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Exhibit 10.24
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CREDIT AGREEMENT
DATED AS OF SEPTEMBER 1,2006
AMONG
SNOWFLAKE WHITE MOUNTAIN POWER, LLC
RENEGY, LLC
AND
RENEGY TRUCKING, LLC
(AS BORROWERS)
COBANK, ACB
(LC ISSUER)
COBANK, ACB
(LEAD ARRANGER, ADMINISTRATIVE AGENT AND COLLATERAL AGENT)
AND
THE FINANCIAL INSTITUTIONS PARTIES HERETO
(LENDERS)
----------
24 MW BIOMASS FIRED POWER PLANT
SNOWFLAKE, ARIZONA
LATHAM & WATKINS LLP
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS....................................................
1
1.1
Definitions.....................................................
1
1.2 Rules of
Interpretation.........................................
1
1.3 Accounting Terms:
GAAP.......................................... 1
1.4 Classification of Loans and
Borrowings.......................... 2
ARTICLE 2 THE CREDIT
FACILITIES.......................................... 2
2.1 Loan
Facilities.................................................
2
2.2 Letter of Credit
Facility....................................... 12
2.3 Total
Commitments...............................................
17
2.4
Fees............................................................
17
2.5 Other Payment
Terms............................................. 18
2.6 Pro Rata
Treatment..............................................
22
2.7 Change of
Circumstances......................................... 23
2.8 Funding
Losses..................................................
25
2.9 Alternate Office;
Minimization of Costs......................... 26
2.10
Register..................... .................................
27
2.11
Joint and Several
Liability of Borrowers........................ 28
ARTICLE 3 CONDITIONS PRECEDENT
......................................... 30
3.1 Conditions Precedent to the
Closing Date........................ 30
3.2 Conditions Precedent to Each
Credit Event....................... 39
3.3 Conditions Precedent to Each
Construction Credit Event.......... 40
3.4 Conditions Precedent to
Term-Conversion......................... 42
3.5 No Approval of
Work............................................. 45
3.6 Adjustment of Drawdown
Requests................................. 45
3.7 Determinations Under Section
3.1................................ 45
ARTICLE 4 REPRESENTATIONS AND
WARRANTIES................................. 45
4.1
Organization....................................................
45
4.2 Authorization- No
Conflict...................................... 45
4.3
Enforceability..................................................
46
4.4 Compliance with
Law............................................. 46
4.5 Single Purpose, Debt,
Contracts, Joint Ventures, Proceeds, Etc.. 46
4.6 Adverse
Change..................................................
47
4.7 Investment Company
Act.......................................... 47
4.8
ERISA...........................................................
47
4.9
Permits.........................................................
47
4.10
Hazardous
Substances............................................ 48
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4.11
Litigation......................................................
49
4.12
No Labor Disputes;
Acts of God; Force Majeure................... 50
4.13
Operative
Documents............................................. 50
4.14
Disclosure......................................................
50
4.15
Private Offering by
Borrowers................................... 51
4.16
Taxes...........................................................
51
4.17
Governmental
Regulation......................................... 51
4.18
Regulation U,
Etc............................................... 52
4.19
Budgets;
Projections............................................
52
4.20
Financial
Statements............................................ 52
4.21
No
Default......................................................
53
4.22
Organizational ID
Number; Location of Tangible Collateral....... 53
4.23
Title and
Liens................................................. 53
4.24
Intellectual
Property........................................... 53
4.25
Collateral......................................................
54
4.26
Sufficiency of Project
Documents................................ 54
4.27
Utilities.......................................................
55
4.28
Other
Facilities................................................
55
4.29
Insurance.......................................................
55
4.30
Anti-Terrorism
Law.............................................. 55
4.31
Construction Loan
Borrowings.................................... 56
4.32
No Recordation
Etc.............................................. 56
ARTICLE 5 AFFIRMATTVE
COVENANTS.......................................... 57
5.1 Use of Proceeds, Equity
Contributions and Project Revenues...... 57
5.2
Payment.........................................................
57
5.3 Maintenance of
Property......................................... 57
5.4
Notices.........................................................
58
5.5 Financing
Reporting............................................. 60
5 6 Books Records
Access............................................ 61
5.7 Compliance with Laws,
Instruments, Applicable Permits, Etc. .... 62
5.8
Reports.........................................................
62
5.9 Existence, Conduct of
Banking, Properties, Etc. ................ 63
5.10
Debt Service Coverage
Ratio..................................... 64
5.11
Indemnification.................................................
64
5.12
Exemption from
Regulation
..................................... 67
5.13
Construction of the
Project..................................... 67
5.14
Completion......................................................
67
5.15
Operation and
Maintenance of Project; Operating Budget.......... 68
5.16
Preservation of
Rights; Further Assurances...................... 69
5.17
Maintenence of
Insurance........................................ 71
5.18
Taxes, Other
Government Charges and Utility Charges............. 71
5.19
Event of Eminent
Domain......................................... 71
5.20
Interest Rate
Protection........................................ 71
5.21
Environmental
Laws.............................................. 72
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5.22
FUEL SUPPLY
PLAN................................................ 72
5.23
Independent
Consultants......................................... 73
ARTICLE 6 NEGATIVE
COVENANTS............................................. 73
6.1 Contingent
Liabilities.......................................... 73
6.2 Limitations on
Liens............................................ 73
6.3
Indebtedness....................................................
73
6.4 Sale or Lease of
Assets......................................... 73
6.5
Changes.........................................................
73
6.6 Restricted
Payments............................................. 74
6.7
Investments.....................................................
75
6.8 Transactions With
Affiliates.................................... 75
6.9 Margin Loan
Regulations......................................... 75
6.10
Partnerships,
etc............................................... 76
6.11
Dissolution;
Merger............................................. 76
6.12
Amendments; Change
Orders; Completion........................... 76
6.13
Name and Location;
Fiscal Year.................................. 78
6.14
Use of
Site.....................................................
78
6.15
Assignment......................................................
78
6.16
Accounts........................................................
78
6.17
Hazardous
Substances............................................ 79
6.18
Additional Project
Documents.................................... 79
6.19
Project Budget
Amendments....................................... 79
6.20
Assignment By Third
Parties..................................... 79
6.21
Acquisition of Real
Property.................................... 79
6.22
ERISA...........................................................
80
6.23
No Merchant
Sales............................................... 80
6.24
Lease
Obligations...............................................
80
6.25
Sale and Leaseback
Transactions................................. 80
6.26
Other
Agreements................................................
80
6.27
Disputes........................................................
80
6.28
Anti-Terrorism Law;
Anti-Money Laundering....................... 80
6.29
Embargoed
Persons............................................... 81
6.30
Bonds...........................................................
81
ARTICLE 7
Accounts.......................................................
82
7.1 Construction
Account............................................ 82
7.2 Revenue
Account.................................................
82
7.3 Debt Service Reserve
Account.................................... 84
7.4 Major Maintenance
Account....................................... 85
7.5 Application of Insurance
Proceeds............................... 86
7.6 Application of Eminent
Domain Proceeds.......................... 88
7.7 CHECKING
ACCOUNTS...............................................
88
7.8 Proceeds and Accounts;
Control.................................. 89
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7.9 Permitted
Investments........................................... 89
ARTICLE 8 EVENTS OF DEFAULT;
REMEDIES.................................... 90
8.1 Events of
Default............................................... 90
8.2
Remedies........................................................
96
ARTICLE 9 SCOPE OF
LIABILITY............................................. 98
ARTICLE 10 AGENTS:
SUBSTITUTION.......................................... 99
10.1
Appointment and
Authority....................................... 99
10.2
Rights as a
Lender.............................................. 99
10.3
Exculpatory
Provisions.......................................... 100
10.4
Reliance........................................................
101
10.5
Delegation of
Duties............................................ 101
10.6
Resignation.....................................................
101
10.7
Non-Reliance....................................................
102
10.8
Administrative Agent
May File Proofs of Claim................... 103
10.9
Collateral
Matters.............................................. 103
10.10
Indemnification.................................................
103
10.11
Withholding Tax.................................................
104
10.12 General
Provisions as to Payments...............................
104
10.13
Substitution of Tender..........................................
105
10.14
Administrative Agent Has LC Issuer's Power of Attorney..........
105
ARTICLE 11 INDEPENDENT
CONSULTANTS...................................... 105
11.1
Removal and
Fees................................................ 105
11.2
Duties..........................................................
106
11.3
Independent
Consultants' Certificates........................... 106
11.4
Certification of
Dates.......................................... 106
ARTICLE 12
Miscellaneous.................................................
107
12.1
Notices;
Signatures.............................................
107
12.2
Additional Security;
Right to Set-Off........................... 108
12.3
Delay and
Waiver................................................ 109
12.4
Costs, Expenses and
Attorneys' Fees............................. 109
12.5
Entire
Agreement................................................
111
12.6
Governing
Law................................................... 111
12.7
Severability....................................................
111
12.8
Headings........................................................
111
12.9
Additional Financing,
Etc....................................... 111
12.10 No
Partnership, Etc.............................................
112
12.11
Mortgage/Collateral Documents...................................
112
12.12 Limitation
on Liability......................................... 112
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12.13 Waiver of
Jury Trial............................................ 112
12.14 Consent to
Jurisdiction......................................... 113
12.15 Knowledge
and Attribution....................................... 114
12.16
Effectiveness...................................................
114
12.17 Successors
and Assigns.......................................... 114
12.18
Counterparts....................................................
118
12.19
Survival........................................................
118
12.20
Amendments; Waivers.............................................
118
12.21
Laws............................................................
120
12.22
Assignability as Collateral.....................................
121
12.23 Service of
Process.............................................. 121
12.24 Interest
Rate Limitation........................................
121
12.25
Marshalling; Assets Set Aside...................................
122
12.26
Independence of Covenants.......................................
122
12.27
Construction of the Documents...................................
122
12.28
Syndication.....................................................
122
12.29
Waiver..........................................................
123
12.30 The
Platform....................................................
123
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INDEX OF EXHIBITS
Exhibit A Definitions and
Rules of Interpretation
NOTES
Exhibit B-l Form
of Construction Note
Exhibit B-2 Form
of Term Note
Exhibit B-3 Form
of Renegy Term Note
Exhibit B-4 Form
of Revolving Note
Exhibit B-5 Form
of LC Loan Note
Exhibit B-6 Form
of Letter of Credit
LOAN DISBURSEMENT PROCEDURES
Exhibit C-l Form
of Notice of Borrowing
Exhibit C-2 Form
of Notice of Term-Conversion
Exhibit C-3 Form
of Notice of Interest Terms
Exhibit C-4 Form
of Drawdown Certificate
Exhibit C-5 Form
of Independent Engineer's Drawdown Certificate
SECURITY-RELATED DOCUMENTS
Exhibit D-l Form
of Mortgage
Exhibit D-2 Form
of Security Agreement
Exhibit D-3-A Form of Pledge Agreement (Stone Axe)
Exhibit D-3-B Form of Pledge Agreement (NZ Land)
Exhibit D-4 Form
of Bond Pledge Agreement
Exhibit D-5 Form
of Sponsor Guaranty
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Exhibit D-6
Schedule of Security Filings
CONSENTS
Exhibit E-l Form
of Consent for Contracting Party
Exhibit E-2
Schedule of Closing Date Consents
CLOSING CERTIFICATES
Exhibit F-l Form
of Borrowers' Closing Certificate
Exhibit F-2 Form
of Insurance Consultant's Certificate
Exhibit F-3 Form
of Independent Engineer's Certificate
Exhibit F-4 Form
of Fuel Consultant's Certificate
PROJECT DESCRIPTION EXHIBITS
Exhibit G-l
Permit Schedule
Exhibit G-2
Project Budget
Exhibit G-3 Base
Case Project Projections
Exhibit G-4
Project Schedule
Exhibit G-5
Pending Litigation
Exhibit G-6
Hazardous Substances Disclosure
Exhibit G-7
Construction Contracts Not in Place on Closing Date
OTHER
Exhibit H Lenders
Proportionate Shares
Exhibit I-1 Term
Loan Amortization Schedule
Exhibit I-2
Renegy Term Loan Amortization Schedule
Exhibit I-3 Bond
Optional Redemption Schedule
Exhibit J Form of Non-Bank
Certificate
Exhibit K Insurance
Requirements
Exhibit L Form of Annual
Insurance Certificate
Exhibit M Form of Monthly
Disbursement Requisition
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This CREDIT AGREEMENT, dated as of September 1, 2006 ("Agreement"),
by
and among SNOWFLAKE WHITE MOUNTAIN POWER, LLC, an Arizona limited
liability
company, as a borrower ("SWMP"), RENEGY, LLC, an Arizona limited
liability
company, as a borrower ("Renegy"), and RENEGY TRUCKING, LLC, an
Arizona limited
liability company, as a borrower ("Renegy Trucking," and,
collectively with SWMP
and Renegy, "Borrowers"), THE FINANCIAL INSTITUTIONS LISTED ON
EXHIBIT H OR WHO
LATER BECOME A PARTY HERETO, (the financial institutions party to
this Agreement
being collectively referred to as the "Lenders"), COBANK, ACB, as
letter of
credit issuer (in such capacity, "LC Issuer"), COBANK, ACB, as
administrative
agent for the Lenders (in such capacity, "Administrative Agent"),
and COBANK,
ACB, as collateral agent for the Secured Parties (in such capacity,
"Collateral
Agent").
RECITALS
A. Borrowers desire to develop, construct, finance, own, operate
and
maintain the Project referred to herein to be located near
Snowflake, Arizona,
and, in connection therewith, Borrowers have requested that the
Lenders provide
credit facilities in connection therewith.
B. The Lenders are willing to provide such credit facilities to
Borrowers upon the terms and subject to the conditions set forth
herein and in
the other Credit Documents.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the
agreements,
covenants and promises set forth herein and in the other Credit
Documents and in
reliance upon the representations and warranties set forth herein
and therein,
the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. For all purposes of the Credit Documents, except
as
otherwise expressly provided, capitalized terms used in the Credit
Documents
(including annexes, appendices, exhibits and schedules thereto)
shall have the
meanings given to such terms 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
the Credit
Documents.
1.3 ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided
herein, all terms of an accounting or financial nature shall be
construed in
accordance with GAAP, as in effect from time to time and as applied
by the
accounting entity to which they refer; provided, however that, if
Borrowers
notify Administrative Agent that Borrowers request an amendment to
any provision
hereof to eliminate the effect of any change occurring after the
date hereof in
GAAP or in the application thereof on the operation of such
provision (or if
Administrative Agent notifies Borrowers that the Majority Lenders
request an
amendment to any
<PAGE>
provision hereof for such purpose), regardless of whether any such
notice is
given before or after such change in GAAP or in the application
thereof, then
such provision shall be interpreted on the basis of GAAP as in
effect and
applied immediately before such change shall have become effective
until such
notice shall have been withdrawn or such provision amended in
accordance
herewith.
1.4 CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this
Agreement, Loans may be classified and referred to by class (e.g.,
"Construction
Loan") or by Type (e.g., "LIBOR Loan") or by class and Type (e.g.,
"Base Rate
Term Loan"). Borrowings may also be classified and referred to by
class or Type
or both.
ARTICLE 2
THE CREDIT FACILITIES
2.1 LOAN FACILITIES.
2.1.1 Construction Loan Facility.
(a) Availability. Subject to the terms and conditions set forth
in
this Agreement and in reliance upon the representations and
warranties
of
Borrowers set forth herein, each Lender severally agrees to advance
to
Borrowers from time to time during the Construction Loan
Availability
Period such loans as Borrowers may request pursuant to this Section
2.1.1
(individually, a "Construction Loan" and, collectively, the
"Construction
Loans"), in an aggregate principal amount which, when added to
such
Lender's Proportionate Share of the aggregate principal amount of
all prior
Construction Loans made by such Lender, does not exceed such
Lender's
Construction Loan Commitment.
(b) Notice of
Borrowing. Borrowers shall request Construction
Loans by delivering to Administrative Agent a written notice in the
form of
Exhibit C-l, appropriately completed ("Notice of Borrowing"),
which
contains or specifies, among other things:
(i) the portion of the requested Borrowing which will be
Base Rate Loans and the portion which will be LIBOR Loans;
(ii) the aggregate principal amount of the requested
Borrowing, which shall be in the minimum amount of $100,000;
provided, that such
minimum amount shall not apply to the Final Construction
Drawing;
(iii) the proposed date of the requested Borrowing (which
shall be a Business Day);
(iv) the initial Interest Period requested for a LIBOR
Borrowing in accordance with Section 2.1.5(d);
(v) a certification by Borrowers that the conditions set
forth in Sections 3.2 and 3.2.5 are satisfied as of the date of the
notice; and
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(vi) a certification by Borrowers that, as of the date such
requested Construction Loan is proposed to be made, the
Construction Loan
proposed to be made on such date, when added together with all
other
Construction Loans, does not exceed the Total Construction Loan
Commitment.
Notwithstanding any provision to the contrary in this section,
Borrowers (x) shall request no more than one Construction Loan
Borrowing per
month, and (y) may not select LIBOR Loans for any Borrowing that is
less than
$100,000 or if the obligations of the Lenders to make LIBOR Loans
shall then be
suspended pursuant to Section 2.7. Borrowers shall give each Notice
of Borrowing
to Administrative Agent with at least the Minimum Notice Period
applicable to
Construction Loans of the Type requested and not later than 11:00
a.m., Denver
time on the applicable day. Any Notice of Borrowing shall be
irrevocable and
binding on Borrowers.
(c) Construction Loan Principal Payments. Borrowers shall repay
to
Administrative Agent, for the account of each Lender, in full on
the
Construction Loan Maturity Date the unpaid principal amount of
all
Construction Loans made by such Lender which will not be
Term-Converted to
Term
Loans and at such time as provided in Section 2.1.2(a), together
with
any
unpaid interest, fees and costs related thereto. Borrowers may
not
re-borrow the principal amount of any Construction Loan so
repaid.
2.1.2 Term Loan Facility.
(a) Availability. Subject to the terms and conditions set forth
in
this Agreement and in reliance upon the representations and
warranties
of
Borrowers set forth herein, each Lender severally agrees to make
to
Borrowers on the Term-Conversion Date, at the request of Borrowers,
a term
loan
under this Section 2.1.2 (individually, a "Term Loan" and
collectively, the "Term Loans") in a principal amount not to exceed
the
lesser of (i) such Lender's Term Loan Commitment, and (ii)the
aggregate
principal amount of outstanding Construction Loans made by such
Lender.
Each
Lender shall make its Term Loan through its outstanding
Construction
Loans converting to a Term Loan.
(b) Notice of Term-Conversion. Borrowers shall request
Term-Conversion by delivering to Administrative Agent a written
notice in
the
form of Exhibit C-2, appropriately completed (the "Notice of
Term-Conversion"), which specifies, among other things:
(i) the portion of the Term Loans which will be Base Rate
Loans and the portion which will be LIBOR Loans;
(ii) the aggregate principal amount of the requested Term
Loans, which shall not exceed the lesser of (A) the Total Term Loan
Commitment
and (B) the aggregate principal amount of all Construction Loans
outstanding on
the Term-Conversion Date (which amount shall be calculated
immediately prior to
Term-Conversion, after giving effect to the Final Construction
Drawing (if any),
and the application of all liquidated damages and other amounts
required to be
applied to the prepayment of Construction Loans pursuant
hereto);
3
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(iii) the proposed date of Term-Conversion (which shall be a
Business Day on or before the Date Certain);
(iv) in the case of any LIBOR Term Loan, the initial
Interest Period requested therefor (which shall be an Interest
Period
contemplated by Section 2.1.4(c)); and
(v) a certification by Borrowers that the conditions set
forth in Sections 3.4.1 and 3.4.2 are satisfied as of the date of
the notice.
Notwithstanding any provision to the contrary in this section,
Borrowers may not select LIBOR Loans for any portion of the Term
Loans that is
less than $100,000 or if the obligations of the Lenders to make
LIBOR Loans
shall then be suspended pursuant to Section 2.7. Borrowers shall
deliver the
Notice of Term-Conversion to Administrative Agent with at least the
Minimum
Notice Period applicable to Loans of the Type requested upon
Term-Conversion;
provided, that not later than 10 Business Days prior to delivery of
the Notice
of Term-Conversion, Borrowers shall deliver to Administrative Agent
a draft of
such Notice of Term-Conversion and evidence documenting
satisfaction of the
conditions to Term-Conversion set forth in Section 3.3.8.
(c) Term Loan Principal Payment. Borrowers shall repay to
Administrative Agent, for the account of each Lender, the aggregate
unpaid
principal amount of the Term Loan made by such Lender in
installments
payable on each Principal Repayment Date in accordance with the
repayment
schedule set forth on Exhibit I-1 (the "Term Loan Amortization
Schedule"),
with
any remaining unpaid principal, interest, fees and costs due
and
payable on the Term Loan Maturity Date. Borrowers may not re-borrow
the
principal amount of any Term Loan so repaid.
2.1.3 Renegy Term Loan Facility.
(a) Availability. Subject to the terms and conditions set forth
in
this Agreement and in reliance upon the representations and
warranties
of
Borrowers set forth herein, each Lender severally agrees to advance
to
Borrowers from time to time during the Construction Loan
Availability
Period such loans as Borrowers may request pursuant to this Section
2.1.3
(individually, a "Renegy Term Loan" and, collectively, the "Renegy
Term
Loans"), in an aggregate principal amount which, when added to
such
Lender's Proportionate Share of the aggregate principal amount of
all prior
Renegy Term Loans made by such Lender, does not exceed such
Lender's Renegy
Term
Loan Commitment.
(b) Notice of Renegy Term Loan Borrowing. Borrowers shall
request
Renegy Term Loans by delivering to Administrative Agent a Notice
of
Borrowing which contains or specifies, among other things:
(i) the aggregate principal amount of the requested
Borrowing;
(ii) the proposed date of the requested Borrowing (which
shall be a Business Day);
4
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(iii) a certification by Borrowers that the conditions set
forth in Sections 3.2 and 3.2.5 are satisfied as of the date of the
notice; and
(iv) a certification by Borrowers that, as of the date such
requested Renegy Term Loan is proposed to be made, the Renegy Term
Loan proposed
to be made on such date, when added together with all other Renegy
Term Loans,
does not exceed the Total Renegy Term Loan Commitment.
Notwithstanding any provision to the contrary in this section,
Borrowers shall request no more than one Renegy Term Loan Borrowing
per month.
Borrowers shall give each such Notice of Borrowing to
Administrative Agent with
at least the Minimum Notice Period applicable to Renegy Term Loans
and not later
than 11:00 a.m., Denver time on the applicable day. Any Notice of
Borrowing
shall be irrevocable and binding on Borrowers.
(c) Renegy Term Loan Principal Payment. Borrowers shall repay
to
Administrative Agent, for the account of each Lender, the aggregate
unpaid
principal amount of the Renegy Term Loans made by such Lender
either (i) on
the
Construction Loan Maturity Date, or (ii) if the Construction Loans
have
Term-Converted, on Principal Repayment Dates in accordance with
the
repayment schedule set forth on Exhibit I-2 (the "Renegy Term
Loan
Amortization Schedule"), with any remaining unpaid principal,
interest,
fees
and costs due and payable on the Renegy Term Loan Maturity
Date.
Borrowers may not re-borrow the principal amount of any Renegy Term
Loan so
repaid.
2.1.4 Revolving Loan Facility.
(a) Availability. Subject to the terms and conditions set forth
in
this Agreement and in reliance upon the representations and
warranties
of
Borrowers set forth herein, each Revolving Lender severally agrees
to
advance to Borrowers from time to time during the Revolving
Loan
Availability Period, other than during the Clean-Up Period, such
loans as
Borrowers may request pursuant to this Section 2.1.4 (individually,
a
"Revolving Loan" and, collectively, the "Revolving Loans"), in an
aggregate
principal amount which, when added to such Lender's Proportionate
Share of
the
aggregate principal amount of all outstanding Revolving Loans of
such
Lender, does not exceed such Lender's Revolving Loan
Commitment.
(b) Notice of Revolving Loan Borrowing. SWMP shall request
Revolving Loans by delivering to Administrative Agent a Notice
of
Borrowing, which contains or specifies, among other things:
(i) the portion of the requested Borrowing which will be
Base Rate Loans and the portion which will be LIBOR Loans;
(ii) the aggregate principal amount of the requested
Borrowing, which shall be in integral multiples of $50,000;
(iii) the proposed date of the requested Borrowing (which
shall be a Business Day);
5
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(iv) the initial Interest Period requested for a LIBOR
Borrowing in accordance with Section 2.1.5(d);
(v) a certification by SWMP that the conditions set forth in
Section 3.2 are satisfied as of the date of the notice; and
(vi) a certification by SWMP that, as of the date such
requested Revolving Loan is proposed to be made, the Revolving Loan
proposed to
be made on such date, when added together with all other
outstanding Revolving
Loans, does not exceed the Total Revolving Loan Commitment.
Notwithstanding any provision to the contrary in this section,
SWMP
shall request no more than two Revolving Loan Borrowings per month.
SWMP shall
give each Notice of Revolving Loan Borrowing to Administrative
Agent with at
least the Minimum Notice Period applicable to the Type of Loans
being requested
and not later than 11:00 a.m., Denver time on the applicable day.
Any Notice of
Revolving Loan Borrowing shall be irrevocable and binding on
SWMP.
(c) Revolving Loan Principal Payments. SWMP may repay and
reborrow Revolving Loans. SWMP shall repay to Administrative Agent,
for the
account of each Revolving Lender, in full on the Revolving Loan
Maturity
Date
the unpaid principal amount of all Revolving Loans made by such
Lender.
2.1.5 Interest Provisions Relating to All Loans.
(a) Interest Rate. Subject to Section 2.5.3, Borrowers shall
pay
interest on the unpaid principal amount of each Loan from the date
of
Borrowing of such Loan until the repayment thereof at either (i)
for
Construction Loans, Term Loans and Revolving Loans, the Adjusted
LIBO Rate
or
Base Rate, plus in each case the applicable Rate Margin, (ii) for
Renegy
Term
Loans, the Fixed Rate, and (iii) for LC Loans, the Base Rate plus
the
applicable Rate Margin.
(b) Changes of Loan Type. The basis for determining the
interest
rate
with respect to any Loan may be changed from time to time as
specified
in a
Notice of Interest Terms delivered pursuant to Section 2.1.9. If
on
any
day a Loan is outstanding with respect to which notice has not
been
delivered to Administrative Agent in accordance with the terms of
this
Agreement specifying the applicable basis for determining the rate
of
interest, then for that day such Loan shall bear interest
determined by
reference to the Base Rate. Notwithstanding any provision in this
Agreement
to
the contrary, the Renegy Term Loans may not change in Type.
(c) Interest Payment Dates. Subject to the last sentence of
Section 2.5.3, Borrowers shall pay accrued interest on the unpaid
principal
amount of each Loan (i) in the case of each Base Rate Loan, on the
last
Business Day of each month, (ii) in the case of each LIBOR Loan, on
the
last
day of each Interest Period related to such LIBOR Loan and,
with
respect to Interest Periods longer than three months, the last
Business Day
of
each third month in which such LIBOR Loan is outstanding, (iii) in
the
case
of Renegy Term Loans, on
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<PAGE>
each
Payment Date until the Renegy Term Loans are repaid in full, (iv)
in
all
cases, for any Loan upon its conversion from one Type of Loan
to
another Type of Loan on the effective date of such conversion, and
(v) in
all
cases, upon repayment or prepayment (whether at stated maturity
or
otherwise, and including any optional prepayments or Mandatory
Prepayments)
of any Loan on the
date of payment thereof in full.
(d) LIBOR Loan Interest Periods.
(i) The Interest Period selected by Borrowers for all LIBOR
Loans shall be one, three or six months. Notwithstanding anything
to the
contrary in the preceding sentence, (A) 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 such next Business Day falls in
another calendar
month, in which case such Interest Period shall end on the
immediately preceding
Business Day; (B) 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 the calendar month in which it would have ended if
there were a
numerically corresponding day in such calendar month; (C) Borrowers
may not
select Interest Periods which would leave a greater principal
amount of Loans
subject to Interest Periods ending after a date upon which Loans
are or may be
required to be repaid (including the Construction Loan Maturity
Date, the Term
Loan Maturity Date, and each Principal Repayment Date) than the
principal amount
of Loans scheduled to be outstanding after such date; (D) unless
Term-Conversion
has occurred, any Interest Period for a Construction Loan which
would otherwise
end after the Construction Loan Maturity Date shall end on the
Construction Loan
Maturity Date; (E) any Interest Period for a Term Loan which would
otherwise end
after the Term Loan Maturity Date shall end on the Term Loan
Maturity Date; (F)
any Interest Period for a Revolving Loan which would otherwise end
after the
Revolving Loan Maturity Date shall end on the Revolving Loan
Maturity Date; (G)
LIBOR Loans for each Interest Period shall be in the minimum amount
of
$1,000,000 or an integral multiple of $100,000 in excess thereof;
(H) Borrowers
may not at any time have outstanding more than five different
Interest Period
end-dates relating to LIBOR Loans; and (I) Borrowers shall select
Types and
Interest Periods for Term Loans corresponding to the "types" and
"interest
periods" used for floating rate payments in the Swap Agreement
which hedge
interest risk arising under the Term Loans so as to create, to the
greatest
extent possible, a complete hedge.
(ii) Borrowers may contact Administrative Agent at any time
prior to the end of an Interest Period for an indicative quotation
of Interest
Rates in effect at such time for given Interest Periods and
Administrative Agent
shall promptly provide such quotation. Borrowers may, subject to
Section
2.1.8(c), select to continue any LIBOR Loan for any permissible
Interest Period
by communicating such selection to Administrative Agent
telephonically or by
email within the time periods required by Section 2.1.8, which
selection shall
be irrevocable. Borrowers shall confirm such telephonic or email
notice to
Administrative Agent by facsimile on the day such notice is given
by delivery to
Administrative Agent of a Notice of Interest Terms appropriately
completed, in
accordance with the instructions contained in such form. Borrowers
shall
promptly deliver to Administrative Agent the original of the Notice
of Interest
Terms initially delivered by facsimile. If Borrowers fail to
notify
7
<PAGE>
Administrative Agent of the next Interest Period for any LIBOR
Loans in
accordance with this Section 2.1.5(d)(ii), such Loans shall
automatically
convert to Base Rate Loans on the last day of the current Interest
Period
therefor. Administrative Agent shall as soon as practicable (and,
in any case,
within two Business Days after delivery of the Notice of Interest
Terms) notify
Borrowers of each determination of the Interest Rate applicable to
each Loan.
(e) Interest Computations. All computations of interest based
on
the
Base Rate shall be based upon a year of 365 days or, in the case of
a
leap
year, 366 days, shall be payable for the actual days elapsed
(including the first day but excluding the last day) in the period
for
which such interest is payable, and shall be adjusted in accordance
with
any
changes in the Base Rate to take effect on the beginning of the day
of
such
change in the Base Rate. All computations of interest based on
the
LIBO
Rate, Federal Funds Rate and of commitment fees shall be based upon
a
year
of 360 days and shall be payable for the actual days elapsed
(including the first day but excluding the last day) in the period
for
which such interest or fees are payable. Borrowers agree that
all
computations by Administrative Agent of interest shall be
conclusive and
binding in the absence of manifest error.
2.1.6 Promissory Notes. The obligation of Borrowers to repay
the Loans made by a Lender and to pay interest thereon at the rates
provided
herein shall, upon the written request of such Lender, be evidenced
by
promissory notes in the form of Exhibit B-1 (individually, a
"Construction Note"
and, collectively, the "Construction Notes"), Exhibit B-2
(individually, a "Term
Note" and, collectively, the "Term Notes"), Exhibit B-3
(individually, a "Renegy
Term Note" and, collectively, the "Renegy Term Notes"), Exhibit
B-4
(individually, a "Revolving Note" and, collectively, the "Revolving
Notes"), and
Exhibit B-5 (individually, a "LC Loan Note" and, collectively, the
"LC Loan
Notes") each payable to the order of such requesting Lender and in
the principal
amount of such Lender's Construction Loan Commitment, Term Loan
Commitment,
Renegy Term Loan Commitment, Revolving Loan Commitment, and the
principal
component of the LC Commitment respectively. Borrowers authorize
each such
requesting Lender to record on the schedule annexed to such
Lender's Note or
Notes, the date and amount of each Loan made by such requesting
Lender, and each
payment or prepayment of principal thereunder and agree that all
such notations
shall constitute prima facie evidence of the matters noted;
provided, that in
the event of any inconsistency between the records or books of
Administrative
Agent and any Lender's records or Notes, the records of
Administrative Agent
shall be conclusive and binding in the absence of manifest error.
Borrowers
further authorize each such requesting Lender to attach to and make
a part of
such requesting Lender's Note or Notes continuations of the
schedule attached
thereto as necessary. No failure to make any such notations, nor
any errors in
making any such notations, shall affect the validity of Borrowers'
obligations
to repay the full unpaid principal amount of the Loans or the
duties of
Borrowers hereunder or thereunder. Upon the payment in full in cash
of the
aggregate principal amount of, and all accrued and unpaid interest
on, the
applicable Loans, or in the case of Construction Notes, upon
Term-Conversion,
the Lenders holding Notes shall promptly mark the applicable Notes
cancelled and
return such cancelled Notes to Borrowers.
2.1.7 Loan Funding.
(a) Notice to Lenders. Administrative Agent shall promptly
notify
each
Lender of the contents of each Notice of Borrowing, Notice of
Renegy
Term
Loan
8
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Borrowing, Notice of Term-Conversion and Notice of Interest Terms,
and
shall notify each Revolving Lender of the contents of each Notice
of
Revolving Loan Borrowing.
(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 each Borrowing to consist collectively of the total of
the
Loans by each Lender equal to such Lender's Proportionate Share of
such
Loan.
(c) Lender Funding. Each Lender shall, before 11:00 a.m.,
Denver
time
on the date of each Borrowing of a Construction Loan, Renegy Term
Loan
or
Revolving Loan, make available to the account of Administrative
Agent
most
recently designated by it for such purpose, by wire transfer,
immediately available funds in Dollars, such Lender's Proportionate
Share
of
the Loan to be made on such date. The failure of any Lender to make
the
Loan
to be made by it as part of any Borrowing shall not relieve any
other
Lender of its obligation hereunder to make its Loan on the date of
such
Loan. No Lender shall be responsible for the failure of any other
Lender to
make
the Loan to be made by such other Lender on the date of any
Borrowing.
(d) Failure of Lender to Fund. Unless Administrative Agent
shall
have
been notified by any Lender prior to the applicable date of a
Borrowing that such Lender does not intend to make available to
Administrative Agent the amount of such Lender's Proportionate
Share of the
Loan
requested on such date, Administrative Agent may assume that
such
Lender has made such amount available to Administrative Agent on
such date
in
accordance with the prior paragraph and Administrative Agent may,
in its
sole
discretion and in reliance upon such assumption, make available
to
Borrowers a corresponding amount on such date. If such
corresponding amount
is
not in fact made available to Administrative Agent by such
Lender,
Administrative Agent shall be entitled to recover such
corresponding amount
on
demand (and, in any event, within two Business Days from the
applicable
date
of such Borrowing) from such Lender together with interest
thereon,
for
each day from the applicable date of such Borrowing until the date
such
amount is paid to Administrative Agent, at the Federal Funds Rate
for the
first two Business Days after such date. If such Lender pays such
amount to
Administrative Agent, then such amount shall constitute such
Lender's
Proportionate Share of such Loan included in such Loan. If such
Lender does
not
pay such corresponding amount forthwith upon Administrative
Agent's
demand therefor or within
two Business Days from the applicable date of
such
Borrowing, Administrative Agent shall promptly notify Borrowers
and
Borrowers shall immediately pay such corresponding amount to
Administrative
Agent together with interest thereon, for each day from the
applicable date
of
such Borrowing until the date such amount is paid to
Administrative
Agent, at the rate then payable under this Agreement for Base Rate
Loans.
Nothing in this Section 2.1.7(d) shall be deemed to relieve any
Lender from
its
obligation to fulfill its obligations hereunder or to prejudice
any
rights that Borrowers may have against any Lender as a result of
any
default by such Lender hereunder.
(e) Construction Account. No later than 2:00 p.m. Denver time
on
the
date specified in each Notice of Borrowing, if the applicable
conditions precedent listed in Article 3 have been satisfied or
waived in
accordance with the terms thereof and, subject to Section 2.1.7(d),
to the
extent Administrative Agent shall have received the appropriate
funds
9
<PAGE>
from
the Lenders, Administrative Agent shall make available the
Construction Loans and Renegy Term Loans requested in such Notice
of
Borrowing (or so much thereof as shall have been determined
pursuant to
Section 3.6) in Dollars and in immediately available funds, and
shall
deposit or cause to be deposited the proceeds of such Construction
Loans
and
Renegy Term Loans into the Construction Account.
(f) Revolving Loan Proceeds. No later than 2:00 p.m. Denver
time
on
the date specified in each Notice of Revolving Loan Borrowing, if
the
applicable conditions precedent listed in Article 3 have been
satisfied or
waived in accordance with the terms thereof and, subject to
Section
2.1.7(d), to the extent Administrative Agent shall have received
the
appropriate funds from the Revolving Lenders, Administrative Agent
shall
make
available the Revolving Loans requested in such Notice of
Revolving
Loan
Borrowing in Dollars and in immediately available funds, and
shall
deposit or cause to be deposited the proceeds of such Revolving
Loans into
the
Revenue Account or one or more of the Checking Accounts, at
Borrowers'
instruction.
2.1.8 Conversion of Loan Type; Continuation of LIBOR Loans.
Upon notice as provided in Section 2.1.9, Borrowers may convert
Loans from one
Type of Loan to another Type of Loan or continue a LIBOR Loan;
provided,
however, that
(a) any conversion of LIBOR Loans into Base Rate Loans shall be
made
on, and only on, the first day after the last day of an
Interest
Period for such LIBOR Loans;
(b) any portion of a Loan maturing or required to be repaid in
less
than one month may not be converted into or continued as a LIBOR
Loan;
(c) notwithstanding any contrary provision hereof, if an Event
of
Default has occurred and is continuing, Administrative Agent or
the
Majority Lenders may require, by notice to Borrowers, that (i)
no
outstanding Loan may be converted to or continued as a LIBOR Loan
and (ii)
unless repaid, each LIBOR Loan shall be converted to a Base Rate
Loan at
the
end of the Interest Period applicable thereto; and
(d) any portion of a LIBOR Loan that cannot be converted or
continued as a LIBOR Loan, or with respect to which Borrowers fail
to give
a
timely Notice of Interest Terms, as appropriately completed in
accordance
with
the instructions contained in such form, shall be converted at the
end
of
an Interest Period then in effect for such LIBOR Loan into a Base
Rate
Loan.
2.1.9 Notice of Conversion/Continuation of Loan Type.
Borrowers shall request a Loan conversion or continuation, as the
case may be,
by delivering to Administrative Agent a Notice of Interest Terms.
Borrowers
shall deliver each Notice of Interest Terms at least with the
applicable Minimum
Notice Period. Any Notice of Interest Terms shall be
irrevocable.
10
<PAGE>
2.1.10 Prepayments.
(a) Terms of All Prepayments.
(i) Upon the prepayment of any Loan (whether such prepayment
is an optional prepayment under Section 2.1.10(b) or a Mandatory
Prepayment),
Borrowers shall pay to Administrative Agent for the account of the
Lender which
made such Loan or Swap Bank, as applicable, (A) all accrued
interest to the date
of such prepayment on the amount of such Loan prepaid, (B) all
accrued fees to
the date of such prepayment relating to the amount of such Loan
being prepaid,
(C) to the extent required by the terms of the applicable Swap
Agreement, all
Swap Breaking Fees owed by Borrowers to such Lender or Swap Bank,
as applicable,
as a result of such prepayment, and (D) if such prepayment is the
prepayment of
a LIBOR Loan on a day other than the last day of an Interest Period
for such
LIBOR Loan, all LIBOR Breakage Costs incurred by such Lender as a
result of such
prepayment (pursuant to the terms of Section 2.8.1.).
(ii) Notwithstanding the foregoing, but only in respect of
any Mandatory Prepayment, Borrowers shall have the right, by giving
five
Business Days' notice to Administrative Agent, in lieu of prepaying
a LIBOR Loan
on a day other than the last day of an Interest Period for such
LIBOR Loan, to
deposit or cause Administrative Agent to deposit into a dedicated
account to be
held by Administrative Agent (which account shall be subjected to
the Lien of
the Collateral Documents in a manner reasonably satisfactory to
Administrative
Agent) an amount equal to the LIBOR Loans to be prepaid; such funds
shall be
held in such account until the expiration of the Interest Period
applicable to
the LIBOR Loan to be prepaid at which time the amount deposited in
such account
shall be used to prepay such LIBOR Loan and any interest accrued on
such amount
shall be deposited into the Revenue Account. The deposit of amounts
into such
dedicated account shall be deemed to satisfy Borrowers' obligation
to make the
relevant Mandatory Prepayment on its due date, but shall not,
however,
constitute a prepayment of Loans and all Loans to be prepaid using
the proceeds
from such account shall continue to accrue interest at the then
applicable
interest rate for such Loans until actually prepaid. All amounts in
such account
shall only be invested in Permitted Investments as directed by and
at the
expense and risk of Borrowers.
(iii) Except as otherwise specifically set forth herein, all
prepayments of Term Loans shall be applied to reduce the remaining
payments
required under Section 2.1.2(d) in inverse order of maturity.
Borrowers may not
re-borrow the principal amount of any Construction Loan, Renegy
Term Loan or
Term Loan which is prepaid. In connection with any optional
prepayments or
optional redemption of Bonds, Borrowers shall terminate or
partially terminate
Swap Agreements such that the notional amount under all of the Swap
Agreements
will not exceed, in the aggregate on any Payment Date, the
principal amount of
Loans and Bonds outstanding on such Payment Date, after giving
effect to such
prepayment or redemption.
(b) Optional Prepayments. Subject to Section 2.1.10(a),
Borrowers
may,
at their option and without premium or penalty, other than
applicable
interest rate hedge breakage costs, upon requisite notice to
Administrative
Agent, prepay (i) any Construction Loans in whole or from time to
time in
part
in minimum principal amounts of $1,000,000 or a multiple of
$100,000
in
excess thereof (provided, that such minimum amounts shall not
11
<PAGE>
apply to a prepayment of all outstanding Construction Loans), (ii)
any
Revolving Loans in whole or from time to time in part or (iii) any
Renegy
Term
Loans in whole or from time to time in part in any multiple of
$100,000 (provided, that such minimum amounts shall not apply to
a
prepayment of all outstanding Term Loans) or (iv) any Term Loans in
whole
or
from time to time in part in minimum principal amounts of
$1,000,000 or
a
multiple of $100,000 in excess thereof (provided, that such
minimum
amounts shall not apply to a prepayment of all outstanding Term
Loans).
(c) Mandatory Prepayments. Borrowers shall prepay (or cause to
be
prepaid) Loans to the extent (i) Borrowers receive any insurance
proceeds
or
eminent domain proceeds in excess of $100,000 and such proceeds are
not
used
to rebuild or repair the Project in accordance with the terms of
the
Credit Documents, (ii) required by Waterfall Level 8, Sections 7.5
and 7.6,
(iii) SWMP receives performance liquidated damages under the
Boiler
Purchase Contract or amounts pursuant to Section 1(c) of the
Sponsor
Guaranty, and (iv) any other provision of the Credit Documents
requires
such
prepayment (each such prepayment, a "Mandatory Prepayment").
Borrowers
shall repay the entire principal amount of Revolving Loans at least
once in
each
calendar year, and upon such repayment, may not reborrow
Revolving
Loans for a 30-day period thereafter (the "Clean-Up Period").
(d) Notice of Prepayment. Borrowers shall notify Administrative
Agent by written notice of any prepayment hereunder not later than
11:00
a.m., Denver time, 10 days before the date of prepayment. Each such
notice
shall be irrevocable. Each such notice shall specify the prepayment
date
and
the principal amount of each Loan or portion thereof to be prepaid
and,
in
the case of a Mandatory Prepayment, a reasonably detailed
calculation of
the
amount of such prepayment. If any notice of prepayment is given,
the
amount specified in such notice shall be due and payable on the
date
specified therefor, together with accrued interest to the payment
date on
the
principal amount to be prepaid. Upon receipt of any notice of
prepayment, Administrative Agent shall promptly advise the Lenders
of the
contents thereof.
2.2 LETTER OF CREDIT FACILITY.
2.2.1 The Letter of Credit Commitment. Subject to the terms
and conditions set forth herein, (a) LC Issuer agrees, in reliance
upon the
agreements of the other Lenders set forth in this Section 2.2, (i)
on the
Closing Date, to issue to the Trustee the Letter of Credit with an
expiration
date of the LC Facility Expiration Date, in the form of Exhibit B-6
(the "Letter
of Credit") for the account of SWMP in a stated amount equal to the
Total LC
Commitment and to deliver the Letter of Credit to the Trustee, and
(ii) to honor
drafts under the Letter of Credit; and (b) the Lenders severally
agree to
participate in the Letter of Credit issued for the account of SWMP.
Immediately
upon the issuance of the Letter of Credit, each Lender shall be
deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from LC
Issuer a
participation in the Letter of Credit in an amount equal to the
product of such
Lender's Proportionate Share times the stated amount of the Letter
of Credit. In
their sole discretion, LC Issuer and all of the Lenders may agree
to extend the
LC Facility Expiration Date (and the Letter of Credit) in two-year
increments
upon request of SWMP delivered to Administrative Agent not more
than six months
and not less than two months prior to the then LC Facility
Expiration Date.
12
<PAGE>
2.2.2 Drawings and Reimbursements; Funding of
Participations. SWMP hereby agrees to reimburse Administrative
Agent for the
account of LC Issuer and Administrative Agent agrees to pay such
amount to LC
Issuer: (a) by the close of business on the Business Day that any
payment by LC
Issuer is made with respect to any drawing other than a Tender
Drawing upon the
Letter of Credit or Confirmation, the amount of such drawing; and
(b) with
respect to any Tender Drawing, through repayment of the related LC
Loan, at the
time specified in Section 2.2.3(e).
2.2.3 If SWMP fails to so reimburse Administrative Agent on
the date of the drawing of the Letter of Credit or Confirmation,
Administrative
Agent shall promptly notify each Lender of the date of the drawing
(the "Drawing
Date"), the amount of the unreimbursed drawing (the "Unreimbursed
Amount"), and
such Lender's Proportionate Share thereof. In the case of a Tender
Drawing upon
the Letter of Credit or Confirmation, SWMP shall be deemed to have
requested a
Base Rate Loan to be disbursed on the Drawing Date in an amount
equal to the
Unreimbursed Amount corresponding to the Tender Drawing (an "LC
Loan"). LC Loans
shall:
(a) be made without regard to the minimum and multiples
specified
in
Section 2.1.1(b)(ii) or otherwise;
(b) be subject to satisfaction of the conditions set forth in
Section 3.2.2;
(c) be made at any time whether before or after the
Term-Conversion Date;
(d) not be subject to conversion of Loan Type; and
(e) be repayable upon the earliest to occur of (i) 90 days
after
the
related Drawing Date, (ii) the date on which the Bonds for which
the
related drawing was made are remarketed, and (iii) the LC
Facility
Expiration Date.
2.2.4 Each Lender shall upon any notice pursuant to Section
2.2.3 make a payment to Administrative Agent for the account of LC
Issuer, in an
amount equal to its Proportionate Share of the Unreimbursed Amount
not later
than 1:00 p.m., Denver time, on the Business Day specified in such
notice by
Administrative Agent, whereupon each Lender that so makes funds
available in
respect of a Tender Drawing shall be deemed to have made an LC Loan
to SWMP in
such amount. Administrative Agent shall remit the funds so received
to LC
Issuer.
2.2.5 With respect to any Unreimbursed Amount that is not
refinanced by an LC Loan, such Unreimbursed Amount shall be due and
payable by
SWMP on demand (together with interest) and shall bear interest at
the Default
Rate for Base Rate Loans. In such event, each Lender's payment to
Administrative
Agent for the account of LC Issuer pursuant to Section 2.2.4 shall
be deemed
payment in respect of its participation in such Unreimbursed Amount
and shall
constitute an LC Advance from such Lender in satisfaction of its
participation
obligation under this Section 2.2.5.
13
<PAGE>
2.2.6 Until each Lender funds its LC Loan or LC Advance to
reimburse LC Issuer for any amount drawn under the Letter of Credit
or
Confirmation, interest in respect of such Lender's Proportionate
Share of such
amount shall be solely for the account of LC Issuer.
2.2.7 Each Lender's obligation to make LC Loans or LC
Advances to reimburse LC Issuer for amounts drawn under the Letter
of Credit or
Confirmation shall be absolute and unconditional and shall not be
affected by
any circumstance, including (a) any setoff, counterclaim,
recoupment, defense or
other right which such Lender may have against LC Issuer, SWMP or
any other
Person for any reason whatsoever; (b) the occurrence or continuance
of a Default
or Event of Default, or (c) any other occurrence, event or
condition, whether or
not similar to any of the foregoing. Any such reimbursement shall
not relieve or
otherwise impair the obligation of SWMP to reimburse LC Issuer
pursuant to
Section 2.2.2 for the amount of any payment made by LC Issuer with
respect to
any drawing under the Letter of Credit or Confirmation, together
with interest
as provided herein.
2.2.8 If any Lender fails to make available to
Administrative Agent for the account of LC Issuer any amount
required to be paid
by such Lender pursuant to the foregoing provisions of this Section
2.2 by the
time specified in Section 2.2.4, LC Issuer shall be entitled to
recover from
such Lender (acting through Administrative Agent), on demand, such
amount with
interest thereon for the period from the date such payment is
required to the
date on which such payment is immediately available to LC Issuer at
a rate per
annum equal to the Federal Funds Rate from time to time in effect.
A certificate
of LC Issuer submitted to any Lender (through Administrative Agent)
with respect
to any amounts owing under this Section 2.2 shall be conclusive
absent manifest
error.
2.2.9 Pledged Bonds. As security for the payment of the
obligations of the Borrowers in respect of LC Loans, SWMP will
pledge to
Collateral Agent, and grant to Collateral Agent a security interest
in, its
right, title and interest in and to Bonds delivered to the Trustee
for the
account of the LC Issuer in connection with any Tender Drawing
(herein called
"Pledged Bonds"), pursuant to a pledge agreement in the form of
Exhibit D-4 (the
"Bond Pledge Agreement"). Any amounts from time to time outstanding
in respect
of LC Loans may be prepaid (a) at any time by SWMP on one Business
Day's notice
stating the amount to be prepaid (which shall be $5,000 or a whole
multiple
thereof) and (b) at any time on behalf of SWMP on notice from the
Borrowers.
Upon payment of the amount to be prepaid, together with accrued
interest to the
date of such prepayment on the amount to be prepaid, the
outstanding obligations
of the Borrowers in respect of LC Loans shall be reduced by the
amount of such
prepayment, interest shall cease to accrue on the amount prepaid
and Collateral
Agent shall release from the pledge and security interest created
by the Bond
Pledge Agreement a principal amount of Pledged Bonds equal to the
amount of such
prepayment; provided, however, that prior to such release from the
pledge and
security interest created by the Bond Pledge Agreement of Bonds
delivered to or
registered in the name of Collateral Agent in connection with a
Tender Drawing,
the Borrowers shall have paid to Administrative Agent for the
account of the
Lenders the amount owing in respect of the interest Drawing, if
any, made in
conjunction with such Tender Drawing. Such Bonds shall be delivered
to or
registered in the name of SWMP, in the event of a prepayment
pursuant to clause
(a) above, or the new Bondholder(s) (as defined in the
Indenture)
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thereof pursuant to Section 6.11(d) of the Indenture, in the event
of a
prepayment pursuant to clause (b) above, as appropriate.
2.2.10 Credit for Amount Paid on Bonds. The Borrowers shall
receive a credit against their payment obligations in respect of
interest on and
principal of LC Loans to the extent of any amounts actually paid
to
Administrative Agent or the Collateral Agent in respect of any
interest or
principal due on any Pledged Bonds.
2.2.11 Repayment of Participations.
(a) At any time after LC Issuer has made a payment in respect
of
any
drawing under the Letter of Credit or Confirmation and has
received
from any Lender such
Lender's LC Advance or funding of LC Loan in respect
of
such payment in accordance with Section 2.2.4, if Administrative
Agent
receives for the account of LC Issuer any payment related to the
Letter of
Credit or Confirmation (whether directly from SWMP or otherwise,
including
proceeds of cash collateral applied thereto by Administrative
Agent), or
any
payment of interest thereon, Administrative Agent will distribute
to
such
Lender its Proportionate Share thereof in the same funds as
those
received by Administrative Agent.
(b) If any payment received by Administrative Agent for the
account of LC Issuer pursuant to Section 2.2.2 is required to be
returned,
each
Lender shall pay to Administrative Agent for the account of LC
Issuer
its
Proportionate Share thereof on demand of Administrative Agent,
plus
interest thereon from the date of such demand to the date such
amount is
returned by such Lender, at a rate per annum equal to the Federal
Funds
Rate
from time to time in effect.
2.2.12 Obligations Absolute. The obligation of SWMP to
reimburse LC Issuer for each drawing under the Letter of Credit or
Confirmation,
and to repay each drawing under the Letter of Credit or
Confirmation that is
refinanced by LC Loans, shall be absolute, unconditional and
irrevocable, and
shall be paid strictly in accordance with the terms of this
Agreement under all
circumstances, including the following:
(a)
any lack of validity or enforceability of the Letter of
Credit, the Confirmation, this Agreement, or any other agreement
or
instrument relating thereto;
(b) the existence of any claim, counterclaim, set-off, defense
or
other right that SWMP may
have at any time against any beneficiary or any
transferee of the Letter of Credit or Confirmation (or any Person
for whom
any
such beneficiary or any such transferee may be acting), LC Issuer
or
any
other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the Letter of Credit or
Confirmation
or
any agreement or instrument relating thereto, or any unrelated
transaction;
(c) any draft, demand, certificate or other document presented
under the Letter of Credit or Confirmation proving to be
forged,
fraudulent, invalid or insufficient in any respect or any statement
therein
being untrue or inaccurate in any respect; or any loss or delay in
the
transmission or otherwise of any document required in order to make
a
drawing under the Letter of Credit or Confirmation;
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<PAGE>
(d) any payment by LC Issuer under the Letter of Credit or by
Confirming Bank under the Confirmation against presentation of a
draft or
certificate that does not strictly comply with the terms of the
Letter of
Credit or Confirmation; or any payment made by LC Issuer under the
Letter
of Credit or by
Confirming Bank under the Confirmation to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession,
assignee
for
the benefit of creditors, liquidator, receiver or other
representative
of
or successor to any beneficiary or any transferee of the Letter
of
Credit or Confirmation, including any arising in connection with
any
proceeding under any Bankruptcy Law; or
(e) any other circumstance or happening whatsoever, whether or
not
similar to any of the foregoing, including any other circumstance
that
might otherwise constitute a defense available to, or a discharge
of, SWMP.
2.2.13 Role of LC Issuer. Each Lender and SWMP agree that,
in paying any drawing under the Letter of Credit or Confirmation,
LC Issuer and
Confirming Bank shall not have any responsibility to obtain any
document (other
than any sight draft, certificates and documents expressly required
by the
Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of
any such document or the authority of the Person executing or
delivering any
such document. No Agent nor any of the respective correspondents,
participants
or assignees of LC Issuer shall be liable to any Lender for (a) any
action taken
or omitted in connection herewith at the request or with the
approval of the
Lenders or the Majority Lenders or Required Lenders, as applicable;
(b) any
action taken or omitted in the absence of gross negligence or
willful
misconduct; or (c) the due execution, effectiveness, validity or
enforceability
of any document or instrument related to the Letter of Credit. SWMP
hereby
assumes all risks of the acts or omissions of any beneficiary or
transferee with
respect to its use of the Letter of Credit or Confirmation;
provided, however,
that this assumption is not intended to, and shall not, preclude
SWMP from
pursuing such rights and remedies as it may have against the
beneficiary or
transferee at law or under any other agreement. Administrative
Agent shall not,
nor shall any of the respective correspondents, participants or
assignees of LC
Issuer, be liable or responsible for any of the matters described
in clauses (a)
through (e) of Section 2.2.12; provided, however, that anything in
such clauses
to the contrary notwithstanding, SWMP may have a claim against LC
Issuer, and LC
Issuer may be liable to SWMP, to the extent, but only to the
extent, of any
direct, as opposed to consequential or exemplary, damages suffered
by SWMP which
SWMP proves were caused by LC Issuer's willful misconduct or gross
negligence or
LC Issuer's willful failure to pay under the Letter of Credit after
the
presentation to it by the beneficiary of a sight draft and
certificate(s)
strictly complying with the terms and conditions of the Letter of
Credit. In
furtherance and not in limitation of the foregoing, LC Issuer may
accept
documents that appear on their face to be in order, without
responsibility for
further investigation, regardless of any notice or information to
the contrary,
and LC Issuer shall not be responsible for the validity or
sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign the
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in
whole or in part, which may prove to be invalid or ineffective for
any reason.
2.2.14 Draw Under Confirmation. For all purposes of this
Section 2.2, a draw under the Confirmation shall be treated as if a
draw had
been made under the Letter of Credit, whether or not LC Issuer has
reimbursed
the Confirming Bank. Without limitation of the
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foregoing, (a) in the event of a draw on the Confirmation, such
draw shall for
all purposes of this Section 2.2 be treated as a draw under the
Letter of Credit
and the protections to LC Issuer and acknowledgments of the
Borrowers and
Lenders in this Section 2.2 shall fully apply to a draw under the
Confirmation.
2.3 TOTAL COMMITMENTS.
2.3.1 Loan Commitment Amounts.
(a) Total Construction Loan Commitment. The aggregate principal
amount of all Construction Loans made by the Lenders shall not
exceed
$12,001,890 (the "Total Construction Loan Commitment").
(b) Total
Term Loan Commitment. The aggregate principal amount of
all
Term Loans to be made by the Lenders shall not exceed the lesser of
(i)
the
Total Construction Loan Commitment, and (ii) the aggregate amount
of
Construction Loans outstanding on the Term-Period Commencement Date
after
giving effect to any Final Construction Drawing (such amount, the
"Total
Term
Loan Commitment").
(c) Total Renegy Term Loan Commitment. The aggregate principal
amount of the Renegy Term Loan to be made by the Lenders shall not
exceed
$1,492,123 (such amount, the "Total Renegy Term Loan
Commitment")
(d) Total Revolving Loan Commitment. The aggregate principal
amount of all Revolving Loans made by the Lenders shall not exceed
$500,000
(such amount, the "Total Revolving Loan Commitment").
(e) Total LC Commitment. The "Total LC Commitment" shall be
equal
to
$40,161,891, of which the principal component is $39,250,000 and
the
interest component is
$911,891.
2.4 FEES.
2.4.1 Administrative Agent Fees. Borrowers shall pay to
Administrative Agent solely for Administrative Agent's account the
fees and
other amounts described in the Fee Letter.
2.4.2 Commitment Fees.
(a) On the last Business Day in each calendar quarter and on
the
Construction Loan Maturity Date (or, if the Total Construction
Loan
Commitment is canceled prior to such date, on the date of such
cancellation), Borrowers shall pay to Administrative Agent, for the
benefit
of
the Lenders, accruing from the date hereof or the first day of
such
quarter, as the case may be, a commitment fee for such quarter (or
portion
thereof) then ending equal to the product of (a) the daily
average
Available Construction Loan Commitment for such quarter (or
portion
thereof), multiplied by (b) a fraction, the numerator of which is
the
number of days in such quarter (or portion thereof) and the
denominator of
which is 360 days multiplied by (c) 0.50%.
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<PAGE>
(b) On the last Business Day in each calendar quarter until the
earlier of the Revolving Loan Maturity Date or the date of
cancellation of
the
Total Revolving Loan Commitment, Borrowers shall pay to
Administrative
Agent, for the benefit of the Revolving Lenders, accruing from the
date
hereof or the first day of such quarter, as the case may be, a
commitment
fee
for such quarter (or portion thereof) then ending equal to the
product
of
(a) daily average unborrowed Revolving Loan Commitment, multiplied
by
(b)
a fraction, the numerator of which is the number of days in
such
quarter (or portion thereof) and the denominator of which is 360
days
multiplied by (c) 0.50%.
2.4.3 Arrangement Fees. Borrowers shall pay to the Lead
Arranger, solely for the account of such Person in such capacity,
the fees as
described and in the manner set forth in the Fee Letter.
2.4.4 Letter of Credit Fees. Borrowers shall pay to
Administrative Agent for the account of each Lender in accordance
with its
Proportionate Share a Letter of Credit fee equal to (a) the Rate
Margin for
LIBOR Loans multiplied by (b) the average daily maximum amount
available to be
drawn under the Letter of Credit during the applicable quarter
multiplied by (c)
a fraction, the numerator of which is the number of days in the
applicable
quarter (or portion thereof) and the denominator of which is the
number of days
in that calendar year (365 or 366, as the case may be) ("LC Fee").
Subject to
the last sentence of Section 2.5.3, such fee shall be due and
payable on the
last Business Day of each March, June, September and December,
commencing with
the first such date to occur after the issuance of the Letter of
Credit, and on
the LC Facility Expiration Date.
2.4.5 Documentary and Processing Charges Payable to LC
Issuer. Borrowers shall pay directly to LC Issuer for its own
account a fronting
fee at the times and in the amounts as are set forth in the Fee
Letter, and the
customary issuance, presentation, amendment and other processing
fees, and other
standard costs and charges, of LC Issuer relating to the Letter of
Credit as
from time to time in effect. Such fees and charges are due and
payable on demand
and are nonrefundable.
2.4.6 Upfront Fee. Borrowers shall pay to each Lender the
upfront closing fee in the amount set forth in the Fee Letter.
2.5 OTHER PAYMENT TERMS.
2.5.1 Place and Manner. Except as otherwise provided in the
Fee Letter or any other provision contained in any of the Credit
Documents,
Borrowers shall make all payments due hereunder to Administrative
Agent, to the
account in the name of SWMP, Account No. 00041437, at CoBank, ACB,
Greenwood
Village, Colorado, ABA No. 307088754, Account Reference: Snowflake
White
Mountain Power, LLC, Attn: Syndication/Participation Servicing-Jana
Ault, or
such other account as Administrative Agent shall notify Borrowers
from time to
time, in Dollars and in immediately available funds not later than
12:00 noon,
Denver 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 Business Day
after such
payment is received. Administrative Agent shall distribute to each
Secured Party
each such payment received by Administrative Agent for such Secured
Party to be
applied in accordance with the terms of this Agreement, such
18
<PAGE>
disbursement to occur on the day such payment is received if
received by 12:00
noon or if otherwise reasonably possible, or otherwise on the next
Business Day.
Upon its acceptance and recording in the Register of any Assignment
and
Assumption, from and after the effective date specified therein,
Administrative
Agent shall make all the payments hereunder and under the Notes in
respect of
the Credit Agreement interest assigned thereby to the Lender
assignee
thereunder, and the parties to such Assignment and Assumption shall
make all
appropriate adjustments in such payments for periods prior to such
effective
date directly between themselves.
2.5.2 Date. 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, without
duplication of any
interest or fees so paid in the next subsequent calculation of
interest or fees
payable; provided, however, that, if such extension would cause
payment of
interest on or principal of a LIBOR Loan to be made in the next
succeeding
calendar month, such payment shall be made on the immediately
preceding Business
Day.
2.5.3 Default Interest. Notwithstanding anything to the
contrary herein, upon the occurrence and during the continuation of
any Event of
Default, the outstanding principal amount of all Loans and, to the
extent
permitted by applicable Legal Requirements, any accrued but unpaid
interest
payments thereon and any accrued but unpaid fees and other amounts
hereunder,
shall thereafter bear interest (including post-petition interest in
any
proceeding under applicable Bankruptcy Laws) from the date of such
Event of
Default until the Event of Default is cured or waived, after as
well as before
judgment, payable monthly and upon demand at a rate that is 2% per
annum in
excess of the interest rate then otherwise payable under this
Agreement for Base
Rate Loans and the LC Fee rate shall be increased by 2% (the
"Default Rate");
provided, that, in the case of LIBOR Loans, upon the expiration of
the Interest
Period in effect at the time any such increase in interest rate is
effective,
such LIBOR Loans shall thereupon become Base Rate Loans and shall
thereafter
bear interest payable upon demand at a rate that is 2% per annum in
excess of
the interest rate then otherwise payable under this Agreement for
Base Rate
Loans. Payment or acceptance of the increased rates of interest and
increased LC
Fees provided for in this Section 2.5.3 is not a permitted
alternative to timely
payment and shall not constitute a waiver of any Event of Default
or otherwise
prejudice or limit any rights or remedies of Administrative Agent
or any Lender.
Notwithstanding any other provision of this Agreement, during such
time as the
Default Rate applies, interest on the Loans and the LC Fees shall
be payable on
the last Business Day of each month.
2.5.4 Net of Taxes, Etc.
(a) Taxes. Subject to each Lender's compliance with Section
2.5.6, any and all payments to or for the benefit of any Secured
Party by
Borrowers under any Credit Document shall be made free and clear of
and
without deduction, set-off 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 any present or future taxes,
assessment,
levies, imposts, duties, deductions, charges or withholdings, and
all
liabilities with respect thereto (excluding income and franchise
taxes,
which include taxes imposed on or measured by the net income, net
profits
or
capital of such Secured Party by any jurisdiction or any
political
19
<PAGE>
subdivision or taxing authority thereof or therein as a result of
a
connection between such Secured Party and such jurisdiction or
political
subdivision, unless such connection results solely from such
Secured
Party's executing, delivering or performing its obligations or
receiving a
payment under, or enforcing, this Agreement or any Note) (all
such
non-excluded taxes, assessment, levies, imposts, duties,
deductions,
charges or withholdings and liabilities being hereinafter referred
to as
"Taxes"), shall be equal to the amounts otherwise specified to be
paid
under the Credit Documents. If Borrowers shall be required by
applicable
Legal Requirements to withhold or deduct any Taxes from or in
respect of
any
sum payable under any Credit Document to any Secured Party, (i) 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 2.5.4), such Secured Party receives an
amount
equal to the sum it would have received had no such deductions been
made,
(ii)
Borrowers shall make such deductions and (iii) Borrowers shall pay
the
full
amount deducted to the relevant taxation authority or other
authority
in
accordance with applicable Legal Requirements. In addition,
Borrowers
agree to pay any present or future stamp, recording or documentary
taxes
and
any other excise or property taxes, charges or similar levies
(not
including income or franchise taxes) that arise under the laws of
the
United States of
America, the State of New York or the Project Jurisdiction
from
any payment made under any Credit Document or from the execution
or
delivery or otherwise with respect to any Credit Document
(hereinafter
referred to as "Other Taxes").
(b) Tax Indemnity. Borrowers shall indemnify each Secured Party
and
Confirming Bank for and hold it harmless against the full amount
of
Taxes and Other Taxes (including any Taxes or Other Taxes imposed
by any
jurisdiction on amounts payable under this Section 2.5.4) paid by
any
Secured Party or Confirming Bank, or any liability (including
penalties,
interest and expenses) arising therefrom or with respect thereto,
whether
or
not such Taxes or Other Taxes were correctly or legally
asserted.
Payments by Borrowers pursuant to this indemnification shall be
made within
30
days from the date such Secured Party or Confirming Bank makes
written
demand therefor (submitted through Administrative Agent), which
demand
shall be accompanied by a certificate describing in reasonable
detail the
basis thereof.
(c) Notice. Within 30 days after the date of any payment of
Taxes
by
Borrowers, Borrowers shall furnish to Administrative Agent, at
its
address referred to in Section 12.1.1, the original or a certified
copy of
a
receipt evidencing payment thereof or, if such receipt is not
obtainable,
other evidence of such payment by Borrowers reasonably satisfactory
to
Administrative Agent. Borrowers shall compensate each Secured Party
or
Confirming Bank for all reasonable losses and expenses sustained by
such
Secured Party or Confirming Bank as a result of any failure by
Borrowers to
so
furnish such copy of such receipt. In the event of any payment
hereunder
(or
under the Notes) by or on behalf of Borrowers through an account
or
branch outside the United States or on behalf of Borrowers by a
payor that
is
not a United States person, if Borrowers determine that no Taxes
are
payable in respect thereof, Borrowers shall furnish, or cause such
payor to
furnish, to Administrative Agent an opinion of counsel acceptable
to
Administrative Agent stating that such payment is exempt from
Taxes. For
purposes of this Section, the terms "United States"
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and
"United States person" have the respective meanings specified
in
Section 7701 of the Code.
(d) Conduit Financing. Notwithstanding anything to the contrary
contained in this Section 2.5.4, if a Lender is a conduit
entity
participating in a conduit financing arrangement (as defined in
Section
7701(1) of the Code and the Treasury Regulations issued thereunder)
with
respect to any payments made by Borrowers under this Agreement and
under
any
Note, Borrowers shall not be obligated to pay additional amounts
to
such
Lender pursuant to this Section 2.5.4 to the extent that the amount
of
United States Taxes exceeds the amount that would have otherwise
been
payable were such Lender not a conduit entity participating in a
conduit
financing arrangement.
2.5.5 Application of Payments. Except as otherwise expressly
provided in any Credit Document, payments made under the Credit
Documents and
other amounts received by the Secured Parties under the Credit
Documents shall
first be applied to any fees, costs, charges or expenses payable to
the Secured
Parties under the Credit Documents, next to any accrued but unpaid
interest then
due and owing, and then to outstanding principal then due and owing
or otherwise
to be prepaid (in each case, such application to be made on a pro
rata basis
among such applicable Persons).
2.5.6 Withholding Exemption Certificates. Administrative
Agent on the Closing Date, each Lender and LC Issuer upon becoming
a Lender or
LC Issuer and each Person to which any Lender grants a
participation (or
otherwise transfers its interest in this Agreement) agree that they
will deliver
to Administrative Agent and Borrowers either (a) if such Lender, LC
Issuer or
Person is a corporation established under the laws of the United
States or any
political subdivision thereof, an executed copy of a United States
Internal
Revenue Service Form W-9, or (b) if such Lender, LC Issuer or
Person is not a
corporation established under the laws of the United States or any
political
subdivision thereof 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 therein an entitlement to a reduction in, or an
exemption from,
United States withholding taxes) and, in case such Lender or LC
Issuer is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, a
duly completed
and executed non-bank certificate in the form of Exhibit J (the
"Non-Bank
Certificate"). Each Lender or LC Issuer which delivers to Borrowers
and
Administrative Agent a Form W-8BEN or W-8ECI pursuant to the
preceding sentence
further undertakes to deliver to Borrowers and Administrative Agent
further
copies of the 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 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 forms previously delivered by it to Borrowers, and such
extensions or
renewals thereof as may reasonably be requested by Borrowers,
certifying in the
case of a Form W-8BEN or W-8ECI that such Lender or LC Issuer is
entitled to
receive payments under this Agreement without deduction or
withholding of any
United States federal income taxes, unless in any such cases an
event (including
any change in treaty, law or regulation) has occurred prior to the
date on which
any such delivery would otherwise be required which renders all
such forms
inapplicable or which would prevent a Lender or LC Issuer from duly
completing
and delivering any such form with respect to it and such Lender
or
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LC Issuer advises Borrowers that it is not capable of receiving
payments without
any deduction or withholding of United States federal income tax,
and in the
case of Form W-8BEN or W-8ECI, establishing an exemption from
United States
backup withholding tax. Notwithstanding any other provision of this
Section
2.5.6, a Lender or LC Issuer shall not be required to deliver any
form pursuant
to this Section 2.5.6 that such Lender or LC Issuer is not legally
able to
deliver. Borrowers shall not be obligated to pay any additional
amounts in
respect of United States federal income tax pursuant to Section
2.5.4 (or make
an indemnification payment pursuant to Section 2.5.4) to any Lender
(including
any entity to which any Lender sells, assigns, grants a
participation in, or
otherwise transfers its rights under this Agreement) or LC Issuer
if the
obligation to pay such additional amounts (or such indemnification)
would not
have arisen but for a failure of such Lender or LC Issuer to comply
with its
obligations under this Section 2.5.6. Administrative Agent will
cause Confirming
Bank to comply with the provisions of this Section 2.5.6 and aside
from such
compliance, the other terms of this Section 2.5.6 shall apply to
Confirming Bank
as if it were LC Issuer.
2.5.7 Administrative Agent Assumption. Unless Administrative
Agent shall have been notified by SWMP prior to the date on which
any payment
from Borrowers is due hereunder that Borrowers do not intend to
make such
payment in full, Administrative Agent may assume that Borrowers
have made such
payment in full to Administrative Agent on such date and
Administrative Agent
may, in its sole discretion and in reliance upon such assumption,
cause to be
distributed to each Secured Party on such due date an amount equal
to the amount
then due such Secured Party. If and to the extent Borrowers shall
not have so
made such payment in full to Administrative Agent, each Secured
Party shall
repay to Administrative Agent forthwith on demand such amount
distributed to
such Secured Party together with interest thereon, for each day
from the date
such amount is distributed to such Secured Party until the date
such Secured
Party repays such amount to Administrative Agent, at the Federal
Funds Rate.
2.6 PRO RATA TREATMENT.
2.6.1 Borrowings. Except as otherwise provided herein, (a)
each LC Loan and each Borrowing consisting of Construction Loans,
Renegy Term
Loans, Revolving Loans or Term Loans shall be made or allocated
among the
Lenders pro rata according to their respective Proportionate Shares
of such
Loans or Commitments, as the case may be, (b) each payment of
principal of and
interest on Loans and each reimbursement of a drawing under the
Letter of Credit
shall be made or shared among the Lenders holding such Loans pro
rata according
to their respective unpaid principal amounts of such Loans held by
such Lenders,
and (c) each payment of Commitment Fees and LC Fees shall be shared
among the
Lenders pro rata according to (i) their respective Proportionate
Shares of the
Commitments to which such fees apply, and (ii) in the case of each
Lender which
becomes a party to this Agreement hereunder after the Closing Date,
the date
upon which such Lender so became a party hereunder.
2.6.2 Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise
of any right
of set-off, or otherwise) on account of Loans or Unreimbursed
Amounts owed to
it, in excess of its Proportionate Share of payments on account of
such Loans or
Unreimbursed Amounts obtained by all Lenders entitled to such
payments, such
Lender shall forthwith purchase from the other Lenders such
participation in the
Loans or Unreimbursed Amounts as shall be necessary to cause
such
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purchasing Lender to share the excess payment ratably with each of
them;
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 Proportionate Share (according to the
proportion of (a)
the amount of such other Lender's required repayment to (b) 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.
Borrowers agree that any Lender so purchasing a participation from
another
Lender pursuant to this Section 2.6.2 may, to the fullest extent
permitted by
law, exercise all its rights of payment (including the right of
set-off) with
respect to such participation as fully as if such Lender were the
direct
creditor of Borrowers in the amount of such participation.
2.7 CHANGE OF CIRCUMSTANCES.
2.7.1 Inability to Determine Rates. If, on or before the
first day of any Interest Period for any LIBOR Loans, (a)
Administrative Agent
determines that the Adjusted LIBO Rate for such Interest Period
cannot be
adequately and reasonably determined due to the unavailability of
funds in or
other circumstances affecting the London interbank market, or (b)
Lenders
holding aggregate Proportionate Shares of 3VA% or more of the
Commitments shall
advise Administrative Agent that (i) the rates of interest for such
LIBOR Loans
do not adequately and fairly reflect the cost to such Lenders of
making or
maintaining such Loans or (ii) 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
Borrowers) in the
ordinary course of business in sufficient amounts to make and/or
maintain their
LIBOR Loans, then Administrative Agent shall immediately give
notice of such
condition to Borrowers. After the giving of any such notice and
until
Administrative Agent shall otherwise notify Borrowers that the
circumstances
giving rise to such condition no longer exist, Borrowers' right to
request the
making of or conversion to, and the Lenders' obligations to make or
convert to,
LIBOR Loans shall be suspended. Any LIBOR Loans 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 unless such
suspension has
then ended.
2.7.2 Illegality. If, after the date of this 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
Borrowers with any request or directive (whether or not having the
force of law,
but if not having the force of law, being of a type with which a
Lender
customarily complies) of any Governmental Authority (a "Change of
Law") shall
make it unlawful or impossible for any Lender to make or maintain
any LIBOR
Loan, then such Lender shall immediately notify Administrative
Agent and
Borrowers of such Change of Law. Upon receipt of such notice, (a)
Borrowers'
right to request the making of or conversion to, and the Lender's
obligations to
make or convert to, LIBOR Loans shall be suspended for so long as
such condition
shall exist, and (b) Borrowers shall at their option, upon request
of such
Lender, either (i) convert any then
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outstanding LIBOR Loans into Base Rate Loans, in accordance with
such request,
immediately or at the end of the current Interest Periods for such
Loans, or
(ii) prepay pursuant to Section 2.1.10 any then outstanding LIBOR
Loans. Any
conversion or prepayment of LIBOR 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 2.8.
2.7.3 Increased Costs. If, after the date of this Agreement,
any Change of Law:
(a) shall subject any Lender, LC Issuer or Confirming Bank to
any
tax,
duty or other charge with respect to any LIBOR Loan or Commitment
in
respect thereof, or the Letter of Credit or Confirmation, or shall
change
the
basis of taxation of payments by Borrowers to any Lender on such a
Loan
or
with respect to any such Commitment, Letter of Credit or
Confirmation
(except for Taxes, Other Taxes or changes in the rate of taxation
on the
overall net income of any Lender); or
(b) shall impose, modify or hold applicable any reserve,
special
deposit or similar requirement (without duplication of any
reserve
requirement included within the applicable Interest Rate through
the
definition of "Reserve Requirement") against assets held by,
deposits or
other liabilities in or for the account of, advances or loans by,
or any
other acquisition of funds by any Lender for any LIBOR Loan; or
(c) shall impose on any Lender, LC Issuer or Confirming Bank
any
other condition directly related to any LIBOR Loan or Commitment in
respect
thereof, or the Letter of Credit or Confirmation;
and the effect of any of the foregoing is to increase the cost to
such Lender,
LC Issuer or Confirming Bank of making, issuing, creating,
renewing,
participating in (subject to the limitations in Section 12.17.3) or
maintaining
any such LIBOR Loan or Commitment in respect thereof, Letter of
Credit or
Confirmation, or to reduce any amount receivable by such Lender, LC
Issuer or
Confirming Bank hereunder or under the Confirmation Agreement, then
Borrowers
shall from time to time, within 10 days after demand by such
Lender, LC Issuer
or Confirming Bank, pay to such Lender, LC Issuer or Confirming
Bank additional
amounts sufficient to reimburse such Lender, LC Issuer or
Confirming Bank for
such increased costs or to compensate such Lender, LC Issuer or
Confirming Bank
for such reduced amounts. A certificate setting forth in reasonable
detail the
amount of such increased costs or reduced amounts and the basis
for
determination of such amount, submitted by such Lender, LC Issuer
or Confirming
Bank to Borrowers, shall, in the absence of manifest error, be
conclusive and
binding on Borrowers for purposes of this Agreement.
2.7.4 Capital Requirements. If any Lender, LC Issuer or
Confirming Bank determines that (a) the adoption, effectiveness,
phase-in or
applicability after the date hereof of any law, rule or regulation
(or any
provision thereof) regarding capital adequacy, or any change
therein or in the
interpretation or administration thereof by any Governmental
Authority charged
with the interpretation or administration thereof, or compliance by
any Lender,
LC Issuer or Confirming Bank with any guideline, request or
directive regarding
capital adequacy (whether or not having the force of law) of any
such
Governmental Authority has or
24
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would have the effect of reducing the rate of return on the capital
of such
Lender, LC Issuer or Confirming Bank or the Lending Office of such
Lender, LC
Issuer or Confirming Bank or any Person controlling such Lender, LC
Issuer or
Confirming Bank (a "Capital Adequacy Requirement") as a consequence
of, or with
reference to, such Lender's Loans or Commitments or Letter of
Credit or
Confirmation or other obligations hereunder to a level below that
which such
Lender, LC Issuer, Confirming Bank or such Person could have
achieved but for
such adoption, effectiveness, phase-in, applicability, change or
compliance
(taking into consideration the policies of such Lender, LC Issuer,
Confirming
Bank or such controlling Person with regard to capital adequacy),
and (b) the
amount of capital maintained by such Lender, LC Issuer, Confirming
Bank or such
Person which is attributable to or based upon the Loans, the
Commitments, the
Letter of Credit, the Confirmation or this Agreement must be
increased as a
result of such Capital Adequacy Requirement (taking into account
such Lender's,
LC Issuer's, Confirming Bank's or such Person's policies with
respect to capital
adequacy), then Borrowers shall pay to such Lender, LC Issuer,
Confirming Bank
or such Person, within 10 days after delivery of demand, such
amounts as such
Lender, LC Issuer, Confirming Bank or such Person shall reasonably
determine are
necessary to compensate such Lender, LC Issuer, Confirming Bank or
such Person
for the increased costs to such Lender, LC Issuer, Confirming Bank
or such
Person of such increased capital. A certificate of such Lender, LC
Issuer,
Confirming Bank or such Person, setting forth in reasonable detail
the
computation of any such increased costs, delivered to Borrowers
shall, in the
absence of manifest error, be conclusive and binding on Borrowers
for purposes
of this Agreement.
2.7.5 Notice. Each Lender or LC Issuer shall notify
Borrowers of any event occurring after the date of this Agreement
that will
entitle such Lender or LC Issuer to compensation pursuant to this
Section 2.7,
as promptly as practicable, and in no event later than 90 days
after the
principal officer of such Lender or LC Issuer responsible for
administering this
Agreement obtains knowledge thereof; provided, that any Lender's or
LC Issuer's
failure to notify Borrowers within such 90-day period shall not
relieve
Borrowers of their obligation under this Section 2.7 with respect
to claims
arising prior to the end of such period, but shall relieve
Borrowers of their
obligations under this Section 2.7 with respect to the time between
the end of
such period and such time as Borrowers receive notice from the
indemnitee as
provided herein. No Person purchasing from a Lender a participation
in any
Commitment (as opposed to an assignment) shall be entitled to any
payment from
or on behalf of Borrowers pursuant to Section 2.7.3 or Section
2.7.4 which would
be in excess of the applicable proportionate amount (based on the
portion of the
Commitment 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
Commitment. Administrative Agent shall provide to Borrowers from
Confirming Bank
comparable notices as are to be delivered by Lenders and LC Issuer
under this
Section 2.7.5.
2.8 FUNDING LOSSES.
2.8.1 LIBOR Funding Costs. If Borrowers shall (a) repay or
prepay any LIBOR Loan on any day other than the last day of an
Interest Period
for such Loan (whether an optional prepayment or a Mandatory
Prepayment), (b)
fail to borrow any LIBOR Loan in accordance with a Notice of
Borrowing delivered
to Administrative Agent (whether as a result of the failure to
satisfy any
applicable conditions or otherwise), (c) fail to convert any Loan
into a
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LIBOR Loan in accordance with a Notice of Interest Terms delivered
to
Administrative Agent (whether as a result of the failure to satisfy
any
applicable conditions or otherwise), (d) fail to continue any LIBOR
Loan in
accordance with a Notice of Interest Terms delivered to
Administrative Agent,
(e) fail to convert any Construction Loan into Term Loan in
accordance with a
Notice of Term-Conversion delivered to Administrative Agent, (f)
fail to make
any prepayment in accordance with any notice of prepayment
delivered to
Administrative Agent, or (g) fail to pay when due principal amount
of or
interest on any LIBOR Loan, then Borrowers shall, within five days
after demand
by any Lender, indemnify such Lender and hold it harmless from any
and all
costs, expenses, losses and liabilities (collectively, the "LIBOR
Breakage
Costs") incurred by such Lender as a result of such repayment,
prepayment or
failure. Borrowers understand and agree that LIBOR Breakage Costs
may include
costs, expenses, losses and liabilities and expenses incurred by a
Lender as a
result of funding and other contracts entered into by such Lender
to fund LIBOR
Loans or otherwise arising from the redeployment of funds obtained
by it or from
fees payable to terminate the deposits from which such funds are
obtained.
2.8.2 Calculations of LIBOR Breakage Costs. Each Lender
demanding payment under this Section 2.8 shall deliver to Borrowers
a
certificate setting forth in reasonable detail the basis for and
the amount of
costs, expenses and losses for which the demand is made; such
certificate so
delivered to Borrowers shall, in the absence of manifest error, be
conclusive
and binding as to the amount payable for purposes of this
Agreement. For the
purpose of calculation of any LIBOR Breakage Costs each Lender
shall be deemed
to have actually funded its relevant LIBOR Loan through the
purchase of a
deposit bearing interest at the Adjusted LIBO Rate in an amount
equal to the
amount of such LIBOR Loan and having a maturity comparable to the
relevant
Interest Period, provided, however, that each Lender may fund each
of its LIBOR
Loans in any manner it see fit, and the foregoing assumption shall
be utilized
only for the calculation of amounts payable under Section
2.8.1.
2.9 ALTERNATE OFFICE; MINIMIZATION OF COSTS.
2.9.1 To the extent reasonably possible, each Lender shall
designate an alternative Lending Office with respect to its LIBOR
Loans and
otherwise take any reasonable actions to reduce any liability of
Borrowers to
any Lender under Section 2.5.4, 2.7.3, 2.7.4 or 2.8, or to avoid
the
unavailability of any Type of Loans under Section 2.7.2 so long as
(in the case
of the designation of an alternative Lending Office) such Lender,
in its sole
discretion, determines that (a) such designation is not
disadvantageous to such
Lender and (b) such actions would eliminate or reduce liability to
such Lender.
Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any
Lender in connection with any such designation or actions within 10
Business
Days of demand thereof to Borrowers.
2.9.2 If and with respect to each occasion that a Lender
either makes a demand for compensation pursuant to Section 2.5.4,
2.7.3 or 2.7.4
or is unable for a period of three consecutive months to fund LIBOR
Loans
pursuant to Section 2.7.2 or such Lender wrongfully fails to fund a
Loan, then
Borrowers may, upon at least five Business Days' prior irrevocable
written
notice to each of such Lender and Administrative Agent, in whole
permanently
replace the Loans and Commitments of such Lender; provided, that
Borrowers shall
replace such Loans and Commitments with the Loans and Commitments
of a
commercial bank
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reasonably satisfactory to Administrative Agent. Such replacement
Lender shall
upon the effective date of replacement purchase the Obligations
owed to such
replaced Lender for the aggregate amount thereof and shall
thereupon for all
purposes become a "Lender" or "LC Issuer", as the case may be,
hereunder. Such
notice from Borrowers shall specify an effective date for the
replacement of
such Lender's Loans and Commitments, which date shall not be later
than the 14th
day after the day such notice is given. On the effective date of
any replacement
of such Lender's Loans and Commitments pursuant to this Section
2.9.2, Borrowers
shall pay to Administrative Agent for the account of such Lender
(a) any fees
due to such Lender to the date of such replacement, (b) the
principal of and
accrued interest on the principal amount of outstanding Loans held
by such
Lender to the date of such replacement (such amount to be
represented by the
purchase of the Obligations of such replaced Lender by the
replacing Lender and
not as a prepayment of such Loans), and (c) the amount or amounts
due to such
Lender pursuant to each of Sections 2.5.4, 2.7.3 and 2.7.4, as
applicable, and
any other amount then payable hereunder to such Lender. Borrowers
will remain
liable to such replaced Lender for any LIBOR Breakage Costs that
such Lender
sustains or incurs as a consequence of the purchase of such
Lender's Loans
(unless such Lender has defaulted on its obligation to fund a Loan
hereunder).
Upon the effective date of the purchase of any Lender's Loans owed
to such
Lender and termination of such Lender's Commitments pursuant to
this Section
2.9.2, such Lender shall cease to be a Lender hereunder. No such
termination of
any such Lender's Commitments and the purchase of such Lender's
Loans pursuant
to this Section 2.9.2 shall affect (i) any liability or obligation
of Borrowers
or any other Lender to such terminated Lender, or any liability or
obligation of
such terminated Lender to Borrowers or any other Lender, which
accrued on or
prior to the date of such termination or (ii) such terminated
Lender's rights
hereunder in respect of any such liability or obligation.
2.9.3 Upon written notice to Administrative Agent, any
Lender may designate a Lending Office other than the Lending Office
most
recently designated to Administrative Agent and may assign all of
its interests
under the Credit Documents and its Notes (if any) 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
Borrowers under Section 2.5.4, 2.7.3 or 2.7.4 or make an Interest
Rate option
unavailable pursuant to Section 2.7.2.
2.10 REGISTER. Administrative Agent shall maintain a register
(the
"Register") for the recordation of certain information hereunder
from time to
time. The Register shall be available for inspection by Borrowers
or any Secured
Party at any reasonable time and from time to time upon reasonable
prior notice.
Administrative Agent shall record in the Register (a) the
Commitments and the
Loans from time to time of each Lender, (b) the interest rates
applicable to all
Loans and the effective dates of all changes thereto, (c) the
Interest Period
for each LIBOR Loan, (d) the date and amount of any principal or
interest due
and payable or to become due and payable from Borrowers to each
Lender
hereunder, (e) each repayment or prepayment in respect of the
principal amount
of the Loans of each Lender and reimbursement of draws of the
Letter of Credit,
(f) the amount of any sum received by Administrative Agent
hereunder for the
account of the Secured Parties and each Secured Party's share
thereof, (g) a
copy of each Assignment and Assumption entered into under Section
12.17.2, and
(h) such other information as Administrative Agent may determine is
necessary
for the administering of the Loans, the Letter of Credit and
27
<PAGE>
this Agreement. Any such recording shall be conclusive and binding
in the
absence of manifest error; provided, that neither the failure to
make any such
recordation, nor any error in such recordation, shall affect any
Lender's
Commitment or the Obligations in respect of any applicable Loans or
the Letter
of Credit or otherwise; and provided, further, that in the event of
any
inconsistency between the Register and any Secured Party's records,
the Register
shall govern absent manifest error.
2.11 JOINT AND SEVERAL LIABILITY OF BORROWERS.
2.11.1 Each of Borrowers is accepting joint and several
liability hereunder and under the other Credit Documents in
consideration of the
financial accommodations to be provided by Secured Parties under
this Agreement,
for the mutual benefit, directly and indirectly, of each of
Borrowers and in
consideration of the undertakings of the other Borrowers to accept
joint and
several liability for the Obligations.
2.11.2 Each of Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a
co-debtor, joint and several liability with the other Borrowers,
with respect to
the payment and performance of all of the Obligations (including,
without
limitation, any Obligations arising under this Section 2.11), it
being the
intention of the parties hereto that all the Obligations shall be
the joint and
several obligations of each Borrower without preferences or
distinction among
them.
2.11.3 If and to the extent that any of Borrowers shall fail
to make any payment with respect to any of the Obligations as and
when due or to
perform any of the Obligations in accordance with the terms
thereof, then in
each such event the other Persons composing Borrowers will make
such payment
with respect to, or perform, such Obligation.
2.11.4 The Obligations of each Borrower under the provisions
of this Section 2.11 constitute the absolute and unconditional,
full recourse
Obligations of each Borrower enforceable against each such Borrower
to the full
extent of its properties and assets, irrespective of the validity,
regularity or
enforceability of this Agreement or any other circumstances
whatsoever.
2.11.5 Except as otherwise expressly provided in this
Agreement, each Borrower hereby waives notice of acceptance of its
joint and
several liability, notice of any Loans or the Letter of Credit
issued under or
pursuant to this Agreement, notice of the occurrence of any
Default, Event of
Default, or of any demand for any payment under this Agreement,
notice of any
action at any time taken or omitted by any Secured Party under or
in respect of
any of the Obligations, any requirement of diligence or to mitigate
damages and,
generally, to the extent permitted by applicable law, all demands,
notices and
other formalities of every kind in connection with this Agreement
(except as
otherwise provided in this Agreement). Each Borrower hereby assents
to, and
waives notice of, any extension or postponement of the time for the
payment of
any of the Obligations, the acceptance of any payment of any of the
Obligations,
the acceptance of any partial payment thereon, any waiver, consent
or other
action or acquiescence by any Secured Party at any time or times in
respect of
any default by any Borrower in the performance or satisfaction of
any term,
covenant, condition or provision of this Agreement, any and all
other
indulgences whatsoever by any Secured Party in respect of any
of
28
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the Obligations, and the taking, addition, substitution or release,
in whole or
in part, at any time or times, of any security for any of the
Obligations or the
addition, substitution or release, in whole or in part, of any
Borrower. Without
limiting the generality of the foregoing, each Borrower assents to
any other
action or delay in acting or failure to act on the part any Secured
Party with
respect to the failure by any Borrower to comply with any of its
respective
Obligations, including, without limitation, any failure strictly or
diligently
to assert any right or to pursue any remedy or to comply fully with
applicable
laws or regulations thereunder, which might, but for the provisions
of this
Section 2.11 afford grounds for terminating, discharging or
relieving any
Borrower, in whole or in part, from any of its Obligations under
this Section
2.11, it being the intention of each Borrower that, so long as any
of the
Obligations hereunder remain unsatisfied, the Obligations of such
Borrower under
this Section 2.11 shall not be discharged except by performance and
then only to
the extent of such performance. The Obligations of each Borrower
under this
Section 2.11 shall not be diminished or rendered unenforceable by
any winding
up, reorganization, arrangement, liquidation, reconstruction or
similar
proceeding with respect to any other Borrower or Secured Party. The
joint and
several liability of the Borrowers hereunder shall continue in full
force and
effect notwithstanding any absorption, merger, amalgamation or any
other change
whatsoever in the name, constitution or place of formation of any
of the
Borrowers or Secured Parties.
2.11.6 Each Borrower represents and warrants to the Secured
Parties that such Borrower is currently informed of the financial
condition of
the other Borrowers and of all other circumstances which a diligent
inquiry
would reveal and which bear upon the risk of nonpayment of the
Obligations. Each
Borrower further represents and warrants to the Secured Parties
that such
Borrower has read and understands the terms and conditions of the
Credit
Documents. Each Borrower hereby covenants that such Borrower will
continue to
keep informed of the other Borrowers' financial condition, the
financial
condition of other guarantors, if any, and of all other
circumstances which bear
upon the risk of nonpayment or nonperformance of the
Obligations.
2.11.7 The provisions of this Section 2.11 are made for the
benefit of the Secured Parties and their respective successors and
assigns, and
may be enforced by it or them from time to time against any or all
of the
Borrowers as often as occasion therefor may arise and without
requirement on the
part of any such Secured Party, successor or assign first to
marshal any of its
or their claims or to exercise any of its or their rights against
any of the
other Borrowers or to exhaust any remedies available to it or them
against any
of the other Borrowers or to resort to any other source or means of
obtaining
payment of any of the Obligations hereunder or to elect any other
remedy. The
provisions of this Section 2.11 shall remain in effect until all of
the
Obligations shall have been paid in full or otherwise fully
satisfied. If at any
time, any payment, or any part thereof, made in respect of any of
the
Obligations, is rescinded or must otherwise be restored or returned
by any
Secured Party upon the insolvency, bankruptcy or reorganization of
any of the
Borrowers, or otherwise, the provisions of this Section 2.11 will
forthwith be
reinstated in effect, as though such payment had not been made.
2.11.8 Each of the Borrowers hereby agrees that it will not
enforce any of its rights of contribution or subrogation against
the other
Borrowers with respect to any liability incurred by it hereunder or
under any of
the other Credit Documents, any payments made by it to
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the Secured Parties with respect to any of the Obligations or any
collateral
security therefor until such time as all of the Obligations have
been paid in
full in cash. Any claim which any Borrower may have against any
other Borrower
with respect to any payments to any Secured Party under any Credit
Documents are
hereby expressly made subordinate and junior in right of payment,
without
limitation as to any increases in the Obligations arising hereunder
or
thereunder, to the prior payment in full in cash of the Obligations
and, in the
event of any insolvency, bankruptcy, receivership, liquidation,
reorganization
or other similar proceeding under the laws of any jurisdiction
relating to any
Borrower, its debts or its assets, whether voluntary or
involuntary, all such
Obligations shall be paid in full in cash before any payment or
distribution of
any character, whether in cash, securities or other property, shall
be made to
any other Borrower therefor.
2.11.9 Each of the Borrowers hereby agrees that, after the
occurrence and during the continuance of any Default or Event of
Default, the
payment of any amounts due with respect to the indebtedness owing
by any
Borrower to any other Borrower is hereby subordinated to the prior
payment in
full in cash of the Obligations. Each Borrower hereby agrees that
after the
occurrence and during the continuance of any Default or Event of
Default, such
Borrower will not demand, sue for or otherwise attempt to collect
any
indebtedness of any other Borrower owing to such Borrower until the
Obligations
shall have been paid in full in cash. If, notwithstanding the
foregoing
sentence, such Borrower shall collect, enforce or receive any
amounts in respect
of such indebtedness, such amounts shall be collected, enforced and
received by
such Borrower as trustee for the Secured Parties, and such Borrower
shall
deliver any such amounts to Administrative Agent for application to
the
Obligations.
2.11.10 Each Borrower agrees that after the Closing Date, if
any certificate is executed and delivered by any one or more of the
Borrowers,
but not one or more of the other Borrowers, such certificate may be
relied upon
by the Secured Parties, and shall bind all of the Borrowers, as if
it were
executed by all of them. Any representation herein made "to
Borrowers'
knowledge" or the like, means to the knowledge of any, but not
necessarily all,
of the Borrowers.
ARTICLE 3
CONDITIONS PRECEDENT
3.1 CONDITIONS PRECEDENT TO THE CLOSING DATE. The closing and
effectiveness of this Agreement is subject to the prior
satisfaction of each of
the following conditions unless waived in writing by Administrative
Agent with
the consent of the Lenders (the date such conditions precedent are
so satisfied
or waived being referred to as the "Closing Date"):
3.1.1 Resolutions. Delivery to Administrative Agent of a
copy of one or more resolutions or other authorizations, in form
and substance
reasonably satisfactory to Administrative Agent, of each of the
Borrowers and
the Pledgors as of the Closing Date certified by a Responsible
Officer of each
such Sponsor Entity as being true, complete, in full force and
effect on the
Closing Date and not amended, modified, revoked or rescinded,
authorizing, as
applicable and among other things, the Borrowings herein provided
for, the
granting of the Liens under the Collateral Documents, the provision
of the
guaranties, the contribution of equity to the
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Borrowers, and the execution, delivery and performance of this
Agreement, the
other Operative Documents and any instruments or agreements
required hereunder
or thereunder to which such Sponsor Entity is a party, provided,
that
Administrative Agent and each Lender may conclusively rely on such
certificate
until it receives notice in writing from such Sponsor Entity to the
contrary.
3.1.2 Incumbency. Delivery to Administrative Agent of a
certificate, in form and substance reasonably satisfactory to
Administrative
Agent, from each of the Borrowers and Pledgors signed by the
appropriate
authorized officer or manager of each such Person and dated as of
the Closing
Date, as to the incumbency and specimen signature of each natural
Person
authorized to execute and deliver this Agreement, the other
Operative Documents
and any instruments or agreements required hereunder or thereunder
to which each
such Person is a party.
3.1.3 Governing Documents. Delivery to Administrative Agent,
in each case certified by a Responsible Officer of each Borrower
and Pledgor as
being true, correct and complete on the Closing Date, of (a) copies
of the
articles of incorporation, certificate of incorporation or
formation, charter or
other state certified constituent documents of each Borrower and
Pledgor,
certified as of a recent date by the secretary of state of such
Person's state
of incorporation or formation, as applicable, and (b) copies of the
bylaws,
limited liability company operating agreement, partnership
agreement or other
comparable constituent documents, if applicable, of each Borrower
and Pledgor.
3.1.4 Good Standing Certificates. Delivery to Administrative
Agent of certificates (in so-called "long-form" if available)
issued by the
secretary of state of the state in which each Borrower and Pledgor
is formed or
incorporated, as applicable, in each case (a) dated a date
reasonably close to
the Closing Date and (b) certifying that such Person is in good
standing and is
qualified to do business in, and has paid all franchise taxes or
similar taxes
due to, such states.
3.1.5 Third Party Approvals. Except for the Permits listed
in Part II of the Permit Schedule, Administrative Agent shall have
received
copies of all documents and copies of any approval by any Person
(including any
Governmental Authority) reasonably required in connection with any
transaction
contemplated in any Credit Document, which Administrative Agent may
reasonably
have requested in connection herewith.
3.1.6 Credit Documents, Project Documents and Bond
Documents. Delivery to Administrative Agent of (a) originals of
each Bond
Document and Credit Document other than those expressly
contemplated hereby to
be executed and delivered after the Closing Date, all of which
shall (i) have
been duly authorized, executed and delivered by the parties thereto
and in form
and substance reasonably satisfactory to Administrative Agent and
the Lenders,
and (ii) be in full force and effect and accompanied by a
certificate of
Borrowers certifying to the foregoing in accordance with Section
3.1.7,
provided, that each Note shall conform to all requirements hereof
and be
delivered to Administrative Agent for the account of, and payable
to, each
Lender that has requested such Note in accordance with Section
2.1.6, and (b) a
certified list of, and true, correct and complete copies of, each
Project
Document (other than any Project Document which is only incidental
to the
development, construction, leasing,
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ownership or operation of the Project) executed on or prior to the
Closing Date,
each in form and substance reasonably satisfactory to
Administrative Agent, all
of which shall (x) have been duly authorized, executed and
delivered by the
parties thereto, and (y) be certified by Borrowers as being true,
complete and
correct and in full force and effect on the Closing Date in
accordance with
Section 3.1.7.
3.1.7 Certificate of Borrowers. Delivery to Administrative
Agent of a certificate, dated as of the Closing Date, duly executed
by a
Responsible Officer of each of Borrowers, in substantially the form
of Exhibit
F-1 (the "Borrowers' Closing Certificate").
3.1.8 Legal Opinions. Delivery to Administrative Agent of
legal opinions with respect of the transactions contemplated hereby
of counsel
to each Sponsor Entity, in each case addressed to the Secured
Parties and in
form and substance reasonably satisfactory to Administrative
Agent.
3.1.9 Certificate and Report of Insurance Consultant.
Delivery to Administrative Agent of the Insurance Consultant's
certificate,
dated as of the Closing Date and in substantially the form of
Exhibit F-2 (the
"Insurance Consultant's Certificate"), together with the Insurance
Consultant's
report, in form and substance reasonably satisfactory to
Administrative Agent,
attached thereto.
3.1.10 Insurance. Insurance complying with terms and
conditions set forth in Exhibit K (the "Insurance Requirements")
shall be in
full force and effect and Administrative Agent and the Insurance
Consultant
shall have received a certificate from Borrowers' insurance
broker(s), dated as
of the Closing Date and in form and substance reasonably
satisfactory to
Administrative Agent, (a) identifying underwriters, type of
insurance, insurance
limits and policy terms, (b) listing the special provisions
required as set
forth in Exhibit K, (c) describing the insurance obtained and (d)
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 broker(s),
such
insurance complies with the terms and conditions set forth in
Exhibit K.
3.1.11 Certificate and Report of the Independent Engineer.
Delivery to Administrative Agent of the Independent Engineer's
certificate,
dated as of the Closing Date and in substantially the form of
Exhibit F-3 (the
"Independent Engineer's Certificate"), together with the
Independent Engineer's
report, in form and substance reasonably satisfactory to
Administrative Agent,
attached thereto.
3.1.12 Environmental Report. Delivery to Administrative
Agent of the Environmental Report along with the corresponding
reliance letters,
each in form and substance reasonably satisfactory to
Administrative Agent.
3.1.13 Certificate and Report of Fuel Consultant. Delivery
to Administrative Agent of the Fuel Consultant's certificate, dated
as of the
Closing Date and in substantially the form of Exhibit F-4, together
with the
Fuel Consultant's report, in form and substance reasonably
satisfactory to
Administrative Agent and the Lenders, attached thereto.
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3.1.14 Schedule of Applicable Permits and Applicable Third
Party Permits.
(a) Delivery to Administrative Agent of Exhibit G-I (the
"Permit
Schedule"), the schedule of Permits, in form and substance
reasonably
satisfactory to Administrative Agent, of which (i) Part I(A) shall
be
Permits which are Applicable Permits as of the Closing Date, (ii)
Part I(B)
shall be Permits which to Borrowers' knowledge are Applicable Third
Party
Permits as of the Closing Date, (iii) Part II(A) shall be Permits
which are
expected to become Applicable Permits after the Closing Date, and
(iv) Part
II(B) shall be Permits which are expected to become Applicable
Third Party
Permits after the Closing Date. Borrowers shall also deliver to
Administrative Agent copies of each Permit listed in Part I(A) and,
to the
extent obtainable, Part I(B), in form and substance reasonably
satisfactory
to
Administrative Agent. The Permits listed in Part I(A) and Part
I(B)
shall in Administrative Agent's reasonable opinion comprise all of
the
Applicable Permits and Applicable Third Party Permits,
respectively, as of
the
Closing Date.
(b) Except as disclosed in the Permit Schedule, each Permit
listed in Part I(A) shall (i) have been duly obtained or been
assigned in a
Borrower's name, (ii) be in full force and effect, (iii) not be
subject to
any
current legal proceeding, and (iv) not be subject to any
Unsatisfied
Condition that could reasonably be expected to result in
material
modification or revocation of such Permit, and all applicable
appeal
periods with respect to each such Permit shall have expired. Except
as
disclosed in the Permit Schedule, each Permit listed in Part I(B)
shall (A)
have
duly obtained or have been assigned in the name of the
applicable
Major Project Participant, (B) be in full force and effect, (C) not
be
subject to any current legal proceeding and (D) not be subject to
any
Unsatisfied Condition that could reasonably be expected to result
in
material modification or revocation of such Permit, and all
applicable
appeal periods with
respect to each such Permit shall have expired.
(c) The Permits listed in Part II of the Permit Schedule shall,
in
Administrative Agent's reasonable opinion, be timely obtainable (i)
on
or
before the date Borrowers or the applicable other Person (as
identified
in
the Permit Schedule) requires such Permit, (ii) without delay
materially
in
excess of the time provided therefor in the Project Schedule
(if
applicable), and (iii) without expense materially in excess of the
amounts
provided therefor in the Project Budget by Borrowers or such other
Person.
(d) No Permit listed in Part I of the Permit Schedule shall be
subject to any restriction, condition, limitation or other
provision which
could reasonably be expected to have a Material Adverse Effect or
result in
the
Project being operated in a manner substantially inconsistent with
the
assumptions underlying the Base Case Project Projections.
3.1.15 Absence
of Litigation. No action, suit,
investigation, or legal or arbitral proceeding shall have been
instituted and be
pending, or, to Borrowers' knowledge threatened, against Borrowers.
No action,
suit, proceeding or investigation shall have been instituted and be
pending, or,
to Borrowers' knowledge, threatened, against any other Major
Project Participant
that could reasonably be expected (either individually or in the
aggregate) to
have a Material Adverse Effect.
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3.1.16 Payment of Fees. All taxes, fees and other costs
payable in connection with the execution, delivery, recordation and
filing of
the documents and instruments referred to in this Section 3.1 and
due on the
Closing Date shall have been paid in full or, if and in the manner
specifically
approved by the Lenders, provided for. Borrowers shall have paid
(or caused to
be paid) or shall have made arrangements in the manner reasonably
satisfactory
to the payee for the payment from the proceeds of the initial
disbursement of
the Loans of all outstanding amounts due, as of the Closing Date,
and owing to
(a) the Secured Parties under any fee or other letter or otherwise
pursuant to
Section 2.4, and (b) the Secured Parties' attorneys and consultants
(including
the Independent Consultants) and the Title Insurer for all services
rendered and
billed prior to the Closing Date.
3.1.17 Financial Statements. Delivery to Administrative
Agent of accurate and complete copies of the most recent (a)
unaudited annual
financial statements of each Sponsor Entity for the year ended
December 31, 2005
and (b) unaudited quarterly financial statements of each Sponsor
Entity for the
fiscal quarter ended on June 30, 2006, together with, in the case
of Borrowers,
a certificate from the appropriate Responsible Officer thereof,
dated as of the
Closing Date and in substantially the form of Exhibit F-1, stating
that no
material adverse change in the consolidated assets, liabilities,
operations or
financial condition of such Person has occurred from those set
forth in the most
recent financial statements provided to Administrative Agent.
3.1.18 Collateral Requirements. Delivery to Administrative
Agent of evidence reasonably satisfactory to Administrative Agent
that Borrowers
or other applicable Lien grantor has taken or caused to be taken
all such
actions, executed and delivered or caused to be executed and
delivered all such
agreements, documents and instruments, and made or caused to be
made all such
filings and recordings that may be necessary or, in the opinion
of
Administrative Agent, desirable in order to create in favor of
Collateral Agent
a valid and (upon such filing and recording) perfected first
priority Lien in
the Collateral. Such actions shall include delivery to
Administrative Agent of:
(a) all pledged securities, including all certificates,
agreements or instruments representing or evidencing the
accompanied by
instruments of transfer and stock powers undated and endorsed in
blank;
(b) all promissory notes or other instruments (duly endorsed,
where appropriate, in a manner reasonably satisfactory to
Administrative
Agent) evidencing any Collateral;
(c) all other certificates, agreements, including control
agreements, or instruments necessary to perfect Collateral Agent's
security
interest in all Chattel Paper, all Instruments, all Deposit
Accounts and
all
Investment Property of Borrowers (as each such term is defined in
the
Security Agreement and to the extent required by the Security
Agreement);
(d) (i) a UCC report of a date no less recent than 10 Business
Days
before the Closing Date for each of the jurisdictions in which
the
UCC-1 financing statements and the fixture filings are intended to
be filed
in
respect of the Collateral, showing that upon due
34
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filing or recordation (assuming such filing or recordation occurred
on the
date
of such respective reports), as the case may be, the security
interests created under the Collateral Documents, with respect to
the
Collateral, will be prior to all other financing statements,
fixture
filings or other security documents wherein the security interest
is
perfected by filing or recording in respect of the Collateral, and
(ii) UCC
termination statements duly executed (if required) by all
applicable
Persons for filing in all applicable jurisdictions as may be
necessary to
terminate any effective UCC financing statements, fixture filings
or other
security documents disclosed in such search (other than any such
financing
statements, fixture filings or other security documents in respect
of any
Liens on the Real Property which are exceptions to title in the
Title
Policy);
(e) UCC financing statements in appropriate form for filing
under
the
UCC, filings with the United States Patent and Trademark Office
and
United States Copyright Office and, where appropriate, fixture
filings or
consignment filings, as the case may be, and such other documents
under
applicable Legal Requirements in each jurisdiction as may be
necessary or
appropriate or, in the opinion of Administrative Agent, desirable
to
perfect the first priority Liens created, or purported to be
created, by
the
Collateral Documents and, with respect to all UCC financing
statements
required to be filed
pursuant to the Credit Documents, evidence
satisfactory to Administrative Agent that Borrowers have retained,
at their
sole
cost and expense, a service provider acceptable to
Administrative
Agent for the tracking of all such financing statements and
notification to
Administrative Agent of, among other things, the upcoming lapse
or
expiration thereof;
(f) certified copies of UCC, United States Patent and Trademark
Office and United States Copyright Office, tax and judgment lien
searches,
bankruptcy and pending lawsuit searches or equivalent reports or
searches,
each
of a recent date listing all effective financing statements,
lien
notices or comparable documents that name Borrowers as debtor and
that are
filed in those state and county jurisdictions in which any property
of
Borrowers are located and the state and county jurisdictions in
which
Borrowers are organized or maintains their principal place of
business and
such
other searches that Administrative Agent deems necessary or
appropriate, none of which encumber the Collateral covered or
intended to
be
covered by the Collateral Documents (other than Permitted Liens or
any
other Liens acceptable to Administrative Agent);
(g) an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) under the laws of the
jurisdiction of
organization of Borrowers and each other applicable grantor under
a
Collateral Document with respect to the perfection of the
security
interests in favor of Collateral Agent in personal or mixed
property
Collateral and such other matters governed by the laws of such
jurisdiction
regarding such security interests as Collateral Agent may
reasonably
request, in each case in form and substance reasonably satisfactory
to
Administrative Agent; and
(h) evidence reasonably satisfactory to Administrative Agent of
payment or arrangements for payment by Borrowers of all
applicable
recording taxes, registration fees or charges, filing costs and
other
similar expenses, if any, required to be paid in connection with
the
execution, delivery, filing, or perfection of any Operative
Document or
otherwise in connection with the Collateral, except to the extent
that
Borrowers have provided
35
<PAGE>
Administrative Agent with reasonably satisfactory assurances that
such
duties, fees, costs and charges, if any, will be paid in full from
the
proceeds of the initial Loan disbursement.
3.1.19 Project Budget. Delivery to Administrative Agent of a
budget in substantially the form of Exhibit G-2 (the "Project
Budget") for all
anticipated costs to be incurred in connection with the
development,
construction, installation, timing and start-up of the Project,
which Project
Budget shall be satisfactory to Administrative Agent and the
Lenders.
3.1.20 Base Case Project Projections. Delivery to
Administrative Agent of a projection of operating results for the
Project over a
period commencing on January 1, 2008 and ending on December 31,
2027, (a)
showing at a minimum (i) Borrowers' reasonable good faith
estimates, as of the
Closing Date, of revenues, operating expenses, the Debt Service
Coverage Ratio
(which Debt Service Coverage Ratio shall be calculated on an annual
basis,
assuming a mortgage-style amortization of the Term Loans, with the
first Payment
Date after Term-Conversion occurring on April 1, 2008, and the
final Payment
Date occurring on January 1, 2026), (ii) that the average projected
annual Debt
Service Coverage Ratio is not less than the Target Average DSCR
over the period
covered, (iii) that the projected minimum Debt Service Coverage
Ratio is not
less than the Target Minimum DSCR for any year in such period, and
(b) otherwise
in form and substance satisfactory to Administrative Agent and the
Lenders,
which projection is attached as Exhibit G-3 (the "Base Case
Project
Projections").
3.1.21 Fuel. Delivery to Administrative Agent of the Fuel
Supply Plan; and Renegy shall have entered into sufficient type and
quantity of
fuel procurement agreements to ensure that the Fuel Stockpile will
be in place
by the Term-Conversion Date.
3.1.22 No Material Adverse Change. Administrative Agent
shall have received a certificate from a Responsible Officer of
Borrowers
stating that since June 30, 2006, no event, circumstance or
condition shall have
occurred and be continuing (and the Lenders shall have become aware
of no such
facts or conditions not previously known) that constitutes or could
reasonably
be expected to result in a Material Adverse Effect.
3.1.23 Surveys. Administrative Agent shall have received
surveys of the Site (which surveys shall be reasonably current and
in form and
substance reasonably satisfactory to Administrative Agent and the
Title
Insurer), certified to Borrowers, Administrative Agent and the
Title Insurer by
a licensed surveyor reasonably satisfactory to Administrative
Agent, showing
such matters as shall be necessary for the Title Insurer to issue
to the Secured
Parties the Title Policy described in Section 3.1.24 (the "Site
Survey").
3.1.24 Title Policy. Delivery to Administrative Agent of a
lender's A.L.T.A. extended coverage policy of title insurance (with
any standard
coverage exception reasonably acceptable to Administrative Agent
but without a
mechanics' and materialmen's exception included therein, except
where applicable
Governmental Rules prevent the deletion of such exception, in which
case the
Sponsor shall provide the Title Insurer with any affidavits or
indemnities (with
respect to which Borrowers shall have no reimbursement obligations)
necessary to
cause the Title Insurer to issue affirmative coverage for
mechanics' and
materialmens' liens in form and substance reasonably satisfactory
to
Administrative Agent)), together with such endorsements thereto as
shall be
reasonably required by Administrative
36
<PAGE>
Agent, or the unconditional and irrevocable commitment of the Title
Insurer to
issue such a policy, dated as of the Closing Date, in an amount
equal to
$52,997,983 (with such reinsurance as is reasonably satisfactory
to
Administrative Agent) issued by the Title Insurer in form and
substance
satisfactory to Administrative Agent.
3.1.25 Real Estate Requirements. Delivery to Administrative
Agent of:
(a) The Mortgage encumbering the Mortgaged Property in favor of
Collateral Agent, duly executed and acknowledged by Borrowers,
and
otherwise in form for recording in the recording office of each
applicable
political subdivision where the Real Property is situated, together
with
such
certificates, affidavits, questionnaires or returns as shall be
required by such political subdivision in connection with the
recording or
filing thereof to create a lien under applicable law, and such
financing
statements and any other instruments necessary to grant a mortgage
lien
under the laws of any applicable jurisdiction;
(b) with respect to the Mortgaged Property, such consents,
approvals, amendments, supplements, estoppels, tenant
subordination
agreements or other instruments as necessary to consummate the
transactions
hereunder contemplated or as shall reasonably be deemed necessary
by
Administrative Agent in order for the owner or holder of the fee
or
leasehold interest constituting such Mortgaged Property to grant
the Lien
contemplated by the Mortgage with respect to such Mortgaged
Property;
(c) with respect to the Mortgaged Property, such affidavits,
certificates, information (including financial data) as shall be
required
to
induce the Title Company to issue the Title Policy (or commitment)
and
endorsements contemplated above;
(d) evidence reasonably acceptable to Administrative Agent of
payment by Borrowers of all Title Policy premiums, search and
examination
charges, and related charges, mortgage recording taxes, fees,
charges,
costs and expenses required for the recording of the Mortgages and
issuance
of
the Title Policies referred to above;
(e) with respect to any Real Property in which Borrowers hold
possession by lease, both (i) any agreement by the fee owner to
obtain a
nondisturbance agreement from each lienholder against the fee
interest in
such
Real Property, and (ii) a nondisturbance agreement from any
such
existing lienholder, in each case in form and substance
reasonably
satisfactory to Administrative Agent; and
(f) evidence reasonably acceptable to Administrative Agent that
Borrowers and each other Major Project Participant have obtained
and hold
all
easements or other possessory rights in real estate, together
with
necessary real property permits and crossing rights (collectively,
"Rights
of
Way") necessary for (i) performance in full of each such
Person's
obligations under the Operative Documents to which such Person is a
party
and
each Permit to which such Person or its assets is bound by, and
(ii)
the
development, leasing, construction and operation the Project in
accordance with the Base Case Project Projections. The use of such
Rights
of
Way shall not encroach on or interfere with property adjacent to
such
Rights of Way or existing easements or other rights (whether on,
above or
37
<PAGE>
below ground) (unless permitted pursuant to the terms of the Rights
of Way)
and
the full length of the Rights of Way shall be continuous,
without
break, gap or interruption.
3.1.26 Regulatory Status. Delivery to Administrative Agent
of all necessary approvals from any Governmental Authority in
respect of each of
the PPAs, to the extent applicable.
3.1.27 Construction Arrangements. All contracts necessary
for construction of the Project shall be in place in full force and
effect, and
all applicable contractors shall have been given an unconditional
notice to
proceed, in each case other than as set forth on Exhibit G-7.
3.1.28 Establishment of Accounts. The Accounts required to
be established as of the Closing Date for the Project under Article
7 shall have
been established to the satisfaction of Administrative Agent.
3.1.29 Representations and Warranties. Each representation
and warranty of Borrowers and each other Sponsor Entity under the
Credit
Documents shall be true and correct as of the Closing Date.
3.1.30 No Default. Borrowers and each other Sponsor Entity
shall be in compliance in all material respects with all the terms
and
provisions set forth in each Credit Document and Major Project
Document on its
part to be observed or performed, and no Event of Default or
Default shall have
occurred and be continuing as of the Closing Date.
3.1.31 Utilities. Delivery to Administrative Agent of
reasonably satisfactory evidence that all potable water, sewer,
telephone,
electric and all other utility services necessary for the
development,
construction, ownership and operation of the Project are either
contracted for,
or readily available on commercially reasonable terms, at the
Project.
3.1.32 Project Schedule. Delivery to Administrative Agent of
the Project Schedule in substantially the form of Exhibit G-4 (the
"Project
Schedule"), which shall be reasonably satisfactory to
Administrative Agent.
3.1.33 Consents. Delivery to Administrative Agent of
executed Consents from each of the Persons set forth on Exhibit E-2
(the
"Schedule of Closing Date Consents"), in form and substance
reasonably
satisfactory to Administrative Agent.
3.1.34 Due Diligence. The Lenders shall have completed a due
diligence investigation of Borrowers in scope, and with results,
satisfactory to
the Lenders.
3.1.35 Other Documents. Delivery to Administrative Agent of
such other documents as Administrative Agent or any Lender may
reasonably
request.
3.1.36 Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the
transactions
contemplated hereby and all documents incidental thereto not
previously found
acceptable by.Administrative Agent, acting on behalf of the
Lenders, and its
counsel shall be reasonably satisfactory in form and substance
to
38
<PAGE>
Administrative Agent and such counsel, and Administrative Agent and
such counsel
shall have received all such counterpart originals or certified
copies of such
documents as Administrative Agent may reasonably request.
3.1.37 Anti-Terrorism Compliance. At least two Business Days
prior to the Closing Date, Administrative Agent shall have received
all
documentation and other information requested by Administrative
Agent, which is
required by bank regulatory authorities under applicable "know your
customer"
and anti-money laundering rules and regulations, including the
U.S.A. Patriot
Act.
3.1.38 Swap Agreements. SWMP shall have entered into the
Swap Agreements.
3.1.39 Bank Equity Interest. The Borrowers shall have
acquired $1,000 of Bank Equity Interest.
3.2 CONDITIONS PRECEDENT TO EACH CREDIT EVENT. The obligation of
each
Lender to allow any Credit Event is subject to the occurrence of
the Closing
Date and prior satisfaction (or written waiver by Administrative
Agent with the
consent of the Majority Lenders) of each of the following
conditions:
3.2.1 Representations and Warranties.
(a) Each representation and warranty of Borrowers and each
other
Sponsor Entity in any of the Credit Documents shall be true and
correct in
all
material respects (except that any representation and warranty that
is
qualified as to "materiality" or "Material Adverse Effect" shall be
true
and
correct in all respects) on and as of the date of such Credit
Event,
before and after giving effect to the applicable Borrowing, with
the same
effect as though made on and as of such date, unless such
representation or
warranty expressly relates solely to an earlier date.
(b) Each representation and warranty of each Major Project
Participant contained in the Operative Documents (other than
this
Agreement) shall be true and correct in all material respects
(except that
any
representation and warranty that is qualified as to "materiality"
or
"Material Adverse Effect" or the like shall be true and correct in
all
respects) on and as of the date of such Credit Event, before and
after
giving effect to the Credit Event, with the same effect as though
made on
and
as of such date, unless such representation and warranty
expressly
relates solely to an earlier date.
3.2.2 No Default. No Event of Default or Default shall have
occurred and be continuing or will result from the relevant Credit
Event.
3.2.3 No Material Adverse Effect. Since the Closing Date, no
event, circumstance or condition shall have occurred and be
continuing (and the
Lenders shall have become aware of no such facts or conditions not
previously
known) that constitutes or could reasonably be expected to result
in a Material
Adverse Effect.
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3.2.4 Additional Documentation. With respect to Additional
Project Documents entered into or obtained, transferred or required
(whether
because of the status of the development, construction or operation
of the
Project or otherwise) since the date of the most recent Credit
Event, there
shall be (a) redelivery of such matters as are described in Section
3.1.6(b) to
the extent applicable to such Additional Project Documents, and (b)
if
reasonably requested by Administrative Agent, delivery of such
matters as are
described in Sections 3.1.1, 3.1.8 and 3.1.18 from Borrowers and
any other
applicable Sponsor Entity; provided, that references to such
matters being
satisfactory to Administrative Agent shall, for purposes of this
Section 3.2.4,
be deemed to be references to such matters being reasonably
satisfactory to
Administrative Agent.
3.2.5 Pro Forma Financial Statements. Within 30 days after
the Closing Date, delivery to Administrative Agent of unaudited pro
forma income
statement, balance sheet, cash flow statement and reconciliation of
net worth of
Borrowers as of the Closing Date.
3.3 CONDITIONS PRECEDENT TO EACH CONSTRUCTION CREDIT EVENT. The
obligation of each Lender to make each Construction Loan (including
the first
Construction Loan and the Final Construction Drawing) on the
occasion of each
Borrowing and each withdrawal of funds from the Construction Fund
(each such
Borrowing of Construction Loans and withdrawal of funds, a
"Construction Credit
Event"), is subject to the occurrence of the Closing Date and prior
satisfaction
(or written waiver by Administrative Agent with the consent of the
Majority
Lenders) of each of the following conditions:
3.3.1 Notice of Borrowing; Calculations. If the Construction
Credit Event is a Construction Loan, SWMP shall have delivered a
Notice of
Borrowing to Administrative Agent in accordance with the procedures
specified in
Section 2.1.1(b).
3.3.2 Drawdown Certificate and Independent Engineer's
Drawdown Certificate.
(a) At least six Business Days prior to each Construction
Credit
Event, Borrowers shall have provided Administrative Agent and
the
Independent Engineer with a duly executed copy of the Drawdown
Certificate,
dated the date of delivery of such certificate, setting forth the
date of
the
proposed occurrence of such Construction Credit Event and signed by
a
Responsible Officer of Borrowers.
(b) At least four Business Days prior to each Construction
Credit
Event, the Independent Engineer shall have provided Administrative
Agent
with
a certificate of the Independent Engineer, dated the date of
delivery
of
such certificate, setting forth the date of the proposed occurrence
of
such
Construction Credit Event and signed by an authorized
representative
of
the Independent Engineer, substantially in the form of Exhibit C-5
(the
"Independent Engineer's Drawdown Certificate").
(c) Borrowers shall use all reasonable efforts to provide
Administrative Agent and the Independent Engineer with drafts of
any
certificates and other materials to be delivered pursuant to this
Section
3.3.2 in advance of the time frames listed above as reasonably
requested in
writing by Administrative Agent.
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3.3.3 Amount. The making of each applicable Construction
Credit Event shall be in such amounts as shall ensure that (a)
uncommitted funds
remaining in the Construction Account shall be disbursed to the
greatest extent
possible, subject to the requirements of Section 2.1.1(b)(ii) and
(b) equity
contributions to Project Costs shall be not less than 15% of
Project Costs
to-date.
3.3.4 Title Policy Endorsements. Borrowers shall provide, or
Administrative Agent shall be adequately assured, that the Title
Insurer is
committed at the time of each Construction Credit Event to issue
to
Administrative Agent, a date-down endorsement of the Title Policy
dated as of
the date of Borrowing of such Construction Credit Event, insuring
the continuing
first priority of the Mortgage (subject only to (a) the exceptions
to title
contained in the title policy delivered pursuant to Section 3.1.25,
(b)
Permitted Liens described in clause (a) or (b) of the definition
thereof (to the
extent the same are afforded priority over the Lien of the Mortgage
by operation
of law) and (c) any other exceptions to title as are reasonably
acceptable to
Administrative Agent) and otherwise in form and substance
reasonably
satisfactory to Administrative Agent.
3.3.5 Lien Releases. Subject to Borrowers' right to contest
liens as described in the definition of "Permitted Liens",
Borrowers shall have
delivered to Administrative Agent duly executed acknowledgments of
payments and
releases of mechanics' and materialmen's liens, sufficient to cause
the Title
Insurer to issue a "date-down" mechanics lien endorsement insuring
the priority
of the Mortgage over all mechanics liens; provided, however, that
such releases
may be conditioned upon receipt of payment with respect to work,
services and
materials to be paid for with the proceeds of the requested
Construction Credit
Event or disbursement of non-Loan proceeds, as applicable.
3.3.6 Acceptable Work; No Liens. All work that has been done
on the Project has been done in a good and workmanlike manner and
in accordance
with each Construction Contract, and there shall not have been
filed against any
of the Collateral or otherwise filed with or served upon Borrowers
with respect
to the Project or any part thereof, notice of any Lien, claim of
Lien or
attachment upon or claim affecting the right to receive payment of
any of the
moneys payable to any of the Persons named on such request which
has not been
released by payment or bonding or otherwise or which will not be
released with
the payment of such obligation out of such Construction Loan or
non-Loan
proceeds, other than Permitted Liens.
3.3.7 Available Construction Funds. After taking into
consideration the making of the applicable Construction Credit
Event,
Administrative Agent (based on consultation with the Independent
Engineer) shall
have reasonably determined that Available Construction Funds shall
not be less
than the aggregate unpaid amount required to cause the Completion
Date to occur
in accordance with all Legal Requirements, the Construction
Contracts, each
other Project Document pursuant to which construction work with
respect to the
Project is being performed and the Credit Documents prior to the
Date Certain
and to pay or provide for all anticipated non-construction Project
Costs, all as
set forth in the then-current Project Budget.
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3.3.8 Use of Equity. With respect to Credit Events occurring
after the Closing Date and first Borrowing, delivery to
Administrative Agent
within 10 Business Days after the Closing Date of reasonably
satisfactory
evidence that $14,566,559 has been contributed to payment of
Project Costs by
Sponsor or either Pledgor.
3.4 CONDITIONS PRECEDENT TO TERM-CONVERSION. NO Construction
Loans
shall Term-Convert unless the following conditions shall have been
satisfied or
waived in writing by Administrative Agent with consent of the
Majority Lenders
(the date such conditions are so satisfied or waived being referred
to as the
"Term-Conversion Date"):
3.4.1 Operative Documents, Applicable Permits and Applicable
Third Party Permits in Effect. Each Credit Document and Major
Project Document
(including each Major Project Document with warranty or
indemnification
obligations then in effect), shall remain in full force and effect
in accordance
with its terms (except for any Major Project Document that has
expired or been
terminated in accordance with the terms thereof) and, if
applicable, the terms
of the relevant Consent.
3.4.2 Payment of Obligations. Borrowers shall have paid to
Administrative Agent the principal amount of the Construction Loans
outstanding
which will not be Term-Converted to Term Loans as provided in
Section 2.1.2,
plus all interest due and owing through such date on such
Construction Loans and
all other Obligations of Borrowers due and owing through such date
to the
Secured Parties under the Credit Documents.
3.4.3 Final Construction Drawing.
(a) Prior to Term-Conversion, Borrowers shall have, subject to
satisfaction of the conditions set forth in Sections 3.2 and 3.2.5,
made a
drawing up to any then-remaining Available Construction Loan
Commitment
(the
"Final Construction Drawing") in an amount equal to, when
aggregated
with
any amounts then on deposit (or being simultaneously deposited) in
the
Construction Account immediately prior to such Final Construction
Drawing,
the
amount necessary to fund in full the payments for Punchlist and
other
items necessary to achieve Final Completion.
(b) If, after giving effect to the making of the Final
Construction Drawing, the Debt to Equity ratio is less than 85:15,
then,
subject to satisfaction of the conditions set forth in Section 3.2
and 3.3,
Borrower may draw an additional Construction Loan in an amount up
to the
lesser of (i) the amount of the then-remaining Available
Construction Loan
Commitment and (ii) an amount which, after giving effect to the
making of
such
additional drawing, yields a Debt to Equity ratio of 85:15. For
purpose of the foregoing sentence, "Debt" means the principal
component of
the
Letter of Credit, the principal amount of all Construction Loans
and
the
principal amount of all Renegy Term Loans; and "Equity" means
all
equity funds applied to the payment of Project Costs, but not
including
pre-Term-Conversion revenues. The proceeds of such Construction
Loan may be
paid
directly to the Sponsor.
3.4.4 Notice of Completion. Borrowers shall have delivered
to Administrative Agent, in form and substance reasonably
satisfactory to
Administrative Agent:
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(a) evidence that (i) all work with respect to the Project
requiring inspection by municipal and other Governmental
Authorities having
jurisdiction has been duly inspected and approved by such
authorities to
the
extent required by applicable Legal Requirements; (ii) to the
extent
required by applicable Legal Requirements, Borrowers have duly
recorded a
notice of completion for the Project and all parties performing
such work
have
been or will be paid for such work (other than with respect to
disputed amounts with respect to which the reserves referred to in
the
definition of "Final Completion" have been established); and (iii)
no
mechanics' and/or materialmen's liens or application therefor have
been
filed and all applicable filing periods for any such mechanics'
and/or
materialmen's liens have expired; provided, however, that in the
event (A)
Borrowers deliver to Administrative Agent either (1) a policy of
title
insurance or endorsement thereto, in form and substance
satisfactory to
Administrative Agent, insuring against loss arising by reason of
any
mechanics' or materialmen's lien gaining priority over the
Mortgage, if
any,
(2) a bond, in form and substance satisfactory to
Administrative
Agent, in the amount of all payments owed to such contractor,
subcontractor
or
other Person performing work on the Project pursuant to a
Project
Document as to whom the filing periods for mechanics' and
materialmen's
liens have not expired, and covering Borrowers' liability to
such
contractors, subcontractors and other Persons, or (3) all such
contractors,
subcontractors and other Persons have signed lien releases in the
form
attached to the relevant Project Document or otherwise in form
and
substance reasonably acceptable to Administrative Agent, or (B)
Borrowers
establish the reserves referred to in the definition of "Final
Completion",
then
Administrative Agent shall waive the conditions referred to in
clause
(iii) above; and
(b) a certification by SWMP, confirmed by the Independent
Engineer, that Commercial Operation has occurred.
3.4.5 Commercial Operation; Boiler Performance. Commercial
Operation shall have occurred and either the boilers shall have
passed the
boiler performance guaranties set forth in the Boiler Purchase
Contract or B&W
shall have paid the performance liquidated damages required by the
Boiler
Purchase Contract and such liquidated damages, together with
amounts payable
pursuant to Section 1(c) of the Sponsor Guaranty shall have been
applied to the
repayment of Construction Loans.
3.4.6 Annual Budget. Administrative Agent shall have
received the Annual Operating Budget as required under Section
5.15.3 for the
period from the Term-Conversion Date through the end of the
calendar year in
which Term-Conversion is to occur; provided, that if such period is
less than
three months, Administrative Agent shall have also received the
Annual Operating
Budget for the first full calendar year thereafter. In the event
that such
Annual Operating Budget does not, in Administrative Agent's
reasonable opinion
acting in consultation with the Independent Engineer, properly
reflect the
operation of the Project during such calendar year as a result of
the actual
date of Term-Conversion being different from the date anticipated
therefor and
set forth in such Annual Operating Budget, Administrative Agent
shall have
received an amendment to such Annual Operating Budget properly
reflecting the
actual date of Term-Conversion upon written request to Borrowers
for the same.
3.4.7 Regulatory Status. Delivery to Administrative Agent of
(a) an order issued by FERC confirming that the Project is an
Eligible Facility
and that SWMP is an
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Exempt Wholesale Generator, (b) an order issued by FERC authorizing
SWMP to sell
electricity at market-based rates, and (c) all necessary approvals
from any
Governmental Authority in respect of the Interconnection Agreement
and each of
the PPAs, to the extent applicable.
3.4.8 Insurance. Insurance complying with the requirements
of Section 5.17 shall be in full force and effect and, upon the
request of
Administrative Agent, evidence thereof shall be provided to
Administrative Agent
(which evidence shall be reasonably satisfactory to Administrative
Agent).
3.4.9 DSR Account Funded. The amount on deposit in the DSR
Account shall be not less than the DSR Requirement.
3.4.10 Permits.
(a) Each Applicable Permit and Applicable Third Party Permit
shall have been duly obtained or been assigned in Borrowers' or
the
applicable third party's name, shall be in full force and effect,
shall not
be
subject to any current legal proceeding, and shall not be subject
to any
Unsatisfied Condition that could reasonably be expected to result
in
material modification or revocation of such Applicable Permit
and
Applicable Third Party Permit, and all applicable appeal periods
with
respect to such Applicable Permit and Applicable Third Party Permit
shall
have
expired.
(b) Except as disclosed in the Permit Schedule, the Permits
which
have
been obtained by Borrowers or any other Person as identified in
the
Permit Schedule shall not be subject to any restriction,
condition,
limitation or other provision that could reasonably be expected to
have a
Material Adverse Effect.
3.4.11 Term Notes. Borrowers shall have delivered duly
executed Term Notes to each Lender, if any, that shall have
requested such Term
Notes pursuant to Section 2.1.6 or Section 12.17.2(f).
3.4.12 Surveys. Administrative Agent shall have received an
update to the Site Survey constituting an as-built survey
reflecting all
improvements to the Real Property in connection with the
construction of the
Project, and otherwise meeting all of the requirements of the Site
Survey.
3.4.13 Fuel Stockpile. The Fuel Stockpile shall be in place.
3.4.14 Term Title Policy. Administrative Agent shall have
received such endorsements to the Title Policy as it shall
reasonably require
(such endorsements being collectively referred to as the "Term
Title Policy"),
insuring the continued first priority Lien on the Mortgaged
Property evidenced
by the Mortgage (without a mechanics' and materialmen's exception
included in
such title policy), and such other matters as Administrative Agent
may
reasonably request.
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3.5 No APPROVAL OF WORK. The making of any Loan hereunder shall in
no
event be deemed an approval or acceptance by any Secured Party of
any work,
labor, supplies, materials or equipment furnished or supplied with
respect to
the Project.
3.6 ADJUSTMENT OF DRAWDOWN REQUESTS. In the event Administrative
Agent
determines that an item or items listed in a Drawdown Certificate
as a Project
Cost is or are not properly included in such Drawdown
Certificate,
Administrative Agent may in its reasonable discretion cause to be
made a Loan or
Loans in the amount requested in such Drawdown Certificate less the
amount of
such item or items or may reduce the amount of Loans made pursuant
to any
subsequent Drawdown Certificate. In the event that Borrowers
prevail in any
dispute as to whether such Project Costs were properly included in
such
Drawdown Certificate, Loans in the amount requested but not
initially made shall
forthwith be made.
3.7 DETERMINATIONS UNDER SECTION 3.1. For purposes of
determining
satisfaction of the conditions set forth in Section 3.1, each
Lender shall be
deemed to have consented to, approved or accepted or to be
satisfied with each
document or other matter required thereunder to be consented to or
approved by
or acceptable or satisfactory to the Lenders unless Administrative
Agent shall
have received notice from such Lender prior to the contemplated
Closing Date, as
notified by Borrowers to the Lenders, specifying its objection
thereto,
Administrative Agent shall promptly notify the Lenders of the
actual occurrence
of the Closing Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Borrowers make the following representations and warranties to and
in
favor of the Secured Parties as of the Closing Date (unless such
representation
and warranty expressly relates solely to another time) and, to the
extent set
forth in Article 3, as of the date of each Credit Event, all of
which shall
survive the execution and delivery of this Agreement, the Closing
Date and the
making of the Loans:
4.1 ORGANIZATION. Each of Borrowers is (a) a limited liability
company
duly organized, validly existing and in good standing (to the
extent such
concept is applicable in the applicable jurisdiction) under the
laws of Arizona
and (b) is duly qualified as a foreign limited liability company,
and is in good
standing, in each jurisdiction in which such qualification is
required by law.
Each of Borrowers has all requisite power and authority to (i) own
or hold under
lease and operate the property it purports to own or hold under
lease, (ii)
carry on its business as now being conducted and as now proposed to
be conducted
in respect of the Project, (iii) execute, deliver and perform each
Operative
Document to which it is a party and (iv) take each action as may be
necessary to
consummate the transactions contemplated hereunder and
thereunder.
4.2 AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by Borrowers of the Operative Documents to which each
of the
Borrowers is a party are within each of the Borrower's power,
authority and
legal right and have been duly authorized by all necessary action.
Each of
Borrowers has duly executed and delivered each Operative Document
to which
Borrowers are a party (or such Operative Documents have been
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duly and validly assigned to Borrowers and Borrowers have
authorized the
assumption thereof, and has assumed the obligations of the assignor
thereunder)
and neither Borrowers' execution and delivery thereof nor their
consummation of
the transactions contemplated thereby nor their compliance with the
terms
thereof (a) does or will contravene the Governing Documents or any
other Legal
Requirement applicable to or binding on Borrowers or any of their
properties,
(b) does or will contravene or result in any breach of or
constitute any default
under, or result in or require the creation of any Lien (other than
Permitted
Liens) upon any of their property under, any agreement or
instrument to which
any of them is a party or by which they or any of their properties
may be bound
or affected, (c) does or will violate or result in a default under
any
indenture, credit agreement, loan, lease or other agreement or
instrument
binding upon Borrowers or their properties, or (d) does or will
require the
consent or approval of any Person, and with respect to any
Governmental
Authority, does or will require any registration with, or notice
to, or any
other action of, with or by any applicable Governmental Authority,
in each case
which has not already been obtained and disclosed in writing to
Administrative
Agent (except as set forth in Part II(A) of the Permit Schedule or
otherwise
provided in Sections 4.9.1 and 4.9.2).
4.3 ENFORCEABILITY. AS of each date on which this representation
and
warranty is made or deemed made, each of the Operative Documents to
which
Borrowers are a party is a legal, valid and binding obligation of
Borrowers,
enforceable against Borrowers in accordance with its terms. None of
the
Operative Documents to which Borrowers are a party has been amended
or modified
after the Closing Date except in accordance with this
Agreement.
4.4 COMPLIANCE WITH LAW. There are no material violations by
Borrowers
or, to Borrowers' knowledge, any Sponsor Entity, of any Legal
Requirement.
Except as otherwise have been delivered to Administrative Agent, no
notices of
any material violation of any Legal Requirement relating to the
Project or the
Site have been issued, entered or received by Borrowers or, to
Borrowers'
knowledge, any Sponsor Entity.
4.5 SINGLE PURPOSE, DEBT, CONTRACTS, JOINT VENTURES, PROCEEDS,
ETC.
4.5.1 Borrowers have not conducted any business other than
the business contemplated by the Operative Documents, do not have
any
outstanding Debt or other material liabilities other than pursuant
to or allowed
by the Operative Documents, and Borrowers are not a party to or
bound by any
material contract other than the Credit Documents and the Major
Project
Documents to which they are a party.
4.5.2 Borrowers are not a general partner or a limited
partner in any general or limited partnership or a joint venturer
in any joint
venture.
4.5.3 Borrowers do not have any Subsidiaries.
4.5.4 The proceeds of each Loan received by Borrowers prior
to, or concurrently with, the date on which this representation and
warranty is
made or deemed made has been or will be used solely in accordance
with, and
solely for the purposes contemplated by, Section 5.1.
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4.5.5 Borrowers have no obligation to any Person in respect
of any finder's, broker's or investment banking fee with respect to
the
Operative Documents or the transactions contemplated thereby or
under any other
agreement, document or instrument with any Person, other than fees
payable under
this Agreement.
4.5.6 No proceeds of any Loan will be used to acquire any
equity security of a class that is registered pursuant to Section
12 of the
Exchange Act.
4.6 ADVERSE CHANGE.
4.6.1 As of the Closing Date, there is no fact known to
Borrowers which has had or could reasonably be expected to have a
Material
Adverse Effect which has not been disclosed in writing to
Administrative Agent
or the Lenders (as of such date) by or on behalf of Borrowers on or
prior to the
Closing Date in connection with the transactions contemplated
hereby.
4.6.2 Since the Closing Date, there has occurred no material
adverse change in the Project Schedule or in the economics or
feasibility of
developing, constructing, owning or operating the Project. Since
the Closing
Date, no event, circumstance or condition shall have occurred and
be continuing
that constitutes or could reasonably be expected to result in a
Material Adverse
Effect.
4.7 INVESTMENT COMPANY ACT. None of Borrowers nor any other
Sponsor
Entity is an "investment company" or a company "controlled by" an
"investment
company", each within the meaning of, or subject to regulation
under, the
Investment Company Act of 1940, as amended.
4.8 ERISA. There are not and have never been any ERISA Plans or
Multiemployer Plans for any Sponsor Entity or any ERISA
Affiliate.
4.9 PERMITS.
4.9.1 There are no Permits under existing Legal Requirements
with respect to the Project as it is currently designed that are or
will become
Applicable Permits other than the Permits listed in the Permit
Schedule (as such
Exhibit may be supplemented by Borrowers to reflect any Change of
Law or the
issuance or modification of any Permit after the Closing Date). All
Permits
which are Applicable Permits or Applicable Third Party Permits have
been issued
and are in full force and effect and not subject to current legal
proceedings or
to any Unsatisfied Condition that could reasonably be expected to
result in
material modification or revocation, all applicable appeal periods
with respect
thereto have expired, and the permittee thereunder is in compliance
therewith in
all material respects.
4.9.2 With respect to any of the Permits which are not yet
Applicable Permits, no fact or circumstance exists, and with
respect to
Applicable Third Party Permits, to Borrower's knowledge, no fact or
circumstance
exists, which makes is likely that any such Permit will not be
timely obtainable
by Borrowers or the applicable Person identified in the Permit
Schedule (i)
prior to the time that it becomes an Applicable Permit or
Applicable Third
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Party Permit, as applicable, (ii) without delay materially in
excess of the time
periods thereof in the Project Schedule (if applicable) and (iii)
without
expense materially in excess of the amounts provided therefor in
the
then-current Project Budget.
4.9.3 Except as disclosed in the Permit Schedule, the
Permits which have been obtained by Borrowers or, to Borrowers'
knowledge, any
other person identified in the Permit Schedule shall not be subject
to any
restriction, condition, limitation or other provision that could
reasonably be
expected to have a Material Adverse Effect.
4.10 HAZARDOUS SUBSTANCES.
4.10.1 Except as set forth in Exhibit G-6 (the "Hazardous
Substances Disclosure"): (a) Borrowers, with respect to Real
Property, are not
and have not in the past been in violation of any Hazardous
Substance Law which
violation could reasonably be expected (i) to result in a material
liability to,
or material Environmental Claims against, Borrowers or their
properties and
assets, (ii) result in an inability of Borrowers to perform their
obligations
under the Operative Documents, (iii) interfere with the continuing
operation of
the Project, or (iv) impair the fair market value of any Mortgaged
Property; (b)
none of Borrowers nor, to Borrowers' knowledge, any other Person
has used,
Released, threatened to Release, generated, manufactured, produced
or stored in,
on, under, or about the Real Property, or transported thereto or
therefrom, any
Hazardous Substances that could reasonably be expected to subject
any Secured
Party to liability, or Borrowers to material liability, under any
Hazardous
Substance Law; (c) there are no underground tanks, whether
operative or
temporarily or permanently closed, located on the Real Property;
(d) there are
no Hazardous Substances used, stored or present at or on the Real
Property,
except in compliance with Hazardous Substance Laws and other Legal
Requirements
or as disclosed in the Environmental Report, or as may be
naturally-occurring;
(e) there are no Hazardous Substances that could reasonably be
expected to
migrate onto the Real Property, except in compliance with Hazardous
Substance
Laws and other Legal Requirements, as disclosed in the
Environmental Report, or
as may be naturally-occurring; and (f) there neither is nor has
been any
condition, circumstance, action, activity or event that could
reasonably be
expected to be, or result in, a material violation by Borrowers of
any Hazardous
Substance Law, or to result in liability to any Secured Party or
material
liability to Borrowers under any Hazardous Substance Law or any
other material
Environmental Claims against Borrowers or any Secured Party.
4.10.2 Except as set forth on Exhibit G-5 (the "Pending
Litigation") or Exhibit G-6, with respect to the Real Property,
there is no
pending or, to Borrowers' knowledge, threatened in writing action,
suit or
proceeding under any Hazardous Substance Law by any Governmental
Authority or
any other Person which is not a Governmental Authority to which
Borrowers are or
will be named as a party.
4.10.3 With respect to the Real Property, (a) except as set
forth in the Environmental Report, there is no consent or other
decree, consent
order, administrative or other order, or other comparable
administrative or
judicial directive outstanding under any Hazardous Substance Law,
and (b)
Borrowers have not received or are aware of any claim or notice of
violation,
alleged violation, non-compliance, liability or potential
liability, nor do
Borrowers
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have knowledge or reason to believe that any such action is being
contemplated,
considered or threatened.
4.10.4 Except as set forth in the Environmental Report,
there are no past violations that have not been finally resolved or
existing
violations of any Hazardous Substances Laws by any Person affecting
the Real
Property, which violations could reasonably be expected to result
in a material
liability to Borrowers. Borrowers have not assumed any liability of
any Person
under any Hazardous Substance Law.
4.10.5 As of the Closing Date, there are no environmental
reports, investigations, studies, audits, reviews or other analyses
conducted by
or which are in the possession of or known to Borrowers in relation
to the
Project other than the Environmental Report.
4.11 LITIGATION.
4.11.1 As of the Closing Date, no action, litigation, suit,
proceeding or investigation before or by any court, arbitrator or
other
Governmental Authority is pending or, to Borrowers' knowledge,
threatened in
writing by or against Borrowers or any of its properties or
revenues (including
the Project Revenues) (i) with respect to the Project, this
Agreement, the Notes
or any transaction contemplated hereby or (ii) which could
reasonably be
expected to have a Material Adverse Effect.
4.11.2 As of the Closing Date, Borrowers have no knowledge
of (i) any action, litigation, suit, proceeding or investigation
before or by
any court, arbitrator or other Governmental Authority pending or
threatened in
writing by or against any Major Project Participant, or by which
any of them or
their properties are bound, which if adversely determined would
have a Material
Adverse Effect, or (ii) any order, judgment or decree has been
issued or
proposed to be issued by any Governmental Authority that, as a
result of the
construction, development, ownership or operation of the Project by
Borrowers,
the sale of electricity therefrom by Borrowers or the entering into
of any
Operative Document or any transaction contemplated hereby or
thereby, could
reasonably be expected to cause or deem any Secured Party or
Borrowers or any
Affiliate of any of them to be subject to, or not exempted from,
regulation
under PUHCA, or treated as a public utility under the laws of the
Project
Jurisdiction as presently constituted and as construed by the
courts of the
Project Jurisdiction, respecting the rates or the financial or
organizational
regulation of electric utilities.
4.11.3 As of the Closing Date, no action, litigation, suit,
proceeding or investigation before or by any court, arbitrator or
other
Governmental Authority is pending to which any Sponsor Entity that
is a party to
an Operative Document as of the Closing Date is a party or to which
its
business, assets or property is subject that could reasonably be
expected to
have a Material Adverse Effect and, to Borrowers' knowledge, no
such action,
litigation, suit, proceeding (arbitral or otherwise) or
investigation is
threatened to which any such Sponsor Entity or its business, assets
or property
would be subject that, in either case, questions the validity of
any of the
Operative Documents.
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4.11.4 After the Closing Date, there are no pending or, to
Borrowers' knowledge, threatened action, litigation, suit,
proceeding or
investigation of any kind, including actions or proceedings of or
before any
Governmental Authority or arbitrator, to which any Sponsor Entity
is a party or
is subject, or by which any of them or any of their properties are
bound that
could reasonably be expected to have a Material Adverse Effect,
which have not
been disclosed by Borrowers to Administrative Agent in accordance
with, and to
the extent required by, Section 5.4.
4.12 No LABOR DISPUTES; ACTS OF GOD; FORCE MAJEURE. Neither the
business nor the properties of Borrowers or, to Borrowers'
knowledge, any other
Major Project Participant are currently 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), which could reasonably be
expected to
have a Material Adverse Effect. Neither Borrowers nor, to
Borrowers' knowledge,
any other Major Project Participant has either given a notice of
"force majeure"
in respect of any event, condition or circumstance or received such
notice from
any other Person that could reasonably be expected to entitle
Borrowers or such
notifying Person to excuse, defer or suspend the performance of any
of the
obligations of Borrowers or such notifying Person under any
Operative Document
to which it is a party on the basis of "force majeure".
4.13 OPERATIVE DOCUMENTS.
4.13.1 As of the Closing Date, copies of all of the Project
Documents (other than any Project Document which is only incidental
to the
development, construction, leasing, ownership or operation of the
Project) and
after the Closing Date, copies of all Additional Project Documents
(except those
Project Documents which Administrative Agent indicated in writing
were not
required to be delivered), executed on or prior to such date have
been delivered
to Administrative Agent by Borrowers. Since the Closing Date,
except as has been
disclosed to Administrative Agent in writing and as permitted
hereunder, as of
such date, none of such Project Documents has been amended,
modified or
terminated (other than expiration thereof in accordance with its
terms and the
Credit Documents).
4.13.2 To Borrowers' knowledge, except as disclosed to
Administrative Agent in writing at or prior to the time the
representation and
warranty in this Section 4.13.2 is being made, the representations
and
warranties of the Major Project Participants contained in the
Operative
Documents (other than this Agreement) are true and correct in all
material
respects.
4.14 DISCLOSURE. The information regarding the Project and any
Sponsor
Entity included in this Agreement and the reports, financial
statements,
certificates, Notices of Borrowing, exhibits, schedules and other
documents
furnished to any Secured Party, or to any consultant submitting a
report
contemplated by Section 3.1 to any Secured Party, by or, to
Borrowers'
knowledge, on behalf of Borrowers, taken as a whole, did not
contain and do not
contain any material misstatement of fact or omitted or omits to
state any
material fact necessary to make the statements therein, in the
light of the
circumstances under which they were or are made, not misleading as
of the date
such information is dated or certified; provided, that to the
extent any such
information, report, financial statement, exhibit or schedule was
based upon or
constitutes a forecast or projection, Borrowers represent only that
they acted
in good faith and
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utilized reasonable assumptions and due care in the preparation of
such
information, report, financial statement, exhibit or schedule.
4.15 PRIVATE OFFERING BY BORROWERS. Assuming that each Lender
is
acquiring its Notes for investment purposes only, and not for
purposes of resale
or distribution thereof except for participations or assignments as
provided in
Sections 12.17.2 and 12.17.3 respectively, no registration of such
Notes under
the Securities Act, or under the securities laws of the Project
Jurisdiction,
the state(s) of Borrowers' formation or the State of New York is
required in
connection with the offering, issuance and sale of such Notes
hereunder. Neither
Borrowers nor anyone acting on their behalf has taken, or will
take, any action
which would subject the issuance or sale of any Notes to Section 5
of the
Securities Act.
4.16 TAXES.
4.16.1 Borrowers have timely filed, or caused to be filed,
all federal, state and local tax returns, information statements
and reports
that they are required to file, have paid or caused to be paid all
taxes,
material assessments, utility charges, fees and other governmental
charges they
are required to pay to the extent due (other than those taxes, if
any, that they
are contesting in good faith and by appropriate proceedings in
accordance with
the requirements of Section 5.18). Borrowers knows of no proposed
tax assessment
against any Sponsor Entity which could reasonably be expected to
have a Material
Adverse Effect (other than those proposed tax assessments that
Borrowers are
contesting in good faith and by appropriate proceedings in
accordance with the
requirements of Section 5.18). In either case, to the extent such
taxes,
assessments, charges and fees are not due, Borrowers or the
applicable Sponsor
Entity have established reserves that are adequate for the payment
thereof in
conformity with GAAP.
4.16.2 At all times since its formation, each Borrower has
been an entity with a single owner that is disregarded as separate
from its
owner for federal tax purposes. No Form 8832 has ever been filed
with respect to
any Borrower as other than a disregarded entity and no such
election shall have
been made.
4.16.3 Borrowers have no liability for the taxes of any
Person (other than Borrowers) (a) under Treasury Regulations
Section 1.1502-6
(or any similar provision of state, local or foreign law), (b) as a
transferee
or successor, (c) by contract, or (d) otherwise.
4.16.4 Borrowers do not intend to treat the Loans (including
the incurrence thereof) as being a "reportable transaction" (within
the meaning
of Treasury Regulation Section 1.6011-4).
4.17 GOVERNMENTAL REGULATION. None of the Sponsor Entities or
any
Secured Party, nor any Affiliate of any of them will, solely as a
result of the
construction, ownership, leasing or operation of the Project, the
sale of
electricity, capacity or ancillary services therefrom or the
entering into any
Operative Document in respect of the Project or any transaction
contemplated
hereby or thereby, be subject to, or not exempt from, regulation
under the FPA
or PUHCA or under state laws and regulations respecting the rates
or the
financial or organizational regulation of electric utilities,
except that (a)
Borrowers will be subject to the
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compliance requirements under PUHCA applicable to an Exempt
Wholesale Generator
and an owner of an Eligible Facility, (b) Borrowers will be a
"public utility"
under the FPA with authority to sell at wholesale electric power at
market-based
rates and with all waivers of regulations and blanket
authorizations as are
customarily granted by FERC to a "public utility" that sells at
wholesale
electric power and ancillary services at market-based rates and (c)
the exercise
of remedies, as provided for under the Collateral Documents, may be
subject to
Section 203 of the FPA. Except to the extent provided in the first
sentence of
this Section 4.17, Borrowers will not be deemed by any Governmental
Authority
having jurisdiction to be subject to, financial, organizational or
rate
regulation as an "electric utility", "electric corporation",
"electrical
company", "public utility", or "public utility holding company" or
any similar
Person under any applicable Governmental Rule then in effect.
4.18 REGULATION U, ETC. Borrowers are not engaged principally, or
as
one of their principal or important activities, in the business of
extending
credit for the purpose of "buying", "carrying" or "purchasing" any
"margin
stock" (each as defined in Regulations T, U or X of the Federal
Reserve Board,
each as now and from time to time hereafter in effect), and no part
of the
proceeds of the Loans or the Project Revenues will be used whether
directly or
indirectly, and whether immediately, incidentally or ultimately,
for the purpose
of "buying", "carrying" or "purchasing" any such margin stock or
for any other
purpose that entails a violation of, or that is inconsistent with,
the
provisions of the regulations of the Federal Reserve Board,
including Regulation
T, U or X.
4.19 BUDGETS; PROJECTIONS. Borrowers have prepared the Project
Budget,
the Annual Operating Budget and the Base Case Project Projections,
have prepared
them in good faith, and are responsible for developing the
assumptions on which
such Project Budget, Annual Operating Budget and the Base Case
Project
Projections are based; and such Project Budget, Annual Operating
Budget and the
Base Case Project Projections (a) as of the date delivered, updated
or
supplemented are based on reasonable assumptions (including as to
all legal and
factual matters material to the estimates set forth therein), (b)
as of the date
delivered, updated or supplemented are consistent in all material
respects with
the provisions of the Project Documents executed on or prior to
such date, and
(c) as of the date delivered, updated or supplemented indicate that
the
estimated aggregate Project Costs will not exceed Available
Construction Funds.
4.20 FINANCIAL STATEMENTS.
4.20.1 Financial Statements. In the case of each financial
statement of Borrowers or the Sponsor (other than the financial
statements
delivered by Borrowers pursuant to Section 3.1.18(d) - which have
been prepared
in good faith) and accompanying information delivered by Borrowers
under the
Credit Documents (insofar as financial statements relate to
Borrowers), each
such financial statement and information has been prepared in
conformity with
GAAP applied consistently throughout the relevant periods (except
as otherwise
approved and disclosed therein), is complete and correct and fairly
presents, in
all material respects, the financial position (on a consolidated
and, where
applicable, consolidating basis) of Borrowers or the Sponsor, as
the case may
be, described in such financial statements as at the respective
dates thereof
and the results of operations and cash flows (on a consolidated
and, where
applicable, consolidating basis) of Borrowers or the Sponsor, as
the case may
be, described therein for each
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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 and
the absence of footnote disclosure.
4.20.2 No Contingent Obligations. Except for the obligations
under the Operative Documents to which it is a party, Borrowers do
not (and will
not following the funding of the initial Loans) have any Contingent
Obligations,
unmatured liabilities, contingent liability or liability for taxes,
long-term
lease or forward or long-term commitment (including any interest
rate or foreign
currency swap or exchange transaction or other financial
derivative) required to
be shown under GAAP that is not reflected in the foregoing
financial statements
or the notes thereto and which in any such case is material in
relation to the
business, results of operations, properties, financial condition or
prospects of
Borrowers.
4.20.3 No Sales. There has been no sale, transfer or other
disposition by Borrowers of any material part of their business or
property,
including the Project, and no purchase or other acquisition of any
material
business or property (including capital stock of any Person).
4.21 No DEFAULT. NO Event of Default or Default which has not
been
disclosed to Administrative Agent in writing has occurred and is
continuing.
Borrowers are not in default under or with respect to any of their
contractual
obligations in any respect which could reasonably be expected to
have a Material
Adverse Effect.
4.22 ORGANIZATIONAL ID NUMBER; LOCATION OF TANGIBLE COLLATERAL.
4.22.1 The Borrowers' organizational identification numbers
are L-1073395-9 for SWMP, L-1172503-8 for Renegy, and L-1203036-0
for Renegy
Trucking.
4.22.2 All of the tangible Collateral is, or when installed
pursuant to the Project Documents will be, located on the Site or
at Borrowers'
address set forth in Section 12.1.1; provided, that certain
equipment may be
temporarily removed from the Site from time to time in the ordinary
course of
business.
4.23 TITLE AND LIENS. Borrowers have (a) good, indefeasible and
insurable (i) leasehold interest in the Site, and (ii) easement
interest in the
Easements, and (b) good, legal and valid title to all other
Collateral, in each
case free and clear of all Liens other than Permitted Liens.
4.24 INTELLECTUAL PROPERTY. Except as disclosed in Exhibit G-5:
(a) Borrowers own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and
trade
names, or rights thereto, that are necessary for the operation of
their
business, without known conflict with the rights of others;
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(b) to the knowledge of Borrowers, no product of Borrowers
infringes in any material respect any license, permit,
franchise,
authorization, patent, copyright, service mark, trademark, trade
name or
other right owned by any other Person;
(c) to the knowledge of Borrowers, there is no violation by any
Person of any right of Borrowers with respect to any patent,
copyright,
service mark, trademark, trade name or other right owned or used
by
Borrowers; and
(d) to the knowledge of Borrowers, there exists no pending or
threatened claim or litigation against or affecting Borrowers
contesting
their right to sell or use any such product, process, method,
substance,
part
or other material.
4.25 COLLATERAL. The respective liens and security interests
granted
to Collateral Agent pursuant to the Collateral Documents (a)
constitute as to
personal property included in the Collateral a valid security
interest and (b)
constitute as to the Mortgaged Property included in the Collateral
a valid lien
and security interest in the Mortgaged Property. The security
interest granted
to Collateral Agent pursuant to the Collateral Documents in the
Collateral
consisting of personal property will be perfected (i) with respect
to any
property that can be perfected by filing, upon the filing of
financing
statements in the filing offices identified in Exhibit D-6 (the
"Schedule of
Security Filings"), and (ii) with respect to any property (if any)
that can be
perfected by possession, upon Collateral Agent receiving possession
thereof, and
in each case such security interest will be, as to Collateral
perfected under
the UCC or otherwise 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, assignment or otherwise, except
Permitted
Liens. Except to the extent possession of portions of the
Collateral is required
for perfection, all such action as is necessary has been taken to
establish and
perfect Collateral Agent's rights in and to the Collateral in
existence on such
date to the extent Collateral Agent's security interest can be
perfected by
filing, including any recording, filing, registration, giving of
notice or other
similar action. As of the Closing Date, no filing, recordation,
re-filing or
re-recording other than those listed on the Schedule of Security
Filings is
necessary to perfect and maintain the perfection of the interest,
title or Liens
of the Collateral Documents, and on the Closing Date all such
filings or
recordings will have been made to the extent Collateral Agent's
security
interest can be perfected by filing. Borrowers have properly
delivered or caused
to be delivered, or provided control, to Collateral Agent all
Collateral that
permits perfection of the Lien and security interest described
above by
possession or control.
4.26 SUFFICIENCY OF PROJECT DOCUMENTS.
4.26.1 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, the
Easements and
other rights granted, or to be granted, pursuant to the Project
Documents in
effect as of such date:
(a) comprise all of the property interests necessary to secure
any
right material to the acquisition, leasing, development,
construction,
installation, completion, operation and maintenance of the Project
in
accordance with all Legal Requirements and in
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accordance with the Project Schedule, all without reference to
any
proprietary information not owned by or available to Borrowers;
(b) are sufficient to enable the Project to be located,
constructed, developed, owned, occupied, operated, maintained and
used on
the
Site and the Easements; and
(c) provide adequate ingress and egress from the Site for any
reasonable purpose in connection with the construction and
operation of the
Project.
4.26.2 There are no services, materials or rights required
for the construction or operation of the Project in accordance with
the
Construction Contracts, the other Major Project Documents and the
assumptions
that form the basis of Base Case Project Projections, other than
those (a) to be
provided under the Project Documents or (b) that can reasonably be
expected to
be commercially available at or for delivery to the Site on
commercially
reasonable terms consistent with the then-current Project Budget,
the
then-current Annual Operating Budget and the Base Case Project
Projections.
4.27 UTILITIES. All utility services necessary for the
construction
and the operation of the Project for its intended purposes are
available at the
Project or can reasonably be expected to be so available as and
when required
upon commercially reasonable terms consistent with the then-current
Project
Budget, the Project Schedule, the then-current Annual Operating
Budget and the
Base Case Project Projections.
4.28 OTHER FACILITIES.
4.28.1 All roads necessary for the construction and full
utilization of the Project for its intended purposes have either
been completed
or Borrowers possesses the necessary rights of way therefor, other
than rights
of way that can reasonably be expected to be available on
commercially
reasonable terms as and when needed.
4.28.2 Borrowers possess, or the counterparties to the Major
Project Documents pursuant to which interconnection facilities will
be
constructed and, if applicable, operated for the benefit of the
Project, possess
and are obligated, except for restrictions or limitations contained
in the
applicable Project Documents, to provide or make available to
Borrowers, all
necessary easements, rights of way, licenses, agreements and other
rights for
the construction, interconnection and utilization of the
interconnection
facilities (including fuel, water, wastewater and electrical).
4.29 INSURANCE. All insurance policies then required to be
maintained
by Borrowers pursuant to the terms of any Operative Document are in
full force
and effect, and all premiums then due and payable have been
paid.
4.30 ANTI-TERRORISM LAW. None of the Borrowers nor, to the best
knowledge of Borrowers any other Sponsor Entity or any Affiliate,
is in
violation of (a) any of the foreign assets control regulations of
the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any
enabling legislation or executive order relating thereto,
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(b) 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) (the "Executive Order") or (c) the anti-money laundering
provisions
of 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) amending the Bank Secrecy Act, 31 U.S.C.
Section 5311
et seq. ("U.S.A. Patriot Act") and any other laws relating to
terrorism or money
laundering (collectively, "Anti-Terrorism Laws").
4.30.2 To the knowledge of Borrowers, none of the
Affiliates, brokers or other agents of any Sponsor Entity acting or
benefiting
in any capacity in connection with the Loans is any of the
following: (a) a
Person that is listed in the annex to, or is otherwise subject to
the provisions
of, the Executive Order; (b) a Person owned or controlled by, or
acting for or
on behalf of, any person that is listed in the annex to, or is
otherwise subject
to the provisions of, the Executive Order; (c) a Person with which
any Lender is
prohibited from dealing or otherwise engaging in any transaction by
any
Anti-Terrorism Law; (d) a Person that commits, threatens or
conspires to commit
or supports "terrorism" as defined in the Executive Order; or (e) a
Person that
is named as a "specially designated national and blocked person" on
the most
current list published by OFAC at its official website or any
replacement
website or other replacement official publication of such list.
4.30.3 To the knowledge of Borrowers, no broker or other
agent of any Sponsor Entity acting in any capacity in connection
with the Loans
(a) conducts any business or engages in making or receiving any
contribution of
funds, goods or services to or for the benefit of any person
described in
Section 4.30.2, (ii) deals in, or otherwise engages in any
transaction relating
to, any property or interests in property blocked pursuant to the
Executive
Order, or (iii) engages in or conspires to engage in any
transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts
to violate,
any of the prohibitions set forth in any Anti-Terrorism Law.
4.31 CONSTRUCTION LOAN BORROWINGS. Each of the giving of the
applicable Notice of Borrowing and the acceptance by Borrowers of
the proceeds
of the related Borrowing shall constitute a representation and
warranty by
Borrowers that on the date of such Borrowing the conditions set
forth in
Sections 3.2 and 3.2.5 have each been satisfied.
4.32 No RECORDATION, ETC. Each Operative Document is in proper
legal
form under the respective governing laws selected in such Operative
Document for
the enforcement thereof in such jurisdictions against Borrowers and
each other
party thereto without any further action on the part of
Administrative Agent or
other Secured Parties, and (b) to ensure the legality, validity,
enforceability,
priority or admissibility in evidence of any such document it is
not necessary
that such document or any other document be filed, registered or
recorded with,
or executed or notarized before, any court or other authority in
such
jurisdiction or that any registration charge or stamp or similar
tax be paid on
or in respect of any such document.
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ARTICLE 5
AFFIRMATIVE COVENANTS
5.1
USE OF PROCEEDS, EQUITY CONTRIBUTIONS AND PROJECT REVENUES.
5.1.1 Proceeds and Equity Contributions. Unless otherwise
applied by Administrative Agent pursuant to any Credit Document,
(i) Borrowers
shall deposit the proceeds of the Construction Loans and any cash
equity
contributions in the Construction Account, and (ii) use them and
the proceeds of
the Bonds solely to pay Project Costs or, subject to the conditions
set forth in
Section 3.4.3(b), paid to the Sponsor.
5.1.2 Revenues. Unless otherwise applied by Administrative
Agent or Collateral Agent pursuant to any Credit Document,
Borrowers shall apply
any Project Revenues, payments SWMP receives under any Swap
Agreement, equity
contributions, Loan proceeds, Insurance Proceeds, Eminent Domain
Proceeds and
damage payments solely for the purpose, and in the order and
manner, provided
for in Section 7.2.
5.2 PAYMENT.
5.2.1 Credit Documents. Borrowers shall pay all sums due
under the Credit Documents to which they are a party according to
the terms
hereof and thereof.
5.2.2 Bonds. Borrower shall take such actions as are
required under the Indenture to optionally redeem Bonds in
accordance with the
schedule set forth on Exhibit 1-3, and pay any associated Swap
Breaking Fees.
5.2.3 Other Obligations. Borrowers shall pay, discharge or
otherwise satisfy at or before maturity or before they become
delinquent, as the
case may be, all of their obligations under the Project Documents
and all of
their other obligations of whatever nature and howsoever arising,
except (a)
such as may be contested in good faith or as to which a bona fide
dispute may
exist, provided, that adequate cash reserves have been established
in conformity
with GAAP, or Administrative Agent is satisfied in its reasonable
discretion
that non-payment of such obligation pending the resolution of such
contest or
dispute will not in any way endanger the Project or result in a
Material Adverse
Effect or that provision is made to the satisfaction of
Administrative Agent
