company, as applicable, or involving any material injunctive, declaratory or other equitable relief, such notice to include copies of all papers filed in such litigation and to be given monthly if any such papers have been filed since the last notice given;

 

(b)                                 Any dispute or disputes which exist between Borrower (or any Project Company, as applicable) and any Governmental Authority and which involve (i) claims against Borrower (or any Project Company, as applicable) which exceed $500,000 in the aggregate in any fiscal year of Borrower (or any Project Company, as applicable), (ii) injunctive or declaratory relief, (iii) revocation, suspension or material adverse modification of any Applicable Permit or the commencement of any action or proceeding that could reasonably be expected to result in revocation,

 

54



 

suspension or material adverse modification of an Applicable Permit, or (iv) any Liens for material taxes due but not yet paid;

 

(c)                                  Any Event of Default or Inchoate Default;

 

(d)                                 Any casualty, damage or loss, whether or not insured, through fire, theft, other hazard or casualty, or any act or omission of Borrower, Member or any Project Company, or their respective officers, directors, employees, agents, contractors, consultants or representatives, or of any other Person if such casualty, damage or loss affects Borrower, any Project Company or the Project in excess of $1,000,000 for any one casualty or loss, or an aggregate of $3,000,000 in any fiscal year of Borrower (or any Project Company, as applicable), and Borrower shall keep Administrative Agent timely apprised of any insurance claim proceedings;

 

(e)                                  Any cancellation or material change in the terms, coverages or amounts of any insurance described in Section 7.20;

 

(f)                                    Any matter that has had or, in Borrower’s reasonable judgment, would reasonably be expected to have a Material Adverse Effect;

 

(g)                                 Any scheduled maintenance calendar with respect to the Project delivered to Borrower (or any Project Company, as applicable) pursuant to the Turbine Service Agreement or the O&M Service Agreement;

 

(h)                                 Any termination or material event of default or notice of termination or default under any Project Document to which Borrower or any Affiliated Participant is a party (including any failure of Borrower to maintain in effect security instruments (including cash collateral) as and when required pursuant to the terms and conditions of the Energy Hedge);

 

(i)                                     Any developments concerning any FERC or MPUC proceedings affecting any Project that could be reasonably expected to have a Material Adverse Effect;

 

(j)                                     (i) Any fact, circumstance, condition or occurrence at, on, or arising from or with respect to, the Projects, the Project Site, the Improvements, or other Mortgaged Property that has resulted or could reasonably be expected to result in a material non-compliance with any Environmental Law or any material liability or material remedial, corrective or investigatory obligation thereunder, (ii) any Release of Hazardous Substances on or from the Project Site, the Improvements or other Mortgaged Property that has resulted or could reasonably be expected to result in personal injury or material property damage or could reasonably be expected to have a Material Adverse Effect, and (iii) any pending or, to Borrower’s knowledge, threatened, Environmental Claim against Borrower (or any Project Company, as applicable) or to Borrower’s knowledge any of its Affiliates, contractors, lessees or any other Persons, arising in connection with their occupying or conducting operations on or at the Projects, the Project Site, the

 

55



 

Improvements or the other Mortgaged Property which could reasonably be expected to have a Material Adverse Effect;

 

(k)                                  The receipt of any management letter or similar communication as to any deficiencies in the accounting practices of Borrower (or any Project Company, as applicable) from Borrower’s (or any Project Company’s, as applicable) auditors, or the resignation, discharge or change of Borrower’s (or any Project Company’s, as applicable) auditors;

 

(l)                                     Any claim of force majeure under any Project Document;

 

(m)                               Any forced outage affecting five (5) Turbines or more for more than 24 hours;

 

(n)                                 Borrower’s, any Project Company’s or any ERISA affiliate’s adoption of or participation in any ERISA Plan, or intention to adopt or participate in any ERISA Plan;

 

(o)                                 The occurrence of an Event of Eminent Domain;

 

(p)                                 Any event or condition likely to require the incurrence of major maintenance items in an amount that is at least 20% higher, in the aggregate, than the corresponding amounts set forth with respect to all such items in the Base Case Project Projections for such year, within thirty (30) days of the date when Borrower obtains such knowledge;

 

(q)                                 (i) a notice of any drawing or demand by the Energy Hedge Provider on the security instruments established by or on behalf of Borrower as required under the Energy Hedge, (ii) a notice of any drawing or demand by Borrower on any security instruments established by or on behalf of Energy Hedge Provider as required under the Energy Hedge; or (iii) prior to the creation of the Energy Hedge Lien, if applicable, if the amount of the available Total LC Commitment in respect of the Hedge LCs plus the value of any other existing credit support (in excess of the value of the Energy Hedge LC) provided to Energy Hedge Provider minus the Energy Hedge Liquidity Reserve Requirement (such amount as calculated on each Payment Date, the “Hedge LC Margin”) is less than $2,500,000, Borrower shall cause to be deposited into the Energy Hedge Reserve Account amounts remaining in the Revenue Account pursuant to Section 6(b)(9) of the Account Control Agreement; provided, that  the amounts on deposit in the Energy Hedge Deposit Account shall never be required to exceed $5,000,000 at any given time.

 

(r)                                    All material notices relating to any Project received by Borrower (or any Project Company) from any Governmental Authority;

 

(s)                                  The receipt of Turbine Mechanical Completion Certificates (as defined in the Turbine Supply Agreement), and the Infrastructure Completion Certificate (as defined in the BOP Agreement) with respect to the Stetson II Project; and

 

56



 

(t)                                    All material written notices or material written periodic reports with respect to any Project received by the Borrower or any Project Company under any Project Document they are a party to, including any such notices related to the Turbines by the Turbine Operator or the Turbine Supplier.

 

7.4                                 Financial Statements.

 

(a)                                  Borrower shall deliver to Administrative Agent (or cause to be delivered to Administrative Agent) with sufficient copies for the Lenders, in form and substance reasonably satisfactory to Administrative Agent (with consent of the Majority Lenders and the Issuing Bank):

 

(i)                                     As soon as practicable but no later than forty-five (45) days after the close of the first, second and third quarterly periods of its fiscal year, quarterly (and year-to-date) unaudited financial statements of Borrower and each Project Company (on a consolidated basis), Member, Sponsor and Energy Hedge Guarantor, including a balance sheet and an income and expense statement.  Such requirement may be satisfied with respect to any Person if the appropriate Form 10-Q filed with the Securities and Exchange Commission is publicly available;

 

(ii)                                  As soon as practicable but no later than 120 days after the close of each applicable fiscal year, audited financial statements of Borrower and each Project Company, on a consolidated basis, Sponsor, Member and Energy Hedge Guarantor including a statement of equity, a balance sheet as of the close of such year, an income and expense statement and a cash flow statement, all prepared in conformity with GAAP and certified by an independent certified public accountant selected by the Person whose financial statements are being prepared and, except in the case of any company subject to reporting requirements under the Securities Exchange Act of 1934, satisfactory to Administrative Agent (with consent of the Majority Lenders and the Issuing Bank); provided, however, that any accounting firm of international or national standing shall be satisfactory.  The certificate to be delivered by an independent certified public accountant pursuant to the first sentence of this Section 7.4(a)(ii) with respect to Borrower and each Project Company shall not be qualified or limited because of such accountant’s restricted or limited examination of any material portion of the records of the applicable Person.  Such requirement may be satisfied with respect to any Person if the appropriate Form 10-K filed with the Securities and Exchange Commission is publicly available; and

 

(iii)                               Any additional financial statements, reports or documents to the extent available to Borrower or to which Borrower (or any Project Company, as applicable) is entitled under the Material Project Documents and that are reasonably requested by Administrative Agent.

 

57



 

(b)                                 Each time the financial statements described above are delivered under this Section 7.4, a certificate signed by an Authorized Officer of the Person whose financial statements are being delivered shall be delivered along with such financial statements, certifying that such Authorized Officer has made or caused to be made a review of the transactions and financial condition of the applicable Person during the relevant fiscal period and that, to the knowledge of the Authorized Officer, no Inchoate Default or Event of Default exists or if any such event or condition existed or exists, the nature thereof and the corrective actions that the Sponsor, Member, Borrower or the Project Company has taken or proposes to take with respect thereto.

 

7.5                                 Reports.

 

(a)                                  No later than five (5) Business Days prior to each Payment Date, Borrower shall deliver to the Administrative Agent the calculation of the Debt Service Coverage Ratio for the past 12-month period (which calculation of the Debt Service Coverage Ratio shall include Borrower’s reasonable estimate for Project Revenues and O&M Costs through such Payment Date).  The calculations of the Debt Service Coverage Ratio hereunder, upon confirmation from the Administrative Agent, shall be used in determining the transfers and releases from the Revenue Account and the Disbursement Reserve Account, as applicable, in accordance with the terms of the Account Control Agreement.

 

(b)                                 Following the Closing Date, on the 26th day of each calendar month commencing January 2010, Borrower shall deliver to Administrative Agent (with sufficient copies for the Lenders) a monthly summary operating report which shall include (i) monthly, a three-month and year-to-date numerical and narrative assessment with respect to each calendar month in the relevant period of (A) the variance analysis of each Project’s compliance with each material category in the Base Case Project Projections, (B) each Project’s electrical production (including variances from budgeted amounts), delivery and curtailment, if any, (C) Project availability and unscheduled maintenance of Turbines in respect of both Projects, (D) [reserved], (E) all Project Revenues received and all O&M Costs paid during such period (including any REC penalties, if applicable and the activity under the Energy Hedge) and all cash balances, including debt service payments during such period, (F) any claims for warranty claims under the Turbine Supply Agreement made or outstanding during such quarter, (G) replacement of equipment not contemplated by the Base Case Project Projections of value in excess of $250,000, and (H) material disputes with contractors, materialmen, suppliers or others and any related claims against Borrower (or any Project Company, as applicable); and (ii) average wind speeds (including with respect to each calendar month in such period).

 

(c)                                  Promptly following the end of each calendar quarter, commencing with the quarter ending December 31, 2009, Borrower shall deliver to Administrative Agent a summary report describing the then current balance of RECs calculated pursuant to the REC Contracts, including the relevant balances of RECs for each

 

58



 

category referenced therein and, to the extent reasonably available to Borrower, the REC balances determined by GIS Administrator with respect to each Project for the relevant quarter.  Promptly following each annual reconciliation of REC balances under the REC Contracts, Borrower shall deliver to Administrative Agent a reasonably detailed report discussing in sufficient detail (i) the results of such reconciliation, (ii) the applicable REC balances for each category referenced therein and, to the extent reasonably available to Borrower, the REC balances determined by GIS Administrator with respect to the Projects for the relevant period, (iii) if applicable, the amount of substitute RECs required to be provided by Borrower (or any Project Company, as applicable) as a result of such reconciliation and the costs payable by Borrower (or any Project Company, as applicable) as a result thereof, and (iv) any REC penalties due and payable by Borrower (or any Project Company, as applicable) or GIS Administrator as a result of such reconciliation.

 

(d)                                 Borrower shall provide to Administrative Agent promptly upon reasonable request such information concerning the Projects and the Project Companies and, to the extent available, the other Affiliated Participants, at such times as Administrative Agent shall reasonably require, including such reports and information as are reasonably required by the Independent Consultants.

 

(e)                                  Borrower shall provide reports required under this Section 7.5 in a number of copies sufficient for distribution to all Lenders.

 

7.6                                 Additional Permits and Project Documents; Additional Consents.

 

Borrower shall deliver to Administrative Agent promptly, but in no event later than thirty (30) days after the receipt thereof by Borrower, copies of (a) all Applicable Permits or any Additional Project Documents obtained or entered into by Borrower (or any Project Company, as applicable) after the Closing Date; and (b) any material amendment, supplement or other modification to any Applicable Permit received by Borrower after the Closing Date.  Each Additional Project Document entered into by Borrower (or any Project Company, as applicable) after the Closing Date shall be in form and substance reasonably satisfactory to Administrative Agent and concurrently with the delivery of such Additional Project Document, Borrower shall cause each other party to such agreement to execute and deliver to Administrative Agent, to the extent reasonably required by Administrative Agent, a consent in substantially the form of Exhibit F-7 and use its commercially reasonable efforts, to the extent reasonably required by Administrative Agent,  to cause such counterparty to provide an opinion of its counsel, in form and substance reasonably acceptable to Administrative Agent.  Within fifteen (15) Business Days after the Closing Date, Stetson Wind II, LLC shall enter into an agreement, in form and substance similar to the Turbine Service Agreement and reasonably satisfactory to the Administrative Agent.

 

7.7                                 Compliance with Environmental Report Recommendations

 

Borrower shall (and Borrower shall cause each Project Company to), and shall use reasonable efforts to cause each counterparty to each Project Document to, comply in all

 

59



 

material respects with all material and relevant recommendations of the applicable Environmental Consultant set forth in the Environmental Reports, and shall inform each such counterparty of each Project Document of the material and relevant recommendations contained in each such Environmental Reports.

 

7.8                                 Existence, Conduct of Business, Properties, Etc.

 

Except as otherwise expressly permitted under this Financing Agreement, Borrower shall (and Borrower shall cause each Project Company to) (a) maintain and preserve its existence as a Delaware limited liability company and all material rights, privileges, remedies and franchises necessary or desirable in the normal conduct of its business; (b) perform all of its material contractual obligations under the Operative Documents and all other agreements and contracts by which it is bound upon the terms contained therein; (c) maintain all Permits and licenses, including all Applicable Permits, which are necessary or advisable to conduct its business and to own, insure, operate and maintain each Project in the manner contemplated by the Project Documents; (d) at or before the time that any Permit becomes an Applicable Permit, obtain such Permit; and (e) engage only in the business contemplated by the Operative Documents.

 

7.9                                 Obligations.

 

Borrower shall (and Borrower shall cause each Project Company to) pay all of its obligations as and when due and payable, including trade payables in the ordinary course of business and taxes and tax claims, except such obligations as may be contested in good faith by Borrower (or any Project Company, as applicable) or as to which a bona fide dispute may exist, provided that with respect to any such disputes relating to amounts of more than $100,000, (i) Administrative Agent is satisfied in its reasonable discretion that non-payment of such obligation pending the resolution of such contest or dispute could not reasonably be expected to have a Material Adverse Effect; or (ii) provision is made to the satisfaction of Administrative Agent (and Administrative Agent’s failure to object to Borrower’s written request for approval of such arrangements within ten (10) Business Days of receipt of such request shall constitute approval thereof) in its reasonable discretion for the posting of security (other than the Collateral) for or the bonding of such obligations or the prompt payment thereof in the event that such obligation is payable.

 

7.10                           Books, Records, Access.

 

(a)                                  Borrower shall (and Borrower shall cause each Project Company to) maintain adequate books, accounts and records with respect to Borrower (or the Project Companies, as applicable) and each Project and prepare all financial statements required hereunder in conformity with GAAP and in material compliance with the regulations of any Governmental Authority having jurisdiction thereof, and permit employees or agents of any Lender at any reasonable time during Borrower’s normal business hours and upon reasonable prior notice to Borrower and Administrative Agent, without undue disturbance to Borrower’s commercial operations and at all times in reasonable compliance with Borrower’s health, safety, and environmental policies (assuming that Borrower has provided

 

60



 

adequate training to such Lender), to inspect all of Borrower’s (and each Project Company’s) properties including the Project Site, to examine or audit all of Borrower’s (and each Project Company’s) books, accounts and records and make copies and memoranda thereof, in each case subject to the provisions of Section 14.19    ; provided, however, that prior to the occurrence of an Inchoate Default or Event of Default the Lender desiring to conduct an inspection in excess of one inspection per 90-day period shall bear the cost thereof.

 

(b)                                 Borrower shall, upon reasonable notice from the Independent Engineer, provide the Independent Engineer with reasonable access to the Project Site at all times during Borrower’s normal business hours, remote access to the Project’s SCADA System (as defined in the Turbine Supply Agreement) and access to and copies of such of the Project’s engineering drawings and civil and electrical designs and interconnection facilities and project manuals so as to enable the Independent Engineer to deliver such certificates and written reports to Administrative Agent (with sufficient copies for the Lenders) as Administrative Agent may reasonably request.

 

(c)                                  Borrower shall provide the Independent Engineer with copies of all manuals that are material to the operation of the Projects and that are required to be delivered to Borrower.

 

7.11                           EWG and Rate Approval.

 

(a)                                  Borrower shall take or cause to be taken all necessary and appropriate actions so that each Project Company will be an Exempt Wholesale Generator until all amounts due the Lenders under the Financing Documents have been paid in full.

 

(b)                                 Borrower shall (i) take or cause to be taken all necessary and appropriate actions so that Borrower will not be subject to the jurisdiction of FERC as a “public utility” under Parts II and III of the FPA and neither Borrower nor any Project Company will be subject to jurisdiction of the MPUC as a “public utility” under applicable Maine law; and (ii) take or cause to be taken all necessary or appropriate actions so that each Project Company will maintain any FERC approvals and Maine state approvals in respect of selling power in Maine.

 

7.12                           Operation of Projects.

 

(a)                                  Borrower shall keep and operate each Project, or cause the same to be kept and operated, in good operating condition consistent in all material respects with Prudent Utility Practices, all Applicable Permits and Legal Requirements and all applicable requirements of the Operative Documents, and make or cause to be made all repairs (structural and non-structural, extraordinary or ordinary) necessary to keep and operate each Project in such condition.  Borrower shall from time to time consider and implement the reasonable recommendations of the Independent Engineer in connection with the operation of each Project.

 

61



 

(b)                                 Borrower shall operate and maintain each Project, or cause each Project to be operated and maintained in accordance with the Base Case Project Projections (subject to Borrower’s other rights under the Financing Documents, including Borrower’s rights to access amounts in the Collateral Accounts in accordance with the terms of this Agreement and the Account Control Agreement).

 

(c)                                  Borrower shall operate and maintain each Project, or cause each Project to be operated and maintained in accordance with the Base Case Project Projections in effect from time to time after the expiration of the applicable Warranty Period (as defined in each Turbine Supply Agreement).

 

(d)                                 Borrower shall not (nor shall it allow any Project Company to) (i) approve any material amendments or modifications to any operation and maintenance manuals referred to in the Turbine Service Agreement and O&M Service Agreement, or (ii) terminate the Turbine Service Agreement for convenience in each case without obtaining the prior written consent of Administrative Agent (with consent of the Majority Lenders and Issuing Bank).

 

7.13                           Preservation of Rights; Further Assurances.

 

(a)                                  Borrower shall preserve, protect and defend its rights (and the rights of each Project Company, as applicable) under each and every Project Document, including (where necessary or appropriate) prosecution of suits to enforce any material right of Borrower (or any Project Company, as applicable) thereunder and enforcement of any claims with respect thereto.

 

(b)                                 From time to time as reasonably requested by any Agent, Borrower shall (and Borrower shall cause each Project Company to) execute, acknowledge, record, register, deliver and/or file all such notices, statements, instruments and other documents (including any memorandum of lease or other agreement, financing statement, continuation statement, fixture filing, certificate of title or estoppel certificate) relating to the Loans and other Obligations of Borrower hereunder stating the interest and charges then due and any known defaults, and take such other steps as may be necessary or reasonably advisable to render fully valid and enforceable under all applicable laws the rights, Liens and priorities of the Secured Parties (or any Agent on their behalf) with respect to all Collateral and other security from time to time furnished under this Financing Agreement and the other Financing Documents or intended to be so furnished, in each case in such form, together with such legal opinions as may reasonably be requested by any Agent and at such times as shall be reasonably satisfactory to Security Agent, and pay all reasonable fees and expenses (including reasonable attorneys’ fees) incident to compliance with this Section 7.13(b).

 

(c)                                  If Borrower (or any Project Company) shall at any time acquire any real property or leasehold, easement or other interest in real property not covered by the Mortgage Documents, promptly upon such acquisition, Borrower shall (and Borrower shall cause each Project Company to) execute, deliver and record a

 

62


 

supplement to the Mortgage Documents, reasonably satisfactory in form and substance to Security Agent, subjecting such real property or leasehold, easement or other interests to the Lien and security interest created by the Mortgage Documents.

 

7.14         Taxes, Other Government Charges and Utility Charges.

 

Borrower shall (and Borrower shall cause each Project Company to) pay, or cause to be paid, as and when due and prior to delinquency, all taxes, assessments and governmental charges of any kind that may at any time be lawfully assessed or levied against or with respect to Borrower, each Project Company or the Projects, all utility and other charges incurred in the completion, operation, maintenance, use, occupancy and upkeep of each Project, and all assessments and charges lawfully made by any Governmental Authority for public improvements that may be secured by a Lien on any Project.  However, Borrower and each Project Company may contest in good faith any such taxes, assessments and other charges and, in such event, may permit the taxes, assessments or other charges so contested to remain unpaid during any period, including appeals, when each of Borrower and each Project Company is in good faith contesting the same, so long as, with respect to any such dispute in an amount greater than $100,000 (a) reserves reasonably satisfactory to Administrative Agent have been established in an amount sufficient to pay any such taxes, assessments or other charges, accrued interest thereon, potential penalties, additions to tax or other costs relating thereto, or other adequate provision for the payment thereof shall have been made, provided that failure of Administrative Agent to object to Borrower’s written request for approval of reserve arrangements within ten (10) Business Days of receipt by Administrative Agent of such request shall constitute and be deemed approval thereof; (b) enforcement of the contested tax, assessment or other charge is effectively stayed for the entire duration of such contest; and (c) any tax, assessment or other charge determined to be due, together with any interest, additions to tax or penalties thereon, is paid when due after resolution of such contest by final non-appealable judgment.

 

7.15         Compliance With Laws; Permits.

 

At its expense, Borrower shall (and Borrower shall cause each Project Company to), except to the extent failure to do so could not be reasonably expected to have a Material Adverse Effect, (a) comply, or cause compliance, with all Legal Requirements relating to the Projects, each Project Company or to Borrower, including all Environmental Laws; (b) procure, maintain and comply, or cause to be procured, maintained and complied with, all Permits required under Legal Requirements (including all Environmental Laws) for any use of the Projects, the Project Site, the Improvements or other Mortgaged Property, then being made or contemplated by the Operative Documents; and (c) in the case of a change of name or corporate organization involving Borrower or any Project Company, as applicable, take such actions, including the filing of appropriate notices with all Governmental Authorities that have issued Applicable Permits, to maintain in full force and effect each Applicable Permit, as may be necessary by applicable Legal Requirements.  Borrower shall (and Borrower shall cause each Project Company to) (i) promptly take any remedial, responsive or corrective action required under any Environmental Law with respect to any presence or Release of Hazardous Substances to the extent that such presence or Release could reasonably be expected to give rise to a material liability or a material remedial, corrective or investigatory obligation of Borrower (or any Project

 

63



 

Company, as applicable) or (ii) promptly respond to, and address, any material Environmental Claim against Borrower, any Project Company or any Project.  Borrower (or any Project Company, as applicable) may, at its expense, contest by appropriate proceedings conducted in good faith the validity or application of Legal Requirements or Permits, provided that (i) none of the Agents, Lenders, Issuing Bank, any Project Company or Borrower reasonably would be likely to be subjected to any criminal or other liability for failure to comply therewith; and (ii) all proceedings to enforce such Legal Requirements or Permits against the Agents, Issuing Bank, the Lenders, Borrower, the Project Companies or the Projects, shall have been duly and effectively stayed during the entire pendency of such contest.

 

7.16         Compliance with Anti-Money Laundering and OFAC Laws.

 

(a)           The Borrower shall (and the Borrower shall cause each Project Company to) comply at all times with the requirements of all Anti-Money Laundering Laws.

 

(b)           The Borrower shall provide the Administrative Agent (on behalf of the Lenders) with any information regarding the Borrower, Sponsor, the Member and any Project Company necessary for the Lenders to comply with all Anti-Money Laundering Laws.

 

(c)           The Borrower shall comply at all times with the requirements of all OFAC Laws.

 

(d)           The Borrower shall not, and shall cause the Member, Sponsor and each Project Company not to, conduct business with or engage in any transaction with any person or entity named in the OFAC SDN List or any Person included in, owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship, or services of any kind to, or otherwise associated with any of the Persons referred to or described in the OFAC SDN List.

 

(e)           If the Borrower obtains actual knowledge or receives any written notice that the Borrower, the Member, Sponsor, any Project Company or any Person holding any legal or beneficial interest whatsoever therein (whether directly or indirectly) is named on the OFAC SDN List (such occurrence, an “OFAC Violation”), the Borrower shall immediately (i) give written notice to the Administrative Agent of such OFAC Violation, and (ii) comply with all applicable laws with respect to such OFAC Violation (regardless of whether the party included on the OFAC SDN List is located within the jurisdiction of the United States of America), including the OFAC Laws, and the Borrower hereby authorizes and consents to the Administrative Agent taking any and all steps the Agent deems necessary, in its sole discretion, to comply with all applicable laws with respect to any such OFAC Violation, including the requirements of the OFAC Laws (including the “freezing” and/or “blocking” of assets and reporting such action to OFAC).

 

(f)            Upon the Administrative Agent’s request from time to time, the Borrower shall deliver a certification confirming its compliance with the covenants set forth in this Section 7.16.

 

64



 

7.17         Separateness Provisions.

 

Borrower shall (and Borrower shall cause each Project Company to) comply with the separateness provisions set forth in Article 6 of its respective LLC Agreement, other than as required for Borrower and each Project Company to execute, deliver and perform the obligations under the Operative Documents to which it is a party.

 

7.18         Enforcement of Remedies.

 

Borrower shall diligently pursue and enforce all of its rights and remedies under the Turbine Supply Agreement and the BOP Agreement in a reasonably commercial manner.

 

7.19         O&M Service Agreement.  The Borrower shall cause the Annual Operating Budget under and as defined in the O&M Service Agreement to be in compliance with the Base Case Project Projections.  The Borrower shall deliver to the Administrative Agent a copy of each such Annual Operating Budget upon receipt.

 

7.20         Maintenance of Insurance.

 

(a)           Borrower shall (and Borrower shall cause each Project Company to), without cost to the Lenders, maintain or cause to be maintained on its (or the Project Companies’, as applicable) behalf in effect at all times the types of insurance required by the following provisions together with any other types of insurance required hereunder or in any other Project Document, with insurance companies rated A-, X or better, by Best’s Insurance Guide and Key Ratings (or an equivalent rating by another nationally recognized insurance rating agency of similar standing if Best’s Insurance Guide and Key Ratings shall no longer be published), or other insurance companies of recognized responsibility satisfactory to Administrative Agent (with the consent of the Majority Lenders and Issuing Bank).  Upon request of the Administrative Agent, Borrower shall supply copies of insurance policies or agreed upon policy wordings.

 

(b)           The following insurance coverages shall be in form and substance reasonably satisfactory to the Administrative Agent and shall be in place as of the Closing Date until all obligations of Borrower pursuant to this Financing Agreement and the other Financing Documents have been fully discharged:

 

(i)            Commercial general liability insurance for the Borrower and each Project Company on a “per occurrence” policy form, or “AEGIS” claims-first made equivalent policy including coverage for premises/operations, explosion, collapse and underground hazards, products/completed operations, broad form property damage, blanket contractual liability, and personal injury, with primary coverage limits of no less than $1,000,000 any one occurrence and $2,000,000 in the aggregate.  The commercial general liability policy shall also include a severability of interest with no exclusions for cross-liability.  Deductibles in excess of $10,000 shall be subject to review and approval by the Administrative Agent.  Pollution

 

65



 

liability is optional unless otherwise required by contract, and then, to such limits as required therein.

 

(ii)           Automobile liability insurance for Borrower and each Project Company, including coverage for owned, non-owned and hired automobiles, as applicable, for both bodily injury and property damage and containing appropriate no-fault insurance provisions or other endorsements in accordance with applicable state legal requirements, with limits of no less than $1,000,000 per accident with respect to bodily injury, property damage or death.

 

(iii)          Worker’s compensation insurance, disability benefits insurance and other similar forms of insurance which Borrower (or any Project Company, as applicable) is required by law to provide for the Project, providing statutory benefits and other applicable States’ endorsement and USL&H Act coverage (if any exposure exists), covering loss resulting from injury, sickness, disability or death of the employees of Borrower (or any Project Company, as applicable) with limits for employer’s liability of not less than bodily injury by accident $4,500,000 each accident, bodily injury by disease $4,500,000 policy limit, and bodily injury by disease $4,500,000 each employee.  These limits may be satisfied through a combination of primary and excess policies.

 

(iv)          Umbrella/Excess Liability Insurance written on an occurrence basis or AEGIS claims-first-made equivalent and providing limits in excess of the primary limits applying under policies described in Sections 7.20(b)(i) and (ii).  Such insurance coverage shall have a limit of liability of not less than $20,000,000 per occurrence and in the annual aggregate.  The umbrella and/or excess liability policies shall not contain endorsements which restrict coverages as set forth in Section 7.20(b)(i), and which are provided in the underlying policies.  If the policy or policies provided under this Section 7.20(b)(iv) contain(s) aggregate limits and such limits are diminished below $15,000,000 by any incident, occurrence, claim, settlement or judgment against such insurance which has caused the carrier to establish a reserve, Borrower (and each Project Company, as applicable) shall take immediate steps to restore such aggregate limits or shall provide other equivalent insurance protection for such aggregate limits.

 

(v)           Aircraft liability, to the extent exposure exists, for the use of any owned, non-owned or hired aircraft used in the operation of the Project with a limit of not less than $10,000,000.

 

(vi)          From the point of groundbreaking for the Borrower and the Stetson II Project and through the date of Substantial Completion, or until such time as cover is provided under the operational insurance as set forth in Section 7.20(b)(vii) below, with no gap in coverage, builder’s risk insurance on an

 

66



 

“all risk” basis on a completed value form including earthquake and flood, collapse, sinkhole, subsidence and malicious mischief, on a replacement cost basis with no coinsurance penalty and providing:

 

A.            coverage for the Stetson II Project including removal of debris, and first party pollution and hazardous material clean up and removal (with a limit of not less than $1,000,000) insuring the buildings, structures, machinery, equipment, facilities, fixtures and other properties intended to be a permanent part of the Stetson II Project in a minimum aggregate amount not less than full replacement value of the Stetson II Project, subject to an annual aggregate limit of not less than $50,000,000 for flood, earthquake, collapse, sinkhole and subsidence coverage,

 

B.            off-site coverage with a per occurrence limit of $5,000,000 of the limit of liability or such higher amount as is sufficient to cover the replacement cost values of off-site equipment for which there have been progress payments.  Said off-site coverage may be insured as a section of the all risk builder’s risk or as a separate policy,

 

C.            transit coverage (including ocean cargo where ocean transit will be required) with a per occurrence limit of the full insurable value of any single shipment and providing for 12 months delay in start-up cover (revenues including PTCs, if applicable, less non-continuing expenses).  Said transit coverage may be insured as a section of the all risk builder’s risk or as a separate policy.  If as a separate policy, such policy to be placed no later than 20 days prior to the first shipment and shall contain a 50/50 clause,

 

D.            coverage for operational testing and startup with the same dollar coverage and modifications as set out in (vi)(A) above for all assets related to the Stetson II Project, with cover running continuously for machinery breakdown from the beginning of testing until such time as operational cover is put into place; and

 

E.             business interruption insurance (of a “delay” or “delay in start-up” and “contingent delay in startup” nature) in a minimum aggregate amount for the delay in start-up of not less than the equivalent of twelve (12) months and for contingent at least six (6) months “Advance Loss of Profits” including grossed up production tax credits and Renewable Energy Credits (if applicable) on an “all risk” basis, as set forth in (vi)(A) through (vi)(D) above.  The “contingent delay in start- up” shall

 

67



 

endorse and insure all non-owned substations and interconnection facilities and material project suppliers

 

F.             All such policies may have deductibles of not greater than $150,000 per loss; and business interruption/delay in start-up coverage shall have a deductible not greater than a 30 day period; and operational testing shall have a deductible of not greater than $150,000 per occurrence; and transit coverage shall have a deductible of not greater than $150,000 per occurrence.

 

(vii)         All-risk property insurance covering against physical loss or damage to the Stetson II Project assets from and after the date of Substantial Completion as defined in the Turbine Supply Agreements with no gap in coverage with the requirements in Section (b)(vi) above, Borrower, and Stetson I Project assets (including (i) buried cables at any of the Project sites and (ii) transmission lines to the extent the Borrower or any Project Company has risk of loss and insurance, subject to commercially availability), including fire and extended coverage, collapse, flood, earth movement and comprehensive boiler and machinery coverage (including electrical malfunction and mechanical breakdown).  Such insurance coverage shall not include any exclusion for resultant damage caused by faulty workmanship, design or materials.  Such insurance coverage shall be written on a full replacement cost basis with no coinsurance penalty, and providing:

 

A.            expediting and extra expense at $500,000 (unless provided under the business interruption cover in F. below);

 

B.            debris removal with a $10,000,000 limit;

 

C.            transit cover to the extent exposure exists, with limits equivalent to the full replacement value of property at risks;

 

D.            earthquake and flood coverage may be written with a sublimit of not less than $50,000,000 and cover for terrorism is optional, unless required by contract;

 

E.             the policy limits shall be automatically reinstated following a loss event, with the exception of damage from earthquake and flood, which shall be on an annual aggregate limit;

 

F.             business interruption insurance covering against the same perils as set forth in Section 7.20(b)(vii) above, in an amount not less than twelve (12) months of projected revenues (including production tax credits and renewable energy credits, to the extent applicable) less non continuing expenses with an indemnity period of not less than  twelve (12) months.  The

 

68



 

business interruption limit may be included in the policy limit set forth in Section 7.20(b)(vii).  Borrower shall also maintain contingent business interruption coverage to the first non-owned substation(s) and transmission facilities or electrical distribution systems on a specified and named location basis with a limit  not less than $5,000,000 (subject to commercial availability).. Borrower shall also maintain or cause to be maintained, expediting or extra expenses coverage in an amount not less than $500,000.  Such cover may be subject to a waiting period not to exceed thirty (30) days; and

 

G.            all such policies may have deductibles of not greater than $150,000 per loss and business interruption coverage shall have a deductible not greater than a 30 day period, unless otherwise approved by the Administrative Agent.

 

(viii)        Such other or additional insurance (as to risks covered, policy amounts, policy provisions or otherwise) as, under Prudent Utility Practices, are from time to time insured against for property and facilities similar in type, nature, use and location to the Project which Administrative Agent may reasonably require after consultation with the Insurance Consultant and Borrower or Borrower’s insurance representative.

 

(c)           Borrower shall use reasonable efforts to require each contractor to maintain insurance consistent with industry practice.

 

(d)           All policies wherein any Lender has an insurable interest shall insure the interests of the Agents and the Lenders as well as Borrower and any Project Company, as applicable ,and shall name Agents, and the Lenders as additional insured, unless the Agents and the Lenders are named as an insured under the policy.  All policies covering real or personal property or business interruption shall name the Security Agent as sole loss payee in accordance with lender’s loss payable endorsement 438 BFU or ISO CP 1218 or their equivalent and shall provide that any payment thereunder for any loss or damage with respect to the Projects shall be made in accordance with the provisions set forth in Article 9 of this Financing Agreement and Section 6 of the Account Control Agreement.  Upon payment and satisfaction of all of Borrower’s obligations under, and termination of the Financing Documents, Administrative Agent will instruct the insurers to name Borrower, or such successor credit provider or other Person as Borrower shall specify, as loss payee.

 

All policies of liability, except for workmens compensation and employer’s liability where not legally allowed, shall name the Secured Parties as Additional Insured.

 

All policies shall:

 

69



 

(A)  expressly provide that all provisions thereof, except the limits of liability (which shall be applicable to all insureds as a group) and liability for premiums (which shall be solely a liability of Borrower) shall operate in the same manner as if there were a separate policy covering each such insured.

 

(B)   be primary and non-contributory with insurance carried by or on behalf of additional insureds.

 

(C)   Each policy shall waive subrogation (to the extent allowed by law) against any of the Secured Parties, any Project Company or Borrower.

 

(D)  To the extent commercially available, each such policy shall provide that if any premium or installment is not paid when due, or if such insurance is to be cancelled or terminated for any reason whatsoever, the insurers (or their representatives) will promptly notify Borrower and Administrative Agent, and any such cancellation or termination shall not be effective until thirty (30) days (ten (10) days with regard to non-payment) after receipt of such notice to Administrative Agent, and that appropriate certification shall be made to Borrower by each insurer with respect thereto.

 

(E)   All policies covering real and personal property or business interruption (including delay in start-up/ advance loss of profits) shall be endorsed so that the interests of Agents and Lenders shall be insured regardless of any breach or violation by Borrower, any Project Company or any other Person, of any warranties, declarations or conditions contained in such insurance policies.

 

(e)           In the event that Borrower (or any Project Company) fails to respond in a timely and appropriate manner (as reasonably determined by Administrative Agent) to take any steps necessary or reasonably requested by Administrative Agent to collect from any insurers for any loss covered by any insurance required to be maintained by this Section 7.20, Administrative Agent shall have the right to make all proofs of loss, adjust all claims with the insurance company or companies and/or receive all or any part of the proceeds of the foregoing insurance policies, either in its own name or the name of Borrower or any Project Company; provided, however, that Borrower shall (and Borrower shall cause each Project Company to), upon Administrative Agent’s request and at Borrower’s (or each Project Company’s, as applicable) own cost and expense, make all proofs of loss and take all other steps necessary or reasonably requested by Administrative Agent to collect from insurers for any loss covered by any insurance required to be obtained by this Section 7.20.  Notwithstanding this Section 7.20(e), Administrative Agent shall have the right to participate and receive information with respect to all claims and losses.

 

70



 

(f)            On or before the Closing Date and at each policy renewal, Borrower or its authorized insurance representative shall furnish evidence of insurance (certificates of insurance, binders, cover notes or policy wordings) to the Administrative Agent in accordance with industry standards.  On or before the Closing Date and annually thereafter, the Borrower or its insurance representative shall furnish to Administrative Agent a certificate signed by a duly authorized representative of Borrower or insurance brokerage firm, showing the insurance then maintained by or on behalf of Borrower and each Project Company pursuant to this Section 7.20 and stating that such insurance complies in all material aspects with the terms hereof and that premiums are current and that no policies are in danger or threat of cancellation for non-payment of premiums.  In the event that at any time the insurance required by this Section 7.20 shall be reduced or cease to be maintained, then (without limiting the rights of Administrative Agent hereunder in respect of the Event of Default which arises as a result of such failure) Administrative Agent may on behalf of the Secured Parties, at its option, maintain the insurance required hereby and, in such event, Borrower shall reimburse Administrative Agent upon demand for the cost thereof together with interest thereon at a rate per annum equal to the Default Rate, but in no event shall the rate of interest exceed the maximum rate permitted by law.

 

(g)           In the event any insurance (including the limits or deductibles thereof) hereby required by this Section 7.20 to be maintained, other than insurance required by law to be maintained, shall not be available on commercially reasonable terms in the commercial insurance market, Administrative Agent acting upon consultation with the Insurance Consultant, shall not unreasonably withhold its agreement to waive such requirement to the extent the maintenance thereof is not so available and/or, to the extent applicable, may allow Borrower (or any Project Company, as applicable) to obtain the best available insurance comparable to the requirements of this Section 7.20 on commercially reasonable terms then available in the commercial insurance market (as determined by the Insurance Consultant); provided, however, that (i) Borrower shall first request any such waiver in writing, which request shall be accompanied by written reports prepared by Borrower and the Insurance Consultant certifying that such insurance is not available on commercially reasonable terms in the commercial insurance market for wind energy generation projects of similar type and capacity (and, in any case where the required amount is not so available, certifying as to the maximum amount which is so available) and explaining in detail the basis for such conclusions and the form and substance of such reports to be reasonably acceptable to Administrative Agent; (ii) at any time after the granting of any such waiver, but not more often than once annually, Administrative Agent may request, and Borrower shall furnish to Administrative Agent within fifteen (15) days after such request, supplemental reports reasonably acceptable to Administrative Agent updating the prior reports and reaffirming such conclusion; and (iii) any such waiver shall be effective only so long as such insurance shall not be available on commercially reasonable terms in the commercial insurance market (as determined by the Insurance Consultant), it being understood that the failure of Borrower to timely furnish any such supplemental report shall be conclusive

 

71



 

evidence that such waiver is no longer effective because such condition no longer exists.

 

(h)           In the event that any policy is written on a “claims-made” or “occurrence reported” basis and such policy is not renewed or the retroactive date of such policy is to be changed, Borrower shall (and Borrower shall cause each Project Company to) obtain for each such policy or policies an extended reporting period coverage or “tail” coverage reasonably available in the commercial insurance market for each such policy or policies and shall provide Administrative Agent with proof that such basic and supplemental extended reporting period coverage or “tail” has been obtained.

 

7.21         Maintenance of Title.

 

Borrower shall (and Borrower shall cause each Project Company to) maintain (a)   good and marketable title to the Mortgaged Property pursuant to the Real Property Agreements, subject only to Permitted Liens; and (b) good and marketable title to all of its other respective personal properties and assets (other than properties and assets disposed of in the ordinary course of business) related to the Project to the extent that failure to do so could be reasonably expected to have a Material Adverse Effect.

 

7.22         Event of Eminent Domain.

 

If an Event of Eminent Domain shall be threatened or occur with respect to any Collateral Borrower shall (and Borrower shall cause each Project Company to) (a) diligently pursue all its rights to compensation against the relevant Governmental Authority in respect of such Event of Eminent Domain; (b) not, without the written consent of Administrative Agent (with the consent of the Majority Lenders whose consent shall not be unreasonably withheld), compromise or settle any claim against such Governmental Authority; and (c) pay or apply all Eminent Domain Proceeds in accordance with Section 6 of the Account Control Agreement.  Borrower (and each Project Company, as applicable) consents to the participation of Administrative Agent in any proceedings resulting from an Event of Eminent Domain, and Borrower shall (and Borrower shall cause each Project Company to) from time to time deliver to Administrative Agent all documents and instruments reasonably requested by it to permit such participation.

 

7.23         Indemnification.

 

(a)           Without duplication of Borrower’s obligations under Sections 3.4(d), 3.6(c) or 3.6(d) (and excluding any items or events specifically excluded from Borrower’s obligations thereunder) and without duplication of any other indemnification requirements in this Financing Agreement, Borrower shall indemnify, defend and hold harmless each Agent, Lender, Issuing Bank and Borrower’s counterparties under Interest Rate Agreements and in their capacities as such, their respective officers, directors, shareholders, controlling persons, employees, agents and servants (collectively, the “Indemnitees”) from and against and reimburse the Indemnitees for:

 

72


 

(i)            any and all claims, obligations, liabilities, losses, damages, injuries (to person, property, or natural resources), penalties, stamp or other similar taxes, actions, suits, judgments, costs and expenses (including reasonable and documented attorney’s fees and expenses) of whatever kind or nature actually incurred, INCLUDING STRICT LIABILITY CLAIMS, whether or not well founded, meritorious or unmeritorious, demanded, asserted or claimed against any such Indemnitee in any way relating to, or arising out of or in connection with this Financing Agreement, the other Operative Documents, or the Project (collectively, “Claims”), except, with respect to any Indemnitee, or any Claims by any Lender, Issuing Bank, any Agent, or any counterparty of Borrower to an Interest Rate Agreement or any Affiliate of any of the same against such Indemnitee or its officers, directors, shareholders, controlling persons, employees, agents or servants (collectively, its “Affiliated Indemnitees”); and

 

(ii)           any Environmental Claims and all other Claims arising under any Environmental Law relating to any fact, circumstance, condition or occurrence at, on, or arising from, or with respect to any Project, the Project Site, the Improvements, or other Mortgaged Property or the past or current facilities or operations of the Subject Persons related to the Projects, including all Claims in connection with the Release or presence of any Hazardous Substances at any Project, the Project Site, the Improvements, or other Mortgaged Property, whether foreseeable or unforeseeable and, as relating to any Project, the Project Site, the Improvements or other Mortgaged Property, (A) all costs of removal and disposal of Hazardous Substances, (B) all reasonably documented costs actually incurred in accordance with the requirements of the Environmental Laws or relevant Governmental Authorities to (1) determine whether the applicable Project is in compliance with all applicable Legal Requirements; and/or (2) correct any non-compliance with any applicable Legal Requirements, and (C) all reasonably documented costs actually incurred for claims for damages to persons or property, including reasonable attorneys’ and consultants’ fees and court costs.

 

(b)           THE FOREGOING INDEMNITIES SHALL NOT APPLY WITH RESPECT TO AN INDEMNITEE OR ITS AFFILIATED INDEMNITEES, TO THE EXTENT ARISING AS A RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR ITS AFFILIATED INDEMNITEES AS DETERMINED BY A FINAL NON-APPEALABLE JUDGMENT OF A COURT OF COMPETENT JURISDICTION, BUT SHALL CONTINUE TO APPLY TO OTHER INDEMNITEES.

 

(c)           The provisions of this Section 7.23 shall survive foreclosure of the Collateral Documents and satisfaction or discharge of Borrower’s obligations (including the Obligations) hereunder, and shall be in addition to any other rights and remedies of the Lenders.

 

73



 

(d)           In case any action, suit or proceeding subject to the indemnity of this Section 7.23 shall be brought against any Indemnitee, such Indemnitee shall notify Borrower of the commencement thereof, and Borrower shall be entitled, at its expense, acting through counsel reasonably acceptable to such Indemnitee, to participate in, and, to the extent that Borrower desires, to assume and control the defense thereof.  Such Indemnitee shall be entitled, at its expense, to participate in any action, suit or proceeding the defense of which has been assumed by Borrower.  Notwithstanding the foregoing, Borrower shall not be entitled to assume and control the defenses of any such action, suit or proceedings if and to the extent that, in the reasonable opinion of such Indemnitee and its counsel, such action, suit or proceeding involves the potential imposition of criminal liability upon such Indemnitee or a potential or actual conflict of interest between such Indemnitee and Borrower (unless such conflict of interest is waived in writing by such Indemnitee), and in such event (other than with respect to disputes between such Indemnitee and another Indemnitee) Borrower shall pay the reasonable expenses of such Indemnitee in such defense; provided that Borrower shall not be required to pay any such expenses of more than one lead counsel.

 

(e)           Borrower shall report to such Indemnitee on the status of such action, suit or proceeding as material developments shall occur and from time to time as requested by such Indemnitee (but not more frequently than every sixty (60) days).  Borrower shall deliver to such Indemnitee a copy of each document filed or served on any party in such action, suit or proceeding, and each material document which Borrower possesses relating to such action, suit or proceeding.

 

(f)            Notwithstanding Borrower’s rights hereunder to control certain actions, suits or proceedings, unless Borrower has provided Indemnitee such security as is adequate (in such Indemnitee’s reasonable judgment taking into account the cover available under the insurance maintained by or on behalf of Borrower to cover any potential unfavorable determination of any such action, suit or proceeding), if any Indemnitee reasonably believes that failure to compromise or settle such Claim is reasonably likely to have an imminent material adverse effect on such Indemnitee or a Material Adverse Effect, such Indemnitee shall be entitled to compromise or settle any such Claim.  Any such compromise or settlement shall be binding upon Borrower for purposes of this Section 7.23.

 

(g)           Upon payment of any Claim by Borrower pursuant to this Section 7.23, or other similar indemnity provisions contained herein to or on behalf of an Indemnitee, Borrower, without any further action, shall be subrogated to any and all claims that such Indemnitee may have relating thereto, and such Indemnitee shall cooperate with Borrower and give such further assurances as are necessary or advisable to enable Borrower vigorously to pursue such claims.

 

(h)           Any amounts payable by Borrower pursuant to this Section 7.23 shall be regularly payable within thirty (30) days after Borrower receives an invoice for such amounts from any applicable Indemnitee, and if not paid within such 30-day period shall bear interest at the Default Rate.

 

74



 

7.24         Replacement of Operator.

 

To the extent that Operator ceases to be the operator of the Projects, Borrower shall retain a replacement operator of the Projects that has recognized knowledge and expertise in providing management, operations, maintenance, and administration services to U.S. wind energy generation projects similar to the Projects and that has been approved in writing by Administrative Agent (acting upon consultation with the Independent Engineer).  If the Turbine Service Agreement is terminated or expires by its terms without being renewed or extended, Borrower shall cause Operator (or replacement operator retained pursuant to the immediately preceding sentence) to expand such operator’s scope of work under the O&M Service Agreement (or an Additional Project Document replacing the Turbine Service Agreement) in order to fully incorporate Turbine Operator’s responsibilities under the Turbine Service Agreement.

 

7.25         Government Grant.

 

Borrower shall, as soon as practicable, apply for and otherwise cause the Stetson II Project to qualify for the maximum allowable Government Grant pursuant to the American Recovery and Reinvestment Act of 2009 and to provide the Administrative Agent with a copy of all application documents and related correspondence.  All Government Grant proceeds received shall be deposited into the Government Grant Proceeds Account, in accordance with Section 6(g) of the Account Control Agreement.

 

7.26         Further Assurances.

 

Promptly upon request by an Agent or any Lender through the Administrative Agent (and, in any event, no more than ten (10) Business Days after any such request), the Borrower shall (a) correct any material defect or error that may be discovered in any Financing Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, the Security Agent or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Financing Documents, (ii) to the fullest extent permitted by applicable law, subject any of the Borrower’s properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Financing Document or under any other instrument executed in connection with any Financing Document to which the Borrower is or is to be a party.

 

7.27         Upwind Array Effect.

 

In the event that an Upwind Array Event shall occur, then within ninety (90) days of such event (such date the “Adjustment Date”), Borrower shall calculate and deliver to the Administrative Agent a Projected Debt Service Coverage Ratio as of such date using the

 

75



 

applicable Base Case Project Projections updated with any changes needed solely to take into account the effect, if any, of such Upwind Array Event on the expected power production of any Project, as determined by the Independent Engineer.  In the event that there occurs an Upwind Array Event, and the annual Debt Service Coverage Ratio through the Maturity Date is less than 1.00 to 1.00 when using the P99 Production Level, then Borrower shall make a mandatory prepayment in accordance with Section 3.2(c)(iii) not later than the next Payment Date after such Adjustment Date to the Administrative Agent, for the account of each Lender, in an amount necessary to maintain through the Maturity Date a minimum annual Debt Service Coverage Ratio of at least 1.00 to 1.00 when using the P99 Production Level using the Debt Sizing Base Case delivered pursuant to Section 5.1(dd) modified only to reflect any decrease in the projected annual production of electricity by the Projects as a result of the Upwind Array Event and the Amortization Schedule shall be amended and revised to take into account the effect of such prepayment.

 

7.28         Capacity Revenues.

 

In the event that after June 30, 2010, the Borrower or the Project Companies fail to qualify in respect of the capacity revenue level as set forth in the Debt Sizing Base Case (which includes a capacity revenue price of $1 per kilowatt per month) for each 6-month period after June 30, 2013, then Borrower shall make a mandatory prepayment in accordance with Section 3.2(c)(iii) not later than the next Payment Date after June 30, 2010 to the Administrative Agent, for the account of each Lender, in an amount equal to the difference between the capacity revenue level as set forth in the Debt Sizing Base Case for the applicable 6-month period and the actual capacity revenue level for which the Projects have qualified for such 6-month period.

 

7.29         Survey — Stetson II Project.

 

Upon the occurrence of Final Completion (as defined in the Stetson II Reed Agreement) in respect of the Stetson II Project, Borrower shall deliver to Administrative Agent, in each case in form and substance satisfactory to Administrative Agent, (i) an as-built ALTA/ASCM survey of the Project Site with respect to the Stetson II Project, dated within sixty (60) days of the date thereof, showing that the Stetson II Project is located entirely in the Stetson II Real Property Interests, and showing the location of all plotable easements and all utility services, and (ii) an endorsement to the Title Policy that (w) deletes all exceptions for mechanics’ liens, (x) redates the Title Policy and all endorsements attached to the Title Policy to the date of Final Completion, (y) amends the survey endorsement attached to the Title Policy and all references in the Title Policy to the initial survey to refer to the new survey required under clause (i) above and (z) deletes the pending disbursement clause and sets forth no additional exceptions (including survey exceptions), except Permitted Liens and those exceptions otherwise approved by the Majority Lenders.

 

76



 

ARTICLE 8.
NEGATIVE COVENANTS OF BORROWER

 

Borrower covenants and agrees that until all of the Loans and Obligations have been paid and performed in full, unless otherwise approved by Administrative Agent (with the consent of the Majority Lenders, unless stated otherwise), Borrower will (and Borrower will cause each Project Company to, as applicable) perform the covenants set forth in this Article 8.

 

8.1           Contingent Liabilities.

 

Except as provided in this Financing Agreement, the Project Documents or the Financing Documents, Borrower shall not (nor shall Borrower allow any Project Company to) become liable as a surety, guarantor, accommodation endorser or otherwise, for or upon the obligation of any other Person or otherwise create, incur, assume or suffer to exist any contingent obligation exceeding in the aggregate $250,000; provided, however, that this Section 8.1 shall not be deemed to prohibit (a) the acquisition of goods, supplies or merchandise in the normal course of business on normal trade credit; (b) the endorsement of negotiable instruments received in the normal course of its business; or (c) the incurrence, creation, assumption or existence of Permitted Debt.

 

8.2           Limitations on Lien.

 

Borrower shall not (nor shall Borrower allow any Project Company to) create, assume or suffer to exist any Lien securing a charge or obligation on any properties or assets of Borrower or any Project Company except for Permitted Liens.  Administrative Agent acknowledges that Borrower has advised that it intends to amend the Energy Hedge, subject to the terms and conditions of this Financing Agreement, to permit the creation of a Lien in favor of the Energy Hedge Provider (the “Energy Hedge Lien”), and Administrative Agent agrees that, upon request from Borrower, it will in good faith review and negotiate documents to be executed in connection therewith in a prompt and reasonable manner.

 

8.3           Indebtedness.

 

Borrower shall not (nor shall Borrower allow any Project Company to) incur, create, assume or permit to exist any Debt except Permitted Debt.

 

8.4           Sale or Lease of Assets.

 

Except with respect to assets not exceeding $450,000 in the aggregate, Borrower shall not (nor shall Borrower allow any Project Company to) sell, lease, assign, transfer or otherwise dispose of its assets, whether now owned or hereafter acquired (a) except in the ordinary course of its business or as contemplated by the Operative Documents; or (b) except for obsolete, worn out, damaged or replaced property not used or useful in its business. Administrative Agent acknowledges that Borrower has informed Administrative Agent that Evergreen Wind Power V, LLC intends to transfer the assets related to the 38-mile 115 kV generator lead line (connecting the Projects’ Turbines to the New England transmission system), including the Transmission Line Real Property Interests to the Gen Lead Company, and Administrative Agent agrees that, upon request from Borrower, it, with the consent of the

 

77



 

Majority Lenders, will in good faith review and negotiate documents, in form and substance reasonably satisfactory to the Administrative Agent, to be executed in connection therewith in a prompt and reasonable manner as long as such documents provide Borrower and the Project Companies with sufficient transmission line access and rights for full and unencumbered operation of the Projects (the “Permitted Transmission Line Transfer”).  Borrower shall cause any applicable parties to execute consents to collateral assignment and any other documents reasonably requested by Security Agent.  In connection with the completed transfer of transmission assets to the Gen Lead Company in accordance herewith, Security Agent shall execute a discharge of the Mortgage Document executed with respect to the Transmission Line Real Property Interests.

 

8.5           Changes.

 

Borrower shall not (nor shall Borrower allow any Project Company to) change the nature of its business or expand its business beyond the business contemplated in the Operative Documents.

 

8.6           Distributions.

 

Except for any distributions (i) made by the Project Companies to the Borrower as required to enable the Borrower to cause all Project Revenues to be deposited into the Revenue Account pursuant to Section 6(b) of the Account Control Agreement, (ii) allowed to be made by the Borrower pursuant to Section 6 of the Account Control Agreement, and (iii) in accordance with the definition of Restoration Conditions, Borrower shall not (nor shall Borrower allow any Project Company to) directly or indirectly, (a) make or declare any distribution (in cash, property or obligation) on, or make any other payment on account of, any interest in Borrower or any Project Company, (b) make any payments in respect of any management fees to the Member or any Affiliated Participant (except if such fees are included in the Base Case Project Projections or are reflected in the Project Documents).

 

8.7           Investments.

 

Borrower shall not (nor shall Borrower allow any Project Company to) make or permit to remain outstanding any advances or loans or extensions of credit to, or purchase or own any stock, bonds, notes, debentures or other securities of any Person, except Permitted Investments.

 

8.8           Transactions With Affiliates.

 

Except for (a) any employment, noncompetition or confidentiality agreement entered into by Borrower or any Project Company, as applicable, with any of its respective employees, officers or directors in the ordinary course of business, (b) as otherwise expressly permitted or contemplated by this Financing Agreement and the other Operative Documents in effect as of the Closing Date or (c) transactions in connection with a Permitted Transmission Line Transfer, Borrower shall not (nor shall Borrower allow any Project Company to) directly or indirectly enter into any transaction or series of transactions with or for the benefit of an Affiliate without the prior written approval of Administrative Agent (with the consent of the Majority Lenders, which consent shall not be unreasonably withheld) unless such transaction or agreement

 

78



 

is entered into in the ordinary course of business on fair and reasonable terms certified by an officer of the Borrower as no less favorable to such Person than what such Person would obtain in an arm’s length transaction with a counterparty that is not an Affiliate.

 

8.9           Margin Stock Regulations.

 

Borrower shall not (nor shall Borrower allow any Project Company to) directly or indirectly apply any part of the proceeds of any Loan or Project Revenues to the “buying,” “purchasing” or “carrying” of any margin stock within the meaning of Regulations T, U or X of the Federal Reserve Board, or any regulations, interpretations or rulings thereunder.

 

8.10         Partnerships.

 

Except for Borrower’s membership interests in the Project Companies or each Project Company’s acquisition of membership interests in the Gen Lead Company in connection with a Permitted Transmission Line Transfer, Borrower shall not (nor shall Borrower allow any Project Company to) become a general or limited partner in any partnership, a joint venturer in any joint venture or a member in any limited liability company.  Except for the Project Companies, Borrower shall not form or acquire any subsidiaries.  No Project Company shall form or acquire any subsidiaries other than in connection with a Permitted Transmission Line Transfer.

 

8.11         Dissolution.

 

Borrower shall not (nor shall Borrower allow any Project Company to) liquidate or dissolve, or sell or lease or otherwise transfer or dispose of all or any substantial part of its property, assets or business, or combine, merge or consolidate with or into any other entity.

 

8.12         Amendments; Change Orders.

 

(a)           Borrower shall not, and shall not allow any Project Company or any Affiliated Participant to, cause, consent to, or permit, any (i) termination or (ii) amendment, modification (other than any amendments or modifications contemplated by Section 12.9(c)), variance, impairment, replacement, or waiver of timely compliance with any material terms or conditions of, any Project Document or execution of any Additional Project Document with payments exceeding $250,000 over its term without the prior written consent of Administrative Agent (acting with the consent of the Majority Lenders and, as applicable for technical matters, upon consultation with the Independent Engineer).

 

(b)           Borrower shall not (and shall not allow any Project Company to) declare Final Completion (as defined in the Stetson II Reed Agreement) of the Stetson II Project under the Stetson II Reed Agreement without the prior written consent of Administrative Agent; provided, however, that such consent shall be deemed to have been given if the Independent Engineer has certified to the Administrative Agent that Final Completion of the Stetson II Project under the Stetson II Reed Agreement has occurred.

 

79



 

8.13         Compliance With Operative Documents.

 

Borrower shall not (nor shall Borrower allow any Project Company to)  permit (to the extent within its control and permitted by the Operative Documents) to be done any act under the Operative Documents, or omit or refrain (to the extent within its control and permitted by the Operative Documents) from any act under the Operative Documents, where such act done or permitted to be done, or such omission of or refraining from action, that could be reasonably expected to have a Material Adverse Effect.

 

8.14         Name and Location; Fiscal Year.

 

Neither Member nor Borrower shall (nor shall Borrower allow any Project Company to) change its name, its limited liability company structure, its jurisdiction of organization or change its fiscal year, in each case, without Administrative Agent’s prior written consent, such consent not to be unreasonably withheld.

 

8.15         Use of Project Site.

 

Borrower shall not (nor shall Borrower allow any Project Company to) use, or permit to be used, the Project Site for any purpose other than for the construction, operation and maintenance of the Projects as contemplated by the Operative Documents, without the prior written consent of Administrative Agent (with the consent of the Majority Lenders, acting reasonably), or locate any portion of any Project on a site other than as permitted by the Operative Documents, except, in each case, to the extent such use does not conflict with the business of Borrower (or the Project Companies)  or Borrower’s (or the Project Companies’) compliance with the Material Project Documents in effect from time to time.

 

8.16         Assignment.

 

Borrower shall not (nor shall Borrower allow any Project Company to) assign its rights hereunder or under any of the Operative Documents to any Person except as permitted by Section 8.17 and the other Financing Documents.

 

8.17         Transfer of Interest.

 

Borrower shall not (nor shall Borrower allow any Project Company to) cause, make, suffer, permit or consent to any creation, sale, assignment or transfer of any ownership interest in Borrower or any Project Company without the prior written consent of Administrative Agent acting in good faith (with the consent of all the Lenders, whose consent shall not be unreasonably delayed or withheld).  As used herein, the transfer of an ownership interest in Borrower shall mean any sale, assignment or transfer of the Sponsor’s direct or indirect ownership interest in the Member.

 

8.18         Abandonment of Projects.

 

Borrower shall not (nor shall Borrower allow any Project Company to) willfully and voluntarily abandon the operation of any Project for a continuous period of more than forty-five (45) days.

 

80



 

8.19         Environmental Matters.

 

Borrower shall not (nor shall Borrower allow any Project Company to) Release, emit or discharge into the environment any Hazardous Substances in a manner that could reasonably be expected to have a Material Adverse Effect.  Borrower shall not (nor shall Borrower allow any Project Company to) engage in any other act or omission in violation of any Environmental Laws, Legal Requirements or Applicable Permits that could reasonably be expected to have a Material Adverse Effect.

 

ARTICLE 9.
COLLATERAL ACCOUNTS

 

9.1           Establishment of Collateral Accounts.

 

On or prior to the Closing Date, the Borrower and the Security Agent shall cause to be established at the Securities Intermediary the Operating Account, Revenue Account, the Disbursement Account, the Debt Service Reserve Account, the O&M Reserve Account, the Loss Proceeds Account, the Distribution Reserve Account, the Stetson I Holding Account, the Government Grant Proceeds Account, the Gen Lead Account and the Energy Hedge Reserve Account.  Each Collateral Account shall be a “securities account” within the meaning of Section 8-501 of the Uniform Commercial Code in effect in the State of New York.  In accordance with the terms of the Collateral Documents, the Borrower and each Project Company has pledged, assigned and transferred to the Security Agent for the equal and ratable benefit of the Secured Parties, and has granted to the Security Agent for the equal and ratable benefit of the Secured Parties a first- priority, perfected lien on and security interest in, all of its right, title and interest in, to and under the Collateral Accounts, any Permitted Investments (or any other property) held in or credited to the Collateral Accounts and the proceeds of any such Permitted Investments (or such other property).  The Borrower hereby irrevocably confirms the authority of the Security Agent to (and directs and authorizes the Security Agent to) instruct the Securities Intermediary to deposit into and remit funds from such Collateral Accounts in accordance with the terms and conditions of this Financing Agreement and the Collateral Documents.

 

9.2           Permitted Investments.

 

Upon the request of the Borrower, the Security Agent shall instruct Securities Intermediary to invest and reinvest any balances in any Collateral Account or any amounts held as Loss Proceeds from time to time solely in Permitted Investments, and solely at the expense and risk of the Borrower; provided, however, that (a) if the Borrower fails to provide such request or during any period when an Event of Default exists and is continuing, the Security Agent may instruct Securities Intermediary to invest and reinvest such balances as the Security Agent shall determine in its sole discretion and (b) the maturity of any Permitted Investment shall not exceed thirty (30) days and (c) the minimum amount of each such Permitted Investment shall be One Hundred Thousand Dollars ($100,000) (or, with respect to any Collateral Account, such lesser amount as equals the balance in such Collateral Account at the time).  Earnings on Permitted Investments shall be deposited on the date received by the Securities Intermediary (or

 

81



 

as soon as practicable thereafter) in the Revenue Account for application as provided for in this Financing Agreement.  All such investments and reinvestments shall be held as provided in the Account Control Agreement.  The Borrower shall bear all risk of loss of capital from investments in Permitted Investments.  As long as the Security Agent, the Administrative Agent and the Securities Intermediary complied with all their respective obligations under the Financing Documents, none of the Administrative Agent, the Security Agent or the Securities Intermediary shall be liable for any loss resulting from any investment in any Permitted Investment or the sale, disposition, redemption or liquidation of such investment or by reason of the fact that the proceeds realized in respect of such sale, disposition, redemption or liquidation were less than that which might otherwise have been obtained, except if such liability is caused by gross negligence or willful misconduct of such Person.

 

9.3           Foreclosure.

 

Regardless of any Bankruptcy Event which has been commenced by or against the Borrower, any Collateral or any proceeds thereof received in connection with the Collateral Documents, in connection with any sale, release or other disposition of, or collection or realization on, such Collateral, shall be applied by the Security Agent in the following order:

 

(a)           first, on a pro rata basis, to the payment of any and all fees, costs and expenses due and payable to the Agents and the Lenders in connection with this Financing Agreement and the other Financing Documents;

 

(b)           second, on a pro rata basis to any Secured Party which has theretofore advanced or paid any fees to any Agent or Issuing Bank that would otherwise have been payable under priority first, in an amount equal to the amount thereof so advanced or paid by such Secured Party and for which such Secured Party has not been previously reimbursed;

 

(c)           third, on a pro rata basis, to the payment of any interest expense then due and payable under this Financing Agreement and all Interest Fix Fees;

 

(d)           fourth, on a pro rata basis, to the payment, without duplication, of all principal and other amounts then due and payable in respect of the Obligations under the Financing Agreement;

 

(e)           last, the balance, if any, after all of the Obligations have been paid in full in cash, to the Borrower or to such other person legally entitled thereto.

 

ARTICLE 10.

EVENTS OF DEFAULT; REMEDIES

 

10.1         Events of Default.

 

The occurrence of any of the following events, shall constitute an event of default (individually, an “Event of Default,” and collectively, the “Events of Default”) hereunder:

 

82


 

 

(a)           Failure to Make Payments.  Borrower shall fail to pay, in accordance with the terms of this Financing Agreement, (i) any principal on any Loan (including any Scheduled Repayment Amount or any Mandatory Prepayments required hereunder) on the date that such sum is due; (ii) any interest on any Loan within five (5) days after the date that such sum is due; or (iii) any fee, cost, charge or other sum, including amounts in respect of any Liquidation Costs or Interest Fix Fees due under this Financing Agreement within ten (10) days after the date notice is provided to Borrower by Administrative Agent that such sum referenced in this clause (iii) is due.

 

(b)           Judgments.  A final judgment or judgments shall be entered against Borrower (or any Project Company) in the aggregate amount of $500,000 or more individually and in the aggregate (other than (i) a judgment which is fully covered by insurance or discharged within thirty (30) days after its entry, or (ii) a judgment, the execution of which is effectively stayed within thirty (30) days after its entry but only for thirty (30) days after the date on which such stay is terminated or expires) or that could reasonably be expected to have a Material Adverse Effect.

 

(c)           Misstatements.  Any financial statement, representation or warranty made or prepared by, under the control of or on behalf of Borrower, Member, Sponsor or any Project Company or pursuant to this Financing Agreement or any other Financing Document shall prove to have been false or misleading in any material respect as of the time made or deemed made which could reasonably be expected to have a Material Adverse Effect; provided, however, that if any such misstatement is capable of being remedied and has not caused a Material Adverse Effect, Borrower may correct such misstatement by delivering a written correction of such misstatement to Administrative Agent, in the form and substance satisfactory to Administrative Agent, within thirty (30) days of obtaining knowledge of such misstatement.

 

(d)           Bankruptcy; Insolvency.  Any of Borrower, Member, any Project Company, any Affiliated Participant or any other Major Project Participant, as long as such Person remains a Major Project Participant (each such Person, the “Subject Person”) shall institute a voluntary case seeking liquidation or reorganization under the Bankruptcy Law (or any successor statute), or shall consent to the institution of an involuntary case thereunder against it; or any of the Subject Persons shall file a petition, answer or consent or shall otherwise institute any similar proceeding under any other applicable federal, state or other applicable law, or shall consent thereto; or any of the Subject Persons shall apply for, or by consent or acquiescence there shall be an appointment of, a receiver, liquidator, sequestrator, trustee or other officer with similar powers, or any of the Subject Persons shall make an assignment for the benefit of creditors (except for the collateral assignments and grants of security interests to Security Agent pursuant to the Financing Documents); or any of the Subject Persons shall admit in writing its inability to pay its debts generally as they become due; or if an involuntary case shall be commenced seeking the liquidation or reorganization of any of the Subject Persons under the Bankruptcy Law (or any successor statute) or any

 

83



 

similar proceeding shall be commenced against any of the Subject Persons under any other applicable federal, state or other applicable law and (i) the petition commencing the involuntary case is not timely controverted; (ii) the petition commencing the involuntary case is not dismissed within sixty (60) days of its filing; (iii) an interim trustee is appointed to take possession of all or a portion of the property, and/or to operate all or any part of the business of any of the Subject Persons and such appointment is not vacated within sixty (60) days; or (iv) an order for relief shall have been issued or entered therein; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee or other officer having similar powers over any of the Subject Persons or of all or a part of their property, shall have been entered; or any other similar relief shall be granted against any of the Subject Persons under any federal, state or other applicable law (any such event, a “Bankruptcy Event”); provided, however, that solely with respect to any BOP Contractor, Borrower or any Affiliated Participant shall have sixty (60) days following any Bankruptcy Event to replace such BOP Contractor with a Replacement Obligor.

 

(e)           Cross Default.  Borrower (or any Project Company) shall default for a period beyond any applicable grace period (i) in the payment of any principal, interest or other amount due under any agreement (other than the Financing Documents) involving the borrowing of money or the advance of credit and the outstanding amount or amounts payable under all such agreements equals or exceeds $500,000 in the aggregate, or (ii) in the payment of any amount or performance of any obligation due under any guaranty or other agreement (other than the Financing Documents) if in either case of clauses (i) or (ii), pursuant to such default, the holder of the obligation concerned exercises its right to accelerate the maturity of an indebtedness evidenced thereby which equals or exceeds $500,000.

 

(f)            ERISA.  If Borrower, any Project Company or any member of the Controlled Group should establish, maintain, contribute to or become obligated to contribute to any ERISA Plan and (i) a reportable event (as defined in Section 4043(b) of ERISA) shall have occurred with respect to any ERISA Plan and, within thirty (30) days after the reporting of such reportable event to Administrative Agent by Borrower (or Administrative Agent otherwise obtaining knowledge of such event) and the furnishing of such information as Administrative Agent may reasonably request with respect thereto, Administrative Agent shall have notified Borrower in writing that (1) Administrative Agent has made a determination that, on the basis of such reportable event, there are reasonable grounds for the termination of such ERISA Plan by the PBGC or for the appointment by the appropriate United States District Court of a trustee to administer such ERISA Plan and (2) as a result thereof, an Event of Default exists hereunder; or (ii) a trustee shall be appointed by a United States District Court to administer any ERISA Plan; or (iii) the PBGC shall institute proceedings to terminate any ERISA Plan; or (iv) a complete or partial withdrawal by Borrower, any Project Company or any member of the Controlled Group from any Multiemployer Plan shall have occurred, or any Multiemployer Plan shall enter reorganization status, become insolvent, or terminate (or notify Borrower, any Project Company or any member of the

 

84



 

Controlled Group of its intent to terminate) under Section 4041A of ERISA and, within thirty (30) days after the reporting of any such occurrence to Administrative Agent by Borrower (or Administrative Agent otherwise obtaining knowledge of such event) and the furnishing of such information as Administrative Agent may reasonably request with respect thereto, Administrative Agent shall have notified Borrower in writing that Administrative Agent has made a determination that, on the basis of such occurrence, an Event of Default exists hereunder; provided, however, that any of the events described in this Section 10.1(f) could reasonably be expected to have a Material Adverse Effect provided, further, that any of the events described in this Section 10.1(f) shall apply only to (x) one or more ERISA Plans that are single-employer plans (as defined in Section 4001(a)(15) of ERISA) and under which the aggregate gross amount of unfunded benefit liabilities (as defined in Section 4001(a)(16) of ERISA), including vested unfunded liabilities which arise or might arise as the result of the termination of such ERISA Plan or Plans, and/or (y) one or more Multiemployer Plans to which the aggregate liabilities of Borrower, each Project Company and all members of the Controlled Group shall, in each case, be in an amount that could reasonably be expected to have a Material Adverse Effect.

 

(g)           Breach of Project Documents.  Subject to Section 10.1(h), Borrower or any Project Company (unless waived by the counterparty under the applicable Project Document) or any Major Project Participant shall be in breach of, or default under, any Project Document and any applicable cure period thereunder shall have expired with respect to such breach or default (or, if no cure period is stipulated for such breach or default, the cure period for such default shall be no longer than thirty (30) days) or if the giving of notice would allow Person to terminate such Project Document, and Administrative Agent shall have reasonably determined (with the consent of the Majority Lenders), and have sent a written notice to Borrower to that effect, that such breach or default could reasonably be expected to have a Material Adverse Effect; provided, however, that with respect to a breach or default by any Major Project Participant, if Borrower or any Affiliated Participant shall replace such Major Project Participant with a Replacement Obligor within sixty (60) days of such breach or default, such breach or default shall not be deemed a default under this Financing Agreement; provided, further, however, the Replacement Obligor and the form of such replacement agreement shall be in form and substance satisfactory to the Administrative Agent and the Lenders.  For purposes of the foregoing, any cure by any Agent or any Lender on Borrower’s or any Project Company’s behalf with respect to a breach or default by Borrower or any Project Company under a Project Document shall not be considered a remedy under this Financing Agreement for any such breach or default of such Project Document.

 

(h)           Loss of Material Project Document.  Notwithstanding Section 10.1    (g), if any Material Project Document shall fail for any reason to be in full force; provided, however, that Borrower shall have forty-five (45) days following such failure to cure such failure or enter into a replacement Material Project Document with a Replacement Obligor.

 

85



 

(i)            Breach of Terms of Financing Documents.

 

(i)            (A) Borrower shall fail to (or Borrower shall fail to cause any Project Company to) perform or observe any of the covenants set forth in Sections 7.1, 7.11, 8.1, 8.2, 8.3, 8.4, 8.6, 8.11, 8.17, or 8.18 or (B) Sponsor shall fail to make any payment when due under the Sponsor Indemnity; or

 

(ii)           Borrower or any Affiliated Participant shall fail to perform or observe any other covenant to be performed or observed by it hereunder or under any other Financing Document to which it is a party not otherwise specifically provided for elsewhere in this Article 10, and such failure shall continue unremedied for a period of thirty (30) days; provided, however, that upon notice from Borrower to Administrative Agent, such cure period shall be extended to such longer period of time as is reasonably necessary to effect a cure so long as (x) such default could reasonably be expected to be susceptible of a cure after the initial 30-day cure period and (y) Borrower or the Project Companies, as applicable, are diligently and continuously preceding to cure, or cause the cure of, such default; provided, further, that such extended cure period shall not exceed thirty (30) days from the expiration of the initial 30-day cure period.

 

(j)            Security.  Any of the Collateral Documents, once executed and delivered, shall (except as the result solely of the acts or omissions of the Agents or any Secured Party) fail to provide the Secured Parties with the first-priority Liens, security interest, rights, titles, interest, remedies, powers or privileges intended to be created thereby or cease to be in full force and effect with respect to the Collateral, or the validity thereof or the applicability thereof to the Loans, the Notes or any other Obligations purported to be secured or guaranteed thereby or any part thereof, shall be disaffirmed by or on behalf of Borrower or any Project Company or there shall occur a default or event of default (however defined) under any of the Collateral Documents and Administrative Agent (with the consent of the Majority Lenders) shall determine in its sole discretion that such default or event of default that could be reasonably expected to have a Material Adverse Effect.

 

(k)           Loss of Applicable Permits.  Any Applicable Permit necessary for completion, operation or maintenance of any Project shall be materially modified, revoked or cancelled by the issuing agency or other Governmental Authority having jurisdiction, and Administrative Agent (with the consent of the Majority Lenders) shall have reasonably determined that such material modification, revocation or cancellation would be reasonably expected to have a Material Adverse Effect on the Project and such material modification, revocation or cancellation continues unremedied for forty-five (45) days from such modification, revocation or cancellation.  For purposes of the foregoing, any cure by any Agent or any Lender on Borrower’s or any Project Company’s behalf with respect to any such material modification, revocation or cancellation of any Applicable Permit shall not be considered a remedy under this Financing Agreement.

 

86



 

(l)            Loss of Collateral.  Borrower or any Project Company, as applicable, ceases to be the sole direct or beneficial owner of the Collateral or any portion of Borrower’s or any Project Company’s Collateral material to any Project is seized or appropriated without fair value being paid therefor such as to allow replacement of such property and/or prepayment in full of all Obligations and to allow Borrower in the judgment of Administrative Agent (with the consent of the Majority Lenders, acting reasonably) to continue satisfying its obligations hereunder and under the other Operative Documents.

 

(m)          Material Adverse Effect.  Occurrence of an event or condition that has a Material Adverse Effect.

 

(n)           Stetson II Project Prepayment and Cure.  Notwithstanding the foregoing and subject to all terms and conditions set forth in this Section 10.1(n), upon the occurrence at any time prior to Final Completion (as defined in the Stetson II Reed Agreement) of the Stetson II Project of any Event of Default set forth in Sections 10.1(g), (h), (k) and/or (m) relating solely to the Stetson II Project or Stetson Wind II, LLC, Borrower shall, upon delivery to Administrative Agent of notice of its intent to Administrative Agent on or before the expiry of the applicable cure period, have the right to cure such Event of Default by making the Stetson II Prepayment within five (5) Business Days after receipt of written notice from Administrative Agent of the required amount of the Stetson II Prepayment (the “Stetson II Prepayment Notice”); provided, that if Borrower disputes the prepayment amount set forth in the Stetson II Prepayment Notice, the Borrower may propose in good faith a revised amount of the Stetson II Prepayment; provided, further, that in the event that Administrative Agent and Borrower are unable, after exercising commercially reasonable efforts, to agree on a revised amount of the Stetson II Prepayment within five (5) Business Days of Borrower’s receipt of the Stetson II Prepayment Notice, Borrower shall have the right to cure the applicable Event of Default by making the Stetson II Prepayment (in the amount set forth in the Stetson II Prepayment Notice) within two (2) Business Days after such written notice is received.

 

Notwithstanding any of the foregoing, the cure right set forth in this Section 10.1(n) is expressly subject to Borrower taking such actions that may be necessary (as determined by the Lenders in their sole discretion) to ensure the adequacy of the Collateral with respect to all remaining Obligations; provided, that upon the indefeasible payment by Borrower of the Stetson II Prepayment, (i) Lenders’ security interests with respect to the portion of the Collateral related solely to the Stetson II Project, to the extent not necessary to ensure the adequacy of the Collateral with respect to all remaining Obligations (as determined by the Lenders in their sole discretion) shall be terminated and released, (ii) any remaining Total Bridge Loan Commitment shall terminate and any remaining Total Term Loan Commitment allocated to the Stetson II Project at such time as determined by the Administrative Agent (taking into account all debt sizing requirements contemplated in the Debt Sizing Base Case) shall terminate, (iii) Stetson Wind II, LLC shall automatically and without further action be

 

87



 

terminated, released and discharged from, and no longer be bound by, any and all of its obligations under this Financing Agreement and the other Loan Documents (except to the extent necessary to ensure the adequacy of the remaining Collateral, as determined by the Lenders in their sole discretion, and except for any such obligations that, by their terms, expressly survive termination), and (iv) none of Borrower, any Affiliated Participant, Evergreen Wind Power V, LLC nor Stetson Wind II, LLC shall be bound by any representations, warranties or covenants of other terms or obligations contained in this Financing Agreement or any of the Loan Documents as they relate solely to Stetson Wind II, LLC or the Stetson II Project, and no Default or Event of Default shall be deemed to have occurred hereunder or any of the Loan Documents as a result of, and any determination of a Default of Event of Default hereunder or any of the Loan Documents shall exclude, any action, omission, circumstance or occurrence with respect to Stetson Wind II, LLC, the Stetson II Project and any other assets of Stetson Wind II, LLC.

 

(o)           Change of Control.  Occurrence of any Change of Control.

 

10.2         Remedies.

 

Upon the occurrence and during the continuation of an Event of Default, Administrative Agent may, at the election of the Majority Lenders, 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, exercise any or all of the following rights and remedies, in any combination or order that Administrative Agent (with the consent of the Majority Lenders) may elect, in addition to such other rights or remedies as the Lenders may have hereunder, under the Collateral Documents or at law or in equity:

 

(a)           No Loans.  Cancel all Commitments, refuse to make any Loans, or refuse to make any payments from the Revenue Account or any other Collateral Account or other funds held by any Agent or the Securities Intermediary under the Financing Documents for or on behalf of Borrower.

 

(b)           Cure by Administrative Agent.  Without any obligation to do so, cure any Event of Default hereunder and cure any default and render any performance under any Project Documents as the Majority Lenders in their sole discretion may consider necessary or appropriate, whether to preserve and protect the Collateral or the Secured Parties’ interests therein or for any other reason, and all sums so expended, together with interest on such total amount at the Default Rate (but in no event shall the rate exceed the maximum lawful rate), shall be repaid by Borrower to Administrative Agent on demand and shall be secured by the Financing Documents as if such amounts were Loans, notwithstanding that such expenditures may, together with amounts advanced under this Financing Agreement, exceed the amount of the Total Commitment.

 

88



 

(c)           Acceleration.  Declare and make any or all sums of accrued and outstanding principal of Loans and accrued but unpaid interest remaining under this Financing Agreement and evidenced by any or all of the Notes, together with all unpaid fees, costs (including Liquidation Costs, Interest Fix Fees and charges and amounts due hereunder or under any other Financing Document) immediately due and payable, provided, however, that upon an Event of Default occurring under Section 10.1(d), all such amounts shall become immediately due and payable without further act of Administrative Agent or Lender or any other Person.

 

(d)           Cash Collateral.  (i) Apply or execute upon, any amounts on deposit in any Collateral Account, any Loss Proceeds or Borrower Equity or any other moneys of Borrower on deposit with Administrative Agent or any Secured Party in the manner provided in the Uniform Commercial Code and other relevant statutes and decisions and interpretations thereunder with respect to cash collateral and/or (ii) draw upon or make a demand under any Collateral Document or any Project Document collaterally assigned to Security Agent by  Borrower or any Project Company; and/or (iii) require the cash collateralization of all Letters of Credit (to the extent of the undrawn Stated Amounts of Letters of Credit issued and outstanding).

 

(e)           Possession of Project.  Enter into possession of the Projects and operate and maintain the Projects, and all sums expended by Administrative Agent in so doing, together with interest on such total amount at the Default Rate, shall be repaid by Borrower to Administrative Agent upon demand and shall be secured by the Financing Documents to the extent provided therein, notwithstanding that such expenditures may, together with amounts advanced under this Financing Agreement, exceed the amount of the Total Commitment.

 

(f)            Remedies Under Financing Documents.  Exercise any and all rights and remedies available to any Agent, Issuing Bank or Lender under any of the Financing Documents (including making a demand under the Sponsor Indemnity pursuant to the terms thereof) or under applicable law, including judicial or non-judicial foreclosure or public or private sale of any of the Collateral pursuant to the Collateral Documents.

 

ARTICLE 11.

SCOPE OF LIABILITY

 

Notwithstanding anything to the contrary in this Financing Agreement or the other Financing Documents (but subject to the last sentence of this Article 11), no Lender, Issuing Bank, Agent, Secured Party or other Person shall have any recourse against any Affiliated Participant (other than Sponsor, Member, Borrower, each Project Company) or the stockholders or other owners, officers, directors or employees of any such Person (each, a “Non-Recourse Party”), for any liability to the Lenders arising in connection with any breach or default under this Financing Agreement or any Financing Document, except to the extent the same is enforced against Sponsor, Member, Borrower, the Project Companies and the Collateral and the rents, issues, profits, proceeds and products of the Collateral, and the Lenders shall look solely to

 

89



 

Sponsor, Member, Borrower and the Project Companies (but not to any Non-Recourse Party or to any distributions received by or payments allowed to any Non-Recourse Party pursuant to the terms of this Financing Agreement or any Financing Document) and the Collateral and the rents, issues, profits, proceeds and products of the Collateral in enforcing rights and obligations under and in connection with the Financing Documents, provided that (a) the foregoing provisions of this Article 11 shall not constitute a waiver, release or discharge of any of the indebtedness, or of any of the terms, covenants, conditions, or provisions of this Financing Agreement, the Notes, any other Collateral Document or other Financing Document or any Material Project Document, and the same shall continue until all Obligations have been fully paid, discharged, observed, or performed; and (b) the foregoing provisions of this Article 11 shall not limit or restrict the right of the Agents, Issuing Bank and/or the Lenders to name Sponsor, Member, Borrower, any Project Company or any applicable 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 Financing Agreement, the Projects, the Sponsor Indemnity Agreement, the Mortgage Documents, the Borrower Pledge and Security Agreement, Member Pledge and Security Agreement, each Guaranty and Security Agreement or any other Financing Document, or otherwise, 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 out of any property, assets or funds other than the Collateral and the rents, issues, profits, proceeds or products of the Collateral, and any other property of Sponsor, Member, Borrower or any Project Company.  Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained in this Article 11 shall be deemed to (i) limit or restrict any right or remedy of the Lenders or the Issuing Bank (or any assignee or beneficiary thereof or successor thereto) with respect to, and each of Sponsor, Member, Borrower, each Project Company shall remain fully liable to the extent that Sponsor, Member, Borrower, each Project Company would otherwise be liable for its own actions with respect to, any fraud, willful misconduct, gross negligence or willful misrepresentation or (ii) limit in any respect the enforceability against the parties thereto (including any Non-Recourse Parties) of any Collateral Documents, any Project Documents or any Operative Document in accordance with their respective terms.

 

ARTICLE 12.

AGENTS

 

12.1         Appointment, Powers and Immunities.

 

(a)           Each Lender hereby appoints and authorizes Administrative Agent to act as its agent hereunder and under the other Financing Documents with such powers as are expressly delegated to Administrative Agent by the terms of this Financing Agreement and the other Financing Documents, together with such other powers as are reasonably incidental thereto.

 

(b)           Each Secured Party hereby appoints and authorizes Security Agent to act as its agent hereunder and under the other Financing Documents with such powers as are expressly delegated to Security Agent by the terms of this Financing Agreement and the other Financing Documents, together with such other powers as are reasonably incidental thereto.

 

90



 

12.2         Duties, Responsibilities, Powers and Immunities of Agents.

 

(a)           Each Agent shall not have any duties or responsibilities except those expressly set forth in this Financing Agreement or in any other Financing Document, and shall not be a trustee for, or fiduciary of, any Lender or any other Secured Party.  Notwithstanding anything to the contrary contained herein, no Agent shall be required to take any action which is contrary to this Financing Agreement or any other Financing Documents or any Legal Requirement or exposes such Agent to any liability.  Each of the Agents, the Lenders and any of their respective Affiliates shall not be responsible to any other Agent, Lender for any recitals, statements, representations or warranties made by Borrower, or any Project Company or any Affiliates thereof contained in this Financing Agreement or any other Financing Document or in any certificate or other document referred to or provided for in, or received by any Agent or any Lender under this Financing Agreement or any other Financing Document, for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Financing Agreement, the Notes, any other Financing Document or any other document referred to or provided for herein or for any failure by Borrower, any Project Company or any Affiliates thereof to perform their respective obligations hereunder or thereunder.  Each Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care.  No Agent shall be liable to Borrower for breach by any other Agent under any Financing Document or any Lender in its capacity solely as Agent, or be liable to any other Agent or any Lender for breach by Borrower of any Financing Document.

 

(b)           Each Agent and its respective directors, officers, employees or agents shall not be responsible for any action taken or omitted to be taken by it or them hereunder or under any other Financing Document or in connection herewith or therewith, except for its or their own gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction.  Without limiting the generality of the foregoing, each Agent (i) may treat the payee of any Note as the holder thereof until such Agent receives written notice of the assignment or transfer thereof signed by such payee and in form and substance satisfactory to such Agent; (ii) may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (iii) makes no warranty or representation to any Lender or any other Agent for any statements, warranties or representations made in or in connection with any Project Document or Financing Document; (iv) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Operative Document on the part of any party thereto or to inspect the property (including the books and records) of Borrower, any Project Company or any other Person; and (v) shall not be responsible to any Lender or any other Agent for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Operative Document or any other instrument or document furnished pursuant

 

91



 

hereto or thereto.  Except as otherwise provided under this Financing Agreement, each Agent shall take such action with respect to the Financing Documents as shall be directed, or consented to, by the Majority Lenders.

 

12.3         Reliance by Agents.

 

Each Agent shall be entitled to rely upon any certificate, notice or other document (including any cable, telegram, telecopy or telex) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by such Agent.  As to any other matters not expressly provided for by this Financing Agreement, Administrative Agent shall not be required to take any action or exercise any discretion, but shall be required to act or to refrain from acting upon instructions or with the consent of the Majority Lenders (except that Administrative Agent shall not be required to take any action which exposes Administrative Agent to personal liability or which is contrary to this Financing Agreement, any other Financing Document or any Legal Requirement) and shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any other Financing Document in accordance with the instructions or consent of the Majority Lenders, and such instructions or consent of the Majority Lenders and any action taken or refraining to act pursuant thereto shall be binding on all Lenders.

 

12.4         Non-Reliance.

 

Each Lender represents that it has, independently and without reliance on any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of the financial condition and affairs of Borrower and each Project Company and decision to enter into this Financing Agreement and agrees that it will, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own appraisals and decisions in taking or not taking action under this Financing Agreement.  Each Agent and Lender shall not be required to keep informed as to the performance or observance by Borrower, any Project Company or any Affiliated Participant under this Financing Agreement or any other document referred to or provided for herein or to make inquiry of, or to inspect the properties or books of Borrower, any Project Company or any Affiliated Participant.

 

12.5         Defaults.

 

(a)           Each Agent (acting in its capacity as Agent and not in any other capacity) shall not be deemed to have knowledge or notice of the occurrence of any Inchoate Default or Event of Default unless such Agent has received a written notice from a Lender, another Agent or Borrower, referring to this Financing Agreement, describing such Inchoate Default or Event of Default and indicating that such notice is a “notice of default”.  If an Agent receives such a notice of the occurrence of an Inchoate Default or Event of Default, it shall give notice thereof to the Lenders and the other Agent.  Each Agent shall take such action with respect to such Inchoate Default or Event of Default as is provided in Article 10 of this Financing Agreement.

 

92


 

 

(b)           Unless and until an Agent shall have received instructions from the Lenders or the other Agent, as may be applicable, such Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Inchoate Default or Event of Default as it shall deem advisable in the best interests of the Lenders (in case of Administrative Agent) or Secured Parties (in case of Security Agent).

 

12.6         Indemnification.

 

Without limiting the Obligations of Borrower hereunder, each Lender agrees to indemnify Administrative Agent and Security Agent, ratably in accordance with the proportion that (i) the aggregate Commitments and/or Loans of such Lender bears to (ii) the aggregate of all Commitments and/or Loans, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against Security Agent or Administrative Agent in any way relating to or arising out of this Financing Agreement any other Financing Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or the enforcement of any of the terms hereof or thereof or of any such other documents; provided, however, that no Lender shall be liable for any of the foregoing to the extent they arise from Security Agent’s or Administrative Agent’s gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction.  Each of Administrative Agent and Security Agent shall be fully justified in refusing to take or to continue to take any action hereunder unless it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  Without limitation of the foregoing, each Lender agrees to reimburse Administrative Agent and Security Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by Security Agent or Administrative Agent in connection with the preparation, execution, administration or enforcement of, or legal advice in respect of rights or responsibilities under, the Operative Documents, to the extent that Security Agent or Administrative Agent are not reimbursed promptly for such expenses by Borrower.

 

12.7         Successor Agents.

 

Each Agent acknowledges that its current intention is to remain Agent hereunder.  Nevertheless, any Agent may resign at any time by giving fifteen (15) days’ written notice thereof to the Lenders and Borrower, such resignation to be effective only upon the acceptance of the appointment of a successor Agent by the Lenders, in case of a successor Administrative Agent or Security Agent.  Furthermore, with the consent of Borrower (such consent not to be unreasonably withheld) any Agent may assign its duties and rights as Agent to any of its Affiliates satisfying the requirements set forth below upon sixty (60) days prior written notice to the Lenders, the other Agents and Borrower.  Upon the occurrence of such assignment, all rights and obligations of such assigning Agent under the Financing Documents shall be transferred to such assignee, and the parties hereto shall execute in conjunction therewith assignment documentation and such other documentation as shall be necessary or desirable to preserve the transactions contemplated hereby and to preserve such Agent’s security interest in the Collateral, if any, all as shall be reasonably satisfactory to such assignee.  Any Agent may be removed

 

93



 

involuntarily only for a material breach of its duties and obligations hereunder or under the other Financing Documents or for gross negligence or willful misconduct as determined by a final non-appealable judgment of a court of competent jurisdiction in connection with the performance of its duties hereunder or under the other Financing Documents and then only upon the affirmative vote of the Majority Lenders (in each case, the “Required Applicable Lenders”) (excluding such Agent from such vote and such Agent’s Loans from the amounts used to determine the portion of the Loans necessary to constitute the Required Applicable Lenders).  Upon any such resignation or removal, the Required Applicable Lenders shall have the right to appoint a successor Agent with the consent of Borrower (unless an Event of Default shall have occurred and be continuing), which consent shall not be unreasonably withheld.  If no successor Agent shall have been so appointed by the Required Applicable Lenders, and shall have accepted such appointment, within thirty (30) days after the retiring Agent’s giving of notice of resignation or the Lenders’ removal of the retiring Agent, the retiring Agent may, on behalf of the Lenders, with the consent of Borrower (such consent not to be unreasonably withheld) appoint a successor Agent, which shall be a Lender, if any Lender shall be willing to serve, and otherwise shall be a financial institution having a combined capital and surplus of at least $500,000,000.  Upon the acceptance of any appointment as Agent under the Operative Documents by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations as Agent only under the Financing Documents.  After any retiring Agent’s resignation or removal hereunder as Agent, the provisions of this Financing Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under the Operative Documents.

 

12.8         Authorization.

 

(a)           Administrative Agent is hereby authorized by the Lenders to execute, deliver and perform each of the Financing Documents to which Administrative Agent is or is intended to be a party and each Lender agrees to be bound by all of the agreements of Administrative Agent contained in the Financing Documents.

 

(b)           Security Agent is hereby authorized by the Secured Parties to execute, deliver and perform each of the Financing Documents to which such Agent is or is intended to be a party and each Secured Party agrees to be bound by all of the agreements of such Agent contained in the Financing Documents.

 

(c)           Borrower irrevocably authorizes each Agent to disclose any information received in its capacity as Agent to the other Agents and Lenders.

 

12.9         Other Rights and Powers of Agents.

 

(a)           With respect to its Commitments, the Loans made by it, the Interest Rate Agreements issued by it and any Note issued to it, each of Administrative Agent and Security Agent shall have the same rights and powers under the Operative Documents as any other Lender; and each Agent may exercise the same as though it were not an Agent.  The term “Lender,” or “Lenders,” shall, unless otherwise expressly indicated, include each Agent in its individual capacity.  Each Agent

 

94



 

and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with Borrower or any other Person, without any duty to account therefor to any of the Lenders, or the other Agent.

 

(b)           Any information acquired by an Agent which, in its reasonable opinion, is acquired by it other than in its capacity as Agent will be treated as confidential by such Agent and will not be deemed to be information possessed by such Agent in its capacity as such.

 

(c)           Administrative Agent shall be entitled to approve an amendment or modification to any Project Document to the extent it is necessary to correct any provision that is inconsistent with any other provision in such Project Document or to the extent such amendment or modification, in the reasonable determination of Administrative Agent, does not adversely affect the interests of any Lender.

 

12.10       Security Agent to Hold in Trust.

 

Security Agent will hold all of its rights under or pursuant to the Collateral Documents and all sums received by it under this Financing Agreement and under the Collateral Documents (save for any sums received solely for its own account pursuant to such documents) in accordance with the terms of this Financing Agreement and the Collateral Documents in trust for each of the Secured Parties.

 

12.11       Amendments and Decision Making.

 

Subject to the terms and conditions as set forth in this Financing Agreement, the Majority Lenders (or Administrative Agent with the consent in writing of the Majority Lenders) and Borrower may enter into any amendments, modifications or supplements to, or waivers of the terms of this Financing Agreement and the other Financing Documents; provided, that any amendments, modifications or supplements to, or waivers that would modify Section 2.2 or otherwise affect the Issuing Bank shall also require the consent of the Issuing Bank; provided, however, that no such amendment, modification or supplement shall, without the consent of all the Lenders and the Issuing Bank:

 

(a)           Extend the maturity of any Loan or any of the Notes or reduce the principal amount thereof, or reduce the rate or change the time of payment of interest due on any Loan or any Note; or

 

(b)           modify Sections 2.1, 2.3, 2.4, 3.4, 3.5, 3.6, 3.7, 7.1, 7.24, and 8.6; or

 

(c)           reduce the amount or extend the payment date for any amount due under Article 2; or

 

(d)           increase the amount of the Commitments of any Lender under this Financing Agreement; or

 

95



 

(e)           reduce or change the time or amount of payment of any fee due or payable hereunder or under any Financing Document; or

 

(f)            reduce the percentage specified in the definition of Majority Lenders; or

 

(g)           permit Borrower to assign its rights under this Financing Agreement except as provided in Section 8.16; or

 

(h)           amend this Section 12.11; or

 

(i)            release any Collateral from the Lien of any of the Collateral Documents or release any guaranties under any of the Collateral Documents or allow release of any funds from any Collateral Account otherwise than in accordance with the terms hereof.

 

Notwithstanding anything to the contrary provided in this Section 12.11, any amendment, modification, supplement or waiver of any provision of Article 12 shall require the prior written consent of each Agent.

 

12.12       Withholding Tax.

 

(a)           Administrative Agent may withhold from any interest payment to any Lender an amount equivalent to any applicable withholding tax.  If the forms or other documentation required by Section 3.4(e) are not delivered to Administrative Agent, then Administrative Agent may withhold from any interest payment to any Lender not providing such forms or other documentation, an amount equivalent to the applicable withholding tax.

 

(b)           If the Internal Revenue Service or any authority of the United States or other jurisdiction asserts a claim that Administrative Agent or Borrower did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered, was inaccurate, was not properly executed, or because such Lender failed to notify Administrative Agent, Borrower or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other reason, other than gross negligence or willful misconduct of Administrative Agent or Borrower claiming indemnity hereunder) such Lender shall indemnify promptly Administrative Agent and/or Borrower (but in the case of Borrower, only to the extent that Borrower would not have been required to pay additional amounts or indemnify such Lender for such tax pursuant to Section 3.4), as applicable, fully for all amounts paid, directly or indirectly, by such Person as tax or otherwise, including penalties, additions to tax and interest, together with all expenses incurred, including legal expenses, allocated staff costs, and any out of pocket expenses.

 

(c)           If any Lender sells, assigns, grants participations in, or otherwise transfers its rights under this Financing Agreement, the participant shall comply and be bound

 

96



 

by the terms of Sections 3.4(d), 3.4(e), 12.12(a) and 12.12(b) as though it were such Lender.

 

12.13       Substitution of Lender.

 

Should any Lender (i) be a Defaulting Lender, (ii) otherwise fail to make a Loan, (iii) fail to provide the forms or other documentation required by Section 3.4(f) in violation of its obligations under this Financing Agreement, (iv) be unable to maintain or continue LIBO Rate Loans due to an event occurring under Section 3.6(a), (v) be unable to maintain or continue Loans due to an event occurring under Section 3.6(b), (vi) claim increased costs under Section 3.6(c) or Section 3.6(d), (vii) claim any right to payment under Section 3.4(d), or (viii) refuse to give timely consent to an amendment, modification or waiver of the Financing Documents that, pursuant to Section 12.11, requires consent of all of the Lenders and the consent of at least the Required Lenders has been obtained with respect thereto (in each case, a “Substitutable Lender”), Administrative Agent shall (a) in its sole and absolute discretion, fund the Loan on behalf of the Substitutable Lender or (b) cooperate with Borrower or any other Lender to find another Person that shall be acceptable to Administrative Agent and that shall be willing to assume the Substitutable Lender’s obligations under this Financing Agreement (including the obligation to make, maintain or continue the Loan which the Substitutable Lender failed to make but without assuming any liability for damages for failing to have made, maintained or continued such Loan or any previously required Loan).  Subject to the provisions of the next following sentence, such Person shall be substituted for the Substitutable Lender hereunder upon execution and delivery to Administrative Agent of an agreement acceptable to Administrative Agent by such Person assuming the Substitutable Lender’s obligations under this Financing Agreement, and all principal, interest and fees which would otherwise have been payable to the Substitutable Lender shall thereafter be payable to such Person.  Nothing in (and no action taken pursuant to) this Section 12.13 shall relieve the Substitutable Lender from any liability it might have to Borrower, to Administrative Agent or to the other Lenders as a result of its failure to make, maintain or continue such Loan.

 

12.14       Participations.

 

Nothing herein provided shall prevent any Lender from selling a participation in its Loans; provided that (a) no such sale of a participation shall (i) alter such Lender’s obligations hereunder, or (ii) cause an increase in any expense or cost to Borrower including pursuant to Section 3.4 or otherwise under this Financing Agreement, and (b) any agreement pursuant to which any Lender may grant a participation in its rights with respect to its Loans shall provide that, with respect to such Loans, such Lender shall retain the sole right and responsibility to exercise the rights of such Lender, and enforce the obligations of Borrower relating to such Loans, including the right to approve any amendment, modification or waiver of any provision of this Financing Agreement or any other Financing Document and the right to take action to have the Obligations (and the Notes) declared due and payable pursuant to Article 10.  Each Lender that sells a participation in its Commitments or Loans shall provide notice of such sale to Borrower no later than ten (10) Business Days after the date of any such sale.  No recipient of a participation in any Loans of any Lender shall have any rights under this Financing Agreement or shall be entitled to any reimbursement for Taxes, Other Taxes, increased cost or reserve

 

97



 

requirements under Section 3.4 or 3.6 or any other indemnity or payment rights against Borrower.

 

12.15       Transfer of Loans; Commitments.

 

Notwithstanding anything else herein to the contrary, any Lender, after receiving the prior written consent of Administrative Agent and the Issuing Bank, such consent not to be unreasonably withheld or delayed, and, prior to the occurrence and continuation of an Event of Default, Borrower, such consent not to be unreasonably withheld or delayed, may from time to time, at its option, sell, assign, transfer, negotiate or otherwise dispose of all or a portion of its Loans and Commitments (including the Lender’s interest in this Financing Agreement and the other Financing Documents) to any bank, insurance company or other financial institution; provided, however, that (i) no Lender (including any assignee of any Lender) may assign any portion of its Loans and Commitments to a new lender if, at the time of transfer, such assignment would result, if the circumstances (including Governmental Rules) at the time of such transfer were unchanged or if the change in such circumstances does not give rise to or increase the costs described in this sentence, in claims being made by such new lender, for costs pursuant to Section 3.4 or Section 3.6 hereof in excess of those which could be made by the assigning Lender were it not to make such assignment, unless such new lender waives its right to claim such costs or unless Borrower consents to such transfer and (ii) in no event shall the consent of the Borrower be required in respect of any such assignments, transfers or other dispositions described above from a Lender to an Affiliate of such Lender and such Lender confirms to Borrower in writing that no material increased costs under Section 3.4 or Section 3.6 could reasonably be expected to result from such transfer.  In the event of any such assignment, (a) the assigning Lender’s Proportionate Share of Loans and Commitments shall be reduced by the amount of the Proportionate Share of Loans and Commitments assigned to the new lender, (b) the parties to such assignment shall execute and deliver to Administrative Agent an assignment agreement in substantially the form of Exhibit N attached hereto, evidencing such sale, assignment, transfer or other disposition and evidencing the assumption by the new Lender of its Proportionate Share of Loans and Commitments; (c) Borrower shall (A) execute and deliver to such new lender a new Note in the form attached hereto as Exhibit B-1, in a principal amount equal to its Proportionate Share of the Loans being assigned, and (B) execute and exchange with the assigning Lender a replacement note for the Note then held by such Lender in an amount equal to the Proportionate Share of the Loans retained by the Lender, if any, and (d) the assigning Lender shall cancel and return any replaced Note to Borrower promptly after the effectiveness of such assignment.  Administrative Agent shall be paid an assignment fee of $3,000 by the assigning Lender for each assignment made pursuant to this Section 12.15, unless waived by Administrative Agent.  For greater certainty, it is the intention of the parties that transfer of a Note among Lenders pursuant to the terms and conditions of this Financing Agreement may be effected only by surrender and reissuance of such Note by Borrower or by issuance of a replacement Note by Borrower.  Thereafter, such new lender shall be deemed to be a Lender and shall have all of the rights and duties of the assigning Lender (except as otherwise provided in this Article 12), in accordance with its Proportionate Share of Loans and Commitments, under each of the Financing Documents.  For greater certainty, other than as set forth in Section 14.4, the costs of the foregoing shall not be for the account of Borrower.

 

98



 

12.16       Laws.

 

Notwithstanding the foregoing provisions of this Article 12, no sale, assignment, transfer, negotiation or other disposition of the interests of any Lender hereunder or under the other Financing Documents shall be allowed if it would require registration under the Securities Act of 1933, as amended, any other federal securities laws or regulations or the securities laws or regulations of any applicable jurisdiction.  Borrower shall, from time to time at the request and expense of the Lenders, execute and deliver to Administrative Agent, or to such party or parties as Administrative Agent may designate, any and all further instruments and take such further actions as may in the opinion of Administrative Agent be reasonably necessary or advisable to give full force and effect to such disposition.

 

12.17       Assignability to Federal Reserve Bank.

 

Notwithstanding any other provision contained in this Financing Agreement or any other Financing Document to the contrary, any Lender may assign all or any portion of the Loans or Notes held by it to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A of the Federal Reserve Board and any Operating Circular issued by such Federal Reserve Bank; provided, however, that any payment in respect of such assigned Loans or Notes made by Borrower to or for the account of the assigning and/or pledging Lender in accordance with the terms of this Financing Agreement shall satisfy 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 and in no event shall such Federal Reserve Bank be considered to be a “Lender” or be entitled to require the assigning Lender to take or omit to take any action hereunder.

 

12.18       Response to Borrower Requests.

 

Each Agent and Lender shall endeavor to act as diligently as practicable in the review of documents, the making of determinations or the consideration of requests for consents, approvals, waivers or amendments required to be reviewed, made or considered by the Agents or Lenders, as the case may be, as contemplated by and in accordance with the provisions of this Financing Agreement and the other Operative Documents.  Borrower shall provide each Agent with reasonable advance written notice of the expected occurrence of any such requirements and, at the reasonable request of Borrower and to the extent required by this Financing Agreement, each Agent shall so advise the Lenders.  Borrower shall provide such documents and information to Administrative Agent as Administrative Agent or any Lender (through Administrative Agent) may reasonably consider necessary or advisable, and shall otherwise cooperate with the Agents and the Lenders to permit the Agents and the Lenders effectively to review such documents, make such determinations or consider such requests for consents, approvals, waivers or amendments.

 

99



 

ARTICLE 13.

INDEPENDENT CONSULTANTS

 

13.1         Removal and Fees.

 

Administrative Agent (with the consent of the Majority Lenders in their reasonable discretion), to the extent consistent with the terms of any letter agreement of Borrower with an Independent Consultant, may remove from time to time, any one or more of the Independent Consultants and appoint replacements reasonably acceptable to Borrower.  Notice of any replacement of Independent Consultant shall be given by Administrative Agent to Borrower, the other Agents, the Lenders and to the Independent Consultant being replaced.  All reasonable fees and expenses of the Independent Consultants (whether the original Independent Consultants or replacements) shall be paid by Borrower; provided, however, that unless an Event of Default shall have occurred and be continuing, Administrative Agent shall request that each such Independent Consultant provide Borrower with its proposed scope of work and proposed budget therefor, and Administrative Agent shall consult with Borrower with regard to the matters contained therein.

 

13.2         Duties.

 

Each Independent Consultant shall be contractually obligated to Administrative Agent to carry out the activities required of it in this Financing Agreement and as otherwise requested by Administrative Agent and shall be responsible solely to Administrative Agent.  Borrower acknowledges that it will not have any cause of action or claim against any Independent Consultant resulting from any decision made or not made, any action taken or not taken or any advice given by such Independent Consultant in the due performance in good faith of its duties to Administrative Agent hereunder, except to the extent arising from such Independent Consultant’s gross negligence or willful misconduct.

 

13.3         Independent Consultants’ Certificates.

 

Borrower shall provide such documents and information to the Independent Consultants as they may reasonably consider necessary in order for the Independent Consultants to deliver annually to Administrative Agent a certificate setting forth a full report on the status of the Project and such other information and certification as Administrative Agent may reasonably require from time to time.

 

13.4         Certification of Dates.

 

Administrative Agent shall request that the Independent Consultants act diligently in the issuance of all certificates and reports required to be delivered by the Independent Consultants hereunder, if their issuance is appropriate.  Borrower shall provide the Independent Consultants with reasonable notice of the expected occurrence of any such dates or events that would require certificates of such Independent Consultants hereunder.

 

100



 

ARTICLE 14.

MISCELLANEOUS

 

14.1         Addresses.

 

Any communications between the parties hereto or notices provided herein to be given may be given to the following addresses:

 

If to Administrative

 

BNP Paribas

Agent or Issuing Bank:

 

787 Seventh Avenue

 

 

New York, NY  10019

 

 

Attention:

Project Finance & Utilities

 

 

Facsimile:

(212) 841-2146

 

 

 

If to Security Agent:

 

BNP Paribas

 

 

787 Seventh Avenue

 

 

New York, NY  10019

 

 

Attention:

Project Finance & Utilities

 

 

Facsimile:

(212) 841-2146

 

 

 

If to Borrower:

 

Stetson Holdings, LLC

 

 

c/o First Wind Energy, LLC

 

 

179 Lincoln Street, Suite 500

 

 

Boston, MA 02111

 

 

Attention:

Secretary

 

 

Facsimile:

(617) 960-2889

 

 

 

If to any Lender:

 

To its address set forth for its Lending Office in Exhibit I.

 

All notices or other communications required or permitted to be given hereunder shall be in writing and shall be considered as properly given (a) if delivered in person; (b) if sent by a nationally recognized overnight delivery service; (c) in the event overnight delivery services are not readily available, if mailed by first class mail, postage prepaid, registered or certified with return receipt requested; or (d) if sent by facsimile or other direct written electronic means with a confirmation of receipt.  Notice so given shall be effective upon receipt by the addressee, except that communication or notice so transmitted by facsimile 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 transmitted if transmitted before 4:00 p.m., recipient’s time, and if transmitted after that time, on the next following Business Day; provided, however, that if any notice is tendered to an addressee and the delivery thereof is refused by such addressee, such notice shall be effective upon such tender.  Any party shall have the right to change its address for notice hereunder to any other location by giving of thirty (30) days’ written notice to the other parties in the manner set forth hereinabove.

 

101



 

Borrower agrees and acknowledges that the Agents, Issuing Bank and the Lenders may act upon any notice or other communication delivered to them by telecopy by or on behalf of Borrower in accordance with the instructions contained therein that are received by the Agents, Issuing Bank or the Lenders from persons purported to be, or which instructions appear to be authorized by Borrower.  Borrower further agrees to indemnify and hold the Agents, Issuing Bank and the Lenders harmless from any claims by virtue of their actions on the basis of instructions contained in any telecopied notice from Borrower as such instructions were understood by the Agents and the Lenders except for claims relating solely from the gross negligence or willful misconduct of the Agents, Issuing Bank or Lenders, as applicable, as determined by a final non-appealable judgment of a court of competent jurisdiction.  The Agents, Issuing Bank and Lenders shall not be liable for any errors in transmission or the illegibility of any telecopied documents delivered by or on behalf of Borrower.  In the event that Borrower sends the Agents, Issuing Bank and Lenders an executed original of a previously telecopied notice or other communication, the Agents, Issuing Bank or Lenders, as applicable, shall have no duty to compare it against such notice previously received by telecopy nor shall the Agents, Issuing Bank or Lenders have any responsibility should the contents of the original notice differ from the telecopied notice acted upon by the Agents, Issuing Bank or Lenders, as applicable.

 

14.2         Additional Security; Right to-Set Off.

 

Any deposits or other sums at any time credited or due from Lenders and any Project Revenues, securities or other property of Borrower or any Project Company in the possession of any of the Agents may at all times be treated as collateral security for the payment of the Loans and the Notes and all other obligations of Borrower to the Lenders under this Financing Agreement and the other Financing Documents and Borrower’s and each Project Company’s interest in such deposits and other property have been pledged and assigned as collateral security to Security Agent pursuant to the Borrower Pledge and Security Agreement and each Guaranty and Security Agreement.  Regardless of the adequacy of any other collateral, any Lender (but only with the consent of Security Agent) may execute or realize on the Lenders’ security interest in any such deposits or other sums credited by or due from the Lenders to Borrower, and may apply any such deposits or other sums to or set them off against Borrower’s obligations to Lenders under the Notes and this Financing Agreement at any time after the occurrence and during the continuance of any Event of Default.

 

14.3         Delay and Waiver.

 

No delay or omission to exercise any right, power or remedy accruing to the Agents, Issuing Bank or the Lenders upon the occurrence of any Event of Default or Inchoate Default or any breach or default of Borrower under this Financing Agreement or any other Financing Document shall impair any such right, power or remedy of the Agents, Issuing Bank or the Lenders, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single Event of Default, Inchoate Default or other breach or default be deemed a waiver of any other Event of Default, Inchoate Default or other breach or default theretofore or thereafter occurring.  Any waiver, indulgence, permit, consent or approval of any kind or character on the part of the Agents, Issuing Bank and/or the Lenders of any Event of Default, Inchoate Default or other breach or default under this Financing Agreement or any other

 

102


 

 

Financing Document, or any waiver on the part of the Agents, Issuing Bank and/or the Lenders of any provision or condition of this Financing Agreement or any other Financing Document, must be in a writing expressly referencing this Financing Agreement and shall be effective only to the extent in such writing specifically set forth.  All remedies, either under this Financing Agreement or any other Financing Document or by law or otherwise afforded to the Agents, Issuing Bank and the Lenders, shall be cumulative and not alternative.

 

14.4         Costs, Expenses and Attorneys’ Fees.

 

Subject to limitations set forth in the relevant letter agreements with Independent Consultants, Borrower shall pay to each Agent all of its reasonable costs and expenses in connection with the preparation, negotiation, closing and costs of administering this Financing Agreement and the documents contemplated hereby, including the reasonable fees, expenses and disbursements of Milbank, Tweed, Hadley & McCloy LLP and other attorneys retained by such Agent (subject to the prior consent of Borrower, not to be unreasonably withheld) in connection with the preparation of such documents and any amendments hereof or thereof, or the negotiation, closing or administration of this Financing Agreement, and the reasonable fees, expenses and disbursements of the Independent Consultants in connection with this Financing Agreement or the Loans or Commitments, and the reasonable travel and out-of-pocket costs incurred by such Persons.  Borrower will reimburse each Agent, Issuing Bank and the Lenders for all costs and expenses, including reasonable attorneys’ fees, expended or incurred by such Agent, Issuing Bank and/or any Lender in enforcing this Financing Agreement or the other Financing Documents or exercising any rights under any Consent in connection with an Event of Default or Inchoate Default, in actions for declaratory relief in any way related to this Financing Agreement, in collecting any sum which becomes due to such Agent, Issuing Bank and/or any Lender on the Notes or under the Financing Documents, or in connection with the participation by such Agent, Issuing Bank and any Lender in any legal proceedings under the Turbine Supply Agreement, provided, however, that Borrower shall not be responsible for the payment of any fees, costs, or other liabilities arising out of any dispute between or among Administrative Agent, Issuing Bank, the Lenders, any counterparty of Borrower under the Interest Rate Agreements, and their respective Affiliates to the extent, and only to the extent, that such dispute does not arise out of any alleged failure of Borrower or any Affiliated Participant to perform their respective obligations under the Financing Documents.

 

14.5         Attorney-In-Fact.

 

For the purpose of allowing the Agents to exercise their rights and remedies provided in Article 10 (as may be applicable) following the occurrence and during the continuation of a Event of Default, Borrower hereby constitutes and appoints each Agent its true and lawful attorney-in-fact, with full power of substitution.

 

14.6         Entire Agreement; Amendments.

 

This Financing Agreement and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof.  In the event of any conflict between the terms, conditions and provisions of this

 

103



 

Financing Agreement and any such agreement, document or instrument, the terms, conditions and provisions of this Financing Agreement shall prevail.  This Financing Agreement may only be amended or modified by an instrument in writing signed by Borrower and the Agents (acting on behalf of or with the consent of the Lenders and the Issuing Bank, in each case, as required herein or in other Financing Documents) in accordance with the terms of this Financing Agreement.

 

14.7         Governing Law.

 

THIS FINANCING AGREEMENT, AND ANY INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER (TO THE EXTENT NOT EXPRESSLY PROVIDED FOR THEREIN), SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE AND WITHOUT REFERENCE TO CONFLICTS OF LAWS RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

14.8         Severability.

 

In case any one or more of the provisions contained in this Financing Agreement 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 hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision.

 

14.9         Headings.

 

Paragraph headings and a table of contents have been inserted in this Financing Agreement as a matter of convenience for reference only and it is agreed that such paragraph headings are not a part of this Financing Agreement and shall not be used in the interpretation of any provision of this Financing Agreement.

 

14.10       Accounting Terms.

 

All accounting terms not specifically defined herein shall be construed in accordance with GAAP and practices consistent with those applied in the preparation of the financial statements of Borrower, each Project Company and Major Project Participants, to the extent required herein, submitted by Borrower to Administrative Agent, and (unless otherwise indicated) all financial data of Borrower, each Project Company  and Major Project Participants, to the extent required herein, submitted pursuant to this Financing Agreement shall be prepared in accordance with such principles and practices.

 

14.11       Additional Financing.

 

The parties hereto acknowledge that the Lenders have made no agreement or commitment to provide any financing except as set forth herein.

 

104



 

14.12       No Partnership, Etc.

 

The Agents, Issuing Bank, the Lenders and Borrower intend that the relationship between them shall be solely that of creditor and debtor.  Nothing contained in this Financing Agreement, the Notes or in any of the other Financing Documents shall be deemed or construed to create a partnership, tenancy-in-common, joint tenancy, joint venture or co-ownership by or between or among the Agents, Issuing Bank, the Lenders and Borrower or any other Person.  None of the Agents, Issuing Bank or the Lenders shall be in any way responsible or liable for the debts, losses, obligations or duties of Borrower, any Project Company 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 charges arising from the ownership, operation or occupancy of the Project and to perform all obligations under agreements and contracts relating to the Project shall be the sole responsibility of Borrower and the Project Companies, as applicable.

 

14.13       Mortgage Documents/Collateral Documents.

 

The Loans and the other Obligations are secured in part by the Mortgage Documents encumbering certain properties in Maine.  Reference is hereby made to the Mortgage Documents and the other Collateral Documents for the provisions, among others, relating to the nature and extent of the security provided thereunder, the rights, duties and obligations of Borrower and the rights of the Agents, Issuing Bank and the Lenders with respect to such security.

 

14.14       Limitation on Liability.

 

NO CLAIM SHALL BE MADE BY ANY PARTY HERETO OR ANY OF ITS AFFILIATES, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS AGAINST ANY OTHER PARTY HERETO OR ANY OF ITS AFFILIATES, DIRECTORS, EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (WHETHER OR NOT THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT, DUTY IMPOSED BY LAW OR OTHERWISE), IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS FINANCING AGREEMENT OR THE OTHER OPERATIVE DOCUMENTS OR ANY ACT OR OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND EACH PARTY HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY SUCH CLAIM FOR ANY SUCH SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

14.15       Waiver of Jury Trial.

 

THE AGENTS, THE ISSUING BANK, THE LENDERS AND BORROWER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS FINANCING AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT, OR ANY

 

105



 

COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE AGENTS, ISSUING BANK, THE LENDERS OR BORROWER.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS, ISSUING BANK AND THE LENDERS TO ENTER INTO THIS FINANCING AGREEMENT.

 

14.16       Consent to Jurisdiction.

 

The Agents, the Issuing Bank, the Lenders and Borrower (on behalf of itself and on behalf of Sponsor, Member, each Project Company and each Affiliated Participant) agree that any legal action or proceeding by or against Borrower or with respect to or arising out of this Financing Agreement, the Notes or any other Financing Document may be brought in or removed to the courts of competent jurisdiction of the State of New York sitting in The City of New York in New York County and of the United States of America in and for the Southern District of New York, as Administrative Agent may elect.  By execution and delivery of this Financing Agreement, the Agents, the Lenders, Issuing Bank and Borrower (on behalf of itself and on behalf of Sponsor, Member, each Project Company and each Affiliated Participant) accept, for themselves and in respect of their property, generally and unconditionally, the jurisdiction of the aforesaid courts.  The Agents, the Lenders, the Issuing Bank and Borrower (on behalf of itself and on behalf of Sponsor, Member, each Project Company and each Affiliated Participant) irrevocably consent to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified airmail, postage prepaid, to the Agents, Issuing Bank, the Lenders or Borrower (on behalf of itself and on behalf of Sponsor, Member, each Project Company and each Affiliated Participant), as the case may be, at their respective addresses for notices as specified herein and that such service shall be effective five (5) Business Days after such mailing.  Nothing herein shall affect the right to serve process in any other manner permitted by law or the right of the Agents, Issuing Bank or any Lender to bring legal action or proceedings in any other competent jurisdiction, including judicial or non-judicial foreclosure of the Mortgage Documents.  The Agents, the Issuing Bank, the Lenders and Borrower (on behalf of itself and on behalf of Sponsor, Member, each Project Company and each Affiliated Participant) hereby waive any right to stay or dismiss any action or proceeding under or in connection with any or all of the Project, this Financing Agreement or any other Financing Document brought before the foregoing courts on the basis of forum non-conveniens.

 

14.17       Usury.

 

Nothing contained in this Financing Agreement or the Notes shall be deemed to require the payment of interest or other charges by Borrower or any other Person in excess of the amount which the holders of the Notes may lawfully charge under any applicable usury laws.  In the event that the holders of the Notes shall collect moneys which are deemed to constitute interest which would increase the effective interest rate to a rate in excess of that permitted to be charged by applicable law, all such sums deemed to constitute interest in excess of the legal rate shall, upon such determination, at the option of the holder of the Notes, be returned to Borrower or credited against the principal balance of the Notes then outstanding.

 

106


 

 

14.18       Successors and Assigns.

 

The provisions of this Financing Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns.  Borrower may not assign or otherwise transfer any of its rights under this Financing Agreement without the prior written consent of Administrative Agent (with the consent of all Lenders and the Issuing Bank).

 

14.19       Confidentiality.

 

The Agents, Issuing Bank and the Lenders agree to use best efforts to maintain the confidential nature of, and shall not use or disclose the financial information or other confidential information related to Borrower, the Project Companies or any of Borrower’s Affiliates without first obtaining Borrower’s prior written consent; provided that nothing in this Section 14.19 shall require any Agent, Issuing Bank or any Lender to obtain any consent of Borrower in connection with (and Borrower hereby authorizes the Agents, Issuing Bank and each Lender to freely disclose any financial information or confidential information with respect to Borrower, the Project Companies, the Project, any Project Document or any Financing Document without any consent of Borrower, to the extent otherwise required, in connection with) (a) exercising any of their respective rights under the Financing Documents, including those exercisable upon the occurrence of an Event of Default; (b) providing information about Borrower, the Project Companies, the Project, any Project Document or any Financing Document or the parties thereto to any other Lender or prospective Lender or any Person acquiring, or potentially acquiring, any interest of the Lenders under the Financing Agreement and any such Person’s directors, officers, employees, agents and consultants in connection with their credit evaluation of Borrower, the Project Companies or otherwise (if, in the case of any such Person potentially acquiring such an interest from any Lender, such Person agrees to be bound by the terms of a confidentiality agreement substantially similar to this Section 14.19); (c) any situation in which any Agent, Issuing Bank or any Lender (i) is required by law or required by any Governmental Authority or the National Association of Insurance Commissioners to disclose information or (ii) is requested by bank examiners to disclose information (provided that in each instance under clauses (i) and (ii) above such Person uses reasonable efforts to maintain confidentiality of the information disclosed); (d) providing information to legal counsel to any Agent, Issuing Bank or any Lender in connection with the transactions contemplated by any of the Financing Documents (if such Lender informs such counsel of the confidential nature of such information and requires that it be kept confidential except as permitted herein); (e) providing information to independent accountants, auditors or other expert consultants retained by any Agent, Issuing Bank or any Lender (if such Lender informs such auditors or consultants of the confidential nature of such information and requires that it be kept confidential except as permitted herein); (f) any information that is in or becomes part of the public domain otherwise than through a wrongful act of any Agent, Issuing Bank, any Lender or any employees or agents thereof or other Persons to whom confidential information is disclosed under subsections (b), (c), (d) or (e) above; (g) any information that is in the possession of any Agent, Issuing Bank or any Lender prior to receipt thereof from Borrower or any other Person known to any Agent, Issuing Bank or any Lender to be acting on behalf of Borrower; (h) any information that is independently developed by any Agent, Issuing Bank or any Lender; and (i) any information that is disclosed to any Agent, Issuing Bank or any Lender by a third

 

107



 

party that is not known or reasonably suspected by such Agent, Issuing Bank or Lender to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation of confidentiality to, Borrower, any Project Company or any of Borrower’s Affiliates, with respect to such information.

 

Notwithstanding anything to the contrary set forth in this Section 14.19, after notice to Borrower, any Agent, Issuing Bank or Lender shall be free to disclose any information regarding the tax structure of the transactions contemplated in this Financing Agreement to any relevant Governmental Authority requiring such information.

 

14.20       Counterparts.

 

This Financing Agreement and any amendment, waivers, consents or supplements hereto or in connection herewith may be executed in one or more counterparts, each of which when executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

 

14.21       Patriot Act Compliance.

 

Administrative Agent hereby notifies Borrower that, pursuant to the requirements of the Patriot Act, it and any Lender shall be required to obtain, verify and record information that identifies Borrower and each Project Company, which information includes, without limitation, the names and addresses and other information that will allow it or any Lender to identify Borrower and each Project Company in accordance with the requirements of the Patriot Act.  Borrower shall promptly deliver information described in the immediately preceding sentence when requested by Administrative Agent, Issuing Bank or any Lender in writing pursuant to the requirements of the Patriot Act.

 

[SIGNATURES FOLLOW]

 

108



 

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

 

 

 

STETSON HOLDINGS, LLC

 

a Delaware limited liability company

 

 

 

By:

/s/ Evelyn Lim

 

Name:

Evelyn Lim

 

Title:

Secretary

 



 

 

BNP PARIBAS,

 

as Administrative Agent for the Lenders

 

 

 

 

 

By:

/s/ Andrew Platt

 

 

Name: Andrew Platt

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Sean Finnegan

 

 

Name: Sean Finnegan

 

 

Title: Director

 



 

 

BNP PARIBAS,

 

as Security Agent

 

 

 

 

 

By:

/s/ Andrew Platt

 

 

Name: Andrew Platt

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Sean Finnegan

 

 

Name: Sean Finnegan

 

 

Title: Director

 



 

 

BNP PARIBAS,

 

as Joint Lead Arranger, Joint Bookrunner and as a Lender

 

 

 

 

 

By:

/s/ Brian A. Goldstein

 

 

Name: Brian A. Goldstein

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Sean Finnegan

 

 

Name: Sean Finnegan

 

 

Title: Director

 



 

 

HSH NORDBANK AG, NEW YORK BRANCH,

 

as Joint Lead Arranger, Joint Bookrunner and as a Lender

 

 

 

 

 

By:

/s/ Sylvia Chong

 

 

Name: Sylvia Chong

 

 

Title: Senior Vice President

 

 

 

 

By:

/s/ David Watson

 

 

Name: David Watson

 

 

Title: Vice President

 



 

 

BNP PARIBAS,

 

as Issuing Bank

 

 

 

 

 

By:

/s/ Andrew Platt

 

 

Name: Andrew Platt

 

 

Title: Managing Director

 

 

 

 

By:

/s/ Sean Finnegan

 

 

Name: Sean Finnegan

 

 

Title: Director

 


 

 

Execution Version

 

EXHIBIT A

to Financing Agreement

 

DEFINITIONS AND RULES OF INTERPRETATION

 

(Attached)

 

A-1



 

EXHIBIT A
to Financing Agreement

 

DEFINITIONS

 

Account Control Agreement” means that certain Account Control Agreement among Borrower, Administrative Agent, Security Agent and Securities Intermediary, in substantially the form of Exhibit E-4 to the Financing Agreement.

 

Additional Project Documents” means, collectively, any contract or agreement entered into by Borrower in respect of any Project subsequent to the Closing Date that either (a) replaces or is entered into in substitution of an existing Material Project Document; or (b) obligates Borrower to make payments in an aggregate amount exceeding $250,000 over its term except with respect to contracts or agreements for the purchase of materials, equipment or Parts that are included in the Base Case Project Projections.

 

Adjustment Date” has the meaning given in Section 7.27 of the Financing Agreement.

 

Administrative Agent” means BNP Paribas, in its capacity as Administrative Agent for the Lenders under the Financing Agreement, or any successor in such capacity appointed from time to time in accordance with the Financing Agreement.

 

Administrative Agent Account” means the account of Administrative Agent at such office or bank as it may notify from time to time to the Lenders, the other Agents and Borrower.

 

Affiliate” means (a) with respect to any Person that is not directly or indirectly controlled by the Sponsor, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Person specified, or who holds or beneficially owns ten percent (10%) or more of the equity interest in the Person specified or ten percent (10%) or more of any class of voting securities of the Person specified.

 

A-2



 

Affiliated Indemnitees” has the meaning given in Section 7.23(a)(i) of the Financing Agreement.

 

Affiliated Participant” means the Borrower, Member, any Project Company, and Sponsor for so long as such Person has any obligation under any Collateral Document to which it is a party and any Major Project Participant that is an Affiliate of Borrower, Sponsor, any Project Company or Member for so long as such Person has any obligation under a Material Project Document to which it is a party.

 

Agency Fee Side Agreement” means that certain Fee Letter, dated as of the Closing Date, by and between the Administrative Agent and the Borrower.

 

Agents” means Administrative Agent and Security Agent.

 

AIMCO Prepayment” means an optional prepayment of the Term Loans as contemplated pursuant to Section 9.17 of that certain Credit Agreement, dated as of July 17, 2009 (as amended from time to time), by and among Wells Fargo, N.A., as collateral agent and administrative agent, the lender party thereto, CSSW, LLC a Delaware limited liability company, and CSSW Holdings, LLC, a Delaware limited liability company.

 

Amortization Schedule” means the amortization schedule set forth as Exhibit K to the Financing Agreement.

 

Annual Operating Plan” means the Annual Operating Plan that shall contain a reasonably detailed narrative description of (a) the categories of revenues and costs set forth in the Base Case Project Projections; (b) maintenance and repair activities expected or planned for the upcoming 12-month period; (c) the planned purchases of Parts, (d) the marketing plan of the Borrower detailing, among other things, the strategy for power sales, power scheduling, renewable energy credit sales and ICAP sales, and (e) any event or condition forecasted for the

 

A-3



 

relevant upcoming 12-month period that is likely to require the incurrence of major maintenance expense items in an amount that is at least 20% higher than the corresponding amount set forth with respect to such category in the Base Case Project Projections for such year.

 

Anti-Money Laundering Laws” means any laws or regulations relating to money laundering or terrorist financing, including, without limitation, the Bank Secrecy Act, 31 U.S.C. sections 5301 et seq.; the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56 (a/k/a the USA Patriot Act); Laundering of Monetary Instruments, 18 U.S.C. section 1956; Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, 18 U.S.C. section 1957; the Financial Recordkeeping and Reporting of Currency and Foreign Transactions Regulations, 31 C.F.R. Part 103; and any similar laws or regulations currently in force or hereafter enacted.

 

Applicable Base Rate Margin” means, with respect to any Base Rate Loans, (i) 2.25% per annum during the period commencing on the Closing Date and ending on the third anniversary thereof, and (ii) 2.50% per annum thereafter until the Maturity Date.

 

Applicable Margin” means, with respect to any LIBO Rate Loans, (i) 3.25% per annum during the period commencing on the Closing Date and ending on the third anniversary thereof, and (ii) 3.50% per annum thereafter until the Maturity Date.

 

Applicable Permit” means, at any given time, any Permit, including any zoning, environmental protection, pollution, sanitation, FERC, the Maine Public Utilities Commission, safety, siting or building, importation of technology, or equipment and materials Permit (a) that is necessary as of and after the Closing Date, in light of the stage of construction or operation of any Project, to test, construct, operate, maintain, repair, own or use such Project as contemplated

 

A-4



 

pursuant to applicable Legal Requirements or as required by the Operative Documents, to generate or sell electricity therefrom, to enter into any Operative Document or to consummate any transaction contemplated thereby in each case materially in accordance with all applicable Legal Requirements; or (b) that is necessary at such time so that (i) none of the Agents, Issuing Bank, the Lenders, or any Affiliate of any of them may be deemed by any Governmental Authority to be subject to regulation under the FPA or PUHCA or under any state laws or regulations respecting the rates or the financial or organizational regulation of electric utilities as a result of the construction, testing or operation of any Project or the generation or sale of electricity therefrom, or (ii) none of Borrower nor any Affiliate of Borrower may be deemed by any Governmental Authority to be subject to, and not exempt from, compliance with PUHCA (other than Section 1265 thereof).

 

Authorized Officer” means (a) with respect to any Person that is a corporation, the president, any vice president, the treasurer or the chief financial officer of such Person; (b) with respect to any Person that is a partnership, the general partner or a duly authorized officer of a general partners of such Person or such other authorized officer as appointed by the board of directors of such general partner; or (c) with respect to any Person that is a limited liability company, any member or manager, or to the extent duly authorized to so act pursuant to such Person’s governing documents, the president, any vice president, the treasurer or chief financial officer of such Person or, in the case of a limited liability company, of a member of such Person.  No Person shall be deemed to be an “Authorized Officer” unless designated as an individual duly authorized to act on behalf of such Person in a certificate of incumbency of such Person delivered to Administrative Agent.

 

Available Bridge Loan Commitment” means (a) at any time prior to the Bridge

 

A-5



 

Loan Maturity Date, the Total Bridge Loan Commitment at such time minus the aggregate outstanding amount of the Bridge Loans at such time, and (b) after the conditions set forth in clause (a) are satisfied, zero.

 

Available Term Loan Commitment” means (a) at any time prior to the Term Loan Maturity Date, the Total Term Loan Commitment at such time minus the aggregate outstanding amount of the Term Loans at such time, and (b) after the conditions set forth in clause (a) are satisfied, zero.

 

Availability Period” means the period commencing on the Closing Date and ending July 1, 2010.

 

Available LC Commitment” means, with respect to any type of Letter of Credit (a) at any time and from time to time, the Total LC Commitment applicable to such type of Letter of Credit minus (b) the aggregate Stated Amounts applicable to such type of Letter of Credit.

 

Bankruptcy Event” has the meaning given in Section 10.1(d) of the Financing Agreement.

 

Bankruptcy Law” means Title 11, United States Code, and any other state or federal insolvency, reorganization, moratorium or similar law for the relief of debtors.

 

Base Case Project Projectionsmeans a good faith projection of reasonable operating results and forecasted cash flows for the Projects for the period from the Closing Date to the twentieth anniversary thereof.

 

Base Rate” means, for any day, a rate per annum equal to the higher of (a) the Prime Rate in effect on such day as determined by the Administrative Agent, (b) the Federal Funds Effective Rate for such day plus 0.50% and (c) 3-month LIBO Rate on such day plus

 

A-6



 

1.50%.  Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the 3-month LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the 3-month LIBO Rate, as the case may be.

 

Base Rate Default Rate” means, with respect to any Base Rate Loans outstanding from time to time, the interest rate per annum equal to the Base Rate then in effect plus the Applicable Base Rate Margin plus 2.00% per annum.

 

Base Rate Loans” means Loans that bear interest at a rate per annum determined by reference to the Base Rate.

 

Benefited Lender” has the meaning given in Section 3.5(b) of the Financing Agreement.

 

BOP Agreement” or “BOP Agreements” means, the Stetson I Reed Agreement, the Stetson II Reed Agreement, and/or Cianbro Agreement, as applicable.

 

BOP Contractor” means as applicable, Reed & Reed, Inc., or Cianbro Corporation.

 

Borrower” means Stetson Holdings, LLC, a Delaware limited liability company.

 

Borrower Equity” means any equity contributed or required to be contributed to Borrower by Member or Sponsor.

 

Borrower LLC Agreement” means Limited Liability Company Agreement of Stetson Holdings, LLC, dated as of May 27, 2008, as modified by that certain Membership Interest Transfer Agreement of Stetson Holdings, LLC, dated as of July 17, 2009, as further amended by that certain First Amendment to Limited Liability Company Agreement of Stetson Holdings, LLC, dated as of July 17, 2009, as modified by that certain Membership Interest

 

A-7



 

Transfer Agreement of Stetson Holdings, LLC, dated as of the date of the Financing Agreement, and as further amended by that certain Second Amendment to Limited Liability Company Agreement, dated as of the date of the Financing Agreement.

 

Borrower Pledge and Security Agreement” has the meaning given in Section 4.1(a)(ii) of the Financing Agreement.

 

Borrowing” means a borrowing or advance of Loans or the issuance or extension of any Letter of Credit under the Financing Agreement except for any conversions or continuation of Loans.  For the avoidance of doubt, neither the conversions of Loans under Sections 3.4(c), 3.6(a) or 3.6(b) of the Financing Agreement, nor continuations of any Loan without any increase in the aggregate principal amount outstanding shall be deemed to be a Borrowing.

 

Bridge Loan” and “Bridge Loans” have the meaning given in Section 2.1(a)(ii) of the Financing Agreement.

 

Bridge Loan Commitment Fees” has the meaning given in Section 3.3(d)(ii) of the Financing Agreement.

 

Bridge Loan Maturity Date” means the earliest to occur of (a) receipt by the Borrower or any Project Company of the Government Grant proceeds in respect of the Stetson II Project; (b) the date that is ninety (90) days or, at the sole discretion of the Administrative Agent, up to one hundred twenty (120) days after Commercial Operation; (c) the date on which the entire outstanding principal balance of the Bridge Loans, together with all unpaid interest, fees, charges and costs, become due and payable under the Financing Agreement; and (d) September 1, 2010.

 

Business Day” means any day (a) other than a Saturday, Sunday or other day on

 

A-8



 

which banks are authorized to be closed in New York, New York; and (b) which is also a day on which dealings in Dollar deposits are carried out in the London interbank market.

 

Capital Adequacy Requirement” has the meaning given in Section 3.6(d) of the Financing Agreement.

 

“Change of Control” means an event or any series of events by which (i) Member ceases to own, directly or indirectly, at least 51% of the voting rights of the equity interests of Borrower or (ii) Member ceases to own legally and beneficially at least 51% of the membership or economic interests of the Borrower.

 

Change of Law” has the meaning given in Section 3.6(b) of the Financing Agreement.

 

Cianbro Agreement” means that certain Construction Agreement, dated as of August 18, 2008, by and between Evergreen Wind Power V, LLC and Cianbro Corporation, as Contractor, for the Stetson Mountain Substation.

 

Citigroup REC Contract” means that certain Agreement for the Purchase and Sale of Renewable Energy Certificates and Credit Support Annex to the Agreement for the Purchase and Sale of Renewable Energy Certificates, each dated as of December 21, 2009, by and between Borrower and Citigroup Energy Inc.

 

Claims” has the meaning given in Section 7.23(a)(i) of the Financing Agreement.

 

Closing Date” means the date when each of the conditions precedent listed in Section 5.1 of the Financing Agreement has been satisfied or waived in writing by Administrative Agent and the Issuing Bank (with the consent of all the Lenders).

 

Code” means the Internal Revenue Code of 1986, as amended, including any applicable Treasury Regulations.

 

A-9


 

Collateral” means all real and personal property which is subject or required to become subject to the security interests or Liens granted by Borrower (or other Persons, as applicable) under any of the Collateral Documents.

 

Collateral Accounts” means the Revenue Account, Operating Account, the Debt Service Reserve Account, the O&M Reserve Account, the Loss Proceeds Account, the Disbursement Reserve Account and the Government Grant Proceeds Account.

 

Collateral Documents” means the Mortgage Documents, the Member Pledge and Security Agreement, the Borrower Security and Pledge Agreement, each Guaranty and Security Agreement, the Account Control Agreement, the Sponsor Indemnity, the Consents and any other security documents, financing statements and the like filed or recorded in connection with the foregoing.

 

Commercial Operation Date” means, in respect of the Stetson II Project, the date on which each of the following has occurred:  (i) the Placed in Service Date, (ii) “Commercial Operation Date” under the PPA, and (iii) “Commercial Operation” under the Interconnection Agreement.

 

Commitment” means, at any time with respect to each Lender, such Lender’s Proportionate Share of the Total Commitment at such time.

 

Commitment Fees” means, collectively, the Term Loan Commitment Fees, Bridge Loan Commitment Fees and the LC Commitment Fees.

 

Confirmation of Interest Period Selection means a written confirmation, substantially in the form of Exhibit C-1 to the Financing Agreement, confirming Borrower’s telephone notice to the Administrative Agent of a selected Interest Period.

 

Consents” means, collectively, the consents listed in Section 4.1(a)(vi) of the

 

A-10



 

Financing Agreement by and among Borrower, Security Agent and the Persons identified in such section, in each case substantially in the forms of Exhibits F-1 through F-12 to the Financing Agreement.

 

Construction Budget and Schedule” means, in respect of the Stetson II Project, the budget and schedule of anticipated costs to be incurred in connection with the construction and development of the Stetson II Project, in form and substance satisfactory to Administrative Agent.

 

Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with Borrower, are treated as a single employer under Section 414(b) or 414(c) of the Code.

 

Debt” of any Person at any date means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (d) all obligations of such Person under leases which are or should be, in accordance with GAAP, recorded as capital leases in respect of which such Person is liable, (e) all obligations of such Person to purchase securities (or other property) which arise out of or in connection with the sale of the same or substantially similar securities (or property), (f) 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, (g) all indebtedness of others secured by a Lien on any asset of such Person, whether or not such indebtedness is assumed by such Person, (h) all indebtedness of others guaranteed directly or indirectly by such Person or as to which such Person has an obligation substantially the economic equivalent of a

 

A-11



 

guaranty and (i) obligations in respect of Interest Rate Agreements.

 

Debt Service” means the obligations payable by Borrower for interest and principal on the Term Loans (other than the $3,000,000 to be prepaid as a Mandatory Prepayment pursuant to Section 3.2(c) of the Financing Agreement), interest only on the Bridge Loans, fees and expenses payable under the Financing Documents or other charges due in respect of Debt, and Reimbursement Obligations and any interest accrued thereon, as set forth in the Financing Documents.

 

Debt Service Coverage Ratio” means the ratio, calculated by the Administrative Agent as of each Payment Date for the preceding twelve-month period, based on (a) (i) Project Revenues from the ownership or operation of the Projects, less (ii) O&M Costs, to (b) Debt Service; provided, that in respect of each applicable Payment Date that is less than twelve (12) months after the date of the Financing Agreement, the calculation shall be performed in respect of the time period from the date of the Financing Agreement to such Payment Date.

 

Debt Service Reserve Account” has the meaning given in Section 6(d) of the Account Control Agreement.

 

Debt Service Reserve LC” means the letter of credit to be issued pursuant to Section 2.2(a)(ii) of the Financing Agreement.

 

Debt Service Reserve LC Loan” has the meaning given in Section 2.2(d)(iv) of the Financing Agreement.

 

Debt Service Reserve Requirement” means $6,630,000.

 

Debt Sizing Base Casemeans a good faith projection of reasonable operating results and forecasted cash flows for the Projects for the period from the Closing Date to the twentieth anniversary thereof, which shall include, without limitation, (i) hedged energy

 

A-12



 

revenues in respect of the Energy Hedge, (ii) energy and REC revenues based on the floor price set forth in the PPA, (iii) hedged REC sales in respect of the REC Contracts, (iv) capacity revenue (utilizing an assumption of a monthly capacity price of $1 per kilowatt after the completion of transmission system upgrades in June 2013), (v) merchant energy revenues, if applicable, (vi) cash collateral in the amount of $3,000,000 that will be placed on deposit in the Stetson I Holding Account, and (vii) any other forecasted cash receipts and expenditures of the Projects.

 

Default Rate” means the Base Rate Default Rate or the LIBO Rate Default Rate, as the context may require.

 

Defaulting Lender” means any Lender, as reasonably determined by the Administrative Agent, that has (a) failed to fund any portion of its Loans or participations in Letters of Credit within one (1) Business Date of the date required to be funded by it hereunder, (b) notified the Borrower, the Administrative Agent, the Issuing Bank or any Lender in writing that it does not intend to comply with any of its funding obligations under the Financing Agreement or under other agreements in which it commits to extend credit, (c) failed, within one (1) Business Day after request by the Administrative Agent, to confirm that it will comply with the terms of the Financing Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit, (d) otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it under the Financing Agreement within one (1) Business Day of the date when due, unless the subject of a good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance

 

A-13



 

of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval o