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EXHIBIT
10.1
EXECUTION
VERSION
CAPITAL CONTRIBUTION
AGREEMENT
This CAPITAL CONTRIBUTION
AGREEMENT (this “ Agreement ”), dated as of
May 31, 2007, is entered into by and among U.S. Energy Biogas
Corp., a Delaware corporation (the “ Company ”),
U.S. Energy Systems, Inc., a Delaware corporation (“
Holdings ”), and Silver Point Finance, LLC (the
“ Administrative Agent ”).
RECITALS:
WHEREAS , the Company
wishes to obtain financing pursuant to that certain Credit and
Guaranty Agreement, dated as of May 31, 2007 (as amended,
supplemented or otherwise modified, the “ Credit
Agreement ”), by and among the Company, certain
subsidiaries of the Company, as guarantors, the lenders party
thereto from time to time (the “ Lenders ”), and
the Administrative Agent, as administrative agent, collateral agent
and lead arranger, the proceeds of which will be used to
(i) fund the Transactions, (ii) pay the Transaction Costs
and (iii) for the general corporate purposes of
Company;
WHEREAS , it is a
condition precedent to the making of any Loan on the Closing Date
pursuant to the Credit Agreement that the Company shall enter into
this Agreement with Holdings.
NOW THEREFORE , in
consideration of the premises and the agreements, provisions and
covenants herein contained, the parties hereto agree as
follows:
ARTICLE I. DEFINITIONS
Section 1.01 Incorporated
Terms . Each capitalized term used herein and not defined
herein shall have the meaning ascribed to such term in the Credit
Agreement (regardless of whether such agreement shall have been
terminated or otherwise not be in full force and
effect).
Section 1.02
Definitions . As used herein, the following terms shall have
the meanings herein specified unless the context otherwise
requires.
“ Bank ”
shall mean
[ ]
.
“ Capital
Contribution ” shall mean, with respect to any YESCo
Payment, a cash capital contribution or any other cash payment to
the Company required to be made by Holdings to the Company in
accordance with Section 2.01 .
“ Capital
Contribution Date ” shall mean, with respect to any YESCo
Payment, the date upon which Holdings makes a Capital Contribution
in repayment of the amount of such YESCo Payment.
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“ Company’s
Account ” shall mean Account No.
[ ] in the
name of the Company at the Bank.
“ Default
Interest ” shall mean, for any day, a rate per annum
equal to the greater of (i) the Prime Rate in effect on such
day and (ii) the Federal Funds Effective Rate in effect on
such day plus three percent (3.0%).
“ Effective Date
” shall mean the date hereof.
“ Event of
Bankruptcy ” shall mean any voluntary or involuntary
event of bankruptcy of the type described in Sections 8.1(f) and
(g) of the Credit Agreement.
“ YESCo ”
shall mean Yankee Energy Services Company.
“ YESCo Document
” shall mean any of (i) the YESCo Note, (ii) the
Intercreditor and Subordination Agreement, dated as of
April 8, 2004, by and among Countryside Canada Power Inc.
(“ Canco ”) and YESCo, with respect to the
indebtedness of Company to such parties (the “ USEB
Subordination Agreement ”), (iii) the Intercreditor
and Subordination Agreement, dated as of April 8, 2004, by and
among Canco and YESCo, with respect to the indebtedness of the
YESCo Note Parties to such parties (the “ BMC Subsidiaries
Subordination Agreement ”), (iv) the Guaranty, dated
as of April 8, 2004, by USEB in favor of YESCo, and
(v) any ancillary documents related to any of the
foregoing.
“ YESCo Note
” shall mean that certain Secured Promissory Note, dated as
of March 30, 2001, by and among the YESCo Note Parties in
favor of YESCo, as amended by that certain BMC Note Amendment,
dated as of April 8, 2004, by and among the YESCo Note Parties
in favor of YESCo.
“ YESCo Note
Parties ” shall mean, collectively, BMC Energy LLC,
Brookhaven Energy, LLC, Countryside Genco, L.L.C., Countryside
Landfill Gasco, L.L.C., Morris Genco, L.L.C. and Morris Gasco,
L.L.C.
“ YESCo Payment
” shall mean any payment made to YESCo by the Company, the
YESCo Note Parties or any of their respective
Subsidiaries.
“ YESCo Payment
Date ” shall mean, with respect to any YESCo Payment, the
date upon which such payment is made.
Section 1.03 Rules of
Construction .
(a) Defined terms in this
Agreement shall include in the singular number the plural and in
the plural number the singular.
(b) The words
“hereof,” “herein” and
“hereunder” and words of similar import when used in
this Agreement shall, unless otherwise expressly specified, refer
to this Agreement as a whole and not to any particular provision of
this Agreement and all references to Sections shall be references
to Sections of this Agreement unless otherwise expressly
specified.
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(c) Any agreement, contract
or document defined or referred to herein shall be deemed to refer
to such agreement, contract or document, all schedules and exhibits
thereto and all amendments or modifications thereto permitted
pursuant to the terms hereof and the other Credit
Documents.
ARTICLE II. CAPITAL CONTRIBUTION
OBLIGATIONS
Section 2.01 Capital
Contributions . Commencing on the Effective Date to and
including the Maturity Date, on any YESCo Payment Date, Holdings
shall make Capital Contributions to the Company in an amount equal
to the YESCo Payment Amount made on such YESCo Payment
Date.
Section 2.02 Interest
. Any amount which is not paid when due pursuant to
Section 2.01 shall bear interest at the Default Rate
plus two percent (2%) (which amount shall be calculated
quarterly in arrears on the basis of a 360-day year) until paid in
full.
Section 2.03 Payments
. Holdings agrees to make all payments required to be made by it
hereunder in United States Dollars and immediately available funds
directly to the Company’s Account for the benefit of the
Company.
ARTICLE III. WAIVERS
Section 3.01 Obligations
Absolute . The obligation of Holdings to make any Capital
Contribution in accordance with Section 2.01 is
absolute, irrevocable and unconditional in all respects and shall
be unaffected by any circumstance whatsoever, including, without
limitation:
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(i) |
any lack of validity or enforceability of any obligations under
any Credit Document; |
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(ii) |
the existence of any claim, setoff, defense or other right
which Holdings may have against the Company, the YESCo Parties,
Bank or any other Person; |
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(iii) |
any failure by Holdings to perform its obligations under this
Agreement or any release (whether by operation of law or otherwise)
of the Company, the YESCo Parties or Holdings from its obligations
under this Agreement, any Credit Document or any YESCo
Document; |
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(iv) |
the occurrence of an Event of Bankruptcy with respect to the
Company, the YESCo Parties or any other Person and the occurrence
of any other proceeding as a result of such event; |
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(v) |
any
amendment, supplement or other modification of any YESCo Document
or any Credit Document (including, without limitation,
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any increase in the
amounts payable in respect of any or all of the obligations under
any Credit Document or any extension of the time of payment,
observance or performance, or any other amendment, supplement or
modification of any of the other terms and provisions relating to
the obligations under any Credit Document);
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(vi) |
the existence of any condition that adversely affects the value
of any of the Brookhaven Project, Countryside Project and the
Morris Project the (collectively, the YESCo-Related Projects
”) or the ability of the Company or the YESCo Parties to use
any of the YESCo-Related Projects for the purposes contemplated by
the applicable Project Documents; |
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(vii) |
the exercise by the Company, the YESCo Parties, the
Administrative Agent or any other Secured Party, or the Bank of any
of their rights and remedies under any Credit Document or any YESCo
Document; |
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(viii) |
any delay or failure by the Company, the YESCo Parties, the
Administrative Agent or any other Secured Party, or the Bank in the
exercise of their rights and remedies under this Agreement, any
Credit Document or any YESCo Document; |
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(ix) |
any breach or default by any Person in the performance or
observance of any of its obligations under this Agreement, any
Credit Document or any YESCo Document to which it is a party;
and |
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(x) |
the existence, value or condition of, or failure to perfect its
Lien against, any security for the obligations under the Credit
Documents or any action, or the absence of any action, by the
Administrative Agent or any other Secured Party or the Bank in
respect thereof (including, without limitation, the release of any
such security). |
Section 3.02 Waiver .
In addition to the wa
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