Exhibit 10.3
GUARANTY AGREEMENT
between
MICROGY GRAND ISLAND,
LLC
and
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee
Dated as of June 1,
2008
THIS GUARANTY
AGREEMENT made and
entered into as of June 1, 2008 (this “Guaranty”),
by and between MICROGY GRAND ISLAND, LLC , a limited
liability company duly organized and existing under the laws of the
State of Nebraska (“Guarantor”), to WELLS FARGO
BANK, NATIONAL ASSOCIATION , a national banking association,
with an office located at Philadelphia, Pennsylvania, as trustee
(“Trustee”), together with any successor trustee, at
the time serving as trustee under the Trust Indenture dated as of
June 1, 2008 between The City of Grand Island, Nebraska, and
Trustee.
W I T N E S S E T H :
WHEREAS, The City of Grand Island,
Nebraska (“Issuer”), a political subdivision duly
organized and existing under the laws of the State of Nebraska (the
“State”), intends to issue its Solid Waste Disposal
Facilities Revenue Bonds (Microgy Grand Island, LLC Project)
Series 2008, in an aggregate principal amount of $7,000,000
(the “Bonds”); and
WHEREAS, the Bonds are to be issued
under and pursuant to a Trust Indenture dated as of this date by
and between Issuer and Trustee (the “Indenture”);
and
WHEREAS, Issuer and Guarantor have
entered into a Lease Agreement dated as of this date (the
“Agreement”) pursuant to which the proceeds derived
from the issuance of the Bonds are to be provided to Guarantor for
the payment of the costs of the acquisition, construction,
improving and equipping of certain industrial solid waste disposal
facilities described in the Agreement (the “Project”)
being leased by Guarantor from Issuer; and
WHEREAS, Guarantor is desirous that
Issuer issue the Bonds and apply the proceeds as aforesaid and is
willing to enter into this Guaranty in order to enhance the
marketability of the Bonds and thereby achieve interest cost and
other savings and as an inducement to the purchase of the Bonds by
all who shall at any time become holders of the Bonds;
NOW, THEREFORE, in consideration of
the premises and in order to enhance the marketability of the Bonds
and thereby achieve cost savings to Guarantor and as an inducement
to the purchase of the Bonds by all who shall at any time become
holders of the Bonds, Guarantor does hereby, subject to the terms
hereof, covenant and agree with Trustee as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF
GUARANTOR
Guarantor hereby represents and
warrants that:
(a) it is a limited liability
company duly incorporated and in good standing under the laws of
the State;
(b) it is not in violation of any
provision of its Articles of Organization, its bylaws or its
Operating Agreement;
(c) it is not in violation of any
law in any manner affecting the validity or enforceability of this
Guaranty or its financial ability to perform hereunder;
(d) it has power to enter into this
Guaranty, has duly authorized the execution and delivery of this
Guaranty by proper corporate action and neither this Guaranty nor
the agreements herein contained contravene or constitute a default
under any agreement, instrument or indenture or any provision of
its Articles of Organization, its bylaws, its Operating Agreement
or any other agreement or requirement of law; and
(e) the assumption of its
obligations hereunder will result in a direct financial benefit to
Guarantor.
ARTICLE II
COVENANTS AND
AGREEMENTS
Section 2.01.
Guarantor hereby unconditionally
guarantees to Trustee for the benefit of the holders from time to
time of the Bonds the full and prompt payment of (a) the
principal of and premium, if any, on any Bond when and as the same
shall become due, whether at the stated maturity thereof, by
acceleration, call for redemption or otherwise, and (b) any
interest on any Bond when and as the same shall become due. In each
and every case, Guarantor agrees, in the event of the failure of
Issuer to make such payments of principal, premium, if any, or
interest, to make such payments to Trustee. All payments by
Guarantor shall be paid in lawful money of the United States
of America. Each and every default in payment of the principal of
and premium, if any, or interest on any Bond shall give rise to a
separate cause of action hereunder, and separate suits may be
brought hereunder as each cause of action arises.
Section 2.02.
The obligations of Guarantor under
this Guaranty shall be absolute and unconditional and shall remain
in full force and effect until the entire principal of and premium,
if any, and interest on the Bonds shall have been paid or provided
for, and such payment shall not be affected, modified or impaired
upon the happening from time to time of any event, including,
without limitation, any of the following whether or not with notice
to, or the consent of, Guarantor:
(a) the compromise, settlement,
release or termination of any or all of the obligations, covenants
or agreements of Issuer under the Indenture;
(b) the failure to give notice to
Guarantor of the occurrence of an event of default under the terms
and provisions of the Indenture or the Agreement;
(c) the assignment or mortgaging or
the purported assignment or mortgaging of all or any part of the
interest of Issuer in the Project or any failure of title with
respect to Issuer’s interest in the Project;
(d) the waiver of the payment,
performance or observance by Issuer or Guarantor of any of the
obligations, covenants or agreements of them contained in the
Indenture, the Agreement or this Guaranty;
(e) the extension of the time for
payment of any principal of or premium, if any, or interest on any
Bond or under this Guaranty or of the time for performance of any
other obligations, covenants or agreements under or arising out of
the Indenture, the Agreement or this Guaranty or the extension or
the renewal of any of them;
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(f) the modification or amendment
(whether material or otherwise) of any obligation, covenant or
agreement set forth in the Indenture or the Agreement;
(g) the taking or the omission of
any of the actions referred to in the Indenture or the Agreement
and any actions under this Guaranty;
(h) any failure, omission, delay or
lack on the part of Issuer or Trustee to enforce, assert or
exercise any right, power or remedy conferred on Issuer or Trustee
in this Guaranty, the Agreement or the Indenture, or any other act
or acts on the part of Issuer, Trustee or any of the holders from
time to time of the Bonds;
(i) the voluntary or involuntary
liquidation, dissolution, sale or other disposition of all or
substantially all the assets, marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition
with creditors or readjustment of, or other similar proceedings
affecting Guarantor or Issuer or any of the assets of them, or any
allegation or contest of the validity of this Guaranty or the
Agreement in any such proceeding;
(j) to the extent permitted by law,
the release or discharge of Guarantor from the performance or
observance of any obligation, covenant or agreement contained in
this Guaranty by operation of law; or
(k) the default or failure of
Guarantor fully to perform any of its obligations set forth in this
Guaranty;
provided that the specific
enumeration of the above-mentioned acts, failures or omissions
shall not be deemed to exclude any other acts, failures or
omissions, though not spe
