IDAHO USG HOLDINGS, LLC $20,000,000 5.80% Senior Secured Notes due March 31, 2023 ______________ NOTE PURCHASE AGREEMENT Dated May 19, 2016
| Execution Version |
IDAHO USG HOLDINGS, LLC
$20,000,000 5.80% Senior Secured Notes due March 31, 2023
______________
______________
Dated May 19, 2016
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| Page | ||
| SCHEDULE A | — | INFORMATION RELATING TO PURCHASERS |
| SCHEDULE B | — | DEFINED TERMS |
| Schedule 4.11(b)(ii) |
— | Consents to be delivered at Closing |
| Schedule 4.11(b)(iii) |
— | Estoppels to be delivered at Closing |
| Schedule 4.22 | — | Base Case Projections |
| Schedule 5.5 | — | Ownership of the Issuer and Issuer Subsidiaries; Officers |
| Schedule 5.8 | — | Required Approvals |
| Schedule 5.12(a) |
— | Material Project Documents |
| Schedule 5.12(d) |
— | Federal Financing Bank Loan Documents |
| Schedule 8.1 | — | Amortization Schedule |
| Schedule 9.2 | — | Insurance Requirements |
| Exhibit 1 | — | Form of 5.80% Senior Secured Note due March 31, 2023 |
| Exhibit 4.10 | — | Form of Funding Instruction Letter |
| Exhibit 7.1 | — | Form of Monthly Operating Report |
| Security Documents | ||
| Exhibit S-1 | Form of Depositary Agreement | |
| Exhibit S-2 | Form of Collateral Agency Agreement | |
| Exhibit S-3 | Form of USG Idaho Pledge Agreement | |
| Exhibit S-4 | Form of Issuer Pledge Agreement | |
| Exhibit S-5 | Form of Security Agreement |
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| Exhibit S-6 | Form of Recapture Indemnity Agreement |
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Idaho USG Holdings, LLC
c/o U.S. Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
5.80% Senior Secured Notes due March 31, 2023
May 19, 2016
TO EACH OF THE PURCHASERS LISTED IN
SCHEDULE
A HERETO:
Ladies and Gentlemen:
Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), agrees with each of the purchasers whose names appear at the end hereof (each, a “Purchaser” and, collectively, the “Purchasers”), as follows (this “Agreement”):
SECTION 1. AUTHORIZATION OF NOTES.
The Issuer will authorize the issue and sale of $20,000,000 aggregate principal amount of its 5.80% Senior Secured Notes due March 31, 2023 (the “Notes”, such term to include any such notes issued in substitution therefor pursuant to Section 13). The Notes shall be substantially in the form set out in Exhibit 1. Certain capitalized and other terms used in this Agreement are defined in Schedule B; and references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement. References to a “Section” are, unless otherwise specified, to a Section of this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Issuer will issue and sell to each Purchaser and each Purchaser will purchase from the Issuer, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule A at the purchase price of 100% of the principal amount thereof. The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 11:00 a.m., New York time, at a closing (the “Closing”) on May 19, 2016 or on such other Business Day thereafter on or prior to May 31, 2016 as may be agreed upon by the Issuer and the Purchasers. At the Closing the Issuer will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $500,000 as such Purchaser may request) dated the Closing Date and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Issuer or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds to an account of the Issuer designated in writing by the Issuer prior to Closing. If at the Closing the Issuer shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to the satisfaction of such Purchaser, prior to or at the Closing, of the following conditions:
Section 4.1 Representations and Warranties. The representations and warranties of the Issuer in this Agreement and of the Issuer and each Issuer Party in any other Financing Document to which such Person is a party shall be true and correct when made and at the time of the Closing.
Section 4.2 Performance; No Default. The Issuer shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and, after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.15), no Default or Event of Default shall have occurred and be continuing.
Section 4.3 Compliance Certificate. The Issuer shall have delivered to each of the Secured Parties an Officer’s Certificate, dated the Closing Date, certifying that the conditions specified in Sections 4.1 and 4.2 have been fulfilled and each of the other conditions precedent to the occurrence of the Closing has been satisfied or waived.
Section 4.4 Opinions of Counsel. Each Secured Party shall have received opinions in form and substance satisfactory to such Person, dated the Closing Date, from (a) (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel for the Issuer, and the Issuer hereby instructs its counsel to deliver such opinions to the Secured Parties, and (b) ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel for the Purchasers, in each case, covering such matters incident to the transactions contemplated hereby and by the other Transaction Documents as such Secured Party may reasonably request.
Section 4.5 Purchase Permitted By Applicable Law, Etc. On the Closing Date, such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation.
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Section 4.6 Sale of Other Notes. Contemporaneously with the Closing, the Issuer shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the Closing as specified in Schedule A.
Section 4.7 Payment of Special Counsel and Other Fees and Expenses. Without limiting the provisions of Section 15.1, the Issuer shall have paid on or before the Closing: (a) the fees, charges and disbursements of the Purchasers’ special counsel, ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, to the extent reflected in a statement of such counsel rendered to the Issuer at least one Business Day prior to the Closing, (b) the initial Servicing Fee payable to the holders of the Notes in accordance with Section 9.10 hereof in an aggregate amount equal to $50,000, (c) a fee payable to each Purchaser of the Notes in an amount equal to 1% of the principal amount of the Notes being purchased by such Purchaser on the Closing Date, and (d) all other fees, out-of-pocket costs and expenses (including legal fees and expenses, consultant fees and expenses (including the fees and expenses of the Independent Engineer, the Geothermal Resource Engineer and the Insurance Consultant), and title insurance premiums) and other compensation contemplated hereby or by the other Financing Documents, or pursuant to separate letter agreements, payable to the Purchasers, the Collateral Agent and the Depositary at Closing.
Section 4.8 Private Placement Number. A Private Placement Number issued by S&P’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for the Notes.
Section 4.9 Changes in Organizational Structure. None of the Issuer or any Issuer Subsidiary shall have changed its jurisdiction of formation, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Section 4.17.
Section 4.10 Funding Instructions. At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Issuer confirming the information specified in Section 3 including (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number and (c) the account name and number into which the purchase price for the Notes is to be deposited, and substantially in the form of Exhibit 4.10 hereto.
Section 4.11 Proceedings and Documents. The Secured Parties shall have received the following, each to be, unless otherwise indicated, dated the Closing Date and in form and substance satisfactory to the Purchasers:
(a) The Notes to be purchased by the Purchasers;
(b) (i) This Agreement and each other Financing Document duly executed, authorized and delivered by each party thereto, (ii) the Consents listed on Schedule 4.11(b)(ii) , duly executed, authorized and delivered by each party thereto, (iii) copies of the Material Project Documents, including any amendments or supplements thereto, and the Estoppels listed on Schedule 4.11(b)(iii) and (iv) copies of the Federal Financing Bank Loan Documents, including any amendments or supplements thereto, in each case, duly authorized, executed and delivered by each party thereto, and certified by an authorized officer of the Issuer as being true, correct and complete and in full force and effect on the Closing Date, each of which shall be in form and substance satisfactory to the Purchasers;
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(c) The certificate of formation, articles of incorporation or other similar organizational documents of the Issuer and each Issuer Party, each certified as of a recent date by the Secretary of State of the State of its incorporation or formation and by such Person’s secretary or other authorized officer;
(d) The limited liability company agreement, by-laws and any other organizational documents of the Issuer and each Issuer Party, certified by such Person’s secretary or other authorized officer;
(e) With respect to the Issuer and each Issuer Party, an incumbency certificate signed by the secretary or an assistant secretary and one other officer of such Person, certifying as to the names, titles and true signatures of the officers of such Person authorized to sign this Agreement, the Notes, the other Financing Documents to which such Person is a party and other documents to be delivered hereunder or thereunder;
(f) A certificate of the secretary of the Issuer and each Issuer Party attaching resolutions of the governing body of such Person evidencing approval of the transactions contemplated by this Agreement and the other Financing Documents to which such Person is a party and, with respect to the Issuer, the issuance of the Notes, and in each case, the execution, delivery and performance thereof, and authorizing certain officers to execute and deliver the same, and certifying that such resolutions were duly and validly adopted and have not since been amended, revoked or rescinded;
(g) Certificates of existence issued by the applicable Secretary of State with respect to each of each Sponsor, the Issuer, each Issuer Subsidiary and the Operator, certificates of qualification to do business in Oregon issued by the Secretary of State of the State of Oregon as to the USG Oregon Project Company, USG Oregon Holdings and the Operator and certificates of qualification to do business in Idaho issued by the Secretary of State of the State of Idaho as to the Raft River Project Company and the Operator;
(h) Copies of reports listing all effective financing statements which name the Issuer or any Issuer Party as debtor and which are filed in all applicable offices, together with copies of such financing statements;
(i) A schedule of all Required Approvals in effect as of the Closing Date, together with copies thereof certified by an officer of the Issuer as being true, correct and complete, in full force and effect and not subject to any appeal or further proceeding; and
(j) Such additional documents or certificates with respect to such legal matters or limited liability company, corporate or other proceedings related to the transactions contemplated hereby as may be reasonably requested by the Purchasers or the Collateral Agent.
Section 4.12 Depositary Agreement, Security Agreement, Etc. The Obligations shall be secured by a perfected first priority security interest (subject only to Permitted Liens) in the Collateral in favor of the Collateral Agent, for the benefit of the Secured Parties, and the Issuer will deliver or caused to be delivered to the Collateral Agent and the Purchasers on the Closing Date, the following, each of which shall be in full force and effect:
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(a) A Depositary and Security Agreement in the form of Exhibit S-1, duly executed by each of the Issuer, the Collateral Agent and the Depositary (the “Depositary Agreement”);
(b) A Collateral Agency Agreement in the form of Exhibit S-2, duly executed by the Issuer, the Collateral Agent, the Depositary and the Purchasers (the “Collateral Agency Agreement”);
(c) A Pledge and Security Agreement in the form of Exhibit S-3, duly executed by USG Idaho in favor of the Collateral Agent for the benefit of the Secured Parties (the “USG Idaho Pledge Agreement”) with respect to the pledge of the USG Idaho’s ownership interests in the Issuer, together with the certificates representing such ownership interests and executed, undated transfer powers (in blank) relating thereto;
(d) A Pledge and Security Agreement in the form of Exhibit S-4, duly executed by the Issuer in favor of the Collateral Agent for the benefit of the Secured Parties (the “Issuer Pledge Agreement”) with respect to the pledge of the Issuer’s ownership interests in USG Oregon Holdings and the Raft River Project Company, together with the certificates representing such ownership interests and executed, undated transfer powers (in blank) relating thereto;
(e) A Security Agreement in the form of Exhibit S-5, duly executed by the Issuer (the “Security Agreement”) in favor of the Collateral Agent for the benefit of the Secured Parties;
(f) An Indemnity Agreement, duly executed by the Sponsors, the Issuer and the Collateral Agent, in the form of Exhibit S-6 (the “Recapture Indemnity Agreement”); and
(g) Such other pay-off letters, releases, documents, instruments and agreements as the Collateral Agent or any of the Purchasers may reasonably request to grant to Collateral Agent first priority perfected Liens on the Collateral (subject only to Permitted Liens).
Section 4.13 Reserve Accounts. The Issuer shall deposit the Minimum Debt Service Reserve Requirement in the Debt Service Reserve Account and $1,807,890 in the Maintenance Reserve Account, or, in lieu thereof, provide Acceptable Letters of Credit in accordance with the Depositary Agreement, and the Issuer shall deposit $3,000,000 in the Raft River Capital Expenditure Account.
Section 4.14 Title Policy. The Secured Parties shall have received copies of (a) Policy No. 472511487576MN-STORM issued by Chicago Title Insurance Company on February 23, 2011 with respect to the USG Oregon Site and (b) Policy No. 03207148 issued by Commonwealth Land Title Insurance Company on December 6, 2006 with respect to the Raft River Site (such policies being hereinafter referred to collectively as the “Title Policies”).
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Section 4.15 UCC Searches and Litigation Searches. The Collateral Agent and the Purchasers shall have received UCC and litigation searches of the Issuer and each Issuer Party, dated a date reasonably near to the Closing Date, which searches shall (i) confirm that no Liens other than Liens that will be released on the Closing Date exist on the Collateral and that none of the Issuer or any Issuer Party is subject to any litigation, and (ii) be otherwise in substance satisfactory to the Collateral Agent and the Purchasers.
Section 4.16 Insurance. The Issuer shall have delivered to the Secured Parties evidence of insurance in effect that meets the requirements of Section 9.2.
Section 4.17 Financial Statements; Pro Forma Balance Sheet. The Secured Parties shall have received: (a) the unaudited financial statements of each Issuer Subsidiary for the fiscal quarters ended September 30, 2015 and December 31, 2015, (b) the unaudited monthly financial statements of each Issuer Subsidiary for the calendar month ended February 29, 2016, (c) the annual audited financial statements for each Issuer Subsidiary for the calendar year 2014, (d) a pro forma balance sheet of the Issuer as of the date of Closing, giving pro forma effect to the transactions contemplated by this Agreement, (e) to the extent not already provided, copies of all documents provided by the USG Oregon Project Company to the U.S. DOE pursuant to (i) Section 6.1(b) of the Federal Financing Bank Loan Guarantee Agreement for the fiscal quarter ended December 31, 2015 and (ii) Section 6.1(c) of the Federal Financing Bank Loan Guarantee Agreement for the calendar year 2014, (f) to the extent not already provided, copies of all documents provided by the Raft River Project Company to the Raft River Members pursuant to (i) Section 6.4(a) of the Raft River LLC Agreement for the fiscal quarter ended December 31, 2015 and (ii) Section 6.4(b) of the Raft River LLC Agreement for the calendar year 2014, and (g) to the extent not already provided, copies of all documents provided by USG Oregon Holdings to the USG Oregon Holdings Members pursuant to Section 9.6 of the USG Oregon Holdings LLC Agreement for the fiscal quarter ended December 31, 2015.
Section 4.18 Required Approvals. All Required Approvals then required to have been obtained and to be in effect shall have been obtained and shall be in effect, and all applicable waiting and appeal periods shall have expired without any materially adverse action being taken by any applicable authority.
Section 4.19 No Material Adverse Effect. No event, occurrence or condition that has had, or could reasonably be expected to have, a Material Adverse Effect shall have occurred and be continuing. A Responsible Officer of the Issuer shall deliver a certificate to the Purchasers dated as of the Closing Date certifying as to the foregoing.
Section 4.20 IE Report. The Purchasers shall have received a report of the Independent Engineer with respect to each of the Projects, addressed to the Purchasers and in form and substance satisfactory to the Purchasers.
Section 4.21 Geothermal Resource Assessment Report. The Purchasers shall have received a final energy production analysis for each Project prepared by the Geothermal Resource Engineer, addressed to the Purchasers and in form and substance satisfactory to the Purchasers (each, a “Geothermal Resource Assessment Report”).
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Section 4.22 Base Case Projections and Budget. The Issuer shall have furnished the Purchasers with the Base Case Projections, showing projections of the operating results of the Issuer and each Issuer Subsidiary through 2023, including each initial Operating Budget, each of which shall be satisfactory to the Purchasers.
Section 4.23 Environmental Report. The Purchasers shall have received an environmental report for each Project prepared by the Environmental Consultant, dated as of a recent date, addressed to the Purchasers and in form and substance satisfactory to the Purchasers.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE ISSUER.
The Issuer represents and warrants to the Collateral Agent and the Purchasers as of the Closing Date that:
Section 5.1 Organization; Power and Authority. Each of the Issuer and each Issuer Subsidiary is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and 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 the Issuer and each Issuer Subsidiary has the limited liability company power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, with respect to the Issuer only, to execute and deliver this Agreement and to execute and deliver the other Transaction Documents to which it is a party and to perform the provisions hereof and thereof.
Section 5.2 Authorization, Etc. This Agreement and the other Transaction Documents to which the Issuer or any Issuer Subsidiary is a party have been, or prior to their execution will be, duly authorized by all necessary limited liability company action on the part of the Issuer or such Issuer Subsidiary, and this Agreement and each other Transaction Document constitute, and upon execution and delivery thereof each Note will constitute, legal, valid and binding obligations of the Issuer or such Issuer Subsidiary, as applicable, enforceable against the Issuer or such Issuer Subsidiary, as applicable, in accordance with their respective terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3 Disclosure. This Agreement, the other Transaction Documents and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Issuer or an Issuer Party in connection with the transactions contemplated hereby (including by posting on an internet or intranet website to which the Purchasers have password-protected access), and the financial statements described in Section 4.17 (this Agreement, the other Transaction Documents and such documents, certificates or other writings and such financial statements delivered to each Purchaser prior to the Closing Date being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Disclosure Documents, since December 31, 2015, there has been no change in the financial condition, operations, business, properties or prospects of the Issuer or any Issuer Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. There is no fact known to the Issuer that could be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents. The Issuer is not aware of any condition, fact, act or circumstance (or absence of any of the foregoing) that could reasonably be expected to interfere with the operation of the Projects as contemplated by the Material Project Documents, the Federal Financing Bank Loan Documents and the LLC Agreements, as applicable.
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Section 5.4 Base Case Projections. The Base Case Projections (a) have been prepared with due care, (b) fairly present the Issuer’s good faith expectations as at the Closing Date as to the matters covered thereby based on the best information available to the Issuer at the time of such Closing, (c) are based on reasonable assumptions as to the factual and legal matters material to the estimates therein and (d) are consistent with the Material Project Documents, the Federal Financing Bank Loan Documents, other than resource degradation and operating expense assumptions under the Federal Financing Bank Loan Documents, and the LLC Agreements.
Section 5.5 Organization and Ownership of Interests in Issuer and Issuer Subsidiaries; Affiliates; Officers; Issuer Subsidiaries.
(a) Schedule 5.5 contains a complete and correct list and description of (i) the Sponsors’ direct ownership interests in the Issuer, (ii) the Issuer’s indirect and direct ownership interests in, and other members of, the Issuer Subsidiaries and (iii) the Issuer’s officers and the officers of each of the Issuer Subsidiaries.
(b) The membership interests in the Issuer are validly issued, are fully paid and nonassessable and are owned by USG Idaho free and clear of any Lien (except for the Lien created by the USG Idaho Pledge Agreement). The membership interests owned by the Issuer in USG Oregon Holdings and the Raft River Project Company are validly issued, are fully paid and nonassessable and are owned by the Issuer free and clear of any Lien (except for the Lien created by the Issuer Pledge Agreement). The membership interests owned by USG Oregon Holdings in the USG Oregon Project Company are validly issued, are fully paid and nonassessable and are owned by USG Oregon Holdings free and clear of any Lien (except for the Lien created by the USG Oregon Pledge Agreement).
(c) USG Idaho is the only member of the Issuer.
(d) The Issuer’s only direct and indirect subsidiaries are the Issuer Subsidiaries.
Section 5.6 Financial Statements; Material Liabilities. The Issuer has delivered to the Purchasers copies of the financial statements described in Section 4.17. All of such financial statements (including in each case the related schedules and notes) fairly present in all material respects the financial position of each Issuer Subsidiary as of the respective dates thereof and the results of its operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). Each Issuer Subsidiary has no Indebtedness or other material liabilities, except as disclosed on such financial statements. The Issuer has no Indebtedness.
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Section 5.7 Compliance with Laws, Other Instruments, Etc. The execution, delivery and performance by (a) the Issuer of this Agreement, the Notes and the other Financing Documents to which it is a party and (b) each Issuer Subsidiary of the Transaction Documents to which it is a party do not and will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien (other than Permitted Liens) in respect of any property of the Issuer or such Issuer Subsidiary under, any Material Project Document or any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, organizational documents of the Issuer, or any other agreement or instrument to which the Issuer or such Issuer Subsidiary is bound or by which the Issuer or such Issuer Subsidiary or any of its properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Issuer or such Issuer Subsidiary, (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Issuer or such Issuer Subsidiary or any Approval, or (iv) require the Approval of any Person, other than Approvals that have been obtained and are in full force and effect.
Section 5.8 Governmental Authorizations, Etc. All Required Approvals are listed on Schedule 5.8. Each Required Approval is validly issued, final and in full force and effect and is not subject to any current legal proceedings, and there are no material unsatisfied conditions to the effectiveness of any such Required Approval and all applicable waiting periods with respect to each such Required Approval have expired without any material adverse action being taken by the applicable authority.
Section 5.9 Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Issuer after due inquiry, threatened against or affecting the Issuer or any Issuer Party in any court or before any arbitrator of any kind or before or by any Governmental Authority that could reasonably be expected to have a Material Adverse Effect, or that question the validity of any of the Transaction Documents.
(b) Neither the Issuer nor any Issuer Party is (i) in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or (ii) in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws or the USA PATRIOT Act) of any Governmental Authority.
Section 5.10 Taxes. Each of the Issuer and each Issuer Subsidiary has filed all tax returns that are required to have been filed in any jurisdiction, and has paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon the Issuer or such Issuer Subsidiary or its properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which is not individually or in the aggregate material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which (A) the Issuer or such Issuer Subsidiary has established adequate reserves in accordance with GAAP, and (B) the nonpayment of all such taxes, assessments, charges, levies and claims during the pendency of such contest could not reasonably be expected to result in a Lien on property or assets of the Issuer or such Issuer Subsidiary other than Permitted Liens. The Issuer knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Issuer and each Issuer Subsidiary in respect of Federal, state or other taxes for all fiscal periods are adequate.
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Section 5.11 Title to Property; Leases; Real Estate; Insurance. Each Project Company has good and sufficient title to, or leasehold interests in, its Project, Site, Geothermal Resource, Water Rights and all of its other properties that individually or in the aggregate are material to such Project Company and its Project, free and clear of Liens (other than Permitted Liens). The applicable Geothermal Leases and all other leases, easements and real property interests that individually or in the aggregate are material to each Project Company and its Project are valid and subsisting and are in full force and effect in all respects. Neither Project Company is in default under any terms of any Geothermal Lease to which it is a party, and no event or omission has occurred which with the giving of notice or lapse of time, or both, would constitute a default under any such Geothermal Lease. The real property interests, leasehold estates, easements and other rights of each Project Company set forth in the Title Policy, as supplemented by the Supplemental Rights:
(a) comprise all of the property interests necessary to secure any right required with respect to the operation or maintenance of the applicable Project in accordance with all requirements of law, including all Required Approvals;
(b) are sufficient to enable the applicable Project to be located, operated and routinely maintained on the applicable Site through the Maturity Date; and
(c) provide adequate ingress and egress for any reasonable purpose in connection with the operation and routine maintenance of the applicable Project.
Section 5.12 Material Project Documents; Commercial Operation Date; Financing Documents.
(a) The Material Project Documents listed on Schedule 5.12(a) constitute and include all contracts and agreements that are necessary for the ownership, operation and maintenance of each Project and the generation, transmission and sale of energy generated by such Project. Each Material Project Document is in full force and effect and constitutes the legal, valid and binding obligation of the Issuer Subsidiary party thereto as of the date hereof. No Issuer Subsidiary nor, to the Issuer’s knowledge, any other Person party to a Material Project Document or other material agreement with the Issuer or any Issuer Subsidiary is in default under any terms of a Material Project Document or material agreement nor has an event or omission occurred which with the giving of notice or lapse of time, or both, would constitute a default under any of the Material Project Documents or other material agreements.
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(b) The Operation Date (as defined in the USG Oregon PPA) of the USG Oregon Project occurred on November 16, 2012. The Operation Date (as defined in the Raft River PPA) of the Raft River Project occurred on April 3, 2008.
(c) The current term of the Public Utility District Purchase and Sale Agreement will expire in 2034. The current term of the Holy Cross Purchase and Sale Agreement will expire on December 31, 2017.
(d) The Federal Financing Bank Loan Documents listed on Schedule 5.12(d) constitute and include all contracts and agreements providing construction or long term financing for the USG Oregon Project. Each Federal Financing Bank Loan Document is in full force and effect and constitutes the legal, valid and binding obligation of the Issuer Subsidiary party thereto as of the date hereof. No Issuer Subsidiary nor, to the Issuer’s knowledge, any other Person party to a Federal Financing Bank Loan Document is in default under any terms of a Federal Financing Bank Loan Document nor has an event or omission occurred which with the giving of notice or lapse of time, or both, would constitute a default under any of the Federal Financing Bank Loan Documents.
(e) The Raft River LLC Agreement is the only contract or agreement providing capital for the Raft River Project. The Raft River Project Company has no Indebtedness for borrowed money.
Section 5.13 Compliance with ERISA.
(a) The Issuer and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. Neither the Issuer nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by the Issuer or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Issuer or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or Federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities. The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.
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(c) The Issuer and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of the last day of the Issuer’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Issuer is not Material.
(e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the Issuer to each Purchaser in the first sentence of this Section 5.13(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such Purchaser.
Section 5.14 Private Offering by the Issuer. Neither the Issuer nor anyone acting on its behalf has offered the Notes or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any person other than the Purchasers, each of which has been offered the Notes at a private sale for investment. Neither the Issuer nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.
Section 5.15 Use of Proceeds; Margin Regulations. The Issuer will apply the proceeds of the sale of the Notes to (a) pay transaction expenses and third party fees, (b) fund the Debt Service Reserve Account in the amount of the Minimum Debt Service Reserve Requirement, the Maintenance Reserve Account in the amount of $1,807,890 and the Raft River Capital Expenditure Account in the amount of $3,000,000 and (c) fund the Closing Date Distribution. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Issuer in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). None of the Issuer or any Issuer Subsidiary owns or carries any margin stock. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in Regulation U.
Section 5.16 Foreign Assets Control Regulations, Etc.
(a) Neither the Issuer nor any Controlled Entity is (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person”). Neither the Issuer nor any Controlled Entity has been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions.
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(b) No part of the proceeds from the sale of the Notes hereunder constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Issuer or any Controlled Entity, directly or indirectly, (i) in connection with any investment in, or any transactions or dealings with, any Blocked Person, or (ii) otherwise in violation of U.S. Economic Sanctions.
(c) Neither the Issuer nor any Controlled Entity (i) has been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions violations, (ii) to the Issuer’s actual knowledge after making due inquiry, is under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) has been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws. The Issuer has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Issuer and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws and U.S. Economic Sanctions.
(d) (1) Neither the Issuer nor any Controlled Entity (i) has been charged with, or convicted of bribery or any other anti-corruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the Issuer’s actual knowledge after making due inquiry, is under investigation by any U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws, (iii) has been assessed civil or criminal penalties under any Anti-Corruption Laws or (iv) has been or is the target of sanctions imposed by the United Nations or the European Union;
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(2) To the Issuer’s actual knowledge after making due inquiry, neither the Issuer nor any Controlled Entity has, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such Government Official in his or her official capacity or such commercial counterparty, (ii) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and
(3) No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage. The Issuer has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Issuer and each Controlled Entity is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.
Section 5.17 Status under Certain Statutes.
(a) None of the Issuer or any Issuer Party is an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(b) Each of the Issuer and each Issuer Subsidiary is not subject to or is exempt from regulation under PUHCA in either case as a “public-utility company” or as a “holding company” of a “public-utility company.”
(c) Each Project is a QF. Those certain “Notices of Self-Certification” that were filed with FERC in Docket Nos. QF12-389 and QF06-187 on or about January 18, 2013, and September 20, 2007, respectively, are in full force and effect and are factually accurate. Each Project Company (i) has obtained and maintained status for its Project as a QF and (ii) has made the requisite QF filings with FERC and any applicable utility and state regulatory authority.
(d) Each Project and Project Company is entitled to the following exemptions:
(i) The Raft River Project and the Raft River Project Company are entitled to (x) all of the exemptions from the FPA provided for in 18 C.F.R. § 292.601(c) including the exemptions from Sections 205 and 206 of the FPA set forth in § 292.601(c)(1); (y) the exemption from PUHCA set forth in 18 C.F.R. § 292.602(b); and (z) the exemption from certain state laws and regulations set forth in § 292.602(c) .
(ii) The USG Oregon Project and the USG Oregon Project Company are entitled to (x) all of the exemptions from the FPA provided for in 18 C.F.R. § 292.601(c) except for the exemptions from Sections 205 and 206 of the FPA set forth in § 292.601(c)(1); (y) the exemption from PUHCA set forth in 18 C.F.R. § 292.602(b); and (z) the exemption from certain state laws and regulations set forth in § 292.602(c) .
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(e) The Issuer is not itself a “public utility” under the FPA. The Issuer holds the exemption from PUHCA that is provided for by 18 C.F.R. § 366.3(a), to the extent set forth therein.
(f) The USG Oregon Project Company holds “market-based rate” authority from FERC under 18 C.F.R. Part 35 Subpart H of its regulations (“MBR Authority”), which MBR Authority is in full force and effect. The order of FERC in Docket No. ER13-413-002 is in full force and effect.
(g) No suit, action, investigation, inquiry, or other legal or administrative proceeding by any Governmental Authority, by or before FERC (including the staff thereof), or by any other Person has been or is pending or threatened which questions or challenges the validity of, or seeks to enjoin, the status of either of the Projects as a QF, nor the MBR Authority of the USG Oregon Project Company.
(h) The PPA and Interconnection Agreement executed by each Project Company have received all Approvals required from all applicable Governmental Authorities. Each Interconnection Agreement is sufficient to permit the applicable Project to: (i) inject all of such Project’s electric energy, capacity and ancillary services up to the point of interconnection specified therein and (ii) satisfy the electrical delivery obligations of the applicable Project Company under the applicable PPA.
(i) Each Project Company is in compliance with all and is not in violation of any applicable requirements and rules of the Public Utilities Commission of Oregon and the Public Utilities Commission of Idaho, as applicable, and FERC, including but not limited to all requirements applicable to such Project Company under Section 215 of the FPA. Neither the Issuer or any Issuer Subsidiary requires permission or authorization from, and is not required to deliver any notice to, the FERC or the Public Utilities Commission of Oregon, the Public Utilities Commission of Idaho in order to execute and deliver the Transaction Documents to which it is a party or to enter into and perform the transactions contemplated thereby.
(j) Solely as a result of the execution and delivery of the Financing Documents and the entering into and performance of the transactions contemplated thereby, neither the Collateral Agent nor any of the Purchasers shall become subject to regulation either by the FERC (under either of the FPA or PUHCA), by the Public Utilities Commission of Oregon under Oregon law or by the Public Utilities Commission of Idaho under Idaho law, except by the exercise of certain remedies allowed under the Financing Documents.
Section 5.18 Environmental Matters.
(a) The Issuer has no knowledge of any claim nor has it received any notice of any claim, and no proceeding has been instituted raising any claim against the Issuer, any Issuer Subsidiary, either Site or any of the real properties now or formerly owned, leased or operated by the Issuer or any Issuer Subsidiary alleging any damage to the environment or violation of any Environmental Laws.
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(b) The Issuer has no knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to either Site or other real properties now or formerly owned, leased or operated by the Issuer or any Issuer Subsidiary or to other assets or its use.
(c) None of the Issuer or any Issuer Subsidiary has stored any Hazardous Materials on either Site or other real properties now or formerly owned, leased or operated by the Issuer or such Issuer Subsidiary and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws; and
(d) All buildings on each Site and all other real properties now owned, leased or operated by the Issuer or any Issuer Subsidiary are in compliance with applicable Environmental Laws.
Section 5.19 Collateral. The Collateral, as described in the Security Documents, includes all of the personal property of the Issuer. The Issuer has no real property. The security interests in the Collateral granted to the Collateral Agent (for the benefit of the Secured Parties) pursuant to the Financing Documents: (a) constitute as to personal property included in the Collateral and, with respect to subsequently acquired personal property included in the Collateral, will constitute, a perfected security interest and Lien under each applicable Uniform Commercial Code, and (b) are, and, with respect to such subsequently acquired property, will be, as to Collateral perfected under each applicable Uniform Commercial Code, 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 for Permitted Liens. All action as is necessary has been taken to establish and perfect the Collateral Agent’s rights in and to, and the first lien priority (subject only to Permitted Liens) of its Lien on, the Collateral for the benefit of the Secured Parties, including any recording, filing, registration, delivery to the Collateral Agent, giving of notice or other similar action (subject to the timely filing of continuation statements as required under the applicable Uniform Commercial Code). The Security Documents and financing statements relating thereto have been duly filed or recorded in each office and in each jurisdiction where required in order to create and perfect the Lien and security interest described above and the priority thereof.
Section 5.20 Labor Relations; Force Majeure Events. No strike, slowdown or stoppage is pending or, to the best of the Issuer’s knowledge, threatened, against the Issuer, any Issuer Subsidiary, any contractors of the Issuer or an Issuer Subsidiary or either Project. Neither the Projects nor the Issuer nor any Issuer Subsidiary nor (to the knowledge of the Issuer) any other Project Party has suffered any force majeure event that is continuing.
Section 5.21 Indebtedness. After giving effect to the Closing, none of the Issuer or any Issuer Subsidiary has any Indebtedness or other material liabilities, other than (a) Indebtedness under the Financing Documents, and (b) Permitted Indebtedness.
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Section 5.22 Capitalization. The Issuer has sufficient capitalization to perform the Obligations under this Agreement and the other Financing Documents.
Section 5.23 Budget. The Issuer and the Operator are in compliance with each initial Operating Budget.
Section 5.24 Firm Transmission. The Raft River Project Company has obtained firm transmission rights for all energy to be delivered pursuant to the Raft River PPA.
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.
Section 6.1 Purchase for Investment. Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s Note or its property shall at all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Issuer is not required to register the Notes.
Section 6.2 Source of Funds. Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:
(a) the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
(b) the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Issuer in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
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(d) the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Issuer that would cause the QPAM and the Issuer to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Issuer in writing pursuant to this clause (d); or
(e) the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d) of the INHAM Exemption) owns a 10% or more interest in the Issuer and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Issuer in writing pursuant to this clause (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Issuer in writing pursuant to this clause (g); or
(h) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.
SECTION 7. INFORMATION.
Section 7.1 Financial and Business Information. The Issuer shall deliver and cause to be delivered to each of the holders:
(a) Quarterly Statements — within 45 days after the end of each quarterly fiscal period in each fiscal year of the Issuer and each Issuer Subsidiary, copies of
(i) a balance sheet of the Issuer and such Issuer Subsidiary as at the end of such quarter, and
(ii) profit and loss statements and cash flows statements for the Issuer and such Issuer Subsidiary for such quarter and (in the case of each quarter other than the first quarter) for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year (except for the balance sheet, which shall set forth in comparative form the figures as of the end of the previous fiscal year), all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, or accompanied by GAAP reconciliations, and certified by a Senior Financial Officer of the Issuer and such Issuer Subsidiary, as applicable, as fairly presenting, in all material respects, the financial position of the Issuer and such Issuer Subsidiary and its results of operations and cash flows, subject to changes resulting from year-end adjustments;
(b) Annual Statements — within 90 days after the end of each fiscal year of the Issuer and each Issuer Subsidiary, copies of
(i) a balance sheet of the Issuer and such Issuer Subsidiary as at the end of such year, and
(ii) statements of income, profit and loss statements and cash flows statements for the Issuer and such Issuer Subsidiary for such year,
setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, or accompanied by GAAP reconciliations, and accompanied by an opinion thereon of ▇▇▇▇ ▇▇▇▇▇ LLP or such other independent public accountants selected by the Issuer and approved by the Required Holders (which consent shall not be unreasonably withheld, conditioned or delayed) (herein, the “Approved Accountant”), which opinion shall (1) state that such financial statements present fairly, in all material respects, the financial position of the Issuer and such Issuer Subsidiary and its results of operations and cash flows and have been prepared in conformity with or accurately reconciled to GAAP, and that the examination of the Approved Accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, and (2) not contain any “going concern” or similar qualification or exception nor any qualification or exception as to the scope of the audit on which such opinion is based;
(c) Other Reports — promptly upon their becoming available, one copy of each regular or periodic report and filing (without exhibits except as expressly requested by a holder) made by the Issuer or any Issuer Subsidiary to or with any state or federal regulatory body;
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(d) Notice of Default or Event of Default — promptly, and in any case within five Business Days, after a Responsible Officer has become aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Issuer or the applicable Issuer Party is taking or proposes to take with respect thereto;
(e) Audit Reports — promptly, and in any event within ten Business Days after receipt, the results of any audit reports relating to the Issuer or any Issuer Subsidiary;
(f) ERISA Matters — promptly, and in any event within ten days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that the Issuer or an ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Issuer or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the incurrence of any liability by the Issuer or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Issuer or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, could reasonably be expected to have a Material Adverse Effect;
(g) Notices from Governmental Authority — promptly, and in any event within 30 days of receipt (or knowledge) thereof copies of any notice to the Issuer or any Issuer Subsidiary from any Federal, state or local Governmental Authority that could reasonably be expected to have a Material Adverse Effect;
(h) Other Notices — promptly, and in any event within five Business Days of receipt (or knowledge) thereof:
(i) any press releases and other statements made available generally by the Issuer or any Issuer Subsidiary;
(ii) notice of the occurrence of any condition or event that could reasonably result in a Material Adverse Effect;
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(iii) copies of any notice of a violation, breach, default or event of default under any Material Project Document, Federal Financing Bank Loan Document or LLC Agreement;
(iv) notice of the occurrence of any condition or event that would restrict the USG Oregon Project Company from making Restricted Payments (as defined in the Federal Financing Bank Loan Guarantee Agreement) under the Federal Financing Bank Loan Documents;
(v) any actual termination or rescission or any written threat of termination or rescission of any Material Project Document, any notice of exercise of a right of termination or suspension of a Material Project Document and any proposed or final amendment of any Material Project Document;
(vi) any material pending or threatened adversarial or contested proceeding of or before a Governmental Authority relating to either Project;
(vii) any termination, suspension, written threat of termination or suspension, or other loss of any Required Approval;
(viii) any material litigation or proceeding taken or threatened in writing against the Issuer or any Issuer Party;
(ix) any notices or communications relating to any Cash Grant Recapture Liability applicable to either Project; and
(x) any claim of force majeure under any Material Project Document.
(i) Operating Reports — within 30 days after the end of each month, a monthly operating report substantially in the form attached hereto as Exhibit 7.1 ;
(j) Annual Insurance Certificates — within 30 days of the end of each fiscal year of the Issuer, evidence of insurance in effect that meets the requirements of Section 9.2 ;
(k) Information Required by Rule 144A — upon the request of a holder (and shall deliver to any qualified institutional buyer designated by such holder), such financial and other information as such holder may reasonably determine to be necessary in order to permit compliance with the information requirements of Rule 144A under the Securities Act in connection with the resale of Notes, except at such times as the Issuer is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act (for the purpose of this Section 7.1(k) , the term “qualified institutional buyer” shall have the meaning specified in Rule 144A under the Securities Act);
(l) Annual Geothermal Resource Report, Operating Budgets and DSCR Notices — (i) at least 30 days prior to the end of each fiscal year of the Issuer, the Annual Geothermal Resource Report and the proposed annual operating plan and budget for each Project for the following three consecutive calendar years required to be delivered pursuant to Section 9.12, and (ii) not later than five Business Days after each Payment Date, the DSCR Notice with respect to such Payment Date required to be delivered pursuant to Section 9.13 ;
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(m) Material Project Documentation — promptly, and in any event within five Business Days and to the extent not already provided hereunder, copies of all reports, notices, certificates, projections, budgets and other documents delivered by (i) the USG Oregon Project Company to the Power Purchaser pursuant to Sections 8.5.2, 14.3, 14.4, 16.3 and 25.2 of the USG Oregon PPA (and all notices of a “Material Breach” (as such term is defined in the USG Oregon PPA); (ii) the Raft River Project Company to the Power Purchaser pursuant to Sections 7.5.2, 15.3, 15.4, 17.3 and 26.2 (including all notices of a “Material Breach” (as such term is defined in the Raft River PPA)), of the Raft River PPA; (iii) the Raft River Project Company to Public Utility District No. 1 of Clallam County, Washington pursuant to the Public Utility District Purchase and Sale Agreement (including any Confirmation Letters (as defined therein)); and (iv) the Raft River Project Company to Holy Cross Energy pursuant to the Holy Cross Purchase and Sale Agreement.
(n) Project Company Information — concurrently with delivery to the U.S. DOE or members, as applicable, and to the extent not already provided hereunder, copies of all documents provided to (i) the U.S. DOE pursuant Article 6 of the Federal Financing Bank Loan Guarantee Agreement, (ii) the Raft River Members pursuant to Section 6.4 of the Raft River LLC Agreement and (iii) the USG Oregon Holdings Members pursuant to Section 9.6 of the USG Oregon Holdings LLC Agreement.
(o) Operator Information — promptly, and in any event within five Business Days of receipt (or knowledge) thereof and to the extent not already provided hereunder, copies of all reports, notices, certificates, projections, budgets and other documents received by (i) the USG Oregon Project Company from the Operator pursuant to Sections 4.1.1, 4.1.4, 4.1.5, 5.2.1, 5.2.2 and 7.2 of the USG Oregon O&M Agreement and (ii) the Raft River Project Company from the Operator pursuant to Sections 4.1(a), 4.1(d), 4.1(e), 5.2(a), 5.2(b), and 8.2 of the Raft River O&M Agreement.
(p) Requested Information — with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Issuer or any Issuer Party or relating to the ability of the Issuer to perform its obligations hereunder and under the Notes (including financial forecasts or cash flow projections) as from time to time may be reasonably requested by a holder.
Section 7.2 Officer’s Certificate. Each set of financial statements delivered to each of the holders pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth a statement that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Issuer and each Issuer Subsidiary from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Issuer or any Issuer Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Issuer shall have taken or proposes to take with respect thereto.
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Section 7.3 Visitation. The Issuer shall, and shall cause each Issuer Subsidary to, permit the representatives of each Purchaser and each holder of a Note that is an Institutional Investor:
(a) No Default — if no Default or Event of Default then exists, at the expense of such Purchaser or holder and upon reasonable prior notice to the Issuer, to visit the principal executive office of each of the Issuer and any Issuer Subsidiary, to discuss consultant reports and the affairs, finances and accounts of the Issuer or such Issuer Subsidiary with the Issuer or such Issuer Subsidiary’s officers, and (with the consent of the Issuer, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Issuer, which consent will not be unreasonably withheld) to visit the other offices and properties of the Issuer or such Issuer Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and
(b) Default — if a Default or Event of Default then exists, at the expense of the Issuer to visit and inspect any of the offices or properties of each of the Issuer and any Issuer Subsidiary, to examine all of its books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss consultant reports and its affairs, finances and accounts with the Issuer or such Issuer Subsidiary’s officers and independent public accountants (and by this provision the Issuer authorizes said accountants to discuss the affairs, finances and accounts of the Issuer and such Issuer Subsidiary), all at such times and as often as may be requested.
Section 7.4 Electronic Delivery. Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates that are required to be delivered by the Issuer pursuant to Sections 7.1(a), (b) or (c) and Section 7.2 shall be deemed to have been delivered if the Issuer satisfies any of the following requirements with respect thereto:
(i) such financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the requirements of Section 7.2 are delivered to each holder of a Note by e-mail;
(ii) such financial statements satisfying the requirements of Section 7.1(a) or Section 7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section 7.2 are timely posted by or on behalf of the Issuer on IntraLinks or on any other similar website to which each holder of Notes has free access; or
(iii) the Issuer shall have filed any of the items referred to in Section 7.1(c) with the SEC on ▇▇▇▇▇ and shall have made such items available on its home page on the internet or on IntraLinks or on any other similar website to which each holder of Notes has free access;
provided however, that in the case of any of clauses (ii) or (iii), the Issuer shall have given each holder of a Note prior written notice, which may be by e-mail or in accordance with Section 18, of such posting or filing in connection with each delivery, provided further, that upon request of any holder to receive paper copies of such forms, financial statements and Officer’s Certificates or to receive them by e-mail, the Issuer will promptly e-mail them or deliver such paper copies, as the case may be, to such holder.
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SECTION 8. PAYMENT AND PREPAYMENT OF THE NOTES.
Section 8.1 Amortization; Maturity; Mandatory Prepayments.
(a) Amortization. On each Payment Date, the Issuer will prepay the principal amounts set forth in the amortization schedule attached hereto as Schedule 8.1 (the “Amortization Schedule”) (or such lesser principal amount as shall then be outstanding) of the Notes at 100% of the principal amount thereof and without payment of the Make-Whole Amount or any premium, provided that upon any partial prepayment of the Notes pursuant to Section 8.1(b) or 8.2, the principal amount of each required prepayment of the Notes becoming due under this Section 8.1 on and after the date of such prepayment shall be reduced in the same proportion as the aggregate unpaid principal amount of the Notes is reduced as a result of such prepayment. The entire unpaid principal balance of the Notes shall be due and payable on the Maturity Date.
(b) Mandatory Prepayments. Except as otherwise provided in Section 8.1(a) and this Section 8.1(b) , the Notes are not subject to mandatory prepayments of principal.
(i) Loss. If there occurs a Loss or series of related Losses (other than a Major Loss) and any Loss Proceeds are distributed to the Issuer, the Issuer shall apply such Loss Proceeds to the prepayment of the principal amount of the Notes, together with accrued and unpaid interest thereon to the date of such prepayment, but without any Make-Whole Amount.
(ii) Major Loss. If a Major Loss with respect to the USG Oregon Project or USG Oregon Site occurs, the Issuer shall, within ten Business Days following the date on which the Issuer receives the Loss Proceeds with respect thereto, repay the outstanding principal amount of the Notes (together with accrued and unpaid interest thereon to the date of such prepayment, but without any Make-Whole Amount) and all other outstanding Obligations. If a Major Loss with respect to the Raft River Project or the Raft River Site occurs, the Issuer shall, within ten Business Days following the date on which the Issuer receives the Loss Proceeds with respect thereto, repay the Notes in an aggregate principal amount equal to 15% of the aggregate outstanding principal amount of the Notes (together with accrued and unpaid interest thereon to the date of such prepayment, but without any Make-Whole Amount).
If the Issuer is required to prepay the Notes pursuant to clauses (i) or (ii) above, the Issuer shall give written notice thereof to each holder. Such notice shall (w) describe the facts and circumstances giving rise to such mandatory prepayment, (x) refer to this Section 8.1(b) , (y) specify the date of repayment, which date shall be on or before the date such prepayment is required to be made as specified in clauses (i) or (ii) above, as applicable, and (z) identify the pro rata portion of the Notes held by such holder to be prepaid (in the case of a prepayment pursuant to clause (i) or the second sentence of clause (ii)), which pro rata portion shall be calculated by multiplying the aggregate amount required to be applied to the prepayment of the Notes as provided in clause (i) above by a fraction the numerator of which is the aggregate principal amount of the Notes held by such holder and the denominator of which the aggregate principal amount of all outstanding Notes (in each case calculated immediately prior to giving effect to such prepayment). On the date of prepayment, the pro rata portion of the principal amount of the Notes held by each holder of Notes, together with interest accrued thereon to such prepayment date, shall become due and payable on such date.
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Section 8.2 Optional Prepayments with Make-Whole Amount. The Issuer may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than $2,000,000 in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Issuer will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Issuer shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.
Section 8.3 Allocation of Partial Prepayments. In the case of each partial prepayment of the Notes, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.
Section 8.4 Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Issuer shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Issuer and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.5 Purchase of Notes. The Issuer will not, and will not permit any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes. The Issuer will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment or prepayment of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.
Section 8.6 Make-Whole Amount.
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“Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:
“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.
“Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities (“Reported”) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date. If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
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“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or 12.1.
“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Issuer covenants that so long as any of the Notes are outstanding:
Section 9.1 Compliance with Law. Without limiting Section 10.4, the Issuer will, and will cause each Issuer Subsidiary to, comply with all laws, ordinances or governmental rules or regulations to which it is subject, including, without limitation, ERISA, the USA PATRIOT Act, Environmental Laws or any laws referenced in Section 5.16. The Issuer will, and will cause each Issuer Subsidiary to, obtain and maintain in effect all licenses, certificates, permits, franchises, Approvals and other governmental authorizations necessary to the ownership of its properties, the operation and maintenance of its Project or to the conduct of its businesses, and will promptly pay when due all necessary license, franchise and other fees and charges due and payable thereunder.
Section 9.2 Insurance. The Issuer will, and will cause each Issuer Subsidiary, to, maintain, with financially sound and reputable insurers, insurance meeting the requirements of Schedule 9.2 and as required under the applicable Material Project Documents and Federal Financing Bank Loan Documents. The Issuer will deliver to the holders a final report of the Insurance Consultant prior to May 31, 2016, in form and substance reasonably satisfactory to the Required Holders.
Section 9.3 Title, Water Rights, Etc. The Issuer shall, and shall cause each Issuer Subsidiary to, maintain good, valid, marketable and insurable title to, or leasehold interests in, its properties, including, as applicable, the Projects, the Sites, the Geothermal Resources, the Water Rights and the Collateral described in the Security Documents, and shall at all times warrant and defend the title to such property and Collateral against all claims that do not constitute Permitted Liens.
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Section 9.4 Payment of Taxes and Claims. The Issuer will, and will cause each Issuer Subsidiary to, file all tax returns required to be filed in any jurisdiction and pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on it or any of its properties, assets, income or franchises, to the extent the same have become due and payable, and all claims for which sums have become due and payable; provided that the Issuer or an Issuer Subsidiary need not pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by the Issuer or such Issuer Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Issuer or such Issuer Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Issuer or such Issuer Subsidiary, and (ii) the nonpayment of all such taxes, assessments, charges, levies and claims could not reasonably be expected to result in a Lien on property or assets of the Issuer or such Issuer Subsidiary.
Section 9.5 Existence, Etc. The Issuer will, and will cause each Issuer Subsidiary to, at all times preserve and keep in full force and effect its limited liability company existence and all rights and franchises of the Issuer or such Issuer Subsidiary.
Section 9.6 Books and Records. The Issuer will, and will cause each Issuer Subsidiary to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Issuer or such Issuer Subsidiary and in a manner consistent with projects similar to the Projects.
Section 9.7 Collateral; Further Assurances. The Issuer shall, and shall cause each Issuer Subsidiary to, obtain all consents (other than any consent required by any Governmental Authority in connection with foreclosure under the Security Documents) and take all actions necessary to insure that the Collateral Agent, on behalf of the Secured Parties, has and continues to have in all relevant jurisdictions duly and validly created, attached, perfected, and enforceable first-priority Liens on the Collateral described in the Security Documents (including after-acquired Collateral), subject to no Liens other than Permitted Liens. The Issuer shall cause the Obligations to constitute direct senior secured obligations of the Issuer and to rank senior in priority of payment, in right of security and in all other respects to all other Indebtedness of the Issuer.
Section 9.8 Material Project Documents; Federal Financing Bank Loan Documents; LLC Agreements. Except as otherwise permitted by Section 10.17, the Issuer shall, and shall cause each Issuer Subsidiary to, (i) perform and observe all of the terms, covenants, provisions and agreements required to be performed and observed by it under the (A) Material Project Documents, Federal Financing Bank Loan Documents and the LLC Agreements to which it is a party and (B) other agreements to which the Issuer or such Issuer Subsidiary is a party except where the failure to perform and observe such other agreements could not individually or in the aggregate have a Material Adverse Effect, (ii) take all actions required to enforce all rights and obligations thereunder, (iii) maintain the Material Project Documents, the Federal Financing Bank Loan Documents and the LLC Agreements in full force and effect in accordance with the terms thereof and (iv) deliver copies of any proposed or final amendments to the Material Project Documents, the Federal Financing Bank Loan Documents or the LLC Agreements to the Purchasers. The Issuer shall cause any PPA whose term would otherwise expire prior to the Maturity Date to be renewed or extended to a date that is at least one year after the Maturity Date.
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Section 9.9 Pledged Accounts. The Issuer shall establish and maintain the following accounts at the Depositary in accordance with the Depositary Agreement: (i) the Revenue Account, (ii) the Debt Service Reserve Account, (iii) the Make-up Well Reserve Account, (iv) the Maintenance Reserve Account, and the (v) Raft River Capital Expenditure Account. The Issuer shall fund the Pledged Accounts as required under the Depositary Agreement. All amounts held in the Pledged Accounts shall be held in cash or, if permitted under the Depositary Agreement, in Permitted Investments.
Section 9.10 Annual Servicing Fee. The Issuer hereby agrees to pay to each holder of Notes, in immediately available funds credited to such holder’s account as specified in the Purchaser Schedule, such holder’s ratable portion of an annual servicing fee in an aggregate amount equal to $50,000 per year (the “Servicing Fee”), which fee will be payable in advance on the Closing Date and annually in advance on each anniversary thereof until all Obligations are repaid in full. The Servicing Fee shall not be refundable under any circumstances. If the Servicing Fee is not paid when due, interest thereon shall be payable from and including the due date until such fee is paid at the Default Rate.
Section 9.11 Maintenance and Operation. The Issuer shall cause each Project Company to operate and maintain its Project in accordance with Good Utility Practice(s) (as defined in the applicable PPA), all requirements of law, all Required Approvals and all requirements of the Material Project Documents, the Federal Financing Bank Loan Documents and the LLC Agreements.
Section 9.12 Resource Review; Budgets.
(a) [Reserved.]
(b) At least 30 days prior to the end of each calendar year, the Issuer shall submit to the holders a report of the Geothermal Resource Engineer, which report shall assess and project (i) the Geothermal Resources (based upon direct, or inferred, reservoir pressure and enthalpy measurements) through the Maturity Date, (ii) requirements for drilling or re-drilling ▇▇▇▇▇ through the Maturity Date and (iii) related capital expenditures in each of the following three years (each such report, an “Annual Geothermal Resource Report”). If the Annual Geothermal Resource Report shows a negative deviation from the Geothermal Resources characteristics predicted in either Geothermal Resource Assessment Report, the Annual Geothermal Resource Report shall also include (A) an estimate of the date when a new geothermal production well will be required to restore the Projected Debt Service Coverage Ratios through March 31, 2036 to Debt Service Coverage Ratios that equal or exceed 1.55:1.00 (using the same assumptions used in preparing the Base Case Projections) (the “Make-Up Well Drill Date”) and (B) the estimated cost of such new geothermal production well that will restore the Projected Debt Service Coverage Ratios through March 31, 2036 to Debt Service Coverage Ratios that equal or exceed 1.55:1.00 (using the same assumptions used in preparing the Base Case Projections) (the “Make-Up Well Cost”).
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(c) At least 15 days prior to the end of each calendar year, the Issuer shall either (i) provide to the holders and the Depositary a new or revised schedule (“Schedule 9.12 ”) of deposits to be made in the Make-Up Well Reserve Account on subsequent Payment Dates, in accordance with the priorities set forth in Section 4.1 of the Depositary Agreement, and to the extent funds are available in the Revenue Account, in the amounts set forth opposite such Payment Dates on such schedule (as updated from time to time in accordance with this Section 9.12(c) , the “Required Make-Up Well Reserve Account Deposit”) to take into account any Make-Up Well Drill Date and Make-Up Well Cost or any update in the Make-Up Well Drill Date and the Make-Up Well Cost as set forth in the most recent Annual Geothermal Resource Report, and submit such Schedule 9.12 for the approval of the Required Holders, or (ii) certify to the holders that there is no Schedule 9.12 or update necessary based upon the most recent Annual Geothermal Resource Report.
(d) On or before October 1 of each calendar year, the Issuer shall submit to the holders and the Independent Engineer a draft proposed annual operating plan and budget for each Project during each of the following three calendar years (prepared on a month-by-month basis), and, by October 15 of each calendar year, the final proposed operating plan and budget. The Required Holders and the Independent Engineer will have the right to request revisions to or approve each of the proposed operating plans and budgets promptly and in any event within 15 days after receipt of the final proposed plan and budget. After an operating plan and budget for each Project has been approved by the Required Holders and the Independent Engineer (as approved for the USG Oregon Project, the “USG Oregon Operating Budget”, as approved for the Raft River Project, the “Raft River Operating Budget”, each an “Operating Budget” and, collectively, the “Operating Budgets”), the Issuer shall, and shall cause the applicable Issuer Subsidiary to, follow and comply with such Operating Budget. Notwithstanding the foregoing, for each Operating Budget, the Issuer may incur aggregate costs on an annual basis of up to 110% of total costs detailed in such Operating Budget for such year without the prior written consent of the Required Holders or the Independent Engineer. Any Operating Budget may be subsequently amended with the consent of the Required Holders. If the Issuer fails to submit a proposed annual operating plan and budget for a Project for any calendar year or if an operating plan and budget for such Project has not yet been approved by the Required Holders and Independent Engineer for any calendar year, then the Issuer shall, and shall cause each Issuer Subsidiary to, follow and comply with the applicable Operating Budget most recently approved by the Required Holders and the Independent Engineer, plus an increase in expenditures thereunder equal to the CPI Adjustment (or, if any Material Project Document imposes escalation limitations on any O&M Costs, subject to escalation in accordance with such limitations), until such time as a new annual operating plan and budget for such Project has been submitted to, and approved by, the Required Holders and the Independent Engineer in accordance with this clause (h); provided that (i) any items of the then-proposed operating plan and budget that have been approved by the Required Holders and the Independent Engineer shall be given effect in substitution of the corresponding items in the applicable Operating Budget most recently in effect, and (ii) with respect to any set amount of expenses which will be incurred under any contract which has previously been entered into in accordance with the provisions hereof, the term of which extends into any period beyond that of the prior applicable Operating Budget, the budgeted amount of expenses under the operating plan and budget for such calendar year will be based on such expenses provided for in such contract.
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(e) On or before October 1 of each calendar year, the Issuer shall also submit to the holders and the Independent Engineer a draft of the draft proposed annual operating plan and budget for the USG Oregon Project to be delivered by the USG Oregon Project Company to the Federal Financing Bank Loan Servicer pursuant to the Federal Financing Bank Loan Guarantee Agreement and, by October 15 of each calendar year, the final proposed operating plan and budget. Each such proposed operating plan and budget shall demonstrate a Debt Service Coverage Ratio (as defined in the Federal Financing Bank Loan Guarantee Agreement) of at least 1.25x for the time periods covered in such operating plan and budget. The Required Holders and the Independent Engineer will have the right to request revisions to the proposed operating plan and budget promptly and in any event within 15 days after receipt of the final proposed plan and budget. The Issuer shall deliver a copy of the final operating plan and budget to the holders and the Independent Engineer concurrently with delivery to the Federal Financing Bank Loan Servicer. The Issuer shall not be required to obtain approval from the Required Holders for any revisions to an operating plan and budget required by the Federal Financing Bank Loan Servicer or the U.S. DOE.
Section 9.13 DSCR Notice on Payment Date. Not later than five Business Days after each Payment Date, the Issuer shall deliver to the Collateral Agent and the holders the Issuer’s calculation of the Debt Service Coverage Ratio for the 12-month period ending on such Payment Date (or, for any date prior to the first anniversary of the Closing Date, for the period commencing on the Closing Date and ending on such Payment Date) and the Projected Debt Service Coverage Ratio for the 12-month period commencing on such Payment Date (the “DSCR Notice”). The Required Holders shall notify the Issuer in writing of any reasonable corrections, changes or adjustments to be made to such calculations within ten Business Days of receipt of a DSCR Notice.
Section 9.14 Perfection Opinion. On the fourth anniversary of this Agreement, the Issuer shall provide to the Collateral Agent and the holders an opinion or opinions of counsel addressed to them (a) stating that all action has been taken with respect to the filing, recording, re-filing and re-recording of the Security Documents and/or financing statements and continuation statements with respect thereto as is necessary to protect and preserve the rights and interests of the Collateral Agent in and to the Collateral and the Liens on and in the Collateral created by the Security Documents and reciting the details of such action or referring to prior opinions of counsel in which such details are given and (b) stating what, if any, action of the foregoing nature may reasonably be expected to become necessary during the next 48 months in order to protect and preserve the rights and interests of the Collateral Agent in and to the Collateral and the Liens on and in the Collateral created by the Security Documents.
Section 9.15 Distributions. The Issuer shall cause each Issuer Subsidiary to distribute all of its distributable cash as and when, and to the extent permitted under, the applicable LLC
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Section 9.16 Use of Proceeds. The Issuer shall use the proceeds of the sale of the Notes only in accordance with the purposes set forth in Section 5.15.
Section 9.17 Membership Interests in Raft River Project Company. The Issuer acknowledges that the Purchasers have requested that the Issuer provide security interests in the membership interests in and assets of the Raft River Project Company to secure the Obligations, but, although the Issuer is able to provide a security interest in the membership interests in the Raft River Project Company that it currently owns (which constitute 95% of the outstanding membership interests in the Raft River Project Company), it is unable to obtain requisite consents prior to Closing to provide a security interest in the assets of the Raft River Project Company or the remaining membership interests. In consideration of the Purchasers’ purchase of the Notes, the Issuer agrees that, if the Sponsors obtain direct or indirect ownership of all of the remaining membership interests in the Raft River Project Company, the Issuer shall take all actions necessary to create a first priority security interest in favor of the Collateral Agent, for the benefit of the Secured Parties, in all such remaining membership interests and all of the assets of the Raft River Project Company to secure the Obligations.
Section 9.18 No Dilution of Ownership Interest in USG Oregon Holdings and the Raft River Project Company. The Issuer shall take reasonable action, including, without limitation, making capital contributions as necessary, to ensure that it legally and beneficially owns and controls, indirectly and directly, at least (a) 60% of the outstanding membership or other equity interests of USG Oregon Holdings (measured by both economic interest and voting power) and (b) 95% of the outstanding membership or other equity interests of the Raft River Project Company (measured by both economic interest and voting power).
SECTION 10. NEGATIVE COVENANTS.
The Issuer covenants that so long as any of the Notes are outstanding:
Section 10.1 Transactions with Affiliates. Except for the Material Project Documents in effect on the date hereof, the Issuer will not, and will not cause or permit any Issuer Subsidiary to, enter into directly or indirectly any transaction or group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate, except in the ordinary course and pursuant to the reasonable requirements of the Issuer or such Issuer Subsidiary’s business and upon fair and reasonable terms no less favorable to the Issuer or such Issuer Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, amend or waive any provision of a Material Project Document to which an Affiliate of the Issuer or such Issuer Subsidiary is a party except with the prior written consent of the Required Holders (which consent will not be unreasonably withheld).
Section 10.2 Merger, Consolidation. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, consolidate or merge with any other Person.
Section 10.3 Line of Business. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, engage in any business other than the direct or indirect ownership, operation and maintenance of the Projects.
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Section 10.4 Terrorism Sanctions Regulations. The Issuer will not and will not permit any Controlled Entity (a) to become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or any Person that is the target of sanctions imposed by the United Nations or by the European Union, or (b) directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder to be in violation of any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (c) to engage, nor shall any Affiliate of either engage, in any activity that could subject such Person or any holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions.
Section 10.5 Liens. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on the Collateral or its other assets and properties other than Permitted Liens.
Section 10.6 Indebtedness. The Issuer will not incur or in any manner become or be liable in respect of any Indebtedness, except (a) Indebtedness under the Financing Documents, (b) trade accounts payable (other than for borrowed money) in the ordinary course of the Issuer’s business which do not exceed $100,000 and are not more than 90 days past due and (c) Additional Permitted Debt; provided, however, that (i) the Issuer may incur Additional Permitted Debt only in a single issuance of notes within 24 months after Closing, (ii) there is only a single purchaser of such notes (it being understood and agreed that one or more accounts managed by a purchaser and/or its affiliates shall qualify as a “single purchaser” of such notes), and (iii) the terms on which such notes are issued shall be the same as, or more favorable than, the terms on which the Notes are issued; and provided further, that, if the terms of such notes are proposed to be more favorable, or if the covenants proposed to be included are more restrictive than the covenants contained in this Agreement, then such more favorable terms and/or such restrictive covenants and any related definitions shall automatically be deemed to be incorporated into this Agreement by reference from the time such other agreement becomes binding upon the Issuer. Promptly but in no event more than 5 Business Days following the execution of any agreement providing for Additional Permitted Debt, the Issuer shall furnish each holder with a copy of such agreement. Upon written request of the Required Holders, the Issuer will enter into an amendment to this Agreement pursuant to which this Agreement will be formally amended to incorporate more favorable terms and/or more restrictive covenants.
Section 10.7 Regulatory Standing. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, take or cause to be taken any action which could reasonably be expected to result in either (a) a Project losing its QF status, (b) the Issuer, either Project or either Project Company ceasing to hold any of the exemptions from regulation provided under 18 C.F.R. §§ 292.601(c) including the exception from Sections 205 and 206 of the FPA, as applicable, set forth in §292.601(c)(1), 292.602(b) and 292.602(c), (c) any disapproval, rejection, suspension, other action adverse to the continued effectiveness of a PPA or Interconnection Agreement by the FERC or the Public Utilities Commission of Oregon or Idaho, as applicable, (d) any termination, revocation, suspension, or other action adverse to the continued effectiveness of the MBR Authority held by the USG Oregon Project Company, or (e) any Secured Party or any “affiliate” (as that term is defined in PUHCA) of any Secured Party, solely as a result of the Issuer’s or any Issuer Subsidiary’s or any of their Affiliates’ actions relating to the ownership, leasing or operation of a Project, the sale of electricity therefrom or the entering into of any Financing Document or any transaction contemplated thereby, becoming subject to, or not exempt from regulation under, PUHCA or the FPA, other than any such regulation that may result from the exercise by any Secured Party of its remedies under the Financing Documents.
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Section 10.8 Loans, Advances, Investments and Contingent Liabilities. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, make or permit to remain outstanding any loan or advance to, or extend credit to any Person, or own, purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any Person, or commit to do any of the foregoing, except Permitted Investments and capital contributions to fund capital improvements to the Projects and other expenditures that are permitted hereunder. Notwithstanding the foregoing, the Issuer may make capital contributions to USG Oregon Holdings and the Raft River Project Company to the extent necessary to fulfill its obligations under Section 9.18 hereto.
Section 10.9 No Subsidiaries. None of the Issuer or any Issuer Subsidiary shall have any subsidiaries except, in the case of the Issuer or USG Oregon Holdings, the Issuer Subsidiaries.
Section 10.10 Restricted Payments. The Issuer shall not, directly or indirectly, make or declare any Distribution other than the Closing Date Distribution unless the following conditions are met (the “Restricted Payment Conditions”):
(a) there does not exist and, after giving effect to the proposed Distribution, there will not exist, a Default or an Event of Default;
(b) the Distribution is to be made no sooner than 15 days and no later than 30 days following delivery by the Issuer to the Collateral Agent and the holders of a DSCR Notice;
(c) all reserve accounts created under the Depositary Agreement have been fully funded or Acceptable Letters of Credit in the amounts required to be funded in the reserve accounts have been delivered to the Depositary in accordance with the terms of the Depositary Agreement; and (d) the DSCR Requirements are met.
Section 10.11 Sale of Assets, Etc. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, Transfer, or agree or otherwise commit to Transfer, any of its assets, other than, in the case of the Project Companies only, (a) sales in the ordinary course of business, (b) sales of Permitted Investments for cash or other Permitted Investments, (c) sales under the terms of the applicable PPA, (d) sales under the terms of the applicable REC Purchase and Sale Agreement and (e) sales of equipment or other assets that are (i) obsolete, (ii) no longer used or useful in the operation of a Project, or (iii) are replaced by other equipment of equal value and utility, and in all cases for which the Issuer Subsidiary shall have received consideration reflecting value that would have been obtained in a transaction on an arm’s length basis with an unaffiliated third party (unless such assets only have scrap value).
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Section 10.12 Equity Capital. Except to the extent permitted by Section 10.10, the Issuer will not, and will not cause or permit any Issuer Subsidiary to, (either directly, or indirectly by the issuance of rights or options for, or securities convertible into, such interests) purchase, redeem or reduce its equity capital.
Section 10.13 Amendments to Constitutive Documents. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, amend or waive any provision of its limited liability company operating agreement or of any other constitutive documents without the prior written consent of the Required Holders, except as may be necessary to reflect any Transfer of any limited liability company interest in the Issuer or such Issuer Subsidiary to the extent such Transfer is permitted under the terms of (a) this Agreement, and (b) with respect to the membership interests of the USG Oregon Project Company only, the USG Oregon Pledge Agreement.
Section 10.14 No Employees; No ERISA Plans. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, (a) hire or become the employer of any employees or (b) maintain or be a participating employer in any Plan, or enter into any indemnity agreement or similar arrangement with, or assume any liability or obligation with respect to, any ERISA Affiliate in connection with any Plan maintained at any time by such ERISA Affiliate or in connection with any Plan to which any ERISA Affiliate may at any time contribute.
Section 10.15 No Margin Stock. Anything herein contained to the contrary notwithstanding, the Issuer will not, and will not cause or permit any Issuer Subsidiary to, or authorize any investment in, or otherwise purchase or carry, any margin stock.
Section 10.16 Reporting Practices. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, make any change in reporting practices, except as may be required or permitted by GAAP.
Section 10.17 Material Project Documents; Federal Financing Bank Loan Documents; LLC Agreements. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, (a) enter into, amend, modify, supplement, vary, waive, cancel, terminate, agree to terminate or agree or purport to do any of the foregoing in relation to, any Material Project Document (other than to correct minor or technical errors that do not change any Person’s rights or obligations), except that the Issuer may allow either Project Company to enter into additional well drilling contracts with the prior written consent of the Required Holders, (b) without the written consent of the Required Holders (which consent shall not be unreasonably withheld or delayed), amend, modify, supplement, vary, waive, cancel, terminate, agree to terminate or agree or purport to do any of the foregoing in relation to, any Federal Financing Bank Loan Document or (c) amend, modify, supplement, vary, waive, cancel, terminate, agree to terminate or agree or purport to do any of the foregoing in relation to, any LLC Agreement.
Section 10.18 Accounts. The Issuer will not maintain, establish or use any deposit or securities accounts, other than (a) the accounts established under the Depositary Agreement and (b) the Local Account, provided that, prior to depositing any funds into such account, the Issuer, the Collateral Agent and the local commercial bank shall have entered into a Local Account Control Agreement.
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Section 10.19 Lease Obligations. Except for the Geothermal Leases and leases of office space, office equipment or motor vehicles with respect to which the aggregate lease payments do not exceed $50,000 per year as required in connection with the operation of the Project, the Issuer will not, and will not cause or permit any Issuer Subsidiary to, enter into, create or suffer to exist any obligations for payment under any operating lease or agreement to lease.
Section 10.20 Material Contracts. The Issuer will not, and will not cause or permit any Issuer Subsidiary to, execute, enter into or otherwise be bound by any Material Contract, other than the Material Project Documents in effect on the date hereof and agreements or contracts contemplated or permitted by the Transaction Documents as in effect on the date hereof, without the consent of the Required Holders. The Issuer will deliver to the holders final drafts of such agreements or contracts and, after execution thereof, copies of the final executed agreements or contracts.
Section 10.21 Raft River Project New Development. The Issuer will not initiate or pursue, or cause any Issuer Subsidiary to initiate or pursue, any new development with respect to the Raft River Project without the consent of the Required Holders.
Section 10.22 No Voting as Member of USG Oregon Holdings or the Raft River Project Company. The Issuer will not vote as a member of USG Oregon Holdings or the Raft River Project Company on any matter if the outcome of such vote could result in a violation of a provision of any Financing Document, Federal Financing Bank Loan Document or Material Project Document.
SECTION 11. EVENTS OF DEFAULT.
An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:
(a) the Issuer defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b) the Issuer defaults in the payment of (i) any interest on any Note or (ii) on any fees payable under the Financing Documents, in each case for more than five Business Days after the same becomes due and payable; or
(c) the Issuer defaults in the performance of or compliance with any term contained in Section 7.1(d) , Section 9.2, Section 9.5 or Section 10; or
(d) (i) the Issuer defaults in the performance of or compliance with any term contained herein (other than those referred to in another clause of this Section 11) or in any other Financing Document to which it is a party or (ii) any Issuer Party defaults in the performance of or compliance with any term contained in any Financing Document or any Material Project Document to which it is a party (other than the PPAs) and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining knowledge of such default and (ii) the Issuer receiving written notice of such default from the Collateral Agent or holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d), or such longer period (but not to exceed an additional 30 days) as may be required to remedy the default so long as the Issuer is diligent by pursuing the remedy throughout the cure period (or, if earlier, within any applicable cure period provided in a Material Project Document); or
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(e) (i) either Project Company defaults in the performance of or compliance with any term contained in its PPA and such default is not remedied within any applicable cure period under such PPA; (ii) the USG Oregon Project Company defaults in the performance of or compliance with any term contained in any Federal Financing Bank Loan Document and such default is not remedied within any applicable cure period under such Federal Financing Bank Loan Document; provided, however, that a failure to remedy any such default (other than a payment or bankruptcy-related default) shall not result in an Event of Default if, within the applicable cure period, (if any), the USG Oregon Project Company has requested in writing a waiver of such default, such waiver has not been denied and none of the Federal Financing Bank Loan Collateral Agent, U.S. DOE or the Depositary (as defined in the Federal Financing Bank Loan Documents) has commenced the exercise of any remedy with respect thereto or blocked withdrawals from the accounts held by the Depositary and, within 180 days of the request for waiver, the DOE grants the waiver; or (iii) any Issuer Subsidiary defaults in the performance of or compliance with any term contained in its LLC Agreement and such default is not remedied within any applicable cure period under such LLC Agreement; or
(f) any representation or warranty made in writing by or on behalf of the Issuer or any Issuer Subsidiary or either Sponsor or by any officer of the Issuer or any Issuer Subsidiary or either Sponsor in this Agreement or any other Financing Document or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or
(g) Any Financing Document is declared by any Governmental Authority to be null and void or otherwise unenforceable, or the Issuer or an Issuer Party claims that any Financing Document is null, void or unenforceable or otherwise repudiates a Financing Document to which it is a party; or
(h) (i) the Issuer or any Issuer Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or interest on any Indebtedness (other than the Indebtedness under the Federal Financing Bank Loan Documents) that is outstanding in an aggregate amount of at least $250,000 beyond any period of grace provided with respect thereto, or (ii) the Issuer or any Issuer Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness (other than the Indebtedness under the Federal Financing Bank Loan Documents) in an aggregate outstanding principal amount of at least $250,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the Issuer or any Issuer Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $250,000, or (y) one or more Persons have the right to require the Issuer or any Issuer Subsidiary to purchase or repay such Indebtedness; or
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(i) the Issuer or any Issuer Subsidiary or USG Idaho (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes limited liability company action for the purpose of any of the foregoing; or
(j) a court or Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Issuer or any Issuer Subsidiary or USG Idaho, as the case may be, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Issuer or such Issuer Subsidiary or USG Idaho or any such petition shall be filed against the Issuer or such Issuer Subsidiary or USG Idaho and such petition shall not be dismissed within 60 days; or
(k) (i) any Material Project Document is declared by any Governmental Authority to be null and void or otherwise unenforceable; provided that, with respect to any such Material Project Document other than the PPAs, no Event of Default shall be deemed to have occurred under this clause (k)(i) if, within 60 days following such event, the Issuer or the applicable Issuer Party enters into a replacement for such Material Project Document that has substantially similar or more favorable terms to the Issuer or such Issuer Subsidiary than such Material Project Document, with an experienced replacement counterparty whose credit rating equals or exceeds the credit rating of the original Project Party as of the Closing Date, or (ii) the Issuer or any Issuer Subsidiary claims that any Material Project Document is null, void or unenforceable or otherwise repudiates any Material Project Document; or
(l) any “Event of Default” or similar event occurs under any Material Project Document as a result of (i) in the case of either PPA, a payment default of the Power Purchaser, or (ii) in the case of any Material Project Document, any breach by any Project Party that is a party thereto (other than a breach under either PPA addressed in clause (i) above) which continues for more than 90 consecutive days, unless, within 60 days, the Issuer or the applicable Issuer Subsidiary enters into a replacement for such Material Project Document that has substantially similar or more favorable terms to the Issuer or such Issuer Subsidiary than such Material Project Document, with an experienced replacement counterparty whose credit rating equals or exceeds the credit rating of the original Project Party as of the Closing Date; or
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(m) the Power Purchaser or other Project Party (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes action for the purpose of any of the foregoing; provided, however, that an Event of Default shall not occur under this clause (m) with respect to any Project Party (other than the Power Purchaser) until after the expiration of a period of 90 consecutive days; and, provided, further, that if, (x) with respect to the Power Purchaser, within 60 days following such event, and (y) with respect to any other Project Party, within 60 days following the expiration of the 90-day period referenced above, the Issuer or applicable Issuer Subsidiary enters into a replacement agreement (which shall be deemed a Material Project Document thereafter) that has substantially similar terms or terms more favorable to the Issuer than the agreement being replaced, with a counterparty whose credit rating and experience equals or exceeds the credit rating and experience of the original Project Party as of the Closing Date; or
(n) final, non-appealable judgment or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Issuer or any Issuer Subsidiary, and (i) enforcement proceedings are commenced with respect to such judgment or judgments, or (ii) within 30 days after entry thereof, such judgment or judgments are not bonded, discharged or stayed pending appeal; or
(o) (i) any Plan fails to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan has been or is reasonably expected to be filed with the PBGC or the PBGC has instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC has notified the Issuer or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, exceeds $250,000, (iv) the Issuer or any ERISA Affiliate has incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Issuer or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Issuer establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Issuer thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect; or
(p) either Project Company (i) abandons its Project or (ii) suspends operation of its Project, except if such suspension is due to (A) a default by the Operator under the applicable O&M Agreement which is remedied within 90 days, or (B) a Force Majeure (as defined in the applicable PPA) event that continues for less than 180 consecutive days; or
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(q) any Lien granted to the Collateral Agent pursuant to any of the Financing Documents is invalid, void, unenforceable or unperfected or ceases to have first priority (subject to Permitted Liens) or the Issuer or an Issuer Party commences any proceeding or takes any other action to render any such Lien invalid, or to avoid any such Lien or to render any such Lien unenforceable or unperfected or to challenge the priority of such Lien; or
(r) (i) the Sponsors and their Affiliates, collectively, cease to legally and beneficially own and control, indirectly and directly, at least 51% of the outstanding membership or other equity interests of the Issuer (measured by both economic interest and voting power), or (ii) the Issuer ceases to legally and beneficially own and control, indirectly and directly, at least 60% of the outstanding membership or other equity interests of USG Oregon Holdings (measured by both economic interest and voting power) or ceases to be the managing member or the manager of USG Oregon Holdings, (iii) the Issuer ceases to legally and beneficially own and control, indirectly and directly, at least 95% of the outstanding membership or other equity interests of the Raft River Project Company (measured by both economic interest and voting power) or ceases to be the managing member or the manager of the Raft River Project Company, or (iv) USG Oregon Holdings ceases to legally and beneficially own and control, indirectly and directly, 100% of the outstanding membership or other equity interests of the USG Oregon Project Company (measured by both economic interest and voting power) or ceases to be the managing member or the manager of the USG Oregon Project Company; or
(s) (i) a Project loses its QF status or either Project Company ceases to hold any of the exemptions from regulation provided under 18 C.F.R. §§ 292.601(c) including the exemptions from Sections 205 and 206 set forth in §262.601(c)(1), if applicable, and the exemptions set forth in §§292.602(b) and 292.602(c); (ii) the Issuer becomes subject to regulation as a “public utility” under the FPA, or ceases to hold the exemption from PUHCA that is provided under 18 C.F.R. § 366.3(a); (iii) the USG Oregon Project Company’s MBR Authority is terminated, revoked, suspended, or subject to other action adverse to its continued effectiveness; (iv) the Issuer or any Issuer Subsidiary suffers any regulatory disapproval, rejection, suspension, or other action adverse to the continued effectiveness of a PPA or an Interconnection Agreement or to the ability of the Issuer or any Issuer Subsidiary to (A) inject all of a Project’s electric energy, capacity and ancillary services up to the point of interconnection specified in the applicable Interconnection Agreement or (B) satisfy all of the Issuer Subsidiary’s electrical delivery obligations under its PPA; or (v) the Collateral Agent or any of the holders or any Affiliates thereof become subject to or not exempt from regulation either by the FERC (under either of the FPA or PUHCA) or by the Public Utilities Commission of Oregon or Idaho solely as a result of the execution, delivery or performance of the Financing Documents, other than as a result of the exercise of any remedies provided thereunder; or
(t) any Well Permit (other than a Well Permit for a well that has been permanently abandoned and such abandonment could not reasonably be expected to have a Material Adverse Effect) is suspended, revoked or otherwise terminated, or expires, or any other Required Approval is denied, suspended or revoked or expires, is held invalid or limited, and is not replaced within 60 days or such longer period (but not to exceed an additional 30 days) as may be required to obtain a replacement well permit so long as the Issuer is diligent by pursuing the replacement permit throughout the cure period; or
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(u) any Cash Grant Recapture Liability has been claimed against the Issuer or an Issuer Subsidiary or any of their Affiliates pursuant to a written notice demanding payment issued by the U.S. Treasury Department or any other applicable Governmental Authority unless (i) such Cash Grant Recapture Liabilities are paid in full on or prior to the deadline for payment set forth in such notice or demand, or (ii) (A) the Issuer or Issuer Subsidiary or any relevant Affiliate has commenced disputing in good faith the claim within the time periods required for payment in such notice (and is thereafter diligently and in good faith pursuing such dispute), and (B) adequate security, in form and substance satisfactory to the Required Holders, in the full amount of such Cash Grant Recapture Liability (as set forth in the demand notice) has been posted for the benefit of the Secured Parties within the time periods required for payment in such notice; or
(v) the Recapture Indemnity Agreement ceases to be in full force and effect, either Sponsor or any Person acting on behalf of either Sponsor shall contest in any manner the validity, binding nature or enforceability of the Recapture Indemnity Agreement, or the obligations of either Sponsor under the Recapture Indemnity Agreement are not or cease to be legal, valid, binding and enforceable in accordance with the terms of the Recapture Indemnity Agreement; or
(w) either Sponsor or any of its Affiliates (i) develops or drills a production or injection well within one-half mile of the location of any well located on property leased by either Project Company under any Geothermal Lease (measured from the closest point of such well to the downhole location of the proposed well to be developed or drilled) or (ii) constructs a geothermal electric generation facility on or adjacent to a Site, unless the applicable Project Company first demonstrates to the reasonable satisfaction of the Required Holders, in consultation with the Geothermal Resource Engineer, that such well(s) or facility will not interfere with, or impair the operation or production of, the applicable Project.
As used in Section 11(n), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1 Acceleration.
(a) If an Event of Default with respect to the Issuer described in Section 11(i) or (j) (other than an Event of Default described in clause (i) of Section 11(i) or described in clause (vi) of Section 11(i) by virtue of the fact that such clause encompasses clause (i) of Section 11(i)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any holder or holders of more than 51% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Issuer, declare all the Notes then outstanding to be immediately due and payable.
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(c) If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Issuer, declare all the Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived. The Issuer acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Issuer (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the Issuer in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
Section 12.2 Other Remedies. Without limiting the rights and remedies provided to the holders under the other Financing Documents, if any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
Section 12.3 Rescission. At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the holders of not less than 51% in principal amount of the Notes then outstanding, by written notice to the Issuer, may rescind and annul any such declaration and its consequences if (a) the Issuer has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Issuer nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.
Section 12.4 No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Issuer under Section 15, the Issuer will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys’ fees, expenses and disbursements.
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SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1 Registration of Notes. The Issuer shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Issuer shall not be affected by any notice or knowledge to the contrary. The Issuer shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.
Section 13.2 Transfer and Exchange of Notes. Upon surrender of any Note to the Issuer at the address and to the attention of the designated officer (all as specified in Section 18), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Issuer shall execute and deliver, at the Issuer’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be substantially in the form of Exhibit 1 and shall be payable to any financial institution as such holder may request. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Issuer may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $1,000,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $1,000,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2. Notwithstanding anything herein to the contrary, if any original Purchaser proposes to transfer a Note to any Person (other than an Affiliate of such original Purchaser) such that after giving effect to such transfer the original Purchasers would own less that 50% of the aggregate principal amount of the Notes then outstanding, then, unless a Default or an Event of Default has occurred and is continuing at such time, such transfer shall require the Issuer’s written consent (such consent not to be unreasonably withheld, conditioned or delayed).
Section 13.3 Replacement of Notes. Upon receipt by the Issuer at the address and to the attention of the designated officer (all as specified in Section 18) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and
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(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $100,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof, within ten Business Days thereafter, the Issuer at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.
SECTION 14. PAYMENTS ON NOTES.
Section 14.1 Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of JPMorgan Chase Bank, N.A. in such jurisdiction. The Issuer may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Issuer in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.
Section 14.2 Home Office Payment. So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Issuer will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in Schedule A, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Issuer in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Issuer made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Issuer at its principal executive office or at the place of payment most recently designated by the Issuer pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Issuer in exchange for a new Note or Notes pursuant to Section 13.2. The Issuer will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.
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SECTION 15. EXPENSES, INDEMNIFICATION, ETC.
Section 15.1 Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Issuer will pay all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement or the other Financing Documents (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement or any other Financing Document or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or any other Financing Document, or by reason of being a holder of any Note, (b) the costs and expenses, including financial advisors’ fees and other consultant’s fees, incurred in connection with the insolvency or bankruptcy of the Issuer or in connection with any work-out or restructuring of the transactions contemplated hereby and by the other Financing Documents and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO, provided that such costs and expenses under this clause (c) shall not exceed $3,500. In addition, the Issuer will pay the reasonable fees and disbursements of the Independent Engineer, the Insurance Consultant, the Geothermal Resource Engineer and other consultants retained by the holders from time to time in connection with this Agreement and the transactions contemplated hereby. The Issuer will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes).
Section 15.2 Indemnification. The Issuer will pay, and will save each Purchaser and any other holders of the Notes, the Collateral Agent, the Depositary and each of their Affiliates and respective officers, directors, trustees, representatives, employees, advisors and agents (collectively, the “Indemnified Parties”) harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes) and any judgment, liability, claim, order, decree, cost, fee, expense, loss, action or obligation resulting from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Issuer, and any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, claims, expenses or disbursements of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any Indemnified Party in any way relating to or arising out of incurred in respect of either Project, this Agreement, any other Financing Document or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or the enforcement of any of the terms hereof or thereof or of any such other documents, including any Environmental Claims, arising in connection with the Release or presence of any Hazardous Material at either Project or either Site, whether foreseeable or unforeseeable, including all costs of removal and disposal of such Hazardous Material, all costs required by any Governmental Authority or under any applicable law to be incurred in determining whether such Project or such Site is in compliance, and causing such Project or such Site to be in compliance, with all applicable requirements of law, all costs associated with claims for damages to persons or property, and reasonable attorneys’ and consultants’ fees and court costs (collectively, the “Indemnified Losses”); except to the extent that any Indemnified Loss is finally determined by a court of competent jurisdiction to be the direct result from the gross negligence or willful misconduct of the party seeking indemnification.
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Section 15.3 Survival. The obligations of the Issuer under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of the Issuer pursuant to this Agreement shall be deemed representations and warranties of the Issuer under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between each Purchaser and the Issuer and supersede all prior agreements and understandings relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1 Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Issuer and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2 Solicitation of Holders of Notes.
(a) Solicitation. The Issuer will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of any of the other Financing Documents. The Issuer will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.
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(b) Payment. The Issuer will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof or of any of the other Financing Documents, unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.
Section 17.3 Binding Effect, etc. Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Issuer without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Issuer and the holder of any Note nor any delay in exercising any rights hereunder or under any other Financing Document shall operate as a waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4 Notes Held by Issuer, etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or any other Financing Document, or have directed the taking of any action provided herein or in any other Financing Document to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Issuer, any Issuer Party or any of their respective Affiliates shall be deemed not to be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:
(A) if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule A, or at such other address as such Purchaser or nominee shall have specified to the Issuer in writing,
(B) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Issuer in writing, and
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(C) if to the Issuer, to the Issuer at c/o U.S. Geothermal Inc., ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Fax No. ▇▇▇-▇▇▇-▇▇▇▇, to the attention of ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer, or at such other address as the Issuer shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced. The Issuer agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Issuer or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Issuer in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Issuer, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Issuer or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which it offers to purchase any security of the Issuer (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Issuer in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Issuer embodying the provisions of this Section 20.
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In the event that as a condition to receiving access to information relating to the Issuer in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and the Issuer, this Section 20 shall supersede any such other confidentiality undertaking.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Issuer, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliate’s agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Issuer of notice of such transfer, any reference to such Affiliate as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.
SECTION 22. MISCELLANEOUS.
Section 22.1 Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.
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Section 22.2 Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice of any prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.
Section 22.3 Accounting Terms. All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP. Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP. For purposes of determining compliance with the financial covenants contained in this Agreement, any election by the Issuer to measure any financial liability using fair value (as permitted by Accounting Standard Codification Topic No. ▇▇▇-▇▇-▇▇ – Fair Value Option or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.
Section 22.4 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.5 Construction, etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.
Section 22.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.
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Section 22.7 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE OF LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
Section 22.8 Jurisdiction and Process; Waiver of Jury Trial.
(a) The Issuer irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the Issuer irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
(b) The Issuer consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.8(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section. The Issuer agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(c) In addition to and notwithstanding the provisions of Section 22.8(b) above, the Issuer hereby irrevocably appoints CT Corporation System as its agent to receive on its behalf and its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Issuer, in care of the process agent at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and the Issuer hereby irrevocably authorizes and directs the process agent to accept such service on its behalf. If for any reason the process agent ceases to be available to act as process agent, the Issuer agrees to immediately appoint a replacement process agent satisfactory to the Required Holders. Each of the parties hereby waives any right to stay or dismiss any action or proceeding under or in connection with any or all of this Agreement or any other Financing Document brought before the foregoing courts on the basis of forum non conveniens.
(d) Nothing in this Section 22.8 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Issuer in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
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(e) The parties hereto hereby waive trial by jury in any action brought on or with respect to this Agreement, the Notes or any other document executed in connection herewith or therewith.
Section 22.9 Transaction References. The Issuer agrees that Prudential may (i) refer to its role in originating the purchase of the Notes from the Issuer, as well as the identity of the Issuer and the aggregate principal amount and issue date of the Notes, on its internet site or in marketing materials, press releases, published “tombstone” announcements or any other print or electronic medium and (ii) display the logo of the Issuer or either Sponsor in conjunction with any such reference; provided, in the case of each press release, that the release is subject to reasonable advance written notice and consent of the Issuer, which may be withheld or conditioned in its reasonable discretion. Neither the Issuer nor either Sponsor shall refer to Prudential or the other Purchasers on an internet site or in marketing materials, press releases, published “tombstone” announcements or any other print or electronic medium, except with Prudential’s prior written consent, which may be withheld in its sole discretion.
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| SCHEDULE A |
| INFORMATION RELATING TO PURCHASERS |
| Idaho USG Holdings, LLC |
| 5.80% Senior Secured Notes due March 31, 2023 |
| Aggregate | |||||||
| Principal | Note Registration | ||||||
| Amount of Notes | Number(s): Note | ||||||
| to be Purchased | Denomination(s) | ||||||
| THE PRUDENTIAL INSURANCE COMPANY OF AMERICA | $18,880,000 | R-1; $10,870,000 | |||||
| R-2; $8,010,000 |
| (1) |
All payments on account of Notes held by such purchaser shall be made by wire transfer of immediately available funds for credit to: |
|
JPMorgan Chase Bank | |
| New York, NY | |
|
ABA No.: ▇▇▇-▇▇▇-▇▇▇ | |
|
Account Name: Prudential Managed Portfolio | |
|
Account No.: P86188 (please do not include spaces) (in the case | |
| of payments on account of the Note originally issued in the | |
| principal amount of $10,870,000) | |
|
Account Name: Privest Plus | |
| Account No.: P86288 (please do not include spaces) (in the case | |
|
of payments on account of the Note originally issued in the | |
| principal amount of $8,010,000) | |
|
Each such wire transfer shall set forth the name of the Company, a | |
| reference to "5.80% Senior Secured Notes due March 31, 2023, | |
| Security No. INV11986, PPN: 45148@ AA4" and the due date | |
| and application (as among principal, interest and Make-Whole | |
| Amount) of the payment being made. | |
| (2) |
Address for all communications and notices: |
|
The Prudential Insurance Company of America | |
| c/o Prudential Capital Group | |
| ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | |
| Dallas, TX 75201 | |
|
Attention: Managing Director, Energy Finance Group - Power | |
|
and for all notices relating solely to scheduled principal and | |
| interest payments to: | |
|
The Prudential Insurance Company of America | |
| c/o PGIM, Inc. | |
|
Prudential Tower |
Schedule A - 1
|
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ | |
| 14th Floor - South Tower | |
| Newark, NJ 07102 | |
|
Attention: PIM Private Accounting Processing Team | |
|
Email: ▇▇▇.▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ | |
| (3) |
Address for Delivery of Notes: |
|
Send physical security by nationwide overnight delivery service to: | |
|
Prudential Capital Group | |
| ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | |
| Dallas, TX 75201 | |
|
Attention: ▇. ▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ | |
| (4) |
Tax Identification No.: ▇▇-▇▇▇▇▇▇▇ |
Schedule A - 2
| Aggregate | |||||||
| Principal | Note Registration | ||||||
| Amount of Notes | Number(s): Note | ||||||
| to be Purchased | Denomination(s) | ||||||
| PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION | $1,120,000 | R-3; $1,120,000 |
| (1) |
All payments on account of Notes held by such purchaser shall be |
| made by wire transfer of immediately available funds for credit to: | |
|
JPMorgan Chase Bank | |
| New York, NY | |
|
ABA No.: ▇▇▇-▇▇▇-▇▇▇ | |
| Account Name: American Skandia Life - Private Placements | |
|
Account No.: P86259 (please do not include spaces) | |
|
Each such wire transfer shall set forth the name of the Company, a | |
| reference to "5.80% Senior Secured Notes due March 31, 2023, | |
| Security No. INV11986, PPN: 45148@ AA4" and the due date | |
| and application (as among principal, interest and Make-Whole | |
| Amount) of the payment being made. | |
| (2) |
Address for all communications and notices: |
|
Prudential Annuities Life Assurance Corporation | |
| c/o Prudential Capital Group | |
| ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | |
| Dallas, TX 75201 | |
|
Attention: Managing Director, Energy Finance Group - Power | |
|
and for all notices relating solely to scheduled principal and | |
| interest payments to: | |
|
Prudential Annuities Life Assurance Corporation | |
| c/o PGIM, Inc. | |
|
Prudential Tower | |
| ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ | |
| 14th Floor - South Tower | |
| Newark, NJ 07102 | |
|
Attention: PIM Private Accounting Processing Team | |
|
Email: ▇▇▇.▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ | |
| (3) |
Address for Delivery of Notes: |
|
Send physical security by nationwide overnight delivery service to: | |
|
Prudential Capital Group | |
| ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | |
| Dallas, TX 75201 | |
| Attention: ▇. ▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ | |
| (4) |
Tax Identification No.: ▇▇-▇▇▇▇▇▇▇ |
Schedule A - 3
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
“Acceptable Letter of Credit” is defined in the Depositary Agreement.
“Additional Permitted Debt” means Indebtedness of the Issuer in an amount equal to the lesser of (a) $50,000,000 minus the principal amount of Notes issued at Closing and (b) the maximum amount of Indebtedness that, if incurred by the Issuer, (i) would result in a minimum trailing twelve month consolidated Debt Service Coverage Ratio equaling or exceeding 1.50:1.00 from the Closing Date through 2023, and (ii) would result in a trailing twelve month consolidated Debt Service Coverage Ratio equaling or exceeding 1.55:1.00 beginning 2024 through 2036 in an update of the Base Case Projections calculated using the same assumptions used in preparing the Base Case Projections but taking into account only contracted revenues and assuming an interest rate that is 1% higher than the weighted average interest rate of the Notes after taking into account the contemplated Additional Permitted Debt; provided that the maturity date of Additional Permitted Debt is the Maturity Date and Additional Permitted Debt is secured by the Collateral and otherwise ranks pari passu with the Notes.
“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and, with respect to the Issuer, shall include any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Issuer or any Person of which the Issuer beneficially owns or holds, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Issuer.
“Agreement” means this Agreement, including all Schedules attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Amortization Schedule” is defined in Section 8.1(a) .
“Annual Geothermal Resource Report” is defined in Section 9.12(b) .
“Anti-Corruption Laws” is defined in Section 5.16(d)(1) .
“Anti-Money Laundering Laws” is defined in Section 5.16(c) .
“Approvals” means any and all approvals, permits, permissions, licenses, authorizations, consents, certifications, actions, orders, waivers, exemptions, variances, franchises, filings, declarations, rulings, registrations, applications and notices to, from or issued by any Person.
Schedule B - 1
“Approved Accountant” is defined in Section 7.1(b) .
“Base Case Projections” means the Final Base Case Projections attached as Schedule 4.22 to this Agreement.
“Blocked Person” is defined in Section 5.16(a) .
“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed.
“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.
“Cash Grant” means a cash grant in lieu of electricity production credits under Section 45 of the Code and energy credits under Section 48 of the Code from the U.S. Department of the Treasury under Section 1603 of the American Recovery and Reinvestment Act of 2009, or any successor or replacement law or regulation, with respect to the Issuer’s investment in a Project.
“Cash Grant Recapture Liability” means any loss or liability to the Issuer or an Issuer Subsidiary or any of their respective Affiliates resulting, directly or indirectly, from all or any portion of any Cash Grant being required to be repaid to the U.S. Treasury Department.
“CISADA” means the Comprehensive Iran Sanctions, Accountability and Divestment Act.
“Closing” is defined in Section 3.
“Closing Date” means the date upon which the Closing occurs.
“Closing Date Distribution” means a distribution in the amount of $12,834,961.46 made to USG Idaho on the Closing Date.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.
“Collateral” means all of the Issuer’s right, title and interest in and to its real and personal property, including without limitation, the limited liability company interests and any other equity interests in each of USG Oregon Holdings and the Raft River Project Company, and the limited liability company interests and any other equity interests in the Issuer.
“Collateral Agency Agreement” is defined in Section 4.12(b) .
“Collateral Agent” means Wilmington Trust, National Association, a national banking association, acting in its capacity as collateral agent for itself and the other Secured Parties under the Financing Documents, or its successor in such capacity appointed pursuant to the terms of the Collateral Agency Agreement.
Schedule B - 2
“Confidential Information” is defined in Section 20.
“Consents” means the consents listed on Schedule 4.11(b)(ii) and any additional consent delivered to Collateral Agent.
“Contractual Obligation” means, with respect to any Person, any provision of any document or undertaking (other than a Financing Document) to which such Person is a party or by which it or any of its property is bound or to which any of its property is subject.
“Controlled Entity” means (a) any of the Subsidiaries of the Issuer and any of their or the Issuer’s respective Controlled Affiliates and (b) if the Issuer has a parent company, such parent company and its Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“CPI Adjustment” means, at any time, with respect to each of the most recent Operating Budgets previously approved by the Required Holders and the Independent Engineer, an increase in each applicable line item of such Operating Budget by a percentage of such line item equal to the percentage increase in the Consumer Price Index from the last published Consumer Price Index prior to the approval of such Operating Budget in accordance with Section 9.12(d) hereof to the most recently published Consumer Price Index at such time. For purposes hereof, “Consumer Price Index” shall mean the Consumer Price Index for all Urban Consumers, Northeast Region, as published by the United States Department of Labor, Bureau of Labor Statistics, such successor index as may be published by the United States Government, or such substitute index as may be mutually agreed to by the Issuer and the Required Holders.
“Debt Service” means, for any period, all payments of principal, interest, fees, expenses or other charges, including Make Whole Amounts, due and payable by the Issuer in respect of all Obligations in such period.
“Debt Service Coverage Ratio” means, for any applicable period, the ratio of (a) the sum of (i) Operating Cash Flow Available for Debt Service for such period and (ii) Project Company Actual Debt Service for such period, minus (iii) the Required Make-Up Well Reserve Account Deposits for such period to (b) the sum of (i) Debt Service for such period, and (ii) the greater of (x) Project Company Scheduled Debt Service for such period and (y) Project Company Actual Debt Service for such period.
“Debt Service Reserve Account” is defined in the Depositary Agreement.
“Debt Service Reserve Letter of Credit” is defined in the Depositary Agreement.
“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
“Default Rate” means that rate of interest per annum from time to time equal to the greater of (a) 7.80%, and (b) 2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York as its “base” or “prime” rate.
Schedule B - 3
“Depositary” means Wilmington Trust, National Association, a national banking association, in its capacity as Depositary under the Depositary Agreement, or its successor in such capacity appointed pursuant to the terms of the Depositary Agreement.
“Depositary Agreement” is defined in Section 4.12(a) .
“Disclosure Documents” is defined in Section 5.3.
“Distribution” means any (i) distribution of any nature or kind, either directly or indirectly, to a member or other equity holder of the Issuer, including any dividend or distribution in cash or property of any kind; a purchase, redemption, reduction, return or any other payment of capital; or any repayment or reduction of Indebtedness owing to an Issuer Party or any Affiliate of an Issuer Party; (ii) loans or other payments to an Issuer Party or any Affiliate of an Issuer Party; and (iii) payment for or on behalf of an Issuer Party or any Affiliate of an Issuer Party by way of guaranty, indemnity or otherwise including in connection with any Indebtedness; but shall not include any payments made to the Operator pursuant to Section 6.1 and 6.2 of the USG O&M Agreement or the Operator pursuant to Sections 6.1, 6.2, and 6.3 of the Raft River O&M Agreement.
“DSCR Notice” is defined in Section 9.13.
“DSCR Requirements” means, as of any Payment Date, (i) the Debt Service Coverage Ratio for the four consecutive quarters ending on such Payment Date and (ii) the Projected Debt Service Coverage Ratio for the four consecutive quarters immediately following such Payment Date, equals or exceeds 1.20:1.00.
“Environmental Claim” means any and all administrative, regulatory or judicial actions, suits, demands, decrees, claims, liens, judgments, warning notices, notices of noncompliance or violation, investigations, proceedings, removal or remedial actions or orders, or damages (foreseeable and unforeseeable, including consequential and punitive damages), penalties, fees, out-of-pocket costs, expenses, disbursements, attorneys’ or consultants’ fees, relating in any way to any Environmental Law or any Required Approval issued under any such Environmental Law (hereafter “Environmental Proceedings”), including (a) any and all Environmental Proceedings by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Environmental Proceedings by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Material or arising from alleged injury or threat of injury to health, safety or the environment.
“Environmental Consultant” means Full Circle Geoscience, LLC.
“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.
Schedule B - 4
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Issuer under section 414 of the Code.
“Estoppels” means the estoppels listed on Schedule 4.11(b)(iii) and any additional estoppel delivered to Collateral Agent.
“Event of Default” is defined in Section 11.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.
“Federal Financing Bank” means The Federal Financing Bank, a body corporate and instrumentality of the United States of America.
“Federal Financing Bank Loan Collateral Agent” means PNC Bank, National Association, doing business as Midland Loan Services, a division of PNC Bank, National Association.
“Federal Financing Bank Loan Documents” means the Federal Financing Bank Loan Guarantee Agreement, the USG Oregon Pledge Agreement, the other Loan Documents (as defined in the Federal Financing Bank Loan Guarantee Agreement) and any other documents listed on Schedule 5.12(d), and any agreement that replaces any of the foregoing.
“Federal Financing Bank Loan Guarantee Agreement” means that Loan Guarantee Agreement, dated as of February 23, 2011, among the USG Oregon Project Company, the Secretary of Energy, acting through the U.S. DOE, the Federal Financing Bank Loan Servicer and the Federal Financing Bank Loan Collateral Agent.
“Federal Financing Bank Loan Servicer” means the U.S. DOE or its successor, as appointed pursuant to the Federal Financing Bank Loan Guarantee Agreement.
“FERC” means the Federal Energy Regulatory Commission, or any successor agency to its duties and responsibilities.
“Financing Documents” means, collectively, this Agreement, the Notes, the Security Documents, the Collateral Agency Agreement, and any other documents, agreements or instruments entered into in connection with any of the foregoing.
“FPA” means the Federal Power Act, 16 U.S.C. §§791 et seq., as amended, and the regulations of the FERC thereunder.
“GAAP” means generally accepted accounting principles as in effect from time to time in the United States of America.
Schedule B - 5
“Geothermal Lease” means each of the USG Oregon Geothermal Lease and Raft River Geothermal Lease (collectively, the “Geothermal Leases”).
“Geothermal Resource” means each of the USG Oregon Geothermal Resource and Raft River Geothermal Resource (collectively, the “Geothermal Resources”).
“Geothermal Resource Assessment Report” is defined in Section 4.21.
“Geothermal Resource Engineer” means Geothermal Science, Inc., a California corporation, or a substitute resource engineer mutually acceptable to the Purchasers and the Issuer.
“Governmental Authority” means
(a) the government of:
(i) the United States of America or any State or other political subdivision thereof, or
(ii) any other jurisdiction in which the Issuer conducts all or any part of its business, or which asserts jurisdiction over any properties of the Issuer, or
(b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
“Governmental Official” means any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.
“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or
Schedule B - 6
(d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.
“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.
“holder” means, with respect to any Note the Person in whose name such Note is registered in the register maintained by the Issuer pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule B, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.
“Holy Cross Purchase and Sale Agreement” means the Renewable Energy Credit Purchase and Sale Agreement, dated as of July 29, 2006, between the Raft River Project Company and Holy Cross Energy, as amended by the First Amendment to Renewable Energy Credit Purchase and Sale Agreement, dated as of December 3, 2008 and the Second Amendment to Renewable Energy Credit Purchase and Sale Agreement, dated as of December 15, 2010.
“Indebtedness” with respect to any Person means, at any time, without duplication,
(a) its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);
(c) (i) all liabilities appearing on its balance sheet in accordance with GAAP in respect of Capital Leases and (ii) all liabilities which would appear on its balance sheet in accordance with GAAP in respect of Synthetic Leases assuming such Synthetic Leases were accounted for as Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities);
Schedule B - 7
(e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money);
(f) the aggregate Swap Termination Value of all Swap Contracts of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.
“Independent Engineer” means, prior to the Closing Date, Luminate LLC, or, after the Closing Date, any other independent engineering firm appointed by the holders.
“Indemnified Losses” is defined in Section 15.2.
“Indemnified Parties” is defined in Section 15.2.
“INHAM Exemption” is defined in Section 6.2(e) .
“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.
“Insurance Consultant” means ▇▇▇▇▇-▇▇▇▇▇▇, LLC.
“Insurance Proceeds” means all amounts and proceeds (including instruments) in respect of any Loss payable under any insurance policy maintained by or on behalf of the Issuer or any Issuer Subsidiary.
“Interconnection Agreement” means each of the USG Oregon Interconnection Agreement and the Raft River Interconnection Agreement (collectively, the “Interconnection Agreements”).
“Issuer” is defined in the introductory paragraph of this Agreement.
“Issuer Party” means each of each Issuer Subsidiary, the Operator and each Sponsor (collectively, the “Issuer Parties”).
“Issuer Pledge Agreement” is defined in Section 4.12(d) .
Schedule B - 8
“Issuer Subsidiary” means each of each Project Company and USG Oregon Holdings (collectively, the “Issuer Subsidiaries”).
“Lien” means, with respect to any Person, any mortgage, lien, pledge, charge, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
“LLC Agreement” means each of the USG Oregon LLC Agreement, the Raft River LLC Agreement and the USG Oregon Holdings LLC Agreement (collectively, the “LLC Agreements”).
“Local Account” means the operating deposit account of the Issuer maintained at a local commercial bank reasonably acceptable to the Required Holders and which is subject to the Local Account Control Agreement.
“Local Account Control Agreement” means a deposit account control agreement with respect to the Local Account, by and among the Issuer, the Collateral Agent and the financial institution maintaining such Local Account, in form and substance satisfactory to the Collateral Agent.
“Loss” means any loss, theft, destruction, damage, casualty, title defect or failure, zoning change, taking, condemnation, seizure, confiscation or requisition of or with respect to either Project or any part thereof.
“Loss Proceeds” means the Insurance Proceeds (including, without limitation, title insurance proceeds), other than proceeds received under business interruption insurance, and any other proceeds paid to, or for the benefit of, the Issuer or any Issuer Subsidiary in connection with any Loss.
“Maintenance Reserve Account” is defined in the Depositary Agreement.
“Maintenance Reserve Letter of Credit” is defined in the Depositary Agreement.
“Major Loss” means any actual or constructive total loss of either Project, a condemnation or taking of a material portion of either Project or either Site, or any other Loss that, in the reasonable judgment of the Required Holders and the Independent Engineer, makes restoration or continued operation of a Project uneconomical or unfeasible.
“Make-Up Well Cost” is defined in Section 9.12(b) .
“Make-Up Well Drill Date” is defined in Section 9.12(b) .
“Make-up Well Reserve Account” is defined in the Depositary Agreement.
“Make-Whole Amount” is defined in Section 8.6 .
Schedule B - 9
“Material Adverse Effect” means a material adverse effect on (a) the business, assets, liabilities, operations, prospects or condition, financial or otherwise, of the Issuer, any Issuer Subsidiary or either Project, (b) the Issuer’s ability to perform any of its obligations under the Notes or the other Financing Documents, (c) the ability of the Issuer or any Issuer Subsidiary to perform its obligations under any Material Project Document, (d) the rights or remedies of the Collateral Agent or any holder of the Notes under any Financing Document, or (e) the validity or enforceability of the Notes or the other Financing Documents or the validity or priority of the Collateral Agent’s Liens with respect to the Collateral.
“Material Contract” means (a) any energy purchase or sale agreement entered into after the Closing Date, (b) any other Contractual Obligation of the Issuer or any Issuer Subsidiary that is material to development, financing, construction, operation or maintenance of either Project, or (c) any Contractual Obligation pursuant to which the aggregate payments to be made by the Issuer or the aggregate liabilities to be incurred by the Issuer or any Issuer Subsidiary thereunder exceed $250,000 in any calendar year or $500,000 during the term thereof.
“Material Project Document” means the PPAs, the Geothermal Leases, the Interconnection Agreements, the O&M Agreements, the Recapture Indemnity Agreement, the Holy Cross Purchase and Sale Agreement, the Public Utility District Purchase and Sale Agreement and any other documents listed on Schedule 5.12(a) , and any agreement that replaces any of the foregoing.
“Maturity Date” means March 31, 2023.
“MBR Authority” is defined in Section 5.17(f) .
“Minimum Debt Service Reserve Requirement” is defined in the Depositary Agreement.
“Minimum Maintenance Reserve Requirement” is defined in the Depositary Agreement.
“Moody’s” means ▇▇▇▇▇’▇ Investors Service, Inc., or any successor entity.
“Multiemployer Plan” means any “employee benefit plan” (as defined in section 3(3) of ERISA) to which contributions are or, within the preceding five years, have been made or required to be made, by the Issuer or any ERISA Affiliate, or with respect to which the Issuer or any ERISA Affiliate may have any liability and that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
“NAIC” means the National Association of Insurance Commissioners or any successor thereto.
“NAIC Annual Statement” is defined in Section 6.2(a) .
“Notes” is defined in Section 1.
Schedule B - 10
“O&M Agreement” means each of the USG Oregon O&M Agreement and the Raft River O&M Agreement (collectively, the O&M Agreements).
“O&M Costs” means, for any period, actual cash maintenance, administration and operation costs related to either Project (including amounts payable under Section 6.2 of the USG O&M Agreement and Section 6.2 of the Raft River O&M Agreement) and for the purchase of goods and services in connection therewith, or required by any requirement of law incurred and paid by a Project Company for such Project in such period, including geothermal royalty and lease payments, property taxes and other state or local taxes, insurance premiums, consumables, legal fees, accounting fees and consulting fees and expenses of such Project, fees and expenses of, and other amounts owing to, the Collateral Agent or the Depositary, expenses of and other amounts owing to the holders and other costs and expenses in connection with the management or operation of such Project, but exclusive in all cases of (a) non-cash charges, including depreciation or obsolescence charges or reserves therefor, amortization of intangibles or other bookkeeping entries of a similar nature, (b) all payments of Debt Service (including any Make Whole Amounts), (c) costs of restoration of such Project paid with Loss Proceeds (other than the proceeds of business interruption insurance), and (d) any capital expenditures, other than as contemplated in the applicable Operating Budgets as then in effect.
“Obligation” means any loan, advance, debt, liability, and obligation of performance, howsoever arising, owed by the Issuer to the Collateral Agent, the Depositary or any holder of any kind or description (whether or not evidenced by any note or instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, pursuant to the terms of any Note or any of the other Financing Document, including all principal, interest, Make-Whole Amounts, fees, charges, expenses, attorneys’ fees and accountants fees payable or reimbursable by the Issuer under any of the Financing Documents.
“OFAC” is defined in Section 5.16(a) .
“OFAC Listed Person” is defined in Section 5.16(a) .
“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be found at ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇-▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇/▇▇▇▇▇/▇▇▇▇▇▇▇▇.▇▇▇▇.
“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Issuer whose responsibilities extend to the subject matter of such certificate.
“Operating Budget” is defined in Section 9.12(d) .
“Operating Cash Flow Available for Debt Service” means, for any period, all Project Company Distributions received during such period minus all operating expenses of the Issuer for such period.
“Operator” means US Geothermal Services, LLC, a Delaware limited liability company.
Schedule B - 11
“Payment Date” means March 31 and September 30, commencing with September 30, 2016 through the Maturity Date, and the Maturity Date.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.
“Permitted Indebtedness” means (a) with respect to the USG Oregon Project Company only, Indebtedness incurred pursuant to or in accordance with the Federal Financing Bank Loan Documents, (b) with respect to USG Oregon Holdings only, Indebtedness incurred pursuant to the USG Oregon Pledge Agreement, and (c) with respect to the Issuer only, Additional Permitted Debt.
“Permitted Investment” means any (a) marketable direct obligation of the United States of America, (b) marketable obligation directly and fully guaranteed as to interest and principal by the United States of America, (c) demand deposit with the Depositary, or time deposit, certificate of deposit and banker’s acceptance issued by any member bank of the Federal Reserve System which is organized under the laws of the United States of America or any state thereof or any United States branch of a foreign bank, in each case whose equity capital is in excess of $500,000,000 and whose long-term debt securities are rated “A” or better by S&P and “A2” or better by Moody’s, (d) commercial paper or tax exempt obligations given the highest rating by Moody’s and S&P, (e) obligation of a commercial bank described in clause (c) above, in respect of the repurchase of obligations of the type as described in clauses (a) and (b) hereof, provided that such repurchase obligation shall be fully secured by obligations of the type described in said clauses (a) and (b) and the possession of such obligation shall be transferred to, and segregated from other obligations owned by, any such bank, (f) money market instrument rated “AAA” by S&P and “Aaa” by Moody’s, (g) Eurodollar certificate of deposit issued by any bank described in clause (c) above, (h) marketable security rated not less than “A-1” by S&P or not less than “Prime-1” by Moody’s, and (i) with respect to the USG Oregon Project Company only, Permitted Investments (as such term is defined in the Federal Financing Bank Loan Guarantee Agreement). In no event shall Permitted Investments include any obligation, certificate of deposit, acceptance, commercial paper or instrument which by its terms matures (A) more than 180 days after the date of investment, unless a bank meeting the requirements of clause (c) above shall have agreed to repurchase such obligation, certificate of deposit, acceptance, commercial paper or instrument at its purchase price plus earned interest within no more than 90 days after its purchase thereunder or (B) after the next Payment Date.
“Permitted Lien” means: (a) Liens created pursuant to any Financing Document; (b) with respect to the USG Oregon Project Company only, ▇▇▇▇▇ created pursuant to any Federal Financing Bank Loan Document, (c) with respect to USG Oregon Holdings only, Liens created pursuant to the USG Oregon Pledge Agreement, (d) Liens for taxes, assessments or governmental charges or levies not yet due and payable or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established and which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien; (e) Liens in respect of property or assets of a Project Company arising by operation of law, which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business which in each and every such circumstance (i) do not individually or in the aggregate materially detract from the value of the property or assets of such Project Company and do not materially impair the use thereof in the operation of the business of such Project Company or (ii) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien and for which adequate reserves have been established; (f) Liens in respect of property or assets of a Project Company set forth in Schedule B of the applicable Title Policy and other easements, rights-of-way, restrictions (including zoning restrictions), encroachments, protrusions and other similar charges or encumbrances, and minor title deficiencies, in each case whether now or hereafter in existence, which do not secure Indebtedness and do not materially affect the value of the properties or interfere with the conduct of the business of the Issuer or any Issuer Subsidiary; (g) pledges or deposits to secure obligations under workers’ compensation or unemployment insurance laws or similar legislation (other than ERISA) or to secure public or statutory obligations or good faith deposits in connection with bids, tenders, contracts or leases; (h) Liens arising out of judgments or awards aggregating less than $250,000, so long as an appeal or proceeding for review is being prosecuted in good faith and for the payment of which adequate reserves in accordance with GAAP; and (i) Liens on assets (real or personal) of either Project Company or either Project which assets have a fair market value of less than $250,000 in the aggregate at any one time.
Schedule B - 12
“Person” means an individual, company, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.
“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Issuer or any ERISA Affiliate or with respect to which the Issuer or any ERISA Affiliate may have any liability.
“Pledged Account” means any of (i) the Revenue Account, (ii) the Debt Service Reserve Account, (iii) the Make-up Well Reserve Account, (iv) the Maintenance Reserve Account, and (v) the Raft River Capital Expenditure Account.
“Power Purchaser” means the Idaho Power Company, an Idaho corporation.
“PPA” means each of the USG Oregon PPA and the Raft River PPA (collectively, the “PPAs”).
“Preferred Stock” means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar equity interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.
“Project” means each of the USG Oregon Project and the Raft River Project (collectively, the “Projects”).
“Project Company” means each of the USG Oregon Project Company and the Raft River Project Company (collectively, the “Project Companies”).
Schedule B - 13
“Project Company Actual Debt Service” means, for any period, (a) all payments actually made of principal and payments actually made of interest, fees, expenses or other charges due and payable by the USG Oregon Project Company pursuant to the terms of the Federal Financing Bank Loan Documents in such period, multiplied by (b) 0.6.
“Project Company Scheduled Debt Service” means, for any period, (a) all scheduled payments of principal and payments of interest, fees, expenses or other charges due and payable by the USG Oregon Project Company pursuant to the terms of the Federal Financing Bank Loan Documents in such period, multiplied by (b) 0.6.
“Project Company Distributions” means all distributions of available cash made to the Issuer under the USG Oregon Holdings LLC Agreement or the Raft River LLC Agreement.
“Project Party” means each Person party to a Material Project Document other than the Issuer or any Issuer Subsidiary.
“Projected Debt Service Coverage Ratio” means as of any Payment Date for the four consecutive quarters commencing on such Payment Date, the ratio of (a) the sum of (i) projected Operating Cash Flow Available for Debt Service for such period, and (ii) Project Company Scheduled Debt Service for such period, minus (iii) the Required Make-Up Well Reserve Deposits for such period calculated using the same assumptions used in preparing the Base Case Projections, to (b) the sum of (i) scheduled principal, interest and fees in respect of the Obligations for such period and (ii) Project Company Scheduled Debt Service for such period, in each case, as calculated by the Issuer and approved by the Required Holders in accordance with this Agreement.
“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇ or inchoate.
“Prudential” means Prudential Investment Management, Inc.
“PTE” is defined in Section 6.2(a) .
“Public Utility District Purchase and Sale Agreement” means the Renewable Energy Certificate Purchase and Sale Agreement, dated as of December 15, 2010, between the Raft River Project Company and Public Utility District No. 1 of Clallam County, Washington.
“PUHCA” means the Public Utility Holding Company Act of 2005, as amended, and all rules and regulations adopted thereunder.
“Purchaser” is defined in the introductory paragraph of this Agreement.
“QF” means a “qualifying small power production facility” (as that term is defined under 16 U.S.C. § 796(17)(C) and the regulations of the FERC at 18 C.F.R. Part 292 thereunder).
“QPAM Exemption” is defined in Section 6.2(d) .
Schedule B - 14
“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.
“Raft River Capital Expenditure Account” is defined in the Depositary Agreement.
“Raft River Geothermal Lease” means each of the (a) Raft River Geothermal Lease and Agreement, dated as of June 28, 2003, among ▇▇▇▇▇▇ ▇▇▇▇▇ and the children of ▇▇▇▇ ▇▇▇▇▇ and USG Idaho, as amended by that Agreement for Ratification and Amendment of Geothermal Lease Agreement, dated August 18, 2005, among USG Idaho and ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ and that Second Amendment to Geothermal Lease Agreement, dated August 11, 2006, as assigned by USG Idaho to the Raft River Project Company pursuant to that Assignment, Assumption and Indemnity Agreement, dated September 1, 2006, (b) Geothermal Lease and Agreement, dated April 3, 2015, between ▇▇▇▇▇ ▇. ▇▇▇▇▇ and the Raft River Project Company, (c) Geothermal Lease and Agreement, dated as of January 25, 2006, between ▇▇▇▇▇▇ ▇▇▇▇▇▇ and USG Idaho, as assigned by USG Idaho to the Raft River Project Company pursuant to that Assignment, Assumption and Indemnity Agreement, dated September 1, 2006, (d) Geothermal Lease and Agreement, dated as of April 30, 2015, between ▇▇▇▇▇▇ Investments, Inc. and the Raft River Project Company, (e) Geothermal Lease and Agreement, dated as of March 1, 2004, between ▇▇▇ ▇▇▇▇▇▇▇ and USG Idaho, as assigned by USG Idaho to the Raft River Project Company pursuant to that Assignment, Assumption and Indemnity Agreement, dated September 1, 2006, (f) Raft River Geothermal Lease and Agreement, dated as of October 19, 2006, between USG Idaho and the Raft River Project Company, and (g) Geothermal Lease and Agreement, dated as of December 1, 2004, among ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and USG Idaho, as assigned by USG Idaho to the Raft River Project Company pursuant to that Assignment, Assumption and Indemnity Agreement, dated September 1, 2006 (collectively, the “Raft River Geothermal Leases”).
“Raft River Geothermal Resource” means the electricity generating capacity of the geothermal reservoirs subject to the Raft River Geothermal Leases and available for use by the Raft River Project.
“Raft River Interconnection Agreement” means (i) the Interconnection and Wheeling Agreement, dated as of March 9, 2006, between Raft River Rural Electric Cooperative and the Raft River Project Company; and (ii) the Service Agreement for Point-to-Point Transmission Service, dated as of October 25, 2006, between the United States of America acting by and through the Bonneville Power Administration and the Raft River Project Company, as amended by three documents styled Exhibit A, Table 1A, Revision No. 1, Exhibit A, Table 1B, Revision No. 1, and Exhibit A, Table 1C, Revision No. 1, each dated as of April 6, 2006, and each between the United States of America acting by and through the Bonneville Power Administration and the Raft River Project Company.
“Raft River LLC Agreement” means the Second Amended and Restated Operating Agreement of Raft River Energy I LLC, dated as of December 14, 2015.
“Raft River Members” means the Issuer and Raft River I Holdings, LLC, as members of the Raft River Project Company.
Schedule B - 15
“Raft River O&M Agreement” means the Management Services Agreement, dated as of August 9, 2006, between the Raft River Project Company and the Operator.
“Raft River Operating Budget” is defined in Section 9.12(d) .
“Raft River PPA” means the Power Purchase Agreement, dated September 24, 2007, between the Raft River Project Company and the Power Purchaser, as supplemented by the letter, dated April 14, 2008 from the Power Purchaser to the Raft River Project Company and as amended by the First Amendment to the Firm Energy Sales Agreement, dated February 20, 2015.
“Raft River Project” means the 13 MW (net) geothermal electric generating facility located in Cassia County, Idaho utilizing a water cooled binary generating unit manufactured by Ormat.
“Raft River Project Company” means Raft River Energy I LLC, a Delaware limited liability company.
“Raft River Site” means the real property on which the Raft River Project or the Raft River Geothermal Resource is located, the legal description of which is set forth in the Title Policy for the Raft River Site and all related easements, rights-of-way and other rights and interests.
“REC Purchase and Sale Agreement” means each of the Public Utility District Purchase and Sale Agreement and the Holy Cross Purchase and Sale Agreement (collectively, the REC Purchase and Sale Agreements)
“Recapture Indemnity Agreement” is defined in Section 4.12(f) .
“Related Fund” means, with respect to any holder of any Note, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.
“Reported” is defined in Section 8.6.
“Required Approval” means all Approvals, including the Water Rights and Well Permits, required in connection with (a) the execution, delivery, performance, admission into evidence or enforcement of the Transaction Documents, (b) the ownership or operation and maintenance of the Projects, and/or (c) the generation, transmission and sale of energy generated by the Projects as contemplated under the Transaction Documents.
“Required Holders” means, at any time, the holders of at least 51% in principal amount of the Notes at the time outstanding (without limiting Section 8.5, exclusive of Notes then owned by the Issuer or any of its Affiliates).
“Required Make-Up Well Reserve Account Deposit” is defined in Section 9.12(a) .
Schedule B - 16
“Responsible Officer” means any Senior Financial Officer and any other officer of the Issuer with responsibility for the administration of the relevant portion of this Agreement.
“Restricted Payment Conditions” is defined in Section 10.10.
“Revenue Account” is defined in the Depositary Agreement.
“SEC” shall mean the Securities and Exchange Commission of the United States, or any successor thereto.
“Secured Parties” means the holders, the Collateral Agent and the Depositary.
“Securities” or “Security” shall have the meaning specified in Section 2(1) of the Securities Act.
“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“Security Agreement” is defined in Section 4.12(e) .
“Security Documents” means the Security Agreement, the USG Idaho Pledge Agreement, the Issuer Pledge Agreement, any future security agreements, the Depositary Agreement, the Local Account Control Agreement, if any, the Recapture Indemnity Agreement, the Estoppels, any Acceptable Letter of Credit delivered to the Depositary pursuant to the Depositary Agreement and any other security documents, financing statements and the like filed or recorded in connection with the foregoing.
“Senior Financial Officer” means the chief financial officer, principal accounting officer, treasurer or comptroller of the Issuer.
“Servicing Fee” is defined in Section 9.10.
“Sites” means, collectively, the USG Oregon Site and the Raft River Site.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc., or any successor thereto.
“Sponsor” means each of USG Idaho and USG Delaware (collectively, the “Sponsors”).
“Supplemental Rights” means (a) with respect to the Raft River Site, the easement granted pursuant to Easement from USG Idaho to Raft River Project Company, dated December 5, 2006, and recorded as Instrument No. 312473 with the Recorder of Cassia County, Idaho, Raft River Energy Geothermal Unit Agreement, by Raft River Project Company, dated December 1, 2015 (Corrected Memorandum of Geothermal Unit Agreement dated April 7, 2016, recorded on April 18, 2016 as #2016-00157), and (b) with respect to the USG Oregon Site, mineral rights granted pursuant to Quitclaim Deed from BRP LLC to USG Oregon Project Company, dated December 18, 2012, and recorded as Instrument No. 2013-4885 with the records of Malheur County, Oregon.
Schedule B - 17
“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.
“Swap Contract” means (a) any and all interest rate swap transactions, basis swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward foreign exchange transactions, cap transactions, floor transactions, currency options, spot contracts or any other similar transactions or any of the foregoing (including, but without limitation, any options to enter into any of the foregoing), and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement.
“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amounts(s) determined as the mark-to-market values(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.
“Synthetic Lease” means, at any time, any lease (including leases that may be terminated by the lessee at any time) of any property (a) that is accounted for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor.
“Title Policy” is defined in Section 4.14(a) .
“Transaction Documents” means, collectively, the Financing Documents and the Material Project Documents.
“Transfer” means, with respect to any item, the sale, exchange, conveyance, lease, transfer or other disposition of such item.
“U.S. DOE” means the U.S. Department of Energy, an agency of the United States of America, acting by and through the Secretary of Energy.
“U.S. Economic Sanctions” is defined in Section 5.16(a) .
“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“USG Delaware” means U.S. Geothermal Inc., a Delaware corporation.
Schedule B - 18
“USG Idaho” means U.S. Geothermal Inc., an Idaho corporation.
“USG Idaho Pledge Agreement” is defined in Section 4.12(c) .
“USG Oregon Geothermal Lease” means each of the (a) Hot Springs Ranch Geothermal Lease and Agreement, dated as of January 24, 2007, between Cyprus Gold Exploration Corporation and USG Delaware, as assigned by USG Delaware to the USG Oregon Project Company pursuant to that Assignment, Assumption and Indemnity Agreement, dated February 16, 2010 (as evidenced by that certain Memorandum of Geothermal Lease Assignment, dated February 17, 2010, executed by USG Delaware and the USG Oregon Project Company), such assignment being consented to by Cyprus Gold Exploration Corporation pursuant to that Consent to Assignment, dated January 29, 2010, (b) Hot Spring Ranch Geothermal Lease and Agreement, dated as of May 24, 2006, between JR Land and Livestock Inc. and USG Delaware, as assigned to the USG Oregon Project Company pursuant to the Assignment, Assumption and Indemnity Agreement, dated February 16, 2010 (as evidenced by that certain Memorandum of Geothermal Lease Assignment, dated February 17, 2010, executed by USG Delaware and the USG Oregon Project Company), such assignment being acknowledged by JR Land and Livestock Inc. pursuant to that Acknowledgement of Lease Assignment/Waiver of Notice, dated September 1, 2010, and (c) Geothermal Lease and Agreement, dated as of November 1, 2009, among ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ and USG Idaho, as assigned to the USG Oregon Project Company pursuant to Assignment, Assumption and Indemnity Agreement, dated February 16, 2010 (as evidenced by that certain Memorandum of Geothermal Lease Assignment, dated February 17, 2010, executed by USG Idaho and the USG Oregon Project Company), such assignment being acknowledged by ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to that Acknowledgement of Lease Assignment/Waiver of Notice, dated August 31, 2010 (collectively, the “USG Oregon Geothermal Leases”).
“USG Oregon Geothermal Resource” mean the electricity generating capacity of the geothermal reservoirs subject to the USG Oregon Geothermal Leases and available for use by the USG Oregon Project.
“USG Oregon Holdings” means Oregon USG Holdings LLC, a Delaware limited liability company.
“USG Oregon Holdings LLC Agreement” means the Amended and Restated Liability Company Agreement of USG Oregon Holdings, dated as of September 8, 2010, as amended by the Written Consent and Amendment, dated August 5, 2011, the Second Written Consent and Amendment, dated January 11, 2012, the Third Written Consent and Amendment, dated April 23, 2012 and the Fourth Amendment and Release Agreement, dated as of February 20, 2014.
“USG Oregon Holdings Members” mean the Issuer and Enbridge (U.S.) Inc., as members of USG Oregon Holdings.
“USG Oregon Interconnection Agreement” means the Standard Large Generator Interconnection Agreement, dated December 16, 2009, between USG Idaho and the Power Purchaser, following FERC approved format, and assigned by USG Idaho to the USG Oregon Project Company as of October 15, 2010.
Schedule B - 19
“USG Oregon LLC Agreement” means the USG Oregon LLC Limited Liability Company Agreement, dated as of August 12, 2009, as amended by the First Amendment to Limited Liability Company Agreement, dated as of December 31, 2009.
“USG Oregon O&M Agreement” means the Management Services Agreement, dated as of February 1, 2011, between the USG Oregon Project Company and the Operator.
“USG Oregon Operating Budget” is defined in Section 9.12(d) .
“USG Oregon Pledge Agreement” means the Equity Pledge Agreement, dated as of February 23, 2011, among USG Oregon Holdings, the USG Oregon Project Company and the Federal Financing Bank Loan Collateral Agent.
“USG Oregon PPA” means the Power Purchase Agreement, dated December 11, 2009, between the USG Oregon Project Company and the Power Purchaser.
“USG Oregon Project” means the approximately 22 MW (net) geothermal electric generating facility located in Malheur County, Oregon utilizing an air cooled binary generating unit manufactured by TAS Energy Systems, Inc.
“USG Oregon Project Company” means USG Oregon LLC, a Delaware limited liability company.
“USG Oregon Site” means the real property on which the USG Oregon Project or the USG Oregon Geothermal Resource is located, the legal description of which is set forth in the Title Policy for the USG Oregon Site and all related easements, rights-of-way and other rights and interests.
“Water Rights” means all water and water rights (whether permitted, certificated, vested, or decreed, and whether or not appurtenant to the Land), applications to appropriate water filed with either the Oregon Water Resources Department or the Idaho Department of Water Resources, ditch and ditch rights, ▇▇▇▇▇, well permits, and well rights, stock or membership interests in any irrigation, canal, ditch, or water company, and all applications or rights to change the point of diversion, place of use, and manner of use with respect thereto, which are now held or are hereafter acquired by either Project Company, or are otherwise relating to, appurtenant to, or used in connection with, all or any part of either Site or either Project, or the use and enjoyment thereof, including, without limitation, the following water rights permits: those certain water rights leased by the Raft River Project Company from USG Idaho under that certain Water Lease Agreement, dated November 2, 2006, between USG Idaho and Raft River Project Company.
“Well Permits” means (a) ▇▇-▇▇▇-▇▇▇▇▇ (NHS-1), ▇▇-▇▇▇-▇▇▇▇▇ (NHS-2), ▇▇-▇▇▇-▇▇▇▇▇ (NHS-4), ▇▇-▇▇▇-▇▇▇▇▇ (NHS-5), ▇▇-▇▇▇-▇▇▇▇▇ (NHS-8), ▇▇-▇▇▇-▇▇▇▇▇ (NHS-10), ▇▇-▇▇▇-▇▇▇▇▇ (NHS-11) and ▇▇-▇▇▇-▇▇▇▇▇ (NHS-13) with respect to the USG Oregon Site, and (b) 43-GR-19 (RRGE-1), 43-GR-20 (RRGE-2), 43-GR-31 (RRG-3), 43-GR-22 (RRGP-4), 43-GR-24 (RRGI-6), 43-GR-32 (RRG-7) and 43-GR-33 (RRG-11) with respect to the Raft River Site.
Schedule B - 20
RULES OF INTERPRETATION
| 1. |
The singular includes the plural and the plural includes the singular; and words in the masculine, neuter or feminine gender shall be read and construed as though in either of the other genders where the context so requires. |
| 2. |
The word “or” is not exclusive. |
| 3. |
A reference to any law includes any amendment or modification to such law, and all regulations, rulings and other law and regulations promulgated under such law. |
| 4. |
A reference to a Person includes its successors and permitted assigns. |
| 5. |
The words “include,” “includes” and “including” are not limiting. |
| 6. |
A reference in a document to an Article, Section, Exhibit, Schedule, Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex or Appendix of such document unless otherwise indicated. Exhibits, Schedules, Annexes or Appendices to any document shall be deemed incorporated by reference in such document. |
| 7. |
References to “knowledge” or words of similar import refer to the actual knowledge of the current officers of the relevant Person, without any duty of investigation unless otherwise indicated. |
| 8. |
References to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include all documents, instruments or agreements issued or executed in replacement thereof, and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time. |
| 9. |
The words “hereof,” “herein” and “hereunder” and words of similar import when used in any document shall refer to such document as a whole and not to any particular provision of such document. |
| 10. |
References to “days” shall mean calendar days, unless the term “Banking Days” shall be used. References to a time of day shall mean such time in New York City, unless otherwise specified. |
| 11. |
The section and subsection headings in a document are for convenience of reference only and shall neither be deemed to be a part of such document nor modify, define, expand or limit any of the terms or provisions thereof. |
Schedule B - 21
Schedule 4.11(b)(ii)
Consents
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement.
| 1. |
Eleventh Omnibus Consent and Agreement, dated May 17, 2016, of U.S. Department of Energy, as DOE Guarantee provider and Loan Servicer, USG Oregon, LLC and PNC Bank, National Association, as Collateral Agent and Administrative Agent |
| 2. |
Letter Agreement, dated as of April 18, 2016, among U.S. Geothermal Inc., Enbridge (U.S.) Inc. and Idaho USG Holdings, LLC |
Schedule 4.11(b)(ii) - 1
Schedule 4.11(b)(iii)
Estoppels
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement.
| 1. |
Estoppel Certificate, dated as of the date hereof, executed by the Power Purchaser and the Collateral Agent with respect to the Raft River PPA |
| 2. |
Estoppel Certificate, dated as of the date hereof, executed by the Power Purchaser and the Collateral Agent with respect to the USG Oregon PPA |
| 3. |
Letter to Sponsor, dated as of April 5, 2016, executed by Holy Cross Energy with respect to the Holy Cross Purchase and Sale Agreement |
| 4. |
Estoppel Certificate, dated as of March 10, 2016, executed by Public Utility District No. 1 of Clallam County, Washington and the Collateral Agent with respect to the Public Utility District Purchase and Sale Agreement |
Schedule 4.11(b)(iii) - 1 )
| Schedule 4.22 |
| Base Case Projections |
| See Attached. |
Schedule 4.22
| Schedule 5.5 |
| Organization and Ownership of Interests in Issuer and Issuer Subsidiaries; Affiliates; |
| Officers; Issuer Subsidiaries. |
| See Attached. |
Schedule 5.5
| Schedule 5.8 |
| Required Approvals |
| RAFT RIVER ENERGY I LLC |
| REQUIRED APPROVALS AND PERMIT SUMMARY1 |
| Authorization | Number | Agency | Status |
| Geothermal Well Permit | RRG-1 43-GR-19 |
Idaho Department of Water Resources |
Issued & Active |
| Geothermal Well Permit | RRG-2 43-GR-20 |
Idaho Department of Water Resources |
Issued & Active |
| Geothermal Well Permit | RRG-3 43-GR-31 |
Idaho Department of Water Resources |
Issued & Active |
| Geothermal Well Permit | RRG-4 43-GR-22 |
Idaho Department of Water Resources |
Issued & Active |
| Geothermal Well Permit | RRG-6 43-GR-24 |
Idaho Department of Water Resources |
Issued & Active |
| Geothermal Well Permit | RRG-7 43-GR-32 |
Idaho Department of Water Resources |
Issued & Active |
| Geothermal Well Permit | RRG-11 43-GR-33 |
Idaho Department of Water Resources |
Issued & Active |
| Water Rights -- Cooling Water ▇▇▇▇▇ 1, 2, 3, 4 & Surface Water |
43-02534B 43-10069 43-2167B 43-120 |
Idaho Department of Water Resources |
Issued & Active |
| Waste Water Reuse Permit |
I-210-02 | Idaho Department of Environmental Quality |
Issued & Active |
___________________________________
1
| RRGE-1 | 43-GR-19 Raft River Energy, LLC | transferred from USG to RRE - 10/23/2006 |
| RRGE-2 | 43-GR-20 Raft River Energy, LLC | transferred from USG to RRE - 10/23/2006 |
| RRG-3 | 43-GR-31 Raft River Energy, LLC | converted to injection well (43-GR-31); the permit number was updated 9/24/2007 |
| RRGP-4 | 43-GR-22 Raft River Energy, LLC | transferred from USG to RRE - 10/23/2006 |
| RRG-5 | 43-GR-34 Raft River Energy, LLC | converted to injection well |
| RRGI-6 | 43-GR-24 Raft River Energy, LLC | transferred from USG to RRE - 10/23/2006 |
| RRG-7 | 43-GR-32 Raft River Energy, LLC | convert from injection to production well (43-GR-32); the permit number was updated |
| RRG-11 | 43-GR-33 Raft River Energy, LLC | Converted to injection permit #43GR33 |
Schedule 5.8 - 1
USG OREGON LLC
REQUIRED APPROVALS AND PERMIT
SUMMARY
| Authorization | Number | Agency | Status |
| Geothermal Well Permit | ▇▇-▇▇▇-▇▇▇▇▇ NHS-1 |
Oregon Department of
Geology and Mineral Industries |
Issued & Active |
| Geothermal Well Permit | ▇▇-▇▇▇-▇▇▇▇▇ NHS-2 |
Oregon Department of
Geology and Mineral Industries |
Issued & Active |
| Geothermal Well Permit | ▇▇-▇▇▇-▇▇▇▇▇ NHS-4 |
Oregon Department of
Geology and Mineral Industries |
Issued & Active |
| Geothermal Well Permit | ▇▇-▇▇▇-▇▇▇▇▇ NHS-5 |
Oregon Department of
Geology and Mineral Industries |
Issued & Active |
| Geothermal Well Permit | ▇▇-▇▇▇-▇▇▇▇▇
NHS-8 |
Oregon Department of
Geology and Mineral Industries |
Issued & Active |
| Geothermal Well Permit | ▇▇-▇▇▇-▇▇▇▇▇ NHS-10 |
Oregon Department of
Geology and Mineral Industries |
Issued & Active |
| Geothermal Well Permit | ▇▇-▇▇▇-▇▇▇▇▇ NHS-11 |
Oregon Department of
Geology and Mineral Industries |
Issued & Active |
| Geothermal Well Permit | ▇▇-▇▇▇-▇▇▇▇▇ NHS-13 |
Oregon Department of
Geology and Mineral Industries |
Issued & Active |
| Right-of-Way | OR-66537 | Bureau of Land Management |
Issued & Active |
| Underground Injection Control Permit |
13281-8 | Oregon Department of
Environmental Quality |
Issued & Active |
Schedule 5.8 - 2
Schedule 5.12(a)
Material Project Documents
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement.
| 1. | USG Oregon PPA | |
| 2. | Raft River PPA | |
| 3. | USG Oregon Geothermal Lease | |
| 4. | Raft River Geothermal Lease | |
| 5. | USG Oregon Interconnection Agreement | |
| 6. | Raft River Interconnection Agreement | |
| 7. | USG Oregon O&M Agreement | |
| 8. | Raft River O&M Agreement | |
| 9. | Recapture Indemnity Agreement | |
| 10. | Holy Cross Purchase and Sale Agreement | |
| 11. | Public Utility District Purchase and Sale Agreement | |
| 12. | Fluid Injection Agreement, dated as of April 15, 2016, between USG Idaho and the Issuer | |
| 13. | Office Lease between USG Idaho and the Raft River Project Company |
Schedule 5.8 - 3
Schedule 5.12(d)
Federal Financing Bank Loan Documents
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Federal Financing Bank Loan Guarantee Agreement.
| 1. |
Federal Financing Bank Loan Guarantee Agreement | |
| 2. |
USG Oregon Pledge Agreement | |
| 3. |
Note Purchase Agreement, dated as of February 23, 2011, by and among the Federal Financing Bank, the USG Oregon Project Company and the U.S. DOE | |
| 4. |
Future Advance Promissory Note, dated February 23, 2011, by the USG Oregon Project Company in favor of the Federal Financing Bank and guaranteed by the U.S. DOE | |
| 5. |
Equity Funding and Recapture Obligation Agreement, dated as of February 23, 2011, among USG Delaware, Enbridge (U.S.), Inc., the USG Oregon Project Company and the U.S. DOE | |
| 6. |
Leasehold Trust Deed, Security Agreement, Financing Statement, Fixture Filing and Assignment of Leases, Rents and Security Deposits, dated as of February 23, 2011, made by the USG Oregon Project Company to Chicago Title Company of Oregon for the benefit of the Federal Financing Bank Loan Collateral Agent | |
| 7. |
Security Agreement, dated as of February 23, 2011, between the USG Oregon Project Company and the Federal Financing Bank Loan Collateral Agent | |
| 8. |
Depositary Agreement, dated as of February 23, 2011, among the USG Oregon Project Company, the Federal Financing Bank Loan Collateral Agent and PNC Bank, National Association, doing business as Midland Loan Services, a division of PNC Bank, National Association (as administrative agent under the Federal Financing Bank Loan Guarantee Agreement) | |
| 9. |
Depositary Accounts Control Agreement, dated as of February 23, 2011, among the USG Oregon Project Company, PNC Bank, National Association and the Federal Financing Bank Loan Collateral Agent | |
| 10. |
Each Direct Agreement | |
| 11. |
Warrant Agreement, dated August 2, 2011, between USG Delaware and the U.S. DOE | |
| 12. |
Omnibus Waiver and Consent Letter Agreement, dated as of April 19, 2012, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. |
Schedule 5.12(d) - 1
| 13. |
Second Omnibus Waiver and Consent Letter Agreement, dated as of August 22, 2012, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 14. |
Third Omnibus Waiver and Consent Letter Agreement, dated as of December 20, 2012, 2012, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 15. |
Fourth Omnibus Waiver and Consent Letter Agreement, dated as of April 5, 2013, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 16. |
Agreement Modifying Note, dated as of April 5, 2013, among the USG Oregon Project Company, the Federal Financing Bank and the U.S. DOE. | |
| 17. |
Fifth Omnibus Waiver and Consent Letter Agreement, dated as of June 4, 2013, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 18. |
Sixth Omnibus Waiver and Consent Letter Agreement, dated as of July 25, 2013, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 19. |
Seventh Omnibus Waiver and Consent Letter Agreement, dated as of August 8, 2013, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 20. |
Eighth Omnibus Waiver and Consent Letter Agreement, dated as of November 7, 2013, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 21. |
Ninth Omnibus Waiver and Consent Letter Agreement, dated as of April 13, 2015, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 22. |
Tenth Omnibus Waiver and Consent Letter Agreement, dated as of March 24, 2016, among the USG Oregon Project Company, USG Delaware, the U.S. DOE and the Federal Financing Bank Loan Servicer. | |
| 23. |
All other documents, certificates and instruments required to be delivered on or before the Financial Closing Date (as defined in the Federal Financing Bank Loan Guarantee Agreement) in connection with the foregoing. |
Schedule 5.12(d) - 2
| Schedule 8.1 |
| Amortization Schedule |
| See Attached. |
Schedule 8.1 - 1
Schedule 9.2
Insurance Requirements
| (a) |
Issuer shall (and Issuer shall cause the Project Companies to), without cost to the Secured Parties, maintain or cause to be maintained on its (or each Project’s as applicable) behalf in effect at all times the types of insurance required by the following provisions together with any other types of insurance required hereunder or in any other Material Project Document or Material Contract or Federal Financing Bank Loan Document, with insurance companies rated A-, X or better, by Best’s Insurance Guide and Key Ratings (or an equivalent rating by another nationally recognized insurance rating agency of similar standing if Best’s Insurance Guide and Key Ratings shall no longer be published), or other insurance companies of recognized responsibility satisfactory to the Required Holders. Upon request of the Required Holders, Issuer shall supply copies of all required insurance policies or the agreed upon policy wordings to the extent copies of such policies are not yet available. | |
| (b) |
The following insurance coverages shall be in form and substance reasonably satisfactory to the Required Holders and shall be in place as of the Closing Date and until all of the Obligations have been paid in full: |
| (i) |
Commercial General Liability insurance for Issuer, each Project Company and each Project on a “per occurrence” policy form that is substantially equivalent to Insurance Services Office’s (“ISO”) commercial general liability form CG 00 01 12 07 or later, or “AEGIS” claims-first made or equivalent claims-made policy form, including coverage for premises/operations, products/completed operations and personal injury, with primary coverage limits of no less than $1,000,000 per any one occurrence and $2,000,000 in the aggregate. The Commercial General Liability policy shall also include a severability of interest clause with no exclusions or limitations for cross-liability. Deductibles and/or self- insured retentions in excess of $50,000 per occurrence shall be subject to review and approval by the Required Holders and any high deductible programs shall contain an aggregate cap on the deductible that is satisfactory to the Required Holders. To the extent exposures exist or if required by written contract, endorsement CG 2417 (or its equivalent) shall be included amending the definition of an insured contract to remove the exclusion for easement or license agreements in connection with construction or demolition operations on or within 50 feet of a railroad. | |
| (ii) |
Automobile Liability insurance for Issuer, each Project Company and each Project, including coverage for owned, non-owned and hired automobiles, as applicable, for both bodily injury and property damage and containing appropriate no-fault insurance provisions or other endorsements in accordance with applicable state legal requirements, with limits of no less than $1,000,000 combined single limit per accident. To the extent exposures exist or if required by written contract, automobile liability insurance shall include coverage for transportation of hazardous materials with a limit of not less than $1,000,000 per accident. |
Schedule 9.2 - 1
| (iii) |
Worker’s Compensation insurance and employer’s liability insurance on a policy form that is substantially equivalent to ISO’s worker’s compensation and employer’s liability form ▇▇ ▇▇ ▇▇ ▇▇ ▇, to the extent the Issuer or a Project Company has employees or is required by law to provide such insurance. Such insurance shall include a list of applicable states (according to exposures) for coverage under the Other States section of the policy. Employer’s Liability shall be insured with limits of not less than bodily injury by accident $1,000,000 each accident, bodily injury by disease $1,000,000 policy limit, and bodily injury by disease $1,000,000 each employee. These limits may be satisfied through a combination of primary and excess policies. High deductible programs must contain an aggregate cap on the deductible that is satisfactory to the Required Holders. | |
| (iv) |
Umbrella/Excess Liability insurance written on an occurrence basis or AEGIS claims-first-made or equivalent form providing limits in excess of the primary limits applying under policies described in Sections (b)(i), (b)(ii) and (b)(iii) of this Schedule 9.2, with respect to Employer’s Liability. Such insurance coverage shall have a limit of liability of not less than $19,000,000 per occurrence and in the annual aggregate. The Umbrella and/or Excess Liability policies shall not contain endorsements which restrict coverages provided under the underlying policies required in Sections (b)(i), (b)(ii) and (b)(iii) of this Schedule 9.2, with respect to Employer’s Liability. If the policy or policies provided under this Section (b)(iv) contain(s) aggregate limits and such limits are diminished below $9,000,000 by any incident, occurrence, claim, settlement or judgment against such insurance which has caused the carrier to establish a reserve, Issuer shall, and shall cause the Project Companies to, take immediate steps to restore such aggregate limits or shall provide other equivalent insurance protection to cover such reduced aggregate limits. | |
| (v) |
Aircraft Liability, to the extent exposure exists, for the use of any owned, non-owned or hired aircraft used in the operation of a Project with a limit of not less than $10,000,000. | |
| (vi) |
Pollution liability covering sudden and accidental release of pollutants shall be provided to protect against claims brought by third parties against Issuer, the USG Oregon Project Company, the Collateral Agent or the Secured Parties, as appropriate, and arising from activities of the USG Oregon Project, with a policy limit of not less than $5,000,000 for any one occurrence. Such coverage may be insured under the commercial general liability policy in lieu of a separate pollution legal liability policy, and shall be renewed as required to maintain insurance coverage in full force and effect. |
Schedule 9.2 - 2
| (vii) |
“All-risk” Property insurance covering against physical loss or damage to the Issuer, the Project Companies and Project assets (including (i) buried cables of either Project site and (ii) transmission lines of which any of Issuer, either Project Company or either Project has ownership and/or a responsibility to insure, which may be subject to a 1,000 foot limitation or self-insured if the value of such transmission lines is under $500,000), including fire and extended coverage, collapse, flood, earth movement and comprehensive equipment breakdown coverage (including pressurized equipment, electrical malfunction and mechanical breakdown), either as part of the “all risk” property insurance or under a separate policy (if insured separately both the “all-risk” property insurance and equipment breakdown policy shall include a joint loss agreement). Such insurance coverage shall include coverage for resultant damage caused by faulty workmanship, design or materials equivalent to LEG 2/96 design clause, or better. Such insurance coverage shall be written on a replacement cost basis with no coinsurance clauses or penalties (or a waiver thereof) with policy limits equal to the full replacement cost value of both Projects or a blanket policy limit (or loss limit) reasonably acceptable to the Required Holders, if accompanied by supporting independent loss studies, and providing: |
| A. |
Time Element coverage extensions for expediting and extra expense with sublimits of not less than $1,000,000 (unless provided under the business interruption coverage required in paragraph (b)(v)(F) below); | |
| B. |
Debris removal with a sublimit of not less than $5,000,000; | |
| C. |
Transit coverage, to the extent exposure exists, with limits equivalent to the full replacement value of property at risk. If transit conveyances contemplate any portion via ocean transit, the coverage will be amended or a separate policy will be purchased, to include both Projects’ property and equipment being shipped (as applicable) on a “warehouse to warehouse” basis, including land, air and ocean transit insuring “all risks” of loss or damage on a replacement cost basis plus freight and insurance from the time the goods are in the process of being loaded for transit until they are finally delivered to the site of the applicable Project, including during shipment deviation, delay, forced discharge, re-shipment and transshipment. Such insurance shall (i) include coverage for war, strikes, theft, pilferage, non-delivery, charges of general average sacrifice or contribution, salvage expenses, temporary storage in route, consolidation, repackaging, refused and returned shipments, (ii) contain a replacement by air extension clause, difference in conditions for C.I.F. shipments, unintentional errors and omissions clause, import duty clause, non-vitiation clause, (iii) contain no exclusion for inadequate packing, (iv) provide coverage on a difference in limits and difference in conditions basis for shipments in which coverage for physical damage is being provided by a third party and (v) provide coverage provided by paragraph (b)(vii)(F) below, if not already provided by insurance required to be obtained in paragraph (b)(vii)(F) below; |
Schedule 9.2 - 3
| D. |
with respect to USG Oregon Project, earth movement and flood coverage may be written with a sublimit of not less than 25% of the Total Insured Value to the extent commercially available but in no event less than 125% of the probable maximum loss (the “PML”) as supported by a qualified PML report specific to the USG Oregon Project and other assets that could reasonably be damaged by the same occurrence. With respect to the Raft River Project, coverage may be written with a sublimit of not less than $5,000,000 for earth movement and $25,000,000 for flood Coverage for terrorism is considered optional, unless required by contract; | |
| E. |
the policy limits shall be automatically reinstated following a loss event, with the exception of damage from earth movement, flood, coastal windstorm (to the extent applicable) and cleanup of hazardous material and pollution, which shall apply on an annual aggregate basis; | |
| F. |
with respect to each Project, business interruption insurance covering against the same perils as set forth in this Section (b)(vii), in an amount not less than twelve (12) months of projected revenues less non continuing expenses with an indemnity period of not less than twelve (12) months. With respect to establishing a combined policy limit (or blanket limit) for physical damage and business interruption losses, the business interruption requirements shall be in addition to the replacement cost requirements for physical damage to each Project as set forth in this Section (b)(vii). For each Project, Issuer shall also maintain contingent business interruption coverage to the first non-owned substation(s) and transmission facilities or electrical distribution systems on a blanket or specified/named location basis with a limit not less than 6 months of projected revenues less non continuing expenses, including a provision for debt servicing (subject to commercial availability) or such other amount acceptable to the Required Holders. Such business interruption and contingent business interruption coverage may be subject to a per occurrence waiting period not to exceed thirty (30) days; and | |
| G. |
all such policies may have deductibles of not greater than $50,000 per loss for the USG Oregon Project and $100,000 for the Raft River Project, except two percent (2%) of the total insured value of either Project with respect to earth movement and Business Interruption coverage shall have a deductible not greater than a thirty (30) day waiting period for business interruption coverage, unless otherwise approved by the Required Holders. |
Schedule 9.2 - 4
| (viii) |
Issuer shall obtain and maintain such other or additional insurance (as to risks covered, policy amounts, policy provisions or otherwise) as, under prudent industry practices, are from time to time insured against for geothermal facilities similar in type, nature, use and location to each Project, which the Required Holders may reasonably require in consultation with the Insurance Consultant and Issuer. |
| (c) |
Issuer shall use reasonable efforts to require each contractor to maintain insurance consistent with prudent industry practice. Such insurance, with the exception of Workers Compensation, supplied by each contractor shall: |
| (i) |
add the Issuer, the Project Companies, the Collateral Agent and the Secured Parties as additional insureds; | |
| (ii) |
be primary and non-contributory as respects insurance provided by the Issuer, the Project Company, the Collateral Agent and the Secured Parties; | |
| (iii) |
waive rights of subrogation against the Issuer, the Project Companies, the Collateral Agent and the Secured Parties; | |
| (iv) |
provide a separation of interest / cross liability clause; | |
| (v) |
continue in force until all obligations of contractors and sub- contractors are fulfilled with respect to the Projects; and | |
| (vi) |
provide that contractors and sub-contractors shall be responsible for tools and equipment brought onto either Project site. |
| (d) |
With respect to the Raft River Project, all policies covering real or personal property or business interruption shall name the Collateral Agent as the sole loss payee in accordance with lender’s loss payable wording acceptable to the Required Holders in consultation with the Insurance Consultant. | |
| (e) |
All property and liability policies required herein shall: |
| (A) |
name (or include via blanket endorsement) the Secured Parties as additional insureds (with the exception of workers’ compensation) under the policy; | |
| (B) |
waive subrogation (to the extent allowed by law) against any of the Secured Parties, either Project Company, either Project or Issuer; and | |
| (C) |
provide that if any premium or installment is not paid when due, or if such insurance is to be cancelled or terminated for any reason whatsoever, the insurers (or their representatives) will promptly notify Issuer and the Collateral Agent on behalf of the Secured Parties, and any such cancellation or termination shall not be effective until forty-five (45) days (10 days with regard to non-payment) after receipt of such notice by the Collateral Agent, and that appropriate certification shall be made to Issuer by each insurer with respect thereto. |
Schedule 9.2 - 5
| (D) |
All policies covering real and personal property or business interruption shall be endorsed so that interests of the Collateral Agent and the Secured Parties shall be insured regardless of any breach or violation by Issuer, either Project Company, either Project or any other Person, of any warranties, declarations or conditions contained in such insurance policies. |
| (f) |
All liability policies required herein (except workers compensation and employer’s liability) shall: |
| (A) |
include a severability of interest clause; and | |
| (B) |
be primary and non-contributory with insurance carried by or on behalf of additional insureds. |
| (g) |
In the event that Issuer (or either Project Company or Project) fails to respond in a timely and appropriate manner (as determined by the Required Holders) to take any steps necessary or requested by the Collateral Agent or the Required Holders to collect from any insurers for any loss covered by any insurance required to be maintained by this Schedule 9.2, Collateral Agent (or its designee) shall have the right to make all proofs of loss, adjust all claims with the insurance company or companies and/or receive all or any part of the proceeds of the foregoing insurance policies, either in its own name or the name of Issuer, a Project Company or a the Project; provided that Issuer shall (and Issuer shall cause each Project Company and Project to), upon Collateral Agent’s request (made at the direction of the Required Holders) and at Issuer’s (or the Project Company’s or the Project’s, as applicable) own cost and expense, make all proofs of loss and take all other steps necessary or requested by Collateral Agent or the Required Holders to collect from insurers for any loss covered by any insurance required to be obtained by this Schedule 9.2. Notwithstanding this Schedule 9.2, Collateral Agent and the Secured Parties shall have the right to participate and receive information with respect to all claims and losses. | |
| (h) |
On or before the Closing Date and at each policy renewal (or policy cancellation and replacement) throughout the term of this Agreement, Issuer (or its authorized insurance representative) shall furnish evidence of insurance (in the form of certificates of insurance, binders, cover notes or complete copies of policies) to the Collateral Agent and the Secured Parties in accordance with industry standards including a certificate signed by a duly authorized representative of Issuer (or its authorized insurance representative), stating that the insurance then maintained by or on behalf of Issuer, the Project Companies and the Projects pursuant to this Schedule 9.2 complies in all material aspects with the terms hereof, is in good standing and in full force and effect without default and that all premiums then due have been paid and that no policies are in danger or threat of cancellation for non-payment of premiums or otherwise. Neither the Collateral Agent nor any Secured Party shall have any obligation to verify the insurance pursuant to this Schedule 9.2 or any information or statement contained in the certificates or opinions of Issuer (or its authorized insurance representative), and failure of the Collateral Agent or the Secured Parties to verify the insurance pursuant to this Schedule 9.2 does not constitute a waiver of the required insurance or other obligations of this Schedule 9.2. In the event that at any time the insurance required by this Schedule 9.2 shall be reduced or cease to be maintained, then (without limiting the rights of the Secured Parties in respect of the Event of Default which arises as a result of such failure) Collateral Agent may on behalf of the Secured Parties, at its option, maintain the insurance required hereby and, in such event, Issuer shall reimburse Collateral Agent upon demand for the cost thereof together with interest thereon at a rate per annum equal to the Default Rate, but in no event shall the rate of interest exceed the maximum rate permitted by law. |
Schedule 9.2 - 6
| (i) |
In the event any insurance (including the limits, deductibles or terms and conditions thereof) hereby required to be obtained and maintained by this Schedule 9.2, other than insurance required by law or a Material Project Document or Material Contract or Federal Financing Bank Loan Document to be obtained and maintained, shall not be commercially available on reasonable terms in the commercial insurance market, the Required Holders in consultation with the Insurance Consultant, shall not unreasonably withhold their agreement to waive such requirement to the extent the maintenance thereof is not so available and/or, to the extent applicable, may allow Issuer (or a Project Company or a Project, as applicable) to obtain the best available insurance comparable to the requirements of this Schedule 9.2 on commercially reasonable terms then available in the commercial insurance market; provided that (i) Issuer shall first request any such waiver in writing, which request shall be accompanied by written reports prepared by Issuer (or its authorized insurance representative) and the Insurance Consultant, satisfactory to the Required Holders, certifying that such insurance is not commercially available on reasonable terms in the commercial insurance market for geothermal facilities similar in size, type and location to the Projects (and, in any case where the required amount is not so available, certifying as to the maximum amount which is so available) and explaining in detail the basis for such conclusions and the form and substance of such reports to be satisfactory to the Required Holders; (ii) at any time after the granting of any such waiver, Issuer shall furnish to the Secured Parties on each anniversary thereof, supplemental reports satisfactory to the Required Holders updating the prior reports and reaffirming such conclusion; and (iii) any such waiver shall be effective only so long as such insurance shall not be commercially available on reasonable terms in the commercial insurance market (as determined by the Required Holders in consultation with the Insurance Consultant), it being understood that the failure of Issuer to timely furnish any such supplemental report shall be conclusive evidence that such waiver is no longer effective because such condition no longer exists. |
Schedule 9.2 - 7
| (j) |
In the event that any policy is written on a “claims-made” or “occurrence reported” basis and such policy is not renewed or the retroactive date of such policy is to be changed, Issuer shall obtain or cause to be obtained for each such policy or policies extended reporting period coverage or “tail” coverage for the longest period reasonably available in the commercial insurance market but in no event not less than a period of three (3) years for each such policy or policies and shall provide the Secured Parties with proof that such extended reporting period or “tail” coverage has been obtained and premiums due with respect to such coverage have been paid in full. |
Schedule 9.2 - 8
EXHIBIT 1
[FORM OF NOTE]
IDAHO USG HOLDINGS, LLC
5.80% SENIOR SECURED NOTE DUE MARCH 31, 2023
| No. [_____] | [____ __], 20__ |
| $[_______] | PPN: 45148@ AA4 |
For Value Received, the undersigned, Idaho USG Holdings, LLC (herein called the “Issuer”), a limited liability company organized and existing under the laws of the State of Delaware, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] Dollars (or so much thereof as shall not have been prepaid) on March 31, 2023 (the “Maturity Date”), with interest (computed on the basis of a 360-day year of twelve 30 day months) (a) on the unpaid balance hereof at the rate of 5.80% per annum from the date hereof, payable semiannually, on March 31 and September 30 in each year, commencing with September 30, 2016, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make Whole Amount, at a rate per annum from time to time equal to the greater (i) 7.80% per annum, and (ii) 2.00% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York City, New York as its “base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the registered holder hereof, on demand).
Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at the principal office of JPMorgan Chase Bank, N.A. in New York City, New York or at such other place as the Issuer shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Secured Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement, dated as of May 19, 2016 (as from time to time amended, the “Note Purchase Agreement”), between the Issuer and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.
This Note is secured by the Security Documents.
This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Issuer may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Issuer will not be affected by any notice to the contrary.
Exhibit 1 - 1
The Issuer will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreement. This Note is also subject to mandatory and optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.
If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the rights of the Issuer and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.
| IDAHO USG HOLDINGS, LLC | |
| By | |
| Name: | |
| Title: | |
Exhibit 1 - 2
| Exhibit 4.10 |
| Form of Funding Instruction Letter |
| Idaho USG Holdings, LLC |
| c/o U.S. Geothermal Inc. |
| ▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ |
| Boise, Idaho 83706 |
| Funding Instruction Letter |
| ____________, 20162 |
TO EACH OF THE PURCHASERS LISTED IN
SCHEDULE
A HERETO:
Ladies and Gentlemen:
The undersigned, a Responsible Officer of Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), hereby confirms, in accordance with Section 4.10 of the Note Purchase Agreement, dated as of May 19, 2016, among the Issuer and the Purchasers (the “Note Purchase Agreement”), that you are to pay the purchase price for the Issuer’s 5.80% Senior Secured Notes due March 31, 2023 issued pursuant to the Note Purchase Agreement by wire transfer of immediately available funds for the account of the Issuer: [Insert Bank Name and Address], ABA # ___________, Account # [_________], Account Name [___________], FFC: [_________], Ref: [_________].
| Very truly yours, | |
| IDAHO USG HOLDINGS, LLC | |
| By | |
| Name | |
| Title | |
___________________________
2 To be delivered
three Business Days prior to Closing.
Exhibit 4.10 - 1
| Exhibit 7.1 |
| Form of Monthly Operating Report |
| See attached. |
Exhibit 7.1 - 1
Exhibit S-1
Form of Depositary Agreement
Exhibit S-1 - 1
Execution Version
DEPOSITARY AND SECURITY AGREEMENT
This DEPOSITARY AND SECURITY AGREEMENT (this “Agreement”), dated as of May 19, 2016, is by and among (i) IDAHO USG HOLDINGS, LLC, a Delaware limited liability company (the “Issuer”), (ii) WILMINGTON TRUST, NATIONAL ASSOCIATION, in its capacity as collateral agent (together with its successors and assigns in such capacity, the “Collateral Agent”), for the benefit of the Secured Parties (as defined in the Note Agreement referred to below), and (iii) WILMINGTON TRUST, NATIONAL ASSOCIATION, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”).
RECITALS:
A. The Issuer has entered into a Note Purchase Agreement, dated as of the date hereof (as amended, restated, modified and supplemented from time to time, the “Note Agreement”), with the note purchasers named therein (the “Purchasers”), providing for the issuance and sale by the Issuer to the Purchasers of the Issuer’s senior secured notes thereunder (as amended, restated, modified and supplemented from time to time, collectively, the “Notes”).
B. The Purchasers have appointed Wilmington Trust, National Association, to act as Collateral Agent on behalf of the Secured Parties in respect of the transactions contemplated by the Note Agreement and the other Financing Documents, pursuant to the terms of the Collateral Agency Agreement, dated as of the date hereof (as amended, modified or supplemented from time to time, the “Collateral Agency Agreement”), by and among the Collateral Agent, the Depositary and the holders of the Notes.
C. It is a condition precedent to the obligations of the Purchasers under the Note Agreement that the parties hereto enter into this Agreement.
The parties therefore agree as follows:
ARTICLE 1
DEFINITIONS
1.1 General. Capitalized terms not otherwise defined in this Agreement shall have the meanings attributed to them in the Note Agreement, or, if not defined herein or therein, the meanings given to those terms in the Uniform Commercial Code as in effect from time to time in the State of New York. The rules of interpretation set forth in Schedule B of the Note Agreement shall apply to this Agreement.
1.2 Certain Defined Terms. The following terms shall have the following meanings (such definitions to be equally applicable to both singular and plural forms of the terms defined):
“Acceptable Letter of Credit” means an unconditional, irrevocable, direct-pay letter of credit, with such terms as are satisfactory to the Required Holders in their sole discretion, for the account of a Person that is not the Issuer or an Issuer Subsidiary, by a commercial bank or trust company organized under the laws of the United States or a political subdivision thereof whose long-term debt is rated at least “A-” by S&P and “A3” by ▇▇▇▇▇’▇, unless such Person is not rated by S&P and ▇▇▇▇▇’▇, in which case it shall be rated not less than “A-” by S&P or “A3” by ▇▇▇▇▇’▇, naming the Depositary, on behalf of the Secured Parties, as the beneficiary. In addition to and without limiting the foregoing, (i) an Acceptable Letter of Credit shall have an initial expiration date at least one year after the date of delivery of the Acceptable Letter of Credit to the Depositary, and shall not be secured by any of the Collateral, (ii) the documents related thereto shall not require any reimbursement by the Issuer of any draw thereunder or payment by the Issuer of any fee or expense related thereto, (iii) an Acceptable Letter of Credit shall entitle the beneficiary to present draws for payment in New York, New York, and (iv) an Acceptable Letter of Credit shall entitle the beneficiary to draw the stated amount thereof (A) upon the occurrence of an Event of Default and (B) within the 30-day period prior to its expiration date.
“Account Collateral” is defined in Section 2.2.
“Business Day” means any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York are required or authorized to be closed.
“Capital Call” means a capital call made by either USG Oregon Holdings or the Raft River Project Company pursuant to its LLC Agreement.
“Capital Contribution” means the proceeds of any capital contribution made by USG Idaho to the Issuer in response to a Capital Call.
“Collateral” is defined in Section 2.2.
“Collateral Agency Agreement” is defined in Recital B.
“Collateral Agreement Account” is defined in Section 2.1(b)(vii) .
“Debt Service” means, for any period, all scheduled payments of principal and all payments of interest, fees, expenses or other charges, including Make-Whole Amounts, due and payable by the Issuer in respect of all Obligations pursuant to the terms of the Financing Documents in such period.
“Debt Service Reserve Account” is defined in Section 2.1(b)(ii) .
“Debt Service Reserve Letter of Credit” is defined in Section 3.2(b) .
“Depositary Agreement Account” is defined in Section 2.1(b)(vi) .
“Disbursement Requisition” means a requisition in the form attached hereto as Exhibit A.
“Maintenance Reserve Account” is defined in Section 2.1(b)(iii) .
“Maintenance Reserve Letter of Credit” is defined in Section 3.3(b) .
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“Maintenance Reserve Requisition” means a requisition in the form attached hereto as Exhibit B.
“Make-Up Well Requisition” means a requisition in the form attached hereto as Exhibit C.
“Make-Up Well Reserve Account” is defined in Section 2.1(b)(iv) .
“Minimum Debt Service Reserve Requirement” means an amount equal to scheduled principal and interest payments on the Notes for (a) prior to the successful extension of the RRG-2 Well, the 12-month period following such date, and (b) following the successful extension of the RRG-2 Well, the 6-month period following such date; provided that at the Closing the amount shall equal $1,799,841. For the purposes of the Minimum Debt Service Reserve Requirement, a successful extension of the RRG-2 Well means that the RRG-2 Well contributes at least an additional $500,000 to the annual cash flow of the Raft River Project Company.
“Minimum Maintenance Reserve Requirement” means, on any date, an amount equal to the projected capital expenditures for the 36-month period following such date as set forth in the current Operating Budget for such period; provided that at Closing the amount shall equal $1,807,890.
“Monthly Date” means the last Business Day of each month.
“Note Agreement” is defined in Recital A.
“Notes” is defined in Recital A.
“Officer’s Certificate” means a certificate of the chief financial officer, treasurer, chief executive officer or president of the Issuer.
“Payment Date” means March 31 and September 30, commencing with September 30, 2016, through the Maturity Date, and the Maturity Date, provided that if any such date is not a Business Day, the provisions of Section 22.2 of the Note Agreement shall apply (as specified in the applicable Payment Requisition).
“Payment Requisitions” means, collectively, the Disbursement Requisitions, Maintenance Reserve Requisitions, the Make-Up Well Requisitions and the Raft River Capital Expenditure Requisitions.
“Permitted Investment” means any of the following investments:
(i) Marketable securities issued by the U.S. Government and supported by the full faith and credit of the U.S. Treasury, either by statute or an opinion of the Attorney General of the United States;
(ii) Marketable debt securities issued by U. S. Government-sponsored enterprises, U. S. Federal agencies, U. S. Federal financing banks, and international institutions whose capital stock has been subscribed for by the United States;
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(iii) Certificates of Deposit, Time Deposits, and Bankers Acceptances of any bank or trust company incorporated under the laws of the United States or any state, provided that, at the date of acquisition, such investment, and/or the commercial paper or other short term debt obligation of such bank or trust company has a short-term credit rating or ratings from ▇▇▇▇▇’▇ and/or S&P, each at least P-1 or A-1;
(iv) Deposit accounts with any bank that is insured by the Federal Deposit Insurance Corporation and whose long-term obligations are rated A2 or better by ▇▇▇▇▇’▇ and/or A or better by S&P
(v) Commercial paper of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition is rated by ▇▇▇▇▇’▇ and/or S&P, provided each such credit rating is least P-1 and/or A-1;
(vi) Money market mutual funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended, and operated in accordance with Rule 2a-7 and that at the time of such investment are rated Aaa-mf by ▇▇▇▇▇’▇ and/or AAAm by S&P, including such funds for which the Trustee or an affiliate provides investment advice or other services;
(vii) Tax-exempt variable rate commercial paper, tax-exempt adjustable rate option tender bonds, and other tax-exempt bonds or notes issued by municipalities in the United States, having a short-term rating of “MIG-1” or “VMIG-1” or a long term rating of “Aa2” (▇▇▇▇▇’▇), or a short-term rating of “A-1” or a long term rating of “AA” (S&P);
(viii) Repurchase obligations with a term of not more than thirty days, 102 percent collateralized, for underlying securities of the types described in clauses (i) and (ii) above, entered into with any bank or trust company or its respective affiliate meeting the requirements specified in clause (iii) above; and
(ix) All rating requirements are based on the time of purchase.
“Pledged Accounts” is defined in Section 2.2.
“Purchasers” is defined in Recital A.
“Raft River Capital Expenditure Account” is defined in Section 2.1(b)(v) .
“Raft River Capital Expenditure Requisition” means a requisition in the form attached hereto as Exhibit D.
“Revenue Account” is defined in Section 2.1(b)(i) .
“RRG-2 Well” means that certain production well owned by the Raft River Project Company that is located on the Raft River Site and designated as RRG-2.
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ARTICLE 2
ESTABLISHMENT OF THE ACCOUNTS; GRANT OF SECURITY INTEREST
2.1 Creation of the Pledged Accounts.
(a) The Issuer hereby appoints Wilmington Trust, National Association, to act as the Depositary under this Agreement. Wilmington Trust, National Association, hereby agrees to act as Depositary under this Agreement on the express terms set forth herein and to receive, accept and hold on deposit all amounts to be delivered to or held by the Depositary pursuant to the express terms of this Agreement, and to deposit promptly all such amounts into the Pledged Accounts specified herein. The Depositary will hold and safeguard the Pledged Accounts during the term of this Agreement in the name of the Issuer, in accordance with the terms of this Agreement.
(b) The Depositary hereby establishes at its office in New York, New York the following trust accounts which shall be maintained at all times until the termination of this Agreement:
(i) a special account entitled “Idaho USG Holdings, LLC Revenue Account” (the “Revenue Account”);
(ii) a special account entitled “Idaho USG Holdings, LLC Debt Service Reserve Account” (the “Debt Service Reserve Account”);
(iii) a special account entitled “Idaho USG Holdings, LLC Maintenance Reserve Account” (the “Maintenance Reserve Account”);
(iv) a special account entitled “Idaho USG Holdings, LLC Make-Up Well Reserve Account” (the “Make-Up Well Reserve Account”); and
(v) a special account entitled “Idaho USG Holdings, LLC Raft River Capital Expenditure Account” (the “Raft River Capital Expenditure Account”);
(vi) a special account entitled “Idaho USG Holdings, LLC Depositary Agreement Account” (the “Depositary Agreement Account”); and
(vii) a special account entitled “Idaho USG Holdings, LLC Collateral Agreement Account” (the “Collateral Agreement Account”).
(c) The account number for each of the Pledged Accounts and the Depositary’s wiring instructions are set forth on Schedule 1 hereto. No payments will be made out of the Pledged Accounts except for the purposes and on the terms provided in this Agreement.
2.2 Grant of Security Interest. As security for the prompt and complete payment of the principal of, interest (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) and Make-Whole Amount, if any, on the Notes issued and delivered and outstanding under the Note Agreement, the payment of all other sums owing to the Secured Parties under the Note Agreement, the Notes and the other Financing Documents when due (whether at stated maturity, by acceleration, because of mandatory prepayment, or otherwise, and including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a)), and the performance of the covenants contained in the Note Agreement and the other Financing Documents, the Issuer hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to the Collateral Agent, for the benefit of the Secured Parties, and grants to the Collateral Agent, for the benefit of the Secured Parties, a continuing Lien on and security interest in: (a) the Revenue Account, the Debt Service Reserve Account, the Maintenance Reserve Account, the Make-Up Well Reserve Account, the Raft River Capital Expenditure Account, the Depositary Agreement Account and the Collateral Agreement Account (the Revenue Account, the Debt Service Reserve Account, the Maintenance Reserve Account, the Make-Up Well Reserve Account, the Raft River Capital Expenditure Account, the Depositary Agreement Account and the Collateral Agreement Account each, a “Pledged Account” and, collectively, the “Pledged Accounts”), any cash balances, securities and other investment property and other property from time to time credited to any of the Pledged Accounts and any and all proceeds thereof, whether now or hereafter existing or arising (collectively, the “Account Collateral”); and (b) to the extent not already granted pursuant to clause (a) above, (i) all Accounts of the Issuer, including any and all accounts receivable, all amounts distributed to the Issuer pursuant to the USG Oregon Holdings LLC Agreement or the Raft River LLC Agreement, and all other amounts received by the Issuer from any source, and all interest, profits or other income derived from the investment of such amounts; (ii) all money and securities from time to time held by the Collateral Agent or the Depositary under the terms of this Agreement and any and all other real or personal property, whether now or in the future, by delivery or by writing of any kind conveyed, pledged, assigned or transferred to the Collateral Agent or the Depositary, as and for additional security hereunder by Issuer, (iii) all funds and accounts established under this Agreement and the investments thereof, if any, and money, securities and obligations therein (subject to disbursements from any such fund or account upon the conditions set forth in this Agreement), including any investment property, deposit accounts, letter-of-credit rights securing, or commercial tort claims relating to the foregoing; and (iv) to the extent not listed above as original collateral, the proceeds (including, without limitation, insurance proceeds) and products of any or all of the foregoing, and all accessions to, substitutions for or replacements of and rents and profits from any or all of the foregoing and all of the Issuer’s rights, remedies, security, Liens and supporting obligations, in, to and in respect of the foregoing (collectively, those items listed in clauses (a) and (b) above are referred to herein as the “Collateral”).
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2.3 Continuing Security Interest. This Agreement creates a continuing security interest in the Collateral, which will remain in full force and effect until the indefeasible payment in full in cash of the Obligations (excluding contingent obligations and reimbursement obligations that by their terms expressly survive the repayment in full of the Notes and for which no claim has been asserted). If, at any time for any reason (including the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of the Issuer, any Issuer Subsidiary or any other Person or the appointment of any intervenor or conservator of, or agent or similar official for any of the Issuer, any Issuer Subsidiary or any other Person or any of their respective properties), any payment received by the Collateral Agent, the Depositary or any holder of a Note in respect of the Obligations is rescinded or must otherwise be restored or returned by such Person, this Agreement will continue to be effective or will be reinstated, if necessary, as if such payment had not been made.
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2.4 Securities Accounts.
(a) The parties agree that each Pledged Account is and will at all times be maintained as a Securities Account.
(b) The Depositary agrees to act as a Securities Intermediary with respect to the Pledged Accounts. The Issuer acknowledges that the Depositary shall act as a Securities Intermediary with respect to the Pledged Accounts.
(c) Upon the delivery or transfer of any cash or other Account Collateral to the Depositary, the Depositary will indicate by book entry that such Account Collateral has been credited to the appropriate Pledged Account or accept such Account Collateral for credit to the appropriate Pledged Account, as applicable. The Depositary agrees that all Account Collateral delivered or transferred to the Depositary pursuant to this Agreement will be promptly credited to the applicable Pledged Account. If the Depositary receives cash or other Account Collateral without directions as to which Pledged Account the Account Collateral is to be credited, the Depositary shall credit such Account Collateral to the Revenue Account and request written directions from the Issuer. Upon receipt of written directions the Depositary shall transfer such Account Collateral and credit it to the appropriate Pledged Account set forth in such directions. All Account Collateral credited to the Pledged Accounts shall be treated as Financial Assets.
(d) The Depositary agrees that all Financial Assets credited to or carried in any Pledged Account will be registered in the name of, payable to or to the order of, or endorsed to, the Depositary, for the benefit of the Collateral Agent, or in blank.
(e) To the extent that any Pledged Account is not considered a Securities Account, such Pledged Account shall be deemed to be a Deposit Account, which the Issuer shall maintain with the Depositary acting not as a Securities Intermediary but as a Bank.
(f) All parties hereto agree that, for purposes of the UCC, notwithstanding anything to the contrary contained in any other agreement relating to the establishment and operation of the Pledged Accounts, the jurisdiction of the Depositary (in its capacity as the Securities Intermediary or as the Bank) is the State of New York and the laws of the State of New York govern the establishment and operation of the Pledged Accounts.
2.5 Exclusive Instructions. Notwithstanding any provision of this Agreement, the Collateral Agent (acting at the direction of the Required Holders) shall be entitled at any time to give the Depositary instructions as to the withdrawal or disposition of funds or other Account Collateral from time to time credited to or carried in any Pledged Account, or as to any other matters relating to any Pledged Account or any Account Collateral, without the further consent of the Issuer or any other Person. The Depositary hereby agrees to comply with any such instructions received from the Collateral Agent (acting at the direction of the Required Holders) without any further consent from the Issuer or any other Person and, upon the occurrence and during the continuance of a Default or an Event of Default, shall cease honoring instructions received from the Issuer or any other Person. Such instructions may include the giving of stop payment orders for any payments requested pursuant to a Payment Requisition. The Depositary shall be fully entitled to rely conclusively on such instructions from the Collateral Agent (acting at the direction of the Required Holders), even if the instructions are contrary to any instructions or Payment Requisitions that the Issuer may give.
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2.6 No Other Agreements. The Depositary represents and warrants to the Collateral Agent that the Depositary has not entered, and the Depositary covenants with the Collateral Agent that it will not enter, into any agreement with any other Person by which the Depositary is obligated to comply with instructions from such other Person as to the disposition of funds from any Pledged Account or other dealings with any Account Collateral.
ARTICLE 3
DEPOSITS INTO ACCOUNTS
3.1 Revenue Account. The Issuer agrees that, and confirms that it has instructed the managers of USG Oregon Holdings and the Raft River Project Company that, all Project Company Distributions are to be made directly to the Depositary for deposit into the Revenue Account. In the event that Project Company Distributions are remitted directly to the Issuer or either Sponsor, the Issuer or such Sponsor will promptly deliver such amounts to the Depositary for deposit into the Revenue Account, and, until delivery, the Issuer shall hold such amounts in trust for the Depositary. The Issuer agrees further that all other amounts received by it from any source shall be deposited promptly into the Revenue Account, except for Capital Contributions, which the Issuer shall promptly contribute to USG Oregon Holdings or the Raft River Project Company, as applicable, to be applied to the stated purpose of the applicable Capital Call. Until so deposited, the Issuer shall hold such amounts (excluding Capital Contributions) in trust for the Depositary.
3.2 Debt Service Reserve Account.
(a) On the Closing Date, the Issuer will deposit $1,703,174 into the Debt Service Reserve Account. Thereafter, on each Payment Date, the Depositary will withdraw from the Revenue Account, subject to and in accordance with the priorities set forth in Section 4.1, for deposit into the Debt Service Reserve Account funds necessary to cause the balance in the Debt Service Reserve Account (after accounting for the amount of cash then on deposit in the Debt Service Reserve Account and any amount then available to be paid or drawn under any Debt Service Reserve Letter of Credit) to equal the Minimum Debt Service Reserve Requirement, all as set forth in a Disbursement Requisition.
(b) If no Default or Event of Default has occurred and is continuing, in lieu of depositing cash into (or in replacement of cash theretofore deposited into) the Debt Service Reserve Account (including in lieu of making the deposit of cash described in Section 3.2(a) ), the Issuer may cause to be delivered to the Depositary, and the Depositary shall accept, a single Acceptable Letter of Credit issued in an initial stated amount equal to (x) the Minimum Debt Service Reserve Requirement or (y) such lesser amount such that the aggregate amount of cash then on deposit in the Debt Service Reserve Account (after giving effect to the release of any cash in accordance with the next succeeding sentence), plus any amount then available to be paid or drawn under such Debt Service Reserve Letter of Credit, equals or exceeds the Minimum Debt Service Reserve Requirement (the “Debt Service Reserve Letter of Credit”). On the date the Debt Service Reserve Letter of Credit is delivered to the Depositary in accordance with this Section 3.2(b) , the Depositary shall withdraw cash then on deposit in the Debt Service Reserve Account in an amount equal to the face amount of such Debt Service Reserve Letter of Credit and transfer such cash directly to such account(s) or to such payee(s) as designated by the Issuer in its sole discretion. To the extent at any time thereafter the sum of (i) the amount then available to be drawn under a Debt Service Reserve Letter of Credit plus (ii) cash then on deposit in the Debt Service Reserve Account exceeds the Minimum Debt Service Reserve Requirement, as set forth in an Officer’s Certificate of the Issuer received by the Depositary, and provided that no Default or Event of Default has occurred and is continuing, the Depositary shall promptly transfer cash held in the Debt Service Reserve Account in the amount of such excess to such account(s) or to such payee(s) as specified in such Officer’s Certificate. As a condition to the delivery to the Depositary of the Debt Service Reserve Letter of Credit, the Issuer shall deliver to the Depositary an Officer’s Certificate stating that such letter of credit constitutes an Acceptable Letter of Credit in the amount required hereby, and that all conditions precedent provided for in this Section 3.2(b) to the delivery of such letter of credit have been satisfied. The Depositary shall have no duty whatsoever to confirm whether such letter of credit meets the requirements of an Acceptable Letter of Credit and may conclusively rely on the certification of the Issuer.
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3.3 Maintenance Reserve Account.
(a) On the Closing Date, the Issuer will deposit $1,807,890 into the Maintenance Reserve Account. Thereafter, on each Payment Date, the Depositary shall withdraw from the Revenue Account, subject to and in accordance with the priorities set forth in Section 4.1, for deposit in the Maintenance Reserve Account, funds necessary to cause the balance in the Maintenance Reserve Account (after accounting for the amount of cash then on deposit in the Maintenance Reserve Account and any amount then available to be paid or drawn under any Maintenance Reserve Letter of Credit) to equal the Minimum Maintenance Reserve Requirement as of such Payment Date, all as set forth in a Disbursement Requisition.
(b) If no Default or Event of Default has occurred and is continuing, in lieu of depositing cash into (or in replacement of cash theretofore deposited into) the Maintenance Reserve Account in accordance with Section 3.3(a) , the Issuer may cause to be delivered to the Depositary, and the Depositary shall accept an Acceptable Letter of Credit in a stated amount equal to (x) the Minimum Maintenance Reserve Requirement on the date of such Acceptable Letter of Credit or (y) such lesser amount such that the aggregate amount of cash then on deposit in the Maintenance Reserve Account (after giving effect to the release of any cash in accordance with the next succeeding sentence), plus any amount then available to be paid or drawn under such Maintenance Reserve Letter of Credit, equals or exceeds the Minimum Maintenance Reserve Requirement (the “Maintenance Reserve Letter of Credit”). On the date the Maintenance Reserve Letter of Credit is delivered to the Depositary in accordance with this Section 3.3(b) , the Depositary shall withdraw cash then on deposit in the Maintenance Reserve Account in an amount equal to the face amount of such Maintenance Reserve Letter of Credit and transfer such cash directly to such account(s) or payee(s) as the Issuer designates, in its sole discretion. To the extent at any time thereafter the sum of (i) the amount then available to be drawn under a Maintenance Reserve Letter of Credit, plus (ii) any cash then on deposit in the Maintenance Reserve Account exceeds the Minimum Maintenance Reserve Requirement, as set forth in an Officer’s Certificate of the Issuer received by the Depositary, and provided that no Default or Event of Default has occurred and is continuing, the Depositary shall promptly transfer cash in the amount of such excess directly to such account(s) or to such payee(s) as are specified in such Officer’s Certificate. As a condition to the delivery to the Depositary of the Maintenance Reserve Letter of Credit, the Issuer shall deliver to the Depositary an Officer’s Certificate stating that such letter of credit constitutes an Acceptable Letter of Credit in the amount required hereby, and that all conditions precedent provided for in this Section 3.3(b) to the delivery of such letter of credit have been satisfied. The Depositary shall have no duty whatsoever to confirm whether such letter of credit meets the requirements of an Acceptable Letter of Credit and may conclusively rely on the certification of the Issuer.
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3.4 Make-Up Well Reserve Account.
(a) On each Payment Date set forth in the most recent Schedule 9.12, if any, the Depositary will withdraw from the Revenue Account, in accordance with the priorities set forth in Section 4.1, for deposit in the Make-Up Well Reserve Account, the Required Make-Up Well Reserve Account Deposit for such date plus the amount of any Required Make-Up Well Reserve Account Deposits for prior Payment Dates that have not yet been deposited in the MakeUp Well Reserve Account, all as set forth in a Disbursement Requisition.
3.5 Raft River Capital Expenditure Account. On the Closing Date, the Issuer will deposit $3,000,000 into the Raft River Capital Expenditure Account.
ARTICLE 4
WITHDRAWALS FROM ACCOUNTS
4.1 Withdrawals from the Revenue Account.
The Depositary will make withdrawals from the Revenue Account in the following priority in accordance with a Disbursement Requisition of the Issuer if no Default or Event of Default has occurred and is continuing or would exist upon giving effect to the application (which shall be certified by the Issuer in each such Disbursement Requisition), described below:
(a) FIRST: on each Monthly Date, the Depositary will withdraw and transfer to accounts and payees specified in a Disbursement Requisition all fees, expenses and indemnities of the Collateral Agent, the Depositary and the holders of the Notes then due and payable or projected to be payable before the next Monthly Date, as set forth in the Disbursement Requisition;
(b) SECOND: on each Monthly Date, the Depositary shall withdraw and transfer to the account or accounts indicated in the Disbursement Requisition the amounts then payable or projected to be payable before the next Monthly Date for administration and operating costs of the Issuer, as set forth in the Disbursement Requisition;
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(c) THIRD: on each Payment Date, the Depositary will withdraw and transfer to the holders of the Notes principal, interest, fees and Make-Whole Amounts, if any, then due and payable, as set forth in the Disbursement Requisition;
(d) FOURTH: on each Payment Date, the Depositary will withdraw and transfer to the Debt Service Reserve Account the amount required to be deposited therein in accordance with Section 3.2, as set forth in the Disbursement Requisition;
(e) FIFTH: on each Payment Date, the Depositary will withdraw and transfer to the Maintenance Reserve Account the amount required to be deposited therein in accordance with Section 3.3, as set forth in the Disbursement Requisition;
(f) SIXTH: on each Payment Date, to the extent a Required Make-Up Well Reserve Deposit is scheduled, the Depositary will withdraw and transfer to the Make-Up Well Reserve Account the amount required to be deposited therein in accordance with Section 3.4, as set forth in the Disbursement Requisition;
(g) SEVENTH: on a date specified in a Disbursement Requisition that is at least 15 days but no more than 30 days following the most recent Payment Date, unless the Depositary has been notified in accordance with this Agreement that any Restricted Payment Condition has not been met on such date, the Depositary shall withdraw any remaining funds in the Revenue Account as of the most recent Payment Date and transfer such funds directly to the account(s) or payee(s) designated by the Issuer in its sole discretion, as set forth in the Disbursement Requisition.
4.2 Withdrawals from the Debt Service Reserve Account. On each Payment Date and on each other date on which Debt Service is due and owing on the Notes, the Depositary will, after application to the payment of Debt Service of all funds available therefor in the Revenue Account, at the written request of the Collateral Agent (in accordance with the directions of the Required Holders), withdraw from the Debt Service Reserve Account and/or draw on the Debt Service Reserve Letter of Credit and transfer to the holders of the Notes amounts necessary to pay Debt Service then due and owing to such holders (as set forth in such written request). If no Event of Default exists, any draw on the Debt Service Reserve Letter of Credit shall be made only to the extent the amount of any cash then available in the Debt Service Reserve Account is insufficient to satisfy the amount of Debt Service then due and owing on the Notes (after application of all funds available therefor in the Revenue Account).
4.3 Withdrawals from the Maintenance Reserve Account.
(a) The Issuer is authorized to submit Maintenance Reserve Requisitions to request transfers of funds to pay costs of repair and replacement of major items of equipment for the Projects. Within three Business Days after the Depositary receives a Maintenance Reserve Requisition, the Depositary will withdraw from the Maintenance Reserve Account and/or draw on the Maintenance Reserve Letter of Credit and transfer to the accounts or payees specified in the Maintenance Reserve Requisition the amounts specified therein, provided no such transfer shall be made if the Depositary has received written notice that a Default or Event of Default has occurred and is continuing.
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(b) Withdrawals from the Maintenance Reserve Account, other than those made in accordance with Sections 4.3(a) , shall be made by the Depositary only in accordance with the written directions of the Collateral Agent (given at the direction of the Required Holders).
4.4 Withdrawals from Make-Up Well Reserve Account.
(a) The Issuer is authorized to submit Make-Up Well Requisitions to request transfers of funds to pay costs of drilling geothermal ▇▇▇▇▇ on the Sites. Within three Business Days after the Depositary receives a Make-Up Well Requisition, the Depositary will withdraw from the Make-Up Well Reserve Account and transfer to the accounts or payees specified in the Make-Up Well Requisition the amounts specified therein, provided no transfer shall be made if the Depositary has received written notice that a Default or Event of Default has occurred and is continuing.
(b) Withdrawals from the Make-Up Well Reserve Account, other than those made in accordance with Section 4.4(a) , shall be made by the Depositary only in accordance with the written directions of the Collateral Agent (given at the direction of the Required Holders).
4.5 Withdrawals from the Raft River Capital Expenditure Account.
(a) The Issuer is authorized to submit Raft River Capital Expenditure Requisitions to request transfers of funds to pay costs of extending the RRG-2 Well. Within three Business Days after the Depositary receives a Raft River Capital Expenditure Requisition, the Depositary will withdraw from the Raft River Capital Expenditure Account and transfer to the accounts or payees specified in the Raft River Capital Expenditure Requisition the amounts specified therein, provided no such transfer shall be made if the Depositary has received written notice that a Default or Event of Default has occurred and is continuing.
(b) Withdrawals from the Raft River Capital Expenditure Account, other than those made in accordance with Sections 4.5(a) , shall be made by the Depositary only in accordance with the written directions of the Collateral Agent (given at the direction of the Required Holders). Upon final completion of the extension of the RRG-2 Well, all funds remaining in the Raft River Capital Expenditure Account shall be released to the account(s) or payee(s) designated by the Issuer in writing to the Depositary.
4.6 No Other Withdrawals. Except as specifically set forth in this Article 4, no withdrawals or transfers in respect of any of the Pledged Accounts shall be made, except upon the written direction of the Collateral Agent (given at the direction of the Required Holders).
4.7 Review of Supporting Documents and Certifications. The Depositary shall not be required to review or confirm any documents, invoices, certifications or calculations accompanying or contained in any Payment Requisition or other withdrawal request other than the schedules provided for in this Agreement, the Depositary’s sole responsibilities with respect to such documents, invoices or certifications being to ascertain that any document, invoice, certification or calculation referenced in a Payment Requisition or a schedule thereto or such other withdrawal request that has been provided with the Payment Requisition or such other withdrawal request and to deliver copies thereof to the holders upon receipt.
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4.8 Reliance on Payment Requisitions. The Depositary may conclusively rely on the accuracy of the information in each Payment Requisition delivered by the Issuer hereunder and will act in accordance therewith, unless prior to the date funds are withdrawn from any Pledged Account the Collateral Agent or any holder delivers a written notice to the Depositary (with a copy to the Issuer) that the amount requested to be withdrawn from any Pledged Account is incorrect or that the Issuer has failed to include any amount required to be withdrawn. The Depositary will conclusively rely on, and act in accordance with, any such notice by the Collateral Agent or any holder. If the Issuer fails to timely deliver any required Payment Requisition, the Collateral Agent (at the direction of the Required Holders) may direct the Depositary, in writing, to make withdrawals or apply funds in the manner contemplated by this Article 4.
4.9 Delivery of Payment Requisitions. Any Payment Requisition, direction or notice and related certificate given by the Issuer to the Depositary under this Agreement must (i) be delivered to the Depositary and the Collateral Agent (with a copy to the holders of the Notes) at least three Business Days prior to the first date specified therein for a withdrawal and transfer of funds and (ii) be in writing and state with specificity the dollar amount, source and disposition of funds (including wire transfer instructions) requested to be withdrawn from any Pledged Account. Payment Requisitions shall be delivered to the Depositary in accordance with the notice provisions in Section 8.10(a) .
4.10 Pro Rata Application. If funds remaining in the Revenue Account at any level in Section 4.1 are insufficient to pay all amounts set forth in a Disbursement Requisition at such level, funds shall be applied on a pro rata basis among payees and accounts specified in a Disbursement Requisition at such level or, solely with respect to clauses SECOND and SEVENTH of Section 4.1 and so long as there is no Default or Event of Default, as otherwise directed by the Issuer in writing.
ARTICLE 5
PERMITTED INVESTMENTS;
NOTICES OF DEFAULT; ETC.
5.1 Permitted Investments.
(a) The Depositary will invest cash held in the Pledged Accounts in Permitted Investments upon receipt of the notices specified in this Section 5.1 at the written direction of the Issuer. The Issuer shall notify the Depositary in writing from time to time of the specific Permitted Investments in which it desires cash in the Pledged Accounts to be invested. Any such notice shall certify that the requested investment constitutes a Permitted Investment. The Collateral Agent authorizes the Issuer to submit such notices (which may be standing instructions of the Issuer) and directs the Depositary to invest cash in the Pledged Accounts in accordance with such notices.
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(b) The Depositary is authorized and directed to sell or liquidate all or any of the Permitted Investments when the proceeds thereof are required for transfer of funds pursuant to the terms of this Agreement. All earnings and losses on any investments shall be credited or debited, as applicable, to the Pledged Account from which such investment was made. Any income tax payable on account of income or gain on Permitted Investments will be for the account of the Issuer.
(c) The Depositary shall have no obligation to invest or reinvest the funds if deposited with the Depositary after 11:00 a.m. (New York City time) on such day of deposit. The Depositary shall have no responsibility for any investment losses resulting from the investment, reinvestment or liquidation of the funds. If a selection is not made and a written direction not given to the Depositary, the funds shall remain uninvested until a direction is received from the Issuer. It is agreed and understood that the entity serving as Depositary or its Affiliates may earn fees associated with the investments outlined above in accordance with the terms of such investments. In no event shall the Depositary be deemed an investment manager or adviser in respect of any selection of investments hereunder. It is understood and agreed that the Depositary or its affiliates are permitted to receive additional compensation that could be deemed to be in the Depositary’s economic self-interest for (i) serving as investment adviser, administrator, shareholder servicing agent, custodian or sub custodian with respect to certain of the investments, (ii) using affiliates to effect transactions in certain investments and (iii) effecting transactions in investments.
5.2 Notice of Default. The Depositary shall rely conclusively on any written notice it receives from the Collateral Agent, the Issuer or any holder of a Note stating that a Default or an Event of Default exists. The Depositary will not be deemed to have notice or knowledge of a Default or an Event of Default unless and until it receives written notice from the Collateral Agent, the Issuer, or a holder of a Note. If the Depositary has received written notice that a Default or Event of Default exists, the Depositary shall be deemed to have received written notice from the Collateral Agent (given at the direction of the Required Holders) that the Restricted Payment Conditions are not met. The Depositary will conclusively rely on a notice from the Collateral Agent or a holder of a Note, notwithstanding any notice, direction, Payment Requisition or certificate to the contrary received from the Issuer.
5.3 Event of Default. Notwithstanding anything in this Agreement to the contrary, if the Depositary has received notice from the Issuer, the Collateral Agent or any holder of a Note that a Default or Event of Default exists and until the Depositary receives notice from (x) with respect to a Default or Event of Default with respect to any payments owed to a holder, such holder, or (y) with respect to any other Default or Event of Default, the Collateral Agent (acting at the direction of the Required Holders), that such Default or Event of Default has ceased to exist, (a) the Depositary will hold and apply the balances in the Pledged Accounts in the manner directed by the Collateral Agent (in accordance with directions of the Required Holders), and (b) except as provided in clause (a), the Required Holders (acting through the Collateral Agent in accordance with the Collateral Agency Agreement) will be entitled to give instructions as to the disposition or investment of the Pledged Accounts and the other Account Collateral, without the consent of the Issuer or any other Person.
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5.4 Account Balance Statements. The Depositary will, on a monthly basis and at such other times as the Issuer or the Collateral Agent may request, provide to the Issuer, the Collateral Agent and the holders of the Notes upon request account balance statements in respect of the Pledged Accounts. The requirements of this Section 5.4 shall be performed by the Depositary by granting the Issuer, the Collateral Agent and the holders on-line read only access to the Pledged Accounts.
ARTICLE 6
EXPENSES; INDEMNIFICATION; FEES
6.1 Indemnification. The Issuer agrees to indemnify and hold harmless the Depositary, its officers, employees, agents and their respective Affiliates from and against any and all claims, liabilities, obligations, losses, damages, penalties, judgments, costs, expenses and disbursements of any kind or nature whatsoever (including documented costs and expenses of its counsel) that may be imposed on, incurred by, or asserted against the Depositary, its Affiliates, employees, agents or their respective Affiliates by any Person in any way relating to or arising out of (a) this Agreement and the transactions hereunder (including, without limitation, enforcement of this Agreement) or (b) any action taken or omitted by the Depositary in connection with this Agreement and the transaction hereunder; provided, however, that the Issuer will not be liable to the Depositary, for any portion of such claims, liabilities, obligations, losses, damages, penalties, judgments, costs, expenses or disbursements resulting from the Depositary’s, gross negligence or willful misconduct as finally determined by a court of competent jurisdiction. Notwithstanding anything contained to the contrary herein, under no circumstances shall the Depositary be liable for special, indirect, consequential or punitive damages hereunder. In addition, the indemnities from the Issuer set forth in Section 15.2 of the Note Agreement and the exceptions to the requirement of the Issuer to indemnify the parties as set forth therein shall cover the administration of this Agreement by the Depositary as if they were fully set forth herein.
6.2 Fees. The Issuer agrees to pay to the Depositary its expenses (including reasonable counsel fees and expenses) and the fees separately agreed to by the Issuer and the Depositary.
6.3 Survival. The obligations of the Issuer to the Depositary under this Article 6, Section 7.2, Section 8.11 or contained in any separate agreement referred to in this Article 6 shall survive the termination of this Agreement and the resignation or removal of the Depositary.
ARTICLE 7
NO SET-OFF; SUCCESSOR DEPOSITARY
7.1 Waiver. The Depositary agrees not to exercise any right of recoupment or set-off or to assert any security interest or other Lien that the Depositary may have against or in any of the Pledged Accounts on account of any credit extended by the Depositary to the Issuer or any other obligation owed to the Depositary by the Issuer or any other Person, except a security interest or other Lien granted to the Depositary under the Financing Documents in respect of amounts owing to the Depositary thereunder.
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7.2 Successor Depositary. Subject to the appointment and acceptance of a successor Depositary as provided below, the Depositary may resign at any time by giving at least 30 days’ prior written notice to the Issuer, the Collateral Agent and the holders of the Notes, or may be removed at any time upon 30 days’ prior written notice by the Required Holders. Upon any resignation or removal, the Required Holders will have the right to appoint a successor Depositary. If no successor Depositary has been appointed and has accepted its appointment within 30 days after notice of the resignation or removal of the Depositary, the Depositary may at the expense of the Issuer petition a court of competent jurisdiction for the appointment of a successor Depositary, which will be a commercial bank organized under the laws of the United States or of any state thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of its appointment as Depositary, the successor Depositary will succeed to and be vested with all the rights, powers, privileges and duties of the Depositary, and the Depositary will be discharged from its duties and obligations under this Agreement. After a Depositary’s resignation or removal, the provisions of Article 6 will inure to its benefit as to any actions taken or omitted to be taken by it while it was the Depositary. Any corporation into which the Depositary may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Depositary shall be a party, or any corporation succeeding to all or substantially all the corporate trust or agency business of the Depositary, shall be the successor of the Depositary hereunder; provided that such corporation shall be otherwise eligible under this Article 7 to act as a successor Depositary, without the execution or filing of any paper or any further act on the part of any of the parties hereto.
ARTICLE 8
MISCELLANEOUS
8.1 Further Assurances. At any time as necessary and from time to time upon the written request of the Depositary, the Collateral Agent or a holder, the Issuer will execute and deliver such further documents and instruments and do such other acts as necessary or as the Depositary, the Collateral Agent or a holder may reasonably request in order to create, perfect, maintain and preserve first-priority Liens on the Collateral in favor of the Collateral Agent, for the benefit of the Secured Parties, and otherwise to carry out the purposes of this Agreement. The Issuer authorizes the Collateral Agent, in its own name, at any time and from time to time, to give notice to any Person of the assignment of the Collateral to the Collateral Agent, for the benefit of the Secured Parties, and of the Collateral Agent’s Lien and security interest in the Collateral. The Issuer further authorizes the Collateral Agent, at any time and from time to time as necessary, to file in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that describe the Collateral and contain other information required by the Uniform Commercial Code for the sufficiency or filing office acceptance of any financing statement or amendment. The Issuer agrees to furnish any such information to the Collateral Agent upon request. Nothing herein shall require the Depositary or the Collateral Agent to file any financing statement, continuation statement or amendment thereto in any public office at any time or times or to otherwise take any action to perfect or maintain the perfection of the Lien on the Collateral in favor of the Collateral Agent or to give notice of any such Lien to any third party, all such responsibilities being responsibilities of the Issuer. Neither the Depositary nor the Collateral Agent, nor any of their respective officers, directors, employees, attorneys or agents, shall be responsible for the existence, genuineness or value of any collateral, for the legality, enforceability, effectiveness or sufficiency of the any security arrangements with respect thereto, for the creation, perfection, priority, sufficiency or protection of any lien.
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8.2 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Issuer may not assign or otherwise transfer any of its rights under this Agreement. Any holder of Notes will have the right to transfer, assign, pledge and grant participations in their rights and interests under this Agreement in accordance with the terms of the Note Agreement. The Depositary may only assign or otherwise transfer its rights and obligations hereunder to a successor in accordance with Section 7.2. The Collateral Agent may only assign or otherwise transfer its rights and obligation hereunder to a successor in accordance with Section 2.7 of the Collateral Agency Agreement.
8.3 Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision.
8.4 Construction, etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.
8.5 Counterparts. This Agreement may be executed in one or more duplicate counterparts and when signed by all of the parties shall constitute a single binding agreement. A facsimile or electronic transmission of the signature page to this Agreement by any party hereto shall be effective as the signature page of such party and shall be deemed to constitute an original signature of such party to this Agreement and shall be admissible into evidence for all purposes.
8.6 Governing Law. THIS AGREEMENT, AND ANY INSTRUMENT OR AGREEMENT REQUIRED HEREUNDER (TO THE EXTENT NOT EXPRESSLY PROVIDED FOR THEREIN), SHALL BE GOVERNED BY, AND CONSTRUED UNDER, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
8.7 Consent to Jurisdiction. The parties agree that any legal action or proceeding by or against the Issuer or with respect to or arising out of this Agreement or any other Financing Document may be brought in or removed to the courts of the State of New York, in and for the County of New York, or of the United States of America for the Southern District of New York. By execution and delivery of this Agreement, each party accepts, for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each of the parties irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such party at its address for notices as specified herein. Each of the parties agrees that such service upon receipt (a) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (b) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
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8.8 Appointment of Process Agent. In addition to and notwithstanding the provisions of Section 8.7 above, the Issuer hereby irrevocably appoints CT Corporation System as its agent to receive on its behalf and its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Issuer, in care of the process agent at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and the Issuer hereby irrevocably authorizes and directs the process agent to accept such service on its behalf. Nothing in this Agreement will affect the right of any party to serve legal process in any other manner permitted by law or affect the right of any party to bring any action or proceeding in the courts of any other jurisdiction. If for any reason the process agent ceases to be available to act as process agent, the Issuer agrees to immediately appoint a replacement process agent satisfactory to the Collateral Agent (acting at the direction of the Required Holders). Each of the parties waives any right to stay or dismiss any action or proceeding under or in connection with any or all of this Agreement or any other Financing Document brought before the foregoing courts on the basis of forum non conveniens.
8.9 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
8.10 Notices. All notices and communications provided for hereunder shall be in writing and sent (a) by facsimile transmission or electronic mail with a portable document format (.pdf) attached, in each case with confirmation of receipt, or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid); provided that Payment Requisitions shall be delivered to the Depositary by the means set forth in clause (a) above. Any such notice must be sent to the address set forth under the intended recipient’s name set forth on the signature pages hereto or at such other address as such Person shall have specified to the other parties in writing. Notices will be deemed given only when received. Notwithstanding the foregoing, (x) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, or return e-mail or other written acknowledgement from such recipient confirming receipt), and (y) communications or notices transmitted by facsimile or e-mail shall be deemed to have been validly and effectively given on the day (if a Business Day and, if not, on the next following Business Day) on which it is transmitted if transmitted before 4:00 p.m., New York City time, and if transmitted after that time, on the next following Business Day.
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8.11 Rights of the Depositary. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Depositary shall not have any duties or responsibilities except those expressly set forth herein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or shall otherwise exist against the Depositary. The Depositary shall be entitled to rely conclusively upon and to act and refrain from acting in reliance upon any Payment Requisition, other written requisition, notice, request, consent, certificate, order, affidavit, letter, facsimile or other document furnished to it hereunder and reasonably believed by it to be genuine and to have been signed or sent by the purported proper party; and the Depositary shall not be liable for anything it may do or refrain from doing in connection with its duties or obligations hereunder except as shall be determined to be the result of its own gross negligence or willful misconduct. The Depositary shall not be under any duty to give the funds deposited with it hereunder any greater degree of care than it gives the property of its other customers and shall not be required to invest any funds held hereunder except as directed in accordance with this Agreement. The Depositary may consult with counsel selected by it with reasonable care and shall not be liable for anything it may do or refrain from doing in good faith in accordance with the advice of such counsel. The Depositary’s duties under this Agreement are ministerial in nature. Except as provided herein, the Depositary shall not incur any liability for (i) any act or failure to act made or omitted in good faith, or (ii) any action taken or omitted in reliance upon any Payment Requisition, instrument, order, request, direction or instruction that the Depositary shall in good faith believe to be genuine. The Depositary shall not be responsible for determining and verifying the authority of any person acting or purporting to act on behalf of any party to this Agreement. The Depositary shall have no duty to risk or advance its own funds in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. All requests, directions, certificates and notices to be furnished to the Depositary hereunder shall be in writing (which may be in the form of electronic mail, to the extent permitted under Section 8.10). The Depositary shall not be required to ascertain or inquire as to the performance by the Issuer or any other Party under any Material Project Document or Financing Document. The Depositary shall not be responsible for the provisions or requirements of the Note Agreement or any other document to which the Depositary is not a party in its capacity as such. The Depositary may execute any of the agencies or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Depositary shall not be responsible for any negligence or misconduct on the part of any agent or attorney appointed by it with due care hereunder. In no event shall the Depositary be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Depositary has been advised of the likelihood of such loss or damage and regardless of the form of action. The Depositary shall be entitled to rely on a notice from a person or persons stating that such person is a holder or that such persons constitute the Required Holders as conclusive evidence that such person or persons are in fact a holder or the Required Holders. Notwithstanding anything to the contrary contained herein, the Depositary shall not be responsible for the calculation of any amounts hereunder and shall be entitled to conclusively rely on the accuracy of any and all amounts stated in each Disbursement Requisition delivered hereunder. Notwithstanding the foregoing, the Depositary shall not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act, or from its own willful misconduct.
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8.12 Termination. Subject to the Articles and Sections of this Agreement which expressly survive, this Agreement shall terminate on the date on which all amounts owing to the holders and the other Secured Parties under the Financing Documents have been paid in full in cash (excluding contingent obligations and reimbursement obligations that by their terms expressly survive the repayment in full of the Notes and for which no claim has been asserted). In connection therewith, the Depositary shall be entitled to conclusively rely, and without any requirement to make any independent investigation, on a certificate of the Required Holders certifying that the Obligations under the Financing Documents have been paid in full in cash (other than contingent indemnification and reimbursement obligations that by their terms expressly survive the repayment in full of the Notes). Upon termination of this Agreement, the Depositary shall transfer remaining amounts, if any, together with any earnings thereon, on deposit in the Pledged Accounts to the party or parties specified in a certificate of an officer of the Issuer. The Collateral Agent, the Depositary and each other Secured Party shall execute and deliver to the Issuer, at the Issuer’s expense, upon such termination such Uniform Commercial Code termination statements and other documentation as shall be reasonably requested by the Issuer to effect the termination and release of the Liens created under this Agreement.
8.13 Incumbency Certificates. The Issuer agrees to deliver to the Depositary concurrently with the execution and delivery of this Agreement certificates as to the incumbency and specimen signatures of its officers authorized to take actions in connection with this Agreement. Promptly after any change in the officers authorized to take actions in connection with this Agreement, the Issuer will deliver to the Depositary an updated incumbency certificate containing specimen signatures. The Depositary shall be entitled to conclusively rely on any such incumbency certificate until receipt of a superseding incumbency certificate. In the absence of an initial or updated incumbency certificate, the Depositary shall be entitled to rely on any communication from the Issuer to be purported signed by any officer thereof.
8.14 Amendments. This Agreement may be amended, modified or waived only by a writing signed by all of the parties.
8.15 Force Majeure. In no event shall the Depositary or the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Depositary and the Collateral Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
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8.16 Collateral Agent Provisions. The Collateral Agent shall act hereunder only in accordance with the written directions of the Required Holders in accordance with the terms and conditions of the Collateral Agency Agreement. Any and all actions the Collateral Agent takes or omits to take hereunder shall be covered by the indemnity provisions of the Collateral Agency Agreement except as a result of the gross negligence or willful misconduct of the Collateral Agent. In the case of a conflict between this Agreement and the Collateral Agency Agreement, the Collateral Agency Agreement shall govern the rights and obligations of the Collateral Agent.
8.17 USA PATRIOT Act. The parties hereto acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties hereto agree that they will provide to the Depositary and the Collateral Agent such information as it may request, from time to time, in order for the Depositary and the Collateral Agent to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
8.18 Written Instructions. Notwithstanding anything else to the contrary herein, whenever reference is made in this Agreement to any discretionary action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Depositary or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of discretion, rights or remedies to be made (or not to be made) by the Depositary, it is understood that in all cases the Depositary shall be fully justified in failing or refusing to take any such action under this Agreement if it shall not have received written instructions in accordance with this Agreement. This provision is intended solely for the benefit of the Depositary and its successors and permitted assigns and is not intended to and will not entitle the other parties hereto to any defense, claim or counterclaim, or confer any rights or benefits on any party hereto.
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IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused this Agreement to be signed on the date first above written.
| IDAHO USG HOLDINGS, LLC | |
| By: | |
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
| Title: | President |
Address for notices:
c/o
U.S. Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Depositary and Security Agreement]
| WILMINGTON TRUST, NATIONAL | |
| ASSOCIATION, solely in its capacity as Collateral | |
| Agent and not individually | |
| By | |
| Name: | |
| Title: | |
Address for notices:
Wilmington Trust, National Association
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Administrator for Idaho USG Holdings,
LLC
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
| WILMINGTON TRUST, NATIONAL | |
| ASSOCIATION, solely in its capacity as Depositary | |
| and not individually | |
| By | |
| Name: | |
| Title: | |
Address for notices:
Wilmington Trust, National Association
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Administrator for Idaho USG Holdings,
LLC
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Depositary and Security Agreement]
SCHEDULE 1
PLEDGED ACCOUNTS
| Pledged Account | Pledged Account Number |
| Idaho USG Holdings, LLC - Collateral Agreement Account | Account No. 115684-000 |
| Idaho USG Holdings, LLC - Depositary Agreement Account | Account No. 115683-000 |
| Idaho USG Holdings, LLC Revenue Account | Account No. ▇▇▇-▇▇▇-▇▇▇ |
| Idaho USG Holdings, LLC Debt Service Reserve Account | Account No. 115683-002 |
| Idaho USG Holdings, LLC Maintenance Reserve Account | Account No. 115683-003 |
| Idaho USG Holdings, LLC Make-Up Well Reserve Account | Account No. 115683-004 |
| Idaho USG Holdings, LLC Raft River Capital Expenditure Account | Account No. 115683-005 |
Wiring Instructions for Depositary:
Wilmington Trust
Company
ABA #▇▇▇▇▇▇▇▇▇
Credit: (See above)
A/C#: (See above)
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
S-2
EXHIBIT A TO
DEPOSITARY AND SECURITY AGREEMENT
FORM OF DISBURSEMENT REQUISITION
| Depositary | [Date] |
| Wilmington Trust, National Association | |
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Wilmington, DE 19890 | |
| Attention: Administrator for Idaho USG Holdings, LLC | |
| Collateral Agent | |
| Wilmington Trust, National Association | |
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Wilmington, DE 19890 | |
| Attention: Administrator for Idaho USG Holdings, LLC |
| Re: | Disbursement Requisition - Idaho USG Holdings, LLC |
Ladies and Gentlemen:
Capitalized terms used herein and not otherwise defined have the meanings assigned to them the Depositary and Security Agreement, dated as of May 19, 2016 (as amended, restated or otherwise modified from time to time, the “Depositary Agreement”), by and among (i) Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), (ii) Wilmington Trust, National Association, in its capacity as collateral agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”), for the benefit of the Secured Parties, and (iii) Wilmington Trust, National Association, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”).
The Issuer hereby requests that the transfers from the Revenue Account described on Schedule I attached hereto, in the order set forth on Schedule I, be made by the Depositary on ___________, 20__.
The undersigned hereby certifies that immediately before and after giving effect to the payments requested hereby, no Default or Event of Default (as defined in the Note Agreement) has occurred and is continuing or will result therefrom.
The Issuer has caused this Disbursement Requisition to be executed and delivered on behalf of the Issuer by its duly authorized signatory this ______day of ____________, 20__.
| IDAHO USG HOLDINGS, LLC | |
| By: | |
| Name: | |
| Title: | |
| cc: |
Holders of the Notes |
A-1
SCHEDULE I TO DISBURSEMENT REQUISITION
Section
references are to the applicable section in the Depositary and Security
Agreement
Monthly Date: _________________
Payment Date: _________________
| Transfer
Amount |
Transfer to | Wire Instructions / Address | |
|
(1) FIRST – Section Transfers from Revenue |
|||
| Fees,
expenses, indemnities, etc. of Collateral Agent, Depositary, other Secured Parties |
[(may include Local Account)] | ||
|
(2) SECOND – Section Transfers from Revenue |
|||
| Administration
and operating costs of the Issuer |
[(may include Local Account)] | ||
|
(3) THIRD – Section 4.1(c) Transfers from Revenue |
|||
| Payment of
principal, interest, fees and Make-Whole Amounts then due and payable |
|||
|
(4) FOURTH – Section Transfers from Revenue |
|||
| Current
balance
in Debt Service Reserve Account:$__________ |
-- | ||
| Available
undrawn amount of Debt Service Reserve Letter of Credit: $_________ |
-- | ||
| Total
available: $_____________ |
-- | ||
A-2
| Transfer
Amount |
Transfer to | Wire Instructions / Address | |
| Minimum
Debt Service Reserve Requirement: $1,799,841 |
-- | ||
| Amount to
be transferred to Debt Service Reserve Account |
Debt Service Reserve Account | ||
|
(5) FIFTH – Section 4.1(e) Transfers from Revenue |
|||
| Current
balance
in Maintenance Reserve Account: $_________ |
-- | ||
| Available
undrawn amount of Maintenance Reserve Letter of Credit: $____________ |
-- | ||
| Total
available: $____________ |
-- | ||
| Minimum
Maintenance Reserve Requirement: $____________ |
-- | ||
| Amount to
be transferred to Maintenance Reserve Account |
Maintenance Reserve Account | ||
|
(6) SIXTH - Section 4.1(f) Transfers from Revenue |
|||
| Amount to
be Transferred to Make-Up Well Reserve Account |
Make-Up Well Reserve Account |
||
|
(7) SEVENTH - Section Distributions from Revenue |
|||
| Remaining
funds
on Payment Date |
|||
| Total transfers | |||
A-3
EXHIBIT B TO
DEPOSITARY AND SECURITY AGREEMENT
FORM OF MAINTENANCE RESERVE REQUISITION
| Depositary | [Date] |
| Wilmington Trust, National Association | |
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Wilmington, DE 19890 | |
| Attention: Administrator for Idaho USG Holdings, LLC | |
| Collateral Agent | |
| Wilmington Trust, National Association | |
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Wilmington, DE 19890 | |
| Attention: Administrator for Idaho USG Holdings, LLC |
| Re: | Maintenance Reserve Requisition - Idaho USG Holdings, LLC |
Ladies and Gentlemen:
Capitalized terms used herein and not otherwise defined have the meanings assigned to them in the Depositary and Security Agreement, dated as of May 19, 2016, by and among (i) Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), (ii) Wilmington Trust, National Association, in its capacity as collateral agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”), for the benefit of the Secured Parties, and (iii) Wilmington Trust, National Association, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”).
The Issuer hereby requests that the transfers from the Maintenance Reserve Account described on Schedule I attached hereto be made by the Depositary on ___________, 20__.
The undersigned hereby certifies that immediately before and after giving effect to the payments requested hereby, no Default or Event of Default (as defined in the Note Agreement) has occurred and is continuing or will result therefrom. The Issuer further certifies that amounts requested to be transferred will be applied to pay costs of major maintenance of the Projects, as indicated in Schedule I.
B-1
The Issuer has caused this Maintenance Reserve Requisition to be executed and delivered by its duly authorized signatory this ______day of ____________, 20__.
| IDAHO USG HOLDINGS, LLC | |
| By: | |
| Name: | |
| Title: | |
| cc: |
Holders of the Notes |
B-2
SCHEDULE I
MAINTENANCE RESERVE REQUISITION
| Amount | Transferee Information | Purpose |
| (including wire instructions)1 |
____________________________________
1 May
include a Local Account
B-3
EXHIBIT C TO
DEPOSITARY AND SECURITY AGREEMENT
FORM OF MAKE-UP WELL REQUISITION
| Depositary | [Date] |
| Wilmington Trust, National Association | |
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Wilmington, DE 19890 | |
| Attention: Administrator for Idaho USG Holdings, LLC | |
| Collateral Agent | |
| Wilmington Trust, National Association | |
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Wilmington, DE 19890 | |
| Attention: Administrator for Idaho USG Holdings, LLC |
| Re: | Make-Up Well Requisition - Idaho USG Holdings, LLC |
Ladies and Gentlemen:
Capitalized terms used herein and not otherwise defined have the meanings assigned to them in the Depositary and Security Agreement, dated as of May 19, 2016, by and among (i) Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), (ii) Wilmington Trust, National Association, in its capacity as collateral agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”), for the benefit of the Secured Parties, and (iii) Wilmington Trust, National Association, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”).
The Issuer hereby requests that the transfers from the Make-Up Well Reserve Account described on Schedule I attached hereto be made by the Depositary on ___________, 20__.
The undersigned hereby certifies that immediately before and after giving effect to the payments requested hereby, no Default or Event of Default (as defined in the Note Agreement) has occurred and is continuing or will result therefrom. The Issuer further certifies that amounts requested to be transferred will be applied to pay or reimburse costs of drilling geothermal ▇▇▇▇▇ on the Sites, as indicated in Schedule I.
C-1
The Issuer has caused this Make-Up Well Requisition to be executed and delivered by its duly authorized signatory this ______day of ____________, 20__.
| IDAHO USG HOLDINGS, LLC | |
| By: | |
| Name: | |
| Title: | |
| cc: |
Holders of the Notes |
C-2
SCHEDULE I
MAKE-UP WELL REQUISITION
| Amount | Transferee Information | Purpose |
| (including wire instructions)2 |
________________________________________
2 May
include accounts of Raft River Energy I, LLC
C-3
EXHIBIT D TO
DEPOSITARY AND SECURITY AGREEMENT
FORM OF RAFT RIVER CAPITAL EXPENDITURE REQUISITION
| Depositary | [Date] |
| Wilmington Trust, National Association | |
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Wilmington, DE 19890 | |
| Attention: Administrator for Idaho USG Holdings, LLC | |
| Collateral Agent | |
| Wilmington Trust, National Association | |
| ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
| Wilmington, DE 19890 | |
| Attention: Administrator for Idaho USG Holdings, LLC |
| Re: | Raft River Capital Expenditure Requisition - Idaho USG Holdings, LLC |
Ladies and Gentlemen:
Capitalized terms used herein and not otherwise defined have the meanings assigned to them in the Depositary and Security Agreement, dated as of May 19, 2016, by and among (i) Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), (ii) Wilmington Trust, National Association, in its capacity as collateral agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”), for the benefit of the Secured Parties, and (iii) Wilmington Trust, National Association, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”).
The Issuer hereby requests that the transfers from the Raft River Capital Expenditure Account described on Schedule I attached hereto be made by the Depositary on ___________, 20__.
The undersigned hereby certifies that immediately before and after giving effect to the payments requested hereby, no Default or Event of Default (as defined in the Note Agreement) has occurred and is continuing or will result therefrom. The Issuer further certifies that amounts requested to be transferred will be applied to pay costs of pay costs of extending the RRG-2 Well, as indicated in Schedule I.
C-1
The Issuer has caused this Raft River Capital Expenditure Requisition to be executed and delivered by its duly authorized signatory this ______day of ____________, 20__.
| IDAHO USG HOLDINGS, LLC | |
| By: | |
| Name: | |
| Title: | |
| cc: |
Holders of the Notes |
C-2
SCHEDULE I
RAFT RIVER CAPITAL EXPENDITURE
REQUISITION
| Amount | Transferee Information | Purpose |
| (including wire instructions)3 |
_______________________________________
3 May
include accounts of Raft River Energy I, LLC
C-3
Exhibit S-2
Form of Collateral Agency Agreement
Exhibit S-2 - 1
Execution Version
COLLATERAL AGENCY AGREEMENT
This COLLATERAL AGENCY AGREEMENT (this “Agreement”), dated as of May 19, 2016, is by and among (a) Wilmington Trust, National Association, in its capacity as collateral agent for the Secured Parties (together with its successors and assigns in such capacity, the “Collateral Agent”), (b) Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), (c) the holders of the Notes (as defined below) issued from time to time pursuant to the Note Agreement (as defined below), and (d) Wilmington Trust, National Association, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”) under the Depositary and Security Agreement, dated as of the date hereof, by and among the Issuer, the Collateral Agent and the Depositary (as amended, modified or supplemented from time to time, the “Depositary Agreement”).
RECITALS:
A. The Issuer has duly authorized the issue and sale of its 5.80% Senior Secured Notes due March 31, 2023 (as amended, modified or supplemented from time to time, the “Notes”), subject to and in accordance with the Note Purchase Agreement, dated as of the date hereof, among the Issuer and the holders of Notes party thereto from time to time (as amended, modified or supplemented from time to time, the “Note Agreement”).
B. In connection therewith, the Issuer and U.S. Geothermal Inc., an Idaho corporation, have agreed to grant to the Collateral Agent liens upon and security interests in the Collateral (as defined in the Note Agreement) to secure all of the obligations of the Issuer under the Note Agreement, the Notes and the other Financing Documents (as defined in the Note Agreement).
C. The Depositary and the holders of the Notes desire to appoint the Collateral Agent as their agent with respect to the Collateral and for all other purposes specifically provided for herein.
D. The Depositary, the holders of the Notes and the Collateral Agent desire to set forth the priorities for the application of any proceeds of the Collateral and various other matters with respect to their rights in the Collateral and otherwise.
The parties therefore agree as follows:
ARTICLE I
DEFINITIONS
1.1 General. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings assigned to them in the Note Agreement.
1.2 Certain Defined Terms. The following terms shall have the following meanings (such definitions to be equally applicable to both singular and plural forms of the terms defined):
“Enforcement” means (a) a holder makes demand for payment of or accelerates the time for payment prior to the scheduled payment date of its Note in accordance with Section 12.1(c) of the Note Agreement, (b) subject to Section 2.1 hereof, the Collateral Agent commences the enforcement of any rights or remedies under any Security Document (other than an action solely for the purpose of establishing or defending the Lien or security interest intended to be created by any Security Document upon or in any Collateral as against or from claims of third parties on or in the Collateral), to (i) setoff, freeze or otherwise appropriate any balances held by it for the account of the Issuer, or any other property at any time held by it for the credit or for the account of the Issuer, or (ii) otherwise take any action to realize upon the Collateral, or (c) the commencement by, against or with respect to the Issuer of any Insolvency Proceeding.
“holders” means the “holders” from time to time under the Note Agreement.
“Insolvency Proceeding” means, with respect to any Person, a general assignment by such Person for the benefit of its creditors or the institution by or against such Person of any proceeding seeking relief as debtor, or seeking to adjudicate such Person as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or composition of such Person or its debts, under any law relating to bankruptcy, insolvency, reorganization or relief of debtors or seeking an appointment of a receiver, trustee, custodian or any similar official for such Person or for any substantial part of its property.
“Losses” has the meaning given in Section 2.6.
ARTICLE II
APPOINTMENT OF COLLATERAL AGENT FOR THE HOLDERS AND THE DEPOSITARY
2.1 Authorization and Action. Each of the holders and the Depositary hereby appoints and authorizes the Collateral Agent to take such action as agent on its behalf and to exercise such powers under this Agreement and the Financing Documents as are expressly delegated to the Collateral Agent by the terms hereof and thereof, provided, however, that the Collateral Agent shall not take any action described in clause (b) of the definition of “Enforcement” except at the written direction of the Required Holders. The Collateral Agent is hereby authorized and directed to execute and deliver all Financing Documents dated as of the date hereof to which the Collateral Agent is a party. The Collateral Agent will have no duties, responsibilities, obligations or liabilities other than those expressly set forth in this Agreement and the Security Documents, and no additional duties, responsibilities, obligations or liabilities will be inferred from the provisions of this Agreement or the Security Documents or imposed on the Collateral Agent. As to matters requiring the exercise of discretion or of a right, including the right to give any consent or make any demand under any Security Document or to determine under any Security Document whether any matter is acceptable or satisfactory to it, or as to matters not expressly provided for by this Agreement or the other Security Documents, the Collateral Agent will not be required to exercise any discretion or right or take any action, but will be required to act or to refrain from acting (and will be fully protected in so acting or refraining from acting) and will only be required to act upon the written instructions of the Required Holders, and such instructions will be binding upon all of the Secured Parties, provided that the Collateral Agent will in no event be required to take any action which exposes the Collateral Agent to personal liability, which is contrary to this Agreement, the Security Documents or law or with respect to which the Collateral Agent does not receive adequate instructions or full indemnification (subject to the provisions of Section 2.9). In determining whether the requisite holders have directed any action or granted an approval requiring the direction or consent of the Required Holders, the Collateral Agent may request and rely on written statements from each of the holders of the outstanding principal amount of its Notes. The Collateral Agent shall not be required to take any such action or give any such approval prior to receiving such written statements. In any event, upon payment in full in cash of any Note, the holder thereof shall deliver written notice to the Collateral Agent that such Note has been paid in full in cash, and the Collateral Agent may rely thereon.
2
2.2 Delegation of Duties. The Collateral Agent may delegate any of its responsibilities or duties under the Security Documents to one or more agents and will not be liable for the negligence or misconduct of any agent selected by it with reasonable care.
2.3 Collateral Agent’s Reliance. None of the Collateral Agent, its agents or any of their respective Affiliates will be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or the Security Documents, except that each will be liable for its own gross negligence or willful misconduct as determined in a final non-appealable judgment from a court of competent jurisdiction. Without limiting the generality of the foregoing, the Collateral Agent: (a) may treat the Person in whose name any Note was issued as the owner and holder of such Note until the Collateral Agent receives written notice of the assignment or transfer of such Note signed by such Person and in form satisfactory to the Collateral Agent; (b) may at the expense of the Issuer consult with legal counsel, independent public accountants and other experts selected by it and will not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (c) will incur no liability under or in respect of this Agreement or any Security Document or otherwise by acting upon any notice, consent, waiver, certificate or other writing or instrument (including facsimiles and electronic transmissions) given in accordance with this Agreement or any Security Document and believed by it, in good faith, to be genuine and signed or sent by the proper person or persons; (d) will not be responsible for insuring the Collateral, for the payment of taxes, charges, assessments or Liens upon the Collateral; (e) will not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or under any of the Security Documents, or in the exercise of any of its rights or powers hereunder or thereunder; and (f) shall have no responsibility to file any financing statement, continuation statement or amendment thereto in any public office at any time or times or to otherwise take any action to perfect or maintain the perfection of the Lien on the Collateral in favor of the Collateral Agent or to give notice of any such Lien to any third party, all such responsibilities being responsibilities of the Issuer.
2.4 Notices; Defaults. The Collateral Agent shall rely on any written notice it receives from the Issuer or a holder stating that a Default or an Event of Default exists, and on any written notice it receives from a holder stating that a notice of a Default or Event of Default is terminated. The Collateral Agent shall not be deemed to have knowledge of any Default or Event of Default unless it has received written notice thereof.
3
2.5 Credit Decisions. Each holder and the Depositary acknowledges for the benefit of the Collateral Agent that none of the Collateral Agent nor any of its Affiliates has made any representations or warranties with respect to the Issuer or any other matter, and agrees that no review or other action by the Collateral Agent or any of its Affiliates will be deemed to constitute any such representation or warranty. Each holder acknowledges, for the benefit of the Collateral Agent and the other holders, that it has, independently and without reliance upon the Collateral Agent or any other holder, and based on the financial statements and such other documents and information as it has deemed appropriate, made its own credit analysis with respect to the Issuer.
2.6 Indemnification. The Issuer agrees to indemnify and hold harmless the Collateral Agent, the Depositary, their respective directors, officers, employees, agents and their respective Affiliates from and against any and all claims, liabilities (including environmental liabilities), obligations, losses, damages, penalties, judgments, costs, expenses (including the reasonable fees and expenses of its agents and counsel) and disbursements of any kind or nature whatsoever (“Losses”) that may be imposed on, incurred by, or asserted against the Collateral Agent, the Depositary or their respective directors, officers, employees, agents or Affiliates by any Person (including any holder) in any way relating to or arising out of (a) this Agreement or the Security Documents, the Transaction Documents and the transactions contemplated hereby and thereby (including, without limitation, any amendments, waivers or releases, and any enforcement of this Agreement or any Security Document) or (b) any action taken or omitted by the Collateral Agent or the Depositary under this Agreement or the other Transaction Documents; provided that the Issuer will not be liable to the Collateral Agent, the Depositary or their respective officers, directors, employees, agents or their respective Affiliates for any portion of such Losses determined to have been caused solely by such Person’s gross negligence or willful misconduct. In addition, the indemnities from the Issuer set forth in Section 15.2 of the Note Agreement and the exceptions to the requirement of the Issuer to indemnify the parties as set forth therein shall cover the administration of this Agreement by the Collateral Agent and the Depositary as if they were fully set forth herein.
2.7 Resignation and Removal; Successor Agent. Subject to the appointment and acceptance of a successor Collateral Agent as provided below, the Collateral Agent may resign at any time by giving at least 30 days’ prior written notice to the holders and the Issuer, or shall resign at any time at the request of the Required Holders upon 30 days’ prior written notice from the Required Holders, provided that (i) such resignation will not be effective until a successor Collateral Agent has been appointed and (ii) the Issuer shall pay all fees and expenses then due and owing to the resigning Collateral Agent prior to the effectiveness of its resignation. Upon any resignation, the Required Holders will have the right to appoint a successor Collateral Agent. If no successor ▇▇▇▇▇▇▇▇▇▇ Agent has been appointed and has accepted its appointment within 30 days after notice of the resignation of the resigning Collateral Agent, the resigning Collateral Agent may at the expense of the Issuer petition a court of competent jurisdiction for the appointment of a successor Collateral Agent, which will be a commercial bank organized under the laws of the United States or of any state thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of its appointment as Collateral Agent, the successor Collateral Agent will succeed to and be vested with all the rights, powers, privileges and duties of the resigning Collateral Agent, and the resigning Collateral Agent will be discharged from its duties and obligations under this Agreement. After any resigning Collateral Agent’s resignation, the provisions of this Article II will (x) inure to its benefit as to any actions taken or omitted to be taken by it while it was the Collateral Agent and (y) survive with respect to any indemnification claim it may have relating to this Agreement. Any corporation into which the Collateral Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Collateral Agent shall be a party, or any corporation succeeding to all or substantially all the corporate trust or agency business of the Collateral Agent, shall be the successor of the Collateral Agent hereunder; provided that such corporation shall be otherwise eligible under this Article II to act as a successor Collateral Agent, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In the event that the Collateral Agent is required to acquire title to an asset, or take any managerial action of any kind in regard thereto, in order to perform any obligation under any Financing Document, which in the Collateral Agent’s sole determination may cause the Collateral Agent to incur potential liability under any environmental law, the Collateral Agent reserves the right, instead of taking such action, to resign as the Collateral Agent in accordance with this Section 2.7.
4
2.8 Collateral Agent Expenses. The Issuer agrees to reimburse, upon demand by the Collateral Agent (and, in any event, within 10 days following receipt of an invoice), all out-of-pocket costs and expenses (including counsel fees and expenses) incurred by the Collateral Agent in connection with the performance of its duties under this Agreement or the Security Documents, any amendments, waivers or releases, realization upon or protection of the Collateral or enforcement or defense of any Lien on the Collateral.
2.9 Indemnification by the Holders. If the Issuer defaults in its obligations under Section 2.6, the holders agree to indemnify the Collateral Agent, the Depositary and their respective directors, officers, employees, agents and Affiliates (solely to the extent not reimbursed by the Issuer), ratably according to their percentages of the sum of the principal amount of all Notes issued and outstanding from time to time, from and against any and all Losses which may be imposed on, incurred by or asserted against the Collateral Agent, the Depositary or their respective directors, officers, employees, agents or Affiliates by any Person (including any holder) in any way relating to or arising out of this Agreement, any Security Document, the transactions contemplated thereunder, or any action taken or omitted by the Collateral Agent; provided that no holder will be liable to any Person for any portion of such Losses determined to have been caused solely by such Person’s gross negligence or willful misconduct.
2.10 Collateral Agent Fees. The Issuer agrees to pay to the Collateral Agent its expenses (including counsel fees and expenses) fees separately agreed to in writing (which may be amended from time to time by the Issuer and the Collateral Agent) by the Issuer by the date specified in such writing or, if not specified in such writing, on demand (and, in any event, within 10 days) upon presentation of an invoice (including upon execution of this Agreement, and the execution of any amendment, waiver or release by the Collateral Agent).
2.11 Force Majeure. In no event shall the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Collateral Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
5
2.12 Survival. The obligations of the Issuer and the holders under this Article II shall survive the termination of this Agreement (including without limitation, any termination under any bankruptcy law) and the resignation or removal of the Collateral Agent or the Depositary.
2.13 USA PATRIOT Act. The parties hereto acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Collateral Agent and the Depositary such information as it may request, from time to time, in order for the Collateral Agent and the Depositary to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
2.14 Special, Consequential and Indirect Damages. In no event shall the Collateral Agent be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether such Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.
ARTICLE III
CERTAIN NOTICES
3.1 Notice of Default or Enforcement. Each holder agrees to use its reasonable efforts to give to the others and the Collateral Agent, substantially concurrently with the sending of such notice to the Issuer, (a) copies of any notice of the occurrence or existence of a Default or Event of Default sent to the Issuer, and (b) any notice that a Default or Event of Default has been terminated, cured or waived. The Collateral Agent and each holder agrees to use its reasonable efforts to give to the others notice of an Enforcement by such party prior to commencing such Enforcement. The failure to give any of the foregoing notices shall not affect the validity of such notice of a Default or Event of Default given to the Issuer, notice of the termination, cure or waiver of any Default or Event of Default or notice of an Enforcement or create a cause of action against or cause a forfeiture of any rights of the party failing to give such notice or create any claim or right on behalf of any third party. Following receipt of any notice that an Event of Default has occurred, the Collateral Agent, subject to Section 2.1, shall await direction from the Required Holders and will act, or decline to act, as directed by the Required Holders, in the exercise and enforcement of the Collateral Agent’s interests, rights, powers and remedies in respect of the Collateral or under the Security Documents or applicable law and, following the initiation of such exercise of remedies, the Collateral Agent, subject to Section 2.1, will act, or decline to act, with respect to the manner of such exercise of remedies as directed by the Required Holders.
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ARTICLE IV
PROCEEDS OF COLLATERAL
4.1 Proceeds. Upon receipt by the Collateral Agent of written notice of the occurrence of an Event of Default and the direction of the Required Holders to pay and distribute funds as set forth in this Section 4.1, all proceeds of the Collateral held or received by the Collateral Agent, the Depositary or any of the holders and, except as provided in Section 4.2, any other payments received, directly or indirectly, by the Collateral Agent, the Depositary or any of the holders on or with respect to any Obligations (including, without limitation, any payment in an Insolvency Proceeding and the proceeds from any sale of any Obligations, or any interest therein to the Issuer or any Affiliate of the Issuer) shall be delivered to the Collateral Agent and distributed as follows:
(a) first: to the (i) Collateral Agent in the amount of any sums owed to it under or pursuant to the Financing Documents, and (ii) Depositary in the amount of any sums owed to it under the Depositary Agreement, ratably in accordance with the respective amounts thereof; and
(b) second: to pay any fees, costs, charges, expenses and any other amounts, and all principal, interest or Make-Whole Amount in respect of the Notes due and payable to the holders of the Notes, ratably in accordance with the amounts owing to each holder in respect of the Notes held by such holder as a percentage of the total amounts owing to all holders in respect of all Notes.
Unless otherwise notified in writing by a holder of Notes (as applicable), payments to such holder shall be paid in accordance with the payment instructions set forth on Schedule A to the Note Agreement.
4.2 Remaining Proceeds. After all Obligations have been paid in full in cash (the payment in full in cash of such Obligations, to the extent relating to amounts due to the holders, to be evidenced to the Collateral Agent by written certification from the holders), the balance of the proceeds of the Collateral, if any, shall be paid to the Issuer or as otherwise required by law.
ARTICLE V
ACTIONS RELATED TO COLLATERAL
5.1 Recourse of Holders; Other Collateral. Each of the holders acknowledges and agrees that (a) it shall only have recourse to the Collateral through the Collateral Agent and that it shall have no independent recourse to the Collateral, and (b) the Collateral Agent shall have no obligation to take any action, or refrain from taking any action, except upon instructions given in accordance with this Agreement. Nothing contained herein shall restrict a holder’s rights to pursue remedies, by proceedings in law and equity, to enforce the performance of and provisions of the Financing Documents in accordance with the terms thereof to the extent that such remedies do not relate to the Collateral or interfere with the Collateral Agent’s right to take action hereunder or under the Security Documents.
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ARTICLE VI
DUTIES OF COLLATERAL AGENT
6.1 Actions Under the Security Documents.
(a) The Collateral Agent shall not amend or waive any provisions of any Security Document or release any Lien or any pledgor or guarantor, except in each case at the written direction of the Required Holders pursuant to such consents as may have been required under Section 17.1 of the Note Agreement or as otherwise expressly provided in the Security Documents.
(b) At any time when a notice of an Event of Default has been delivered to the Collateral Agent by a holder or the Issuer, the Collateral Agent shall exercise or refrain from exercising all rights, powers and remedies as shall be available to it under the Security Documents in accordance with any written instructions received from the Required Holders, subject to Section 2.1. Absent such written instructions (a) at a time when a notice of an Event of Default has been delivered to the Collateral Agent and has not been terminated by a written notice delivered to the Collateral Agent by the Required Holders or a holder, or (b) in the case of an emergency in order to protect any of the Collateral, the Collateral Agent may take, but shall have no obligation to take, any and all actions under the Security Documents or otherwise (other than Enforcement actions) as it shall deem to be in the best interests of the Depositary and the holders.
6.2 No Impairment. Nothing contained in this Agreement shall (a) prevent any holder from imposing a default rate of interest in accordance with its Note or any other Financing Document or prevent a holder from raising any defenses in any action in which it has been made a party defendant or has been joined as a third party, except that the Collateral Agent may direct and control any defense directly relating to the Collateral or any one or more of the Security Documents in accordance with Section 6.1, or (b) affect or impair the right any holder may have under the Financing Documents to accelerate the Obligations.
ARTICLE VII
ACCOUNTING
The Collateral Agent, the Depositary and each of the holders agrees to render a written accounting to the others of the amounts of its outstanding Obligations, receipts of payments from the Issuer or from the Collateral Agent and other items relevant to the provisions of this Agreement upon the reasonable request from one of the others, as soon as reasonably practicable after such request.
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ARTICLE VIII
NOTICES
All notices and communications provided for hereunder shall be in writing and sent (i) by facsimile transmission if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (ii) by registered or certified mail with return receipt requested (postage prepaid), (iii) by a recognized overnight delivery service (with charges prepaid) or (iv) by electronic mail with a portable document format (.pdf) attachment, with confirmation of receipt and (a) if to a holder, addressed to it at the address specified for such communications in Section 18 of the Note Agreement, or at such other address as a holder shall have specified to the Collateral Agent, in writing, (b) if to the Collateral Agent or the Depositary addressed to it in such capacity at Wilmington Trust, National Association, 11▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Administrator for Idaho USG Holdings, LLC, Facsimile: ▇▇▇-▇▇▇-▇▇▇▇, Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ or at such other address as the Collateral Agent or the Depositary shall have specified to each holder and the Issuer, and (c) if to the Issuer, addressed to it at c/o U.S. Geothermal Inc., 39▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Facsimile: (▇▇▇)-▇▇▇-▇▇▇▇, E-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, or at such other address as the Issuer shall have specified to each holder, the Depositary and the Collateral Agent in writing. Notwithstanding the foregoing, (x) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, or return e-mail or other written acknowledgement from such recipient confirming receipt), and (y) communications or notices transmitted by facsimile or e-mail shall be deemed to have been validly and effectively given on the day (if a Business Day and, if not, on the next following Business Day) on which it is transmitted if transmitted before 4:00 p.m., New York City time, and if transmitted after that time, on the next following Business Day.
ARTICLE IX
CONTESTING LIENS OR SECURITY INTERESTS; NO PARTITIONING OR
MARSHALLING OF COLLATERAL; CONTESTING OBLIGATIONS
9.1 No Contest of Liens. None of the Collateral Agent, the Depositary nor any holder shall contest the validity, perfection, priority or enforceability of or seek to avoid, have declared fraudulent or have put aside any lien or security interest granted to the Collateral Agent pursuant to this Agreement, the Note Agreement or any other Financing Document, and each party hereby agrees to cooperate in the defense of any action contesting the validity, perfection, priority or enforceability of such liens or security interests.
9.2 No Partition. Notwithstanding anything to the contrary in this Agreement or in any Security Document, no holder or the Depositary shall have the right to have any of the Collateral, or any security interest or other property being held as security for all or any part of the Obligations by the Collateral Agent, partitioned, or to file a complaint or institute any proceeding at law or in equity to have any of the Collateral or any such security interest or other property partitioned, and each holder and the Depositary hereby waives any such right.
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9.3 No Contest of Obligations. None of the Collateral Agent, the Depositary nor any holder shall contest the validity or enforceability of or seek to avoid, have declared fraudulent or have set aside any Obligations. Subject to Section 2.1, in the event any of the Obligations is invalidated, avoided, declared fraudulent or set aside for the benefit of the Issuer, the Collateral Agent, the Depositary and the holders agree that such Obligations shall nevertheless be considered to be outstanding for all purposes of this Agreement.
ARTICLE X
NO ADDITIONAL RIGHTS FOR THE ISSUER HEREUNDER
The Issuer agrees that if the Collateral Agent, the Depositary or any holder violates the terms of this Agreement, it shall not use such violation as a defense to any enforcement by any such party nor assert such violation as a counterclaim or basis for setoff or recoupment against any such party.
ARTICLE XI
INSOLVENCY PROCEEDINGS
This Agreement shall survive the commencement of any Insolvency Proceeding. In the event of any Insolvency Proceeding relative to the Issuer or any other Issuer Party, the Collateral Agent shall be entitled and empowered in any such Insolvency Proceeding, at the request of the Required Holders, to (a) file and prove a claim for the whole amount of the principal, interest, fees and Make-Whole Amounts owing and unpaid in respect of the Notes and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Secured Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Secured Parties and their respective agents and counsel) allowed in such Insolvency Proceeding, in each case to the extent that any such Secured Party fails to do so prior to 10 Business Days’ before the expiration of the time to file any such proof of claim or other documents, and (b) collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same in accordance with this Agreement.
Nothing contained herein shall limit or restrict the independent right of any holder of the Notes to initiate any Insolvency Proceeding in its individual capacity and to appear or be heard on any matter before the bankruptcy or other applicable court in any such Insolvency Proceeding, including, without limitation, with respect to any question concerning the post-petition usage of Collateral and post-petition financing arrangements. The Collateral Agent is not authorized in any such proceeding to enter into any agreement for, or give any authorization or consent with respect to, the post-petition usage of Collateral, unless such agreement, authorization or consent has been approved in writing by the Required Holders. Nothing contained herein shall be deemed to authorize the Collateral Agent to authorize or consent to or accept or adopt on behalf of any Secured Party any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Secured Party or to authorize the Collateral Agent to vote in respect of the claim of any Secured Party in any such proceeding.
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ARTICLE XII
TURNOVER OF COLLATERAL
If any holder or the Depositary acquires custody, control or possession of any Collateral (except pursuant to the Depositary Agreement) or any proceeds thereof by set-off or any other means other than pursuant to the terms of this Agreement, such holder and/or the Depositary, as applicable, shall promptly cause such Collateral or the proceeds thereof to be delivered to or put in the custody, possession or control of the Collateral Agent for disposition and distribution in accordance with the provisions of this Agreement. Until such time as any such holder and/or the Depositary, as applicable, shall have complied with the provisions of the immediately preceding sentence of this Article XII, such holder and/or the Depositary, as applicable, shall be deemed to hold such Collateral and the proceeds thereof in trust for the Collateral Agent.
ARTICLE XIII
AMENDMENT
This Agreement and the provisions hereof may be amended, modified or waived only by a writing signed by all of the parties hereto.
ARTICLE XIV
SUCCESSORS AND ASSIGNS
The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and the successors and assigns of the holders who execute and deliver a Joinder Agreement in substantially the form attached as Exhibit A hereto. The Issuer may not assign or otherwise transfer any of its rights under this Agreement. Any holder of Notes will have the right to transfer, assign, pledge and grant participations in its rights and interests under this Agreement in accordance with the terms of the Note Agreement. The Collateral Agent may only assign or otherwise transfer and assign its rights and interests under this Agreement to a successor in accordance with Section 2.7 hereof. The Depositary may only assign or otherwise transfer and assign its rights and interests under this Agreement to a successor in accordance with Section 7.2 of the Depositary Agreement.
ARTICLE XV
SEVERABILITY
In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision.
ARTICLE XVI
CONSTRUCTION, ETC.
Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. The rules of interpretation set forth in Schedule B of the Note Agreement shall apply to this Agreement.
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ARTICLE XVII
COUNTERPARTS; SIGNATURES
This Agreement may be executed in one or more duplicate counterparts and when signed by all of the parties shall constitute a single binding agreement. A facsimile or electronic transmission of the signature of any party on any counterpart shall be effective as the signature of the party executing such counterpart and shall be deemed to constitute an original signature of such party to this Agreement and shall be admissible into evidence for all purposes.
ARTICLE XVIII
GOVERNING LAW
THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY OF REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
ARTICLE XIX
CONSENT TO JURISDICTION; PROCESS AGENT; WAIVER OF JURY TRIAL
19.1 Consent to Jurisdiction. The parties agree that any legal action or proceeding arising out of this Agreement or any other Financing Document may be brought in or removed to the courts of the State of New York, in and for the County of New York, or of the United States of America for the Southern District of New York, in each case, in the Borough of Manhattan. By execution and delivery of this Agreement, each party accepts, for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Issuer agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested to such party at its address for notices as specified herein. Each of the parties agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices under this Section 19.1 shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
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19.2 Appointment of Process Agent. In addition to and notwithstanding the provisions of Section 19.1 above, the Issuer hereby irrevocably appoints CT Corporation System as its agent to receive on its behalf and its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Issuer, in care of the process agent at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ and the Issuer hereby irrevocably authorizes and directs the process agent to accept such service on its behalf. Nothing in this Agreement will affect the right of any party hereto to serve legal process in any other manner permitted by law or affect the right of any party hereto to bring any action or proceeding in the courts of any other jurisdiction. If for any reason the process agent ceases to be available to act as process agent, the Issuer agrees to immediately appoint a replacement process agent satisfactory to the Collateral Agent. Each of the parties waives any right to stay or dismiss any action or proceeding under or in connection with any or all of this Agreement or any other Financing Document brought before the foregoing courts on the basis of forum non conveniens.
19.3 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
ARTICLE XX
TERMINATION
The provisions of this Agreement and the Security Documents shall terminate on the date on which all of the Obligations owing to the holders under the Notes and the other Secured Parties under the Financing Documents have been paid in full in cash (excluding contingent obligations and reimbursement obligations that by their terms expressly survive the repayment in full of the Notes and for which no claim has been asserted). Upon receipt of written notice from each of the holders that the Obligations under the Financing Documents have been paid in full in cash (excluding contingent obligations and reimbursement obligations that by their terms expressly survive the repayment in full of the Notes), the Collateral Agent is ▇▇▇▇▇▇ directed to execute the documents provided to it by the Issuer to release the Collateral. Any liability or obligation hereunder arising prior to the termination of this Agreement shall survive such termination (including without limitation, any termination under any bankruptcy law). Any indemnity of any Person relating to events occurring prior to the termination of such documents shall survive termination of this Agreement.
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ARTICLE XXI
LIMITATION RELATIVE TO OTHER AGREEMENTS
Nothing contained in this Agreement is intended to impair as between the holders, on the one hand, and the Issuer, on the other hand, the rights of the holders and the obligations of the Issuer under the Note Agreement and the other Financing Documents. To the extent there is any discrepancy between provisions of this Agreement and any other Financing Document to which the Collateral Agent is a party, the terms of this Agreement shall govern.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused this Agreement to be signed on the date first above written.
| Issuer: | ||
| IDAHO USG HOLDINGS, LLC | ||
| By: | ||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: | President | |
[Signature Page to Collateral Agency Agreement]
| Purchasers: | |||
| THE PRUDENTIAL INSURANCE | |||
| COMPANY OF AMERICA | |||
| By: | |||
| Vice President | |||
| PRUDENTIAL ANNUITIES LIFE | |||
| ASSURANCE CORPORATION | |||
| By: | PGIM, Inc., as investment manager | ||
| By: | |||
| Vice President | |||
[Signature Page to Collateral Agency Agreement]
Collateral Agent:
WILMINGTON TRUST, NATIONAL
ASSOCIATION, not in its
individual capacity but solely in its
capacity as the
Collateral Agent
| By: | ||
| Name: | ||
| Title: |
Depositary:
WILMINGTON TRUST, NATIONAL
ASSOCIATION, not in its individual capacity but
solely in its
capacity as the Depositary
| By: | ||
| Name: | ||
| Title: |
[Signature Page to Collateral Agency Agreement]
Exhibit A
FORM OF JOINDER AGREEMENT
Reference is made to the Collateral Agency Agreement (the “Collateral Agency Agreement”), dated as of May 19, 2016, by and among Wilmington Trust, National Association, in its capacity as collateral agent for the Secured Parties and as depositary, Idaho USG Holdings, LLC, a Delaware limited liability company, and the holders of the Notes signatory thereto from time to time. All capitalized terms used but not defined herein have the respective meanings ascribed thereto in the Collateral Agency Agreement. This agreement is a Joinder Agreement referred to in Article XIV of the Collateral Agency Agreement.
The undersigned hereby agrees that it is a party to the Collateral Agency Agreement and is therefore bound by, and subject to, the terms of the Collateral Agency Agreement, and that it is a “holder” under, and as defined, therein.
The undersigned certifies that on or about the date hereof it is the holder of the following Notes:
[describe Notes]
The address for notices and wiring instructions for all payments to the undersigned pursuant to the Collateral Agency Agreement and all other Security Documents is as follows:
[Address and wiring instructions]
Very truly yours,
[NAME OF ▇▇▇▇▇▇ OF NOTES]
| By | ||
| Name: | ||
| Title: |
Exhibit S-3
Form of USG Idaho Pledge Agreement
Exhibit S-3 - 1
Execution Version
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of May 19, 2016, is by and among U.S. Geothermal Inc., an Idaho corporation (the “Pledgor”), and Wilmington Trust, National Association, in its capacity as collateral agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”), for the benefit of itself, the holders from time to time of the Notes (as defined below) and Wilmington Trust, National Association, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”) under the Depositary and Security Agreement, dated as of the date hereof, among the Issuer (as defined below), the Collateral Agent and the Depositary (as amended, modified or supplemented from time to time, the “Depositary Agreement”) (the holders of the Notes from time to time, the Depositary and the Collateral Agent are referred to herein collectively as the “Secured Parties”), and acknowledged and consented to by Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”).
RECITALS:
The Issuer has authorized the issue and sale of its 5.80% Senior Secured Notes due March 31, 2023 (as amended, modified or supplemented from time to time, the “Notes”), subject to and in accordance with the Note Purchase Agreement, dated as of the date hereof, among the Issuer and the holders of Notes party thereto from time to time (as amended, modified or supplemented from time to time, the “Note Agreement”).
The Pledgor owns 100% of the outstanding limited liability company interests of the Issuer. The Pledgor will benefit from the issuance of the Notes. It is a condition precedent to the purchase of the Notes pursuant to the Note Agreement that the Pledgor pledge and grant the security interests described in this Agreement, and the Pledgor wishes to pledge and grant a security interest in favor of the Collateral Agent, for the benefit of the Secured Parties, as herein provided.
Capitalized terms used but not defined in this Agreement have the meanings assigned to them in the Note Agreement.
The Pledgor and the Collateral Agent therefore agree as follows:
ARTICLE I.
ASSIGNMENT AND PLEDGE
1.1. Grant. As collateral security for the prompt and complete payment when due of the principal, interest (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) and Make-Whole Amount on all of the Notes issued and delivered and outstanding under the Note Agreement, the payment of all other sums owing under the Note Agreement and each other Financing Document, when due (whether at stated maturity, by acceleration, because of mandatory prepayment, or otherwise) and the performance of the covenants contained in the Note Agreement and each of the other Financing Documents (in each case, including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) and of all obligations of the Pledgor under this Agreement (collectively, the “Secured Obligations”), and to induce the Purchasers to purchase the Notes, the Pledgor hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to the Collateral Agent, for the benefit of the Secured Parties, and grants to the Collateral Agent a continuing first priority Lien on and security interest in the following:
(a) the Pledgor’s right, title and interest in and to all of the limited liability company interests and all other ownership or equity interests of every class which the Pledgor holds in the Issuer, as more fully described on Annex A hereto (collectively, the “Securities”);
(b) all of the Pledgor’s present and future rights, authority, status and powers as a member of the Issuer, whether arising under the limited liability company operating agreement or other constitutive document of the Issuer, at law or otherwise, including all of the Pledgor’s rights to vote and otherwise control or participate in the management of the business and affairs of the Issuer;
(c) all additional limited liability company interests or other ownership or equity interests in the Issuer, all warrants, rights and options to acquire or subscribe for any such interests, and all securities and instruments convertible into or exchangeable for any such interests, in which the Pledgor at any time has or obtains any right, title, or interest; and
(d) all distributions, profit allocations, interest, revenues, income and proceeds of any kind, whether cash, instruments, securities or other property, received by or distributable to the Pledgor in respect of, or in exchange for, its Securities or any other Pledged Collateral and all of the Pledgor’s rights to receive the foregoing (collectively, the “Pledged Collateral”).
Notwithstanding the foregoing, the Pledged Collateral shall not include any Distributions to the Pledgor made in compliance with Section 10.10 of the Note Agreement.
1.2. Continuing Security Interest. This Agreement creates a continuing security interest in the Pledged Collateral and will remain in full force and effect until the indefeasible payment in full in cash and performance of all Secured Obligations. If, at any time for any reason (including the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Pledgor, the Issuer, any Issuer Subsidiary, any guarantor, or any other Person or the appointment of any intervenor or conservator of, or agent or similar official for the Pledgor, the Issuer, any Issuer Subsidiary, any guarantor or any other Person or any of their respective properties), any payment received by the Collateral Agent or any holder of a Note in respect of the Secured Obligations is rescinded or must otherwise be restored or returned by such Person, this Agreement will continue to be effective or will be reinstated, if necessary, as if such payment had not been made.
1.3. Delivery of Certificates and Instruments. The Pledgor shall deliver at Closing, and thereafter agrees to deliver to the Collateral Agent, immediately upon receipt thereof, all certificates and instruments evidencing or representing any of the Pledged Collateral, in each case properly endorsed in blank and in suitable form for transfer by delivery and accompanied by instruments of transfer endorsed in blank, in form and substance satisfactory to the Collateral Agent. The Collateral Agent will hold such certificates and instruments until all Secured Obligations have been paid in case and satisfied. The Pledgor will not cause or permit any of the Securities to be or become uncertificated or to constitute a security not governed by Article 8 of the Uniform Commercial Code of the State of Delaware.
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1.4. Waiver of Certain Operating Agreement Provisions. The Pledgor irrevocably waives any and all provisions of its articles of incorporation, by-laws and other constitutive documents or the limited liability company operating agreement or other constitutive document of the Issuer that (a) prohibit, restrict, condition or otherwise affect the grant hereunder of any Lien on any of the Pledged Collateral or any enforcement action which may be taken in respect of any such Lien or the transfer of the Pledged Collateral by the Collateral Agent or any of its designees or transferees, (b) would operate to limit or restrict the ability of the Collateral Agent or any of its designees or transferees from becoming a full voting member of the Issuer following an Event of Default, or (c) otherwise conflict with the terms of this Agreement. The Issuer agrees that it shall not (and the Pledgor agrees that it shall not cause or permit the Issuer to) issue any equity interests to any Person other than the holders of its equity interests on the date hereof.
1.5. Authorization to File Statements. The Pledgor authorizes the Collateral Agent to file in any Uniform Commercial Code filing office financing statements naming the Collateral Agent as the secured party and indicating the Pledged Collateral as the collateral. Notwithstanding the foregoing, nothing herein shall require the Collateral Agent to file financing statements or continuation statements, or be responsible for maintaining the security interests purported to be created as described herein and such responsibility shall be solely that of the Pledgor.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS; WAIVERS AND
AUTHORIZATIONS, ETC.
2.1. Representations and Warranties. As of the date of this Agreement, the Pledgor represents and warrants to the Collateral Agent as follows:
(a) Existence and Authority. It is a corporation duly organized, validly existing, and in good standing under the laws of the State of Idaho, is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which it is required by law to be qualified. It has all necessary rights, franchises and privileges and full corporate power and authority to execute, deliver and perform this Agreement and to act as a member of the Issuer. It has taken all necessary corporate action to execute, deliver and perform this Agreement, and this Agreement has been duly executed and delivered by it and constitutes its legally valid and binding obligation, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by general principles of equity;
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(b) No Violations or Defaults. The execution, delivery and performance of this Agreement by it do not and will not (i) violate any applicable law, (ii) violate, or result in a default under its by-laws or other constitutive document or the Issuer’s limited liability company operating agreement or other constitutive document, (iii) violate, or result in a default under, any contractual obligation to which it or the Issuer is a party, or (iv) require an Approval or any consent from any Person that has not been obtained;
(c) Membership Interests. All of the Securities have been duly and validly issued and are fully paid and non-assessable, are certificated and constitute securities governed by Article 8 of the Uniform Commercial Code of the State of Delaware; the certificate representing the Securities has been delivered, together with transfer powers in substantially the form of Annex B, endorsed in blank, to the Collateral Agent; and the Securities identified on Annex A hereto constitute all of the outstanding limited liability company interests and other ownership interests of the Issuer;
(d) No Liens. (i) It is the sole, direct, legal and beneficial owner of, and has good and valid title to, the Pledged Collateral; (ii) none of the Pledged Collateral is subject to any Lien (except the Lien of this Agreement); and (iii) no effective security agreement (other than this Agreement), financing statement (except for financing statements in favor of the Collateral Agent) or other instrument similar in effect is on file or of record in the office of any Governmental Authority with respect to any of the Pledged Collateral;
(e) Name and Address. Its name set forth in the first paragraph of this Agreement is its true, correct and complete name; its legal address and the address of its principal place of business and chief executive office, its organizational number and its EIN are all as set forth below its name on Annex C hereto; its type of organization is a corporation, its jurisdiction of incorporation is Idaho;
(f) Perfection and Priority of Liens. The pledge and grant of a security interest in, and delivery of the Pledged Collateral pursuant to this Agreement, will create a valid and perfected Lien on and in the Pledged Collateral, and the proceeds thereof, securing the payment of the Secured Obligations, subject to no prior Lien, assuming continued possession of the original certificates evidencing the Securities constituting Pledged Collateral by the Collateral Agent.
(g) No Litigation. There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Pledgor, threatened against or affecting the Pledgor in any court or before any arbitrator or before or by any Governmental Authority;
(h) Blocked Person. It is not (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person”). The Pledgor has not been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions;
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(i) Anti-Money Laundering Laws. It (i) has not been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions violations, (ii) to the Pledgor’s actual knowledge after making due inquiry, is not under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) has not been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has not had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws. The Pledgor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Pledgor is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws and U.S. Economic Sanctions.
(j) (1) The Pledgor (i) has not been charged with, or convicted of bribery or any other anti-corruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the Pledgor’s actual knowledge after making due inquiry, is not under investigation by any U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws, (iii) has not been assessed civil or criminal penalties under any Anti-Corruption Laws or (iv) has not been or is not the target of sanctions imposed by the United Nations or the European Union;
(2) To the Pledgor’s actual knowledge after making due inquiry, the Pledgor has not, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such Government Official in his or her official capacity or such commercial counterparty, (ii) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and
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(3) The Pledgor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Pledgor is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.
2.2. Affirmative Covenants. The Pledgor covenants and agrees that it will perform and observe each of the following covenants:
(a) Existence. It will preserve and maintain its existence, rights, franchises and privileges and remain in good standing in the jurisdiction of its incorporation, and qualify and remain qualified as a foreign company in good standing in each jurisdiction in which such qualification is necessary in view of its current or proposed business and operations or the ownership of its properties;
(b) Compliance with Laws, Approvals, and Obligations. It will comply with all laws and Approvals to which it or its property is subject and with its by-laws or other constitutive document and all material contractual obligations to which it is a party. It will obtain and maintain in full force and effect all Approvals necessary (i) for its current and proposed business and operations and the ownership of its properties and (ii) for the execution, delivery, performance and enforcement of this Agreement; and
(c) Defend Title. (i) It will defend the rights of the Collateral Agent and security interest of the Collateral Agent in the Pledged Collateral against the claims and demands of all other persons whomsoever; and (ii) it will have like title to and the right to pledge and grant a security interest in the Pledged Collateral hereafter pledged or in which a security interest is granted to the Collateral Agent, for the benefit of the Secured Parties, hereunder and will likewise defend the rights, pledge and security interest thereof and therein of the Collateral Agent.
2.3. Negative Covenants. The Pledgor covenants and agrees that it will perform and observe each of the following covenants:
(a) Business, Name and Address. It will not change its name, the address of its principal place of business or chief executive office, its type of organization, its jurisdiction of incorporation or its organizational identification number without giving the Collateral Agent and the holders of the Notes 30 days’ prior written notice of such change;
(b) Governing Documents. It will not permit or agree to any amendment of its by-laws or other constitutive document or the limited liability company operating agreement or other constitutive document of the Issuer, except in connection with the admission of a new member or substitution of an existing member of the Issuer in compliance with Section 2.3(d) . It will not sell, assign, lease, or otherwise dispose of (whether in one transaction or in a series of transactions), any or all of its rights, title or interest in the Pledged Collateral, except as provided in Section 2.3(d) ;
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(c) Bankruptcy. It will not take or authorize any other Person to take any action that might result in the occurrence of a Bankruptcy Event (as defined below) with respect to it or the Issuer or any Issuer Subsidiary. In addition, it will not solicit, consent to or join in any such action, nor will it consent to the appointment of a custodian, receiver, trustee or other official, or to any other relief, for itself or for the Issuer or any Issuer Subsidiary or any of its or their respective property. “Bankruptcy Event” means, with respect to any Person, (i) such Person’s insolvency, inability to pay its debts as they become due, or admission in writing of its inability to pay its debts as they become due; (ii) a general assignment by such Person for the benefit of its creditors; (iii) any action taken or initiated by it for its winding-up, dissolution or liquidation or for the appointment of a receiver, trustee, custodian or similar officer for it or for any of its assets or revenues; (iv) the commencement by such Person of any bankruptcy, insolvency, moratorium, reorganization or liquidation case, action or proceeding or any other proceeding for relief under any bankruptcy law or any other law for the relief of debtors or affecting the rights of creditors generally; (v) the commencement against such Person by any other Person of a case, action or proceeding described in clause (iii) or (iv) or similar in effect, which action or proceeding, for purposes of the first sentence of this Section 2.3(c) , shall not be dismissed or vacated within 60 days thereof; (vi) any action by which a court takes jurisdiction of its assets or revenues; or (vii) any corporate, partnership, member, management or other action taken or initiated by such Person authorizing, approving, consenting to or indicating acquiescence in any case, action or proceeding described in clause (ii), (iii), (iv), (v), or (vi);
(d) New Members. Except as set forth in this Section 2.3(d) , the Pledgor will not permit or consent to the admission of any new or substitute members in the Issuer, except, following an Event of Default and the exercise by the Collateral Agent or its designee of remedies under the Financing Documents, a new or substitute member that is the Collateral Agent or a designee of the Collateral Agent; the Pledgor will not effect or permit any sale, transfer or encumbrance of the Pledged Collateral, except, following an Event of Default, in connection with an exercise of remedies by the Secured Parties. Notwithstanding the foregoing, the Pledgor may transfer its Securities in the Issuer to a new or substitute member so long as, in each case, after giving effect to such transaction (x) an Event of Default under the Note Agreement does not occur, (y) the Lien created by this Agreement continues to be a first-priority perfected Lien in all of the Pledged Collateral (to the extent this Agreement continues after such transfer and is not replaced by a new pledge and security agreement in accordance with clause (z) hereof), and (z) the new or substitute member (including any transferee of the Pledgor’s limited liability company interests in the Issuer) executes and delivers a pledge and security agreement on substantially the same terms and conditions as this Agreement and causes to be delivered an opinion of counsel with respect to the matters set forth in clause (y) above and the enforceability of the pledge and security agreement against such new member, which opinion shall otherwise be in form and substance reasonably satisfactory to the Required Holders.
2.4. Protection of Secured Parties. The Pledgor agrees that:
(a) its liabilities and obligations under its by-laws or other constitutive document or the Issuer’s limited liability company operating agreement or other constitutive document will not be affected by this Agreement or the Lien on the Pledged Collateral created in favor of the Collateral Agent pursuant to this Agreement, or the exercise by the Collateral Agent of any of its rights under this Agreement;
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(b) no Secured Party, unless it expressly agrees in writing, will have any liabilities or obligations under the Issuer’s limited liability company operating agreement or other constitutive document as a result of this Agreement or the exercise by the Collateral Agent of its rights under this Agreement; and
(c) no Secured Party has any obligation to enforce any contractual obligation or claim with respect to the Pledged Collateral, or to take any other action with respect to the Pledged Collateral except as expressly set forth in this Agreement and the other Financing Documents.
2.5. Waiver of Subrogation. Notwithstanding any payment made by the Pledgor under this Agreement or any set-off or application by any Secured Party of any funds of the Pledgor, until all of the Secured Obligations have been indefeasibly paid in full in cash, the Pledgor will not (a) be entitled to be subrogated to any of the rights of any Secured Party against the Issuer, any Issuer Subsidiary or any guarantor or in any collateral security or guaranty or right of offset held by the Collateral Agent for the payment of any Secured Obligations; or (b) seek any reimbursement or contribution from the Issuer or any guarantor in respect of any payment made by it under this Agreement or any set-off or application of any of its funds.
2.6. Additional Waivers. The Pledgor waives diligence, presentment, demand of any kind, protests of any kind and notices of any kind, all set-offs and all counterclaims, to the extent permitted by applicable law, and all suretyship defenses to the extent otherwise applicable.
ARTICLE III.
RIGHTS AND REMEDIES
3.1. Distributions and Voting Rights.
(a) So long as no Event of Default has occurred and is continuing, the Pledgor will be entitled to exercise any and all management, voting, consent and other rights with respect to the Pledged Collateral for any purpose not inconsistent with the terms of the Note Agreement or any of the Financing Documents and to receive and retain any and all cash distributions and other payments in respect of the Pledged Collateral made in accordance with the Note Agreement and the other Financing Documents.
(b) Upon the occurrence and during the continuation of an Event of Default, all rights of the Pledgor to exercise management, voting, consent and other rights with respect to the Pledged Collateral and to receive distributions and other payments in respect of the Pledged Collateral will cease, and all such rights will immediately become vested solely in the Collateral Agent or its nominee. After the occurrence and during the continuation of an Event of Default, any distributions and other payments in respect of the Pledged Collateral received by the Pledgor will be held in trust for the Collateral Agent, and the Pledgor will keep all such amounts separate and apart from all other funds and property so as to be capable of identification as the property of the Collateral Agent and the Pledgor will deliver such amounts promptly to the Collateral Agent or its designee in the identical form received, properly endorsed or assigned when required to enable the Collateral Agent or its designee to complete collection thereof.
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3.2. Collateral Agent’s Rights Upon Default. Upon the occurrence and during the continuation of an Event of Default, the Collateral Agent, acting at the direction of the Required Holders, may, but shall not be obligated to, in its sole discretion, take any or all of the following actions, in each case at the Pledgor’s expense and without prior notice to the Pledgor except as required below or under applicable law:
(a) give notice of the Event of Default to any Person, collect distributions and other amounts constituting or payable in respect of the Pledged Collateral, and enforce all rights of the Pledgor in the Pledged Collateral;
(b) take possession of any or all of the Pledged Collateral, including through agents, wherever it may be found, and hold and manage the same;
(c) foreclose its Lien upon any or all of the Pledged Collateral;
(d) become, or cause its nominee or a transferee to become, a substitute or successor member of the Issuer;
(e) sell, lease, assign and deliver or otherwise dispose of any or all of the Pledged Collateral at public or private sale, with or without having any or all of the Pledged Collateral at the place of sale, upon terms, in such manner, at such time or times, and at such place or places as the Collateral Agent, acting at the direction of the Required Holders, may determine; and
(f) exercise any or all other rights or remedies available to the Collateral Agent, acting at the direction of the Required Holders, under applicable law, the Note Agreement and the other Financing Documents, or any other agreement between the parties.
The Collateral Agent may, to the fullest extent permitted by law, exercise the foregoing rights and remedies in such order, at such times and in such manner as the Collateral Agent, acting at the direction of the Required Holders, may, in its sole and exclusive judgment, determine from time to time.
3.3. Power of Attorney. The Pledgor irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with each full power of substitution, as the Pledgor’s true and lawful attorney-in-fact and proxy, in the Pledgor’s name or in such Collateral Agent’s name or otherwise, and at the Pledgor’s expense, to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default, without notice to or the consent of the Pledgor:
(a) take any or all of the actions described in Section 3.2 and exercise any other right or power granted to the Collateral Agent and any holder of a Note under this Agreement or any other Financing Document or by law;
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(b) transfer to, or register in the name of, the Collateral Agent or its nominee any or all of the Pledged Collateral;
(c) exercise all voting, consent, management and other rights relating to any Pledged Collateral; and
(d) do any and all things necessary and proper to carry out the purposes of this Agreement.
The Pledgor recognizes and agrees that the power of attorney granted pursuant to this Section 3.3 is coupled with an interest and is not revocable until the termination of this Agreement in accordance with its terms. The Pledgor ratifies and confirms all actions taken by the Collateral Agent or its agents pursuant to this power of attorney in accordance herewith.
3.4. Other Rights of the Collateral Agent.
(a) The Collateral Agent will have, with respect to the Pledged Collateral, in addition to the rights and remedies set forth in this Agreement: (i) all of the rights and remedies available to a secured party under applicable law, as if such rights and remedies were fully set forth in this Agreement, and (ii) all of the rights, protections and indemnities set forth in the Collateral Agency Agreement, which provisions are incorporated by reference and made a part of this Agreement.
(b) The Collateral Agent may at any time and from time to time release or relinquish any right, remedy or Lien it has with respect to a particular item of Pledged Collateral without thereby releasing, relinquishing or in any way affecting its rights, remedies or Lien with respect to any other item of Pledged Collateral.
3.5. Disposition of Collateral.
(a) Upon the written request by the Collateral Agent (acting at the direction of the Required Holders) or the Required Holders after the occurrence and during the continuation of an Event of Default, the Pledgor agrees, promptly and at its own expense, to assemble any or all of the Pledged Collateral and make it available to the Collateral Agent.
(b) The Collateral Agent will be entitled to sell the Pledged Collateral on any commercially reasonable terms, and the Pledgor agrees that a private sale or a sale on extended payment terms, or in exchange for property, stock or other consideration will not in and of itself be deemed to be commercially unreasonable. The Pledged Collateral may be sold in one lot as an entirety or in separate parcels. Any Secured Party may purchase any or all of the Pledged Collateral sold at any public sale and, to the extent permitted by applicable law, may purchase any or all of the Pledged Collateral sold at any private sale, including by a credit bid.
(c) The Collateral Agent may, at the direction of the Required Holders, restrict the prospective bidders or purchasers at any sale as to their number, nature of business, financial or business expertise, net worth or financial resources and investment intention or on the basis of any other factors that are commercially reasonable. Any sale of Pledged Collateral may be subject to the requirement that any purchase of all or any part of the Pledged Collateral constituting a security for purposes of the Securities Act or the Exchange Act must be for the purpose of investment and without any intention to make a distribution thereof.
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(d) The Pledgor expressly agrees that the Collateral Agent need not give more than 10 days’ prior written notice to it of the time and place of any public sale of Pledged Collateral or of the time after which a private sale of the Pledged Collateral may take place, and that such notice will constitute reasonable notice under all circumstances. The Collateral Agent will not be obligated to hold any sale pursuant to any such notice and may, without notice or publication, adjourn any public or private sale by announcement at the time and place fixed for such sale, and a subsequent sale may be held at the time and place designated in such announcement without further notice or publication. To the extent permitted by applicable law, the Pledgor irrevocably waives any right it may have to demand performance or other demand, advertisement, judicial hearing or notice to it or any other Person in connection with the collection, sale or other disposition of, or realization upon, any or all of the Pledged Collateral.
(e) The Collateral Agent may settle, pay or discharge any or all taxes, Liens, claims and other charges with respect to Pledged Collateral. All sums expended by the Collateral Agent pursuant to this Section 3.5(e) will constitute Secured Obligations secured by the Liens created by the Financing Documents. Neither the Collateral Agent nor any other Secured Party will have any duty to take any action authorized by this Section 3.5(e) , and no sale of Pledged Collateral will be deemed to have been commercially unreasonable by reason of the Collateral Agent’s decision not to take any such action.
3.6. No Marshaling or Right of Redemption.
(a) Except to the extent required by applicable law, neither the Collateral Agent nor any other Secured Party will be required to marshal any Pledged Collateral or any guaranties of the Secured Obligations, or to resort to any item of Pledged Collateral or any guaranty in any particular order, and the Collateral Agent’s rights with respect to the Pledged Collateral and any guaranties will be cumulative and in addition to all other rights, however existing or arising. To the extent permitted by applicable law, the Pledgor irrevocably waives, and agrees that it will not invoke or assert, any law requiring or relating to the marshaling of collateral or any other law which could reasonably be expected to cause a delay in or impede the enforcement of the Collateral Agent’s rights under this Agreement or any other Financing Document.
(b) To the extent permitted by applicable law, the Pledgor irrevocably waives, and agrees that it will not invoke or assert, any rights to equity of redemption or other rights of redemption, appraisement, valuation, stay, extension or moratorium that it may have in equity, at law, or otherwise with respect to any Pledged Collateral. The sale or other transfer pursuant to this Agreement of any right, title or interest of the Pledgor in any item of Pledged Collateral will operate to permanently divest the Pledgor and all Persons claiming under or through the Pledgor of such right, title or interest, and will be a perpetual bar, both at law and in equity, to any and all claims by the Pledgor or any such Person with respect to such item of Pledged Collateral.
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3.7. Application of Proceeds. After the occurrence and during the continuation of an Event of Default, or after the exercise of remedies by the Collateral Agent, any cash held by the Collateral Agent as Pledged Collateral and all cash proceeds received by the Collateral Agent from any realization upon Pledged Collateral may, at the direction of the Required Holders, be held by the Collateral Agent as collateral security for the payment of the Secured Obligations or applied by the Collateral Agent in accordance with the Collateral Agency Agreement.
3.8. Collateral Agent’s Duties.
(a) The grant to the Collateral Agent under this Agreement of any right or power does not impose upon the Collateral Agent any duty to exercise such right or power. The Collateral Agent will have no obligation to take any steps to preserve any claim or other right against any Person or with respect to any Pledged Collateral.
(b) To the extent permitted by applicable law, the Pledgor waives all claims against the Collateral Agent or its agents arising out of the repossession, taking, retention, storage, operation or sale of the Pledged Collateral except to the extent such actions shall be determined to amount to gross negligence or willful misconduct on the part of the Collateral Agent. To the extent permitted by applicable law, the Pledgor waives any claim it may have based on the allegation or fact that the price obtained for Pledged Collateral sold at a private sale was less than could have been obtained for the same Pledged Collateral at a public sale. All risk of loss, damage, diminution in value, or destruction of the Pledged Collateral will be borne by the Pledgor. Notwithstanding anything contained herein to the contrary, the Collateral Agent will have no responsibility to the Pledgor for any act or omission of the Collateral Agent, except to the extent such act or failure to act shall be determined to be gross negligence or willful misconduct on the part of the Collateral Agent. Notwithstanding anything herein to the contrary, in no event shall the Collateral Agent be liable for special, punitive indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.
(c) The Collateral Agent does not and will not make any express or implied representations or warranties with respect to any Pledged Collateral or other property released to the Pledgor or its successors and assigns.
(d) The Collateral Agent will be accountable only for such proceeds as the Collateral Agent actually receives as a result of the exercise of its rights under this Agreement, and delivery or other accounting of such proceeds or the Pledged Collateral by the Collateral Agent to the Pledgor or the assignee of the Secured Obligations will discharge the Collateral Agent of all liability therefor.
(e) Except as expressly set forth herein or as required under applicable law, the Collateral Agent will have no other duties or obligations under this Agreement or with respect to the Pledged Collateral.
3.9. Indemnity and Expenses. The Pledgor hereby indemnifies and holds harmless the Collateral Agent, each Secured Party, and each of their respective officers, directors, employees, agents and Affiliates (collectively, the “Indemnified Persons”) from and against any and all claims (including environmental claims), losses, and liabilities arising out of or resulting from this Agreement (including enforcement of this Agreement), except claims, losses, or liabilities determined to have been caused by the gross negligence or willful misconduct of any such Indemnified Person. Within ten (10) days after receipt of an invoice, the Pledgor shall pay to the Collateral Agent or such Secured Party the amount of any and all documented expenses, including fees and disbursements of its counsel and of any experts and agents (including attorneys’ fees and costs) which the Collateral Agent or such Secured Party may incur in connection with (a) the custody, preservation, use, or operation of, or the sale of, collection from, or other realization upon, any of the Pledged Collateral, (b) the exercise or enforcement of any of the rights of the Collateral Agent or the Secured Parties hereunder, or (c) the failure by the Pledgor to perform or observe any of the provisions hereof. This Section 3.9 shall survive the termination of this Agreement and the earlier resignation or removal of the Collateral Agent.
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ARTICLE IV.
GENERAL PROVISIONS
4.1. Further Assurances.
(a) At any time and from time to time, including upon the request of the Collateral Agent (acting at the direction of the Required Holders) or the Required Holders, the Pledgor will, at the Pledgor’s expense, execute and deliver and/or file such further documents, financing statements, continuation statements, amendments and instruments and do such other acts as are, in each case, necessary or required by applicable law in order to create, perfect, maintain and preserve first-priority Liens on the Pledged Collateral in favor of the Collateral Agent for the benefit of the Secured Parties and to facilitate any sale of or other realization upon Pledged Collateral, to make any sale of or other realization upon Pledged Collateral valid, binding and in compliance with applicable law, and to provide for the payment of the Secured Obligations in accordance with the terms of the Financing Documents and this Agreement.
(b) The Pledgor shall pay all filing, registration and recording fees or re-filing, re-registration and re-recording fees, and all expenses incident to the execution and acknowledgment of this Agreement, and any instruments of further assurance, and all federal, state, county and municipal stamp taxes and other taxes, duties, imports, assessments and charges arising out of or in connection with the execution and delivery of this Agreement, any agreement supplemental hereto and any instruments of further assurance.
(c) The Collateral Agent shall (at the direction of the Required Holders) execute and deliver all such proxies, powers of attorney, distribution and other orders and instruments as the Pledgor may reasonably require for the purpose of enabling the Pledgor to exercise the voting rights to which it is entitled and to receive the distributions to which it is entitled to receive prior to the occurrence of an Event of Default.
4.2. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Pledgor may not assign or otherwise transfer any of its rights under this Agreement. The Collateral Agent may only assign or otherwise transfer and assign its rights and interests under this Agreement to a successor in accordance with Section 2.7 of the Collateral Agency Agreement. The holders of the Notes will have the right to transfer, assign, pledge and grant participations in their rights and interests under this Agreement in accordance with the terms of the Note Agreement.
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4.3. Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision.
4.4. Construction, etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. The rules of interpretation set forth in Schedule B of the Note Agreement shall apply to this Agreement.
4.5. Counterparts. This Agreement may be executed in one or more duplicate counterparts and when signed by all of the parties shall constitute a single binding agreement. A facsimile or electronic transmission of the signature page to this Agreement by any party hereto shall be effective as the signature page of such party and shall be deemed to constitute an original signature of such party to this Agreement and shall be admissible into evidence for all purposes.
4.6. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS OR REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
4.7. Waiver of Jury Trial. EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
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4.8. Consent to Jurisdiction.
(a) The parties agree that any legal action or proceeding by or against the Pledgor or with respect to or arising out of this Agreement or any other Financing Document may be brought in or removed to the courts of the State of New York, in and for the County of New York, or of the United States of America for the Southern District of New York, in each case, in the Borough of Manhattan. By execution and delivery of this Agreement, each party accepts, for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Pledgor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested to such party at its address for notices as specified herein. Each of the parties agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices under this Section 4.8(a) shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(b) In addition to and notwithstanding the provisions of Section 4.8(a) above, the Pledgor hereby irrevocably appoints CT Corporation System as its agent to receive on its behalf and its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Pledgor, in care of the process agent at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and the Pledgor hereby irrevocably authorizes and directs the process agent to accept such service on its behalf. Nothing in this Agreement will affect the right of any party hereto to serve legal process in any other manner permitted by law or affect the right of any party hereto to bring any action or proceeding in the courts of any other jurisdiction. If for any reason the process agent ceases to be available to act as process agent, the Pledgor agrees to immediately appoint a replacement process agent satisfactory to the Collateral Agent. Each of the parties hereby waives any right to stay or dismiss any action or proceeding under or in connection with any or all of this Agreement or any other Financing Document brought before the foregoing courts on the basis of forum non conveniens.
4.9. Release of Liens. Upon the payment in cash and satisfaction in full of all Secured Obligations, the Collateral Agent will, upon the written request of the Pledgor and at the Pledgor’s expense, execute documents necessary to effect or evidence the release of the Pledged Collateral from the Lien of this Agreement and return to the Pledgor all certificates evidencing the Pledged Collateral and any transfer powers with respect to such certificates.
4.10. No Waiver by the Collateral Agent, Amendments.
(a) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the parties hereto, with the consent of the Required Holders, and then any such waiver, amendment or modification shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment or modification shall release all or substantially all of the Pledged Collateral in any transaction or series of related transactions, without the written consent of each holder.
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(b) The Collateral Agent shall not be deemed to have waived any of its rights and remedies in respect of the Secured Obligations or the Pledged Collateral unless such waiver shall be in accordance with paragraph (a) above. No delay or omission on the part of the Collateral Agent in exercising any right or remedy shall operate as a waiver of such right or remedy or any other right or remedy. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. All rights and remedies of the Collateral Agent with respect to the Secured Obligations or the Pledged Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly, alternatively, successively or concurrently at such time or at such times as the Collateral Agent deems expedient.
4.11. Overdue Amounts. Until paid, all amounts due and payable by the Pledgor under this Agreement shall be a debt secured by the Pledged Collateral and shall bear, whether before or after judgment, interest at the Default Rate.
4.12. Notice, etc. All notices and communications provided for hereunder shall be in writing and sent (a) by facsimile with confirmation of receipt, (b) by registered or certified mail with return receipt requested (postage prepaid), (c) by a recognized overnight delivery service (with charges prepaid) or (d) as a .pdf attachment to an email. Any such notice must be sent to the address set forth under the intended recipient’s name set forth on the signature pages hereto or at such other address as such Person shall have specified to the other party hereto in writing. Notices will be deemed given only when received.
4.13. Collateral Agency Agreement. The Collateral Agent shall act hereunder only in accordance with the terms and conditions of this Agreement and the Collateral Agency Agreement. Any and all actions the Collateral Agent takes or omits to take hereunder shall be covered by the indemnity provisions of the Collateral Agency Agreement which shall be deemed to be incorporated by reference herein. In the case of a conflict between this Agreement (including Section 3.8), and the Collateral Agency Agreement, the Collateral Agency Agreement shall govern the rights and obligations of the Collateral Agent.
4.14. Waiver of Suretyship Defenses. The obligations of the Pledgor shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim the Pledgor may have against the Issuer or any holder or otherwise, and shall remain in full force and effect without regard to, and (except by indefeasible payment in full in cash of all of the Secured Obligations) shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not the Pledgor shall have any knowledge or notice thereof), including, without limitation: (a) any amendment, modification of or supplement to the Notes, the Note Agreement or any other Financing Document or any assignment or transfer of any thereof or of any interest therein, or any furnishing, acceptance or release of any security for the Secured Obligations; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of the Notes or in respect of the Note Agreement or any other Financing Document; (c) any bankruptcy, insolvency, readjustment, composition, liquidation or similar proceeding with respect to the Issuer, any Issuer Subsidiary or their property; (d) any merger, amalgamation or consolidation of the Pledgor or of the Issuer into or with any other Person or any sale, lease or transfer of any or all of the assets of the Issuer to any Person; (e) any failure on the part of the Issuer for any reason to comply with or perform any of the terms of any other agreement with the Pledgor; or (f) any other circumstance which might otherwise constitute a legal or equitable discharge, suretyship defense or other defense of a guarantor (whether or not similar to the foregoing). To the extent permitted by law, the Pledgor irrevocably and unconditionally waives any defense it might have to its performance hereunder, based on any of the foregoing.
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4.15. USA PATRIOT Act. The parties hereto acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Collateral Agent such information as it may request, from time to time, in order for the Collateral Agent to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
4.16. Force Majeure. The Collateral Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of the Collateral Agent (including but not limited to any act or provision of any present or future law or regulation or Governmental Authority, any act of God or war, civil unrest, local or national disturbance or disaster, any act of terrorism, or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility); it being understood that the Collateral Agent shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused this Agreement to be signed on the date first above written.
| U.S. GEOTHERMAL INC. | ||
| By: | ||
| Name: | ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Title: | Treasurer | |
Address for notices:
c/o
U.S. Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Phone:
▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Sponsor Pledge Agreement]
| (STATE OF | ) |
| ss. | |
| (COUNTY OF | ) |
On this ______day of ____________, 2016, before me, the undersigned notary public, personally appeared ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Treasurer of U.S. Geothermal Inc., proved to me through satisfactory evidence of identification, which was ______________________, to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he signed it voluntarily for its stated purpose as Treasurer of U.S. Geothermal Inc.
__________________________________
Official signature and seal
of notary
My commission expires:
[Notary Page to Sponsor Pledge Agreement]
WILMINGTON TRUST, NATIONAL
ASSOCIATION, not in its individual capacity but
solely in its
capacity as the Collateral Agent
| By: | ||
| Name: | ||
| Title: |
Address:
Wilmington Trust,
National Association
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Administrator for Idaho USG Holdings, LLC
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Sponsor Pledge Agreement]
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the foregoing Pledge and Security Agreement (the “Agreement”) and agrees to be bound thereby and to comply with the terms thereof, any provisions of its limited liability company operating agreement or other constitutive document to the contrary notwithstanding. The undersigned further agrees that the Collateral Agent (as that term is defined in the Agreement) referred to therein will not have any of the obligations of a member of the Issuer unless the Collateral Agent affirmatively elects to undertake such obligations in accordance with the terms of the Agreement.
Dated as of May 19, 2016
[Acknowledgement Page to Pledge Agreement]
IDAHO USG HOLDINGS, LLC
| By: | ||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: | President |
Address for notices:
c/o
U.S. Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Phone:
▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Acknowledgement Page to Pledge Agreement]
ANNEX A TO PLEDGE AND SECURITY AGREEMENT
The Issuer has no authorized, issued or outstanding shares of its capital stock, limited liability company interests, partnership interests or other equity interests of any class or any commitments to issue any shares of its capital stock, limited liability company interests, partnership interests or other equity interests of any class or any securities convertible into or exchangeable for any shares of its capital stock, limited liability company interests, partnership interests or other equity interests of any class, except as otherwise stated in this Annex A.
| Issuer | Pledgor | Certificate No. | % Interest Held |
| Idaho USG Holdings, LLC |
U.S. Geothermal Inc. | No. 001 | 100% |
ANNEX B TO PLEDGE AND SECURITY AGREEMENT
FORM OF TRANSFER POWER
(TO BE SIGNED IN BLANK)
FOR VALUE RECEIVED, __________________, a _______________(“Assignor”), hereby sells, assigns and transfers unto _______________________, all of its ownership interest(s) in Idaho USG Holdings, LLC, a Delaware limited liability company (the“Issuer”), standing in its name on the books of the Issuer and represented by Certificate No. [__] and does hereby irrevocably constitute and appoint __________________, its attorney to transfer said ownership interests on the books of the Issuer with full power of substitution in the premises.
Dated: ________________ ____ , 20___
[NAME]
| By: | ||
| Name: | ||
| Title: |
In the presence of:
__________________________________
Name:
ANNEX C TO PLEDGE AND SECURITY AGREEMENT
U.S. Geothermal Inc.
Legal
address/address of principal place
of business and chief executive office:
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Organizational number: C142711
EIN: ▇▇-▇▇▇▇▇▇▇
Exhibit S-4
Form of Issuer Pledge Agreement
Exhibit S-4 - 1
Execution Version
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of May 19, 2016, is by and among Idaho USG Holdings, LLC, a Delaware limited liability company (the “Pledgor”), and Wilmington Trust, National Association, in its capacity as collateral agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”), for the benefit of itself, the holders from time to time of the Notes (as defined below) and Wilmington Trust, National Association, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”) under the Depositary and Security Agreement, dated as of the date hereof, among the Pledgor, the Collateral Agent and the Depositary (as amended, modified or supplemented from time to time, the “Depositary Agreement”) (the holders of the Notes from time to time, the Depositary and the Collateral Agent are referred to herein collectively as the “Secured Parties”), and acknowledged and consented to by Oregon USG Holdings LLC, a Delaware limited liability company (“USG Oregon Holdings”), and Raft River Energy I LLC, a Delaware limited liability company (the “Raft River Project Company” and, together with USG Oregon Holdings, each a “Pledged Subsidiary” and collectively the “Pledged Subsidiaries”).
RECITALS:
The Pledgor, as issuer, has authorized the issue and sale of its 5.80% Senior Secured Notes due March 31, 2023 (as amended, modified or supplemented from time to time, the “Notes”), subject to and in accordance with the Note Purchase Agreement, dated as of the date hereof, among the Pledgor and the holders of Notes party thereto from time to time (as amended, modified or supplemented from time to time, the “Note Agreement”).
The Pledgor owns 60% of the outstanding limited liability company interests of USG Oregon Holdings (the “USG Oregon Holdings Interests”) and 95% of the outstanding limited liability company interests of the Raft River Project Company (the “Raft River Interests”). The Pledgor will benefit from the issuance of the Notes. It is a condition precedent to the purchase of the Notes pursuant to the Note Agreement that the Pledgor pledge and grant the security interests described in this Agreement, and the Pledgor wishes to pledge and grant a security interest in favor of the Collateral Agent, for the benefit of the Secured Parties, as herein provided.
Capitalized terms used but not defined in this Agreement have the meanings assigned to them in the Note Agreement.
The Pledgor and the Collateral Agent therefore agree as follows:
ARTICLE I.
ASSIGNMENT AND PLEDGE
1.1. Grant. As collateral security for the prompt and complete payment when due of the principal, interest (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) and Make-Whole Amount on all of the Notes issued and delivered and outstanding under the Note Agreement, the payment of all other sums owing under the Note Agreement and each other Financing Document, when due (whether at stated maturity, by acceleration, because of mandatory prepayment, or otherwise) and the performance of the covenants contained in the Note Agreement and each of the other Financing Documents (in each case, including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) and of all obligations of the Pledgor under this Agreement (collectively, the “Secured Obligations”), and to induce the Purchasers to purchase the Notes, the Pledgor hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to the Collateral Agent, for the benefit of the Secured Parties, and grants to the Collateral Agent a continuing first priority Lien on and security interest in the following:
(a) the Pledgor’s right, title and interest in and to all of the limited liability company interests and all other ownership or equity interests of every class which the Pledgor holds in each Pledged Subsidiary, as more fully described on Annex A hereto (collectively, the “Securities”);
(b) all of the Pledgor’s present and future rights, authority, status and powers as a member of each Pledged Subsidiary, whether arising under the limited liability company operating agreement or other constitutive document of such Pledged Subsidiary, at law or otherwise, including all of the Pledgor’s rights to vote and otherwise control or participate in the management of the business and affairs of such Pledged Subsidiary;
(c) all additional limited liability company interests or other ownership or equity interests in each Pledged Subsidiary, all warrants, rights and options to acquire or subscribe for any such interests, and all securities and instruments convertible into or exchangeable for any such interests, in which the Pledgor at any time has or obtains any right, title, or interest; and
(d) all distributions, profit allocations, interest, revenues, income and proceeds of any kind, whether cash, instruments, securities or other property, received by or distributable to the Pledgor in respect of, or in exchange for, its Securities or any other Pledged Collateral and all of the Pledgor’s rights to receive the foregoing (collectively, the “Pledged Collateral”).
1.2. Continuing Security Interest. This Agreement creates a continuing security interest in the Pledged Collateral and will remain in full force and effect until the indefeasible payment in full in cash and performance of all Secured Obligations. If, at any time for any reason (including the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Pledgor, any Issuer Subsidiary, any guarantor, or any other Person or the appointment of any intervenor or conservator of, or agent or similar official for the Pledgor, either Pledged Subsidiary, any other Issuer Subsidiary, any guarantor or any other Person or any of their respective properties), any payment received by the Collateral Agent or any holder of a Note in respect of the Secured Obligations is rescinded or must otherwise be restored or returned by such Person, this Agreement will continue to be effective or will be reinstated, if necessary, as if such payment had not been made.
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1.3. Delivery of Certificates and Instruments. The Pledgor shall deliver at Closing, and thereafter agrees to deliver to the Collateral Agent, immediately upon receipt thereof, all certificates and instruments evidencing or representing any of the Pledged Collateral, in each case properly endorsed in blank and in suitable form for transfer by delivery and accompanied by instruments of transfer endorsed in blank, in form and substance satisfactory to the Collateral Agent. The Collateral Agent will hold such certificates and instruments until all Secured Obligations have been paid in case and satisfied. The Pledgor will not cause or permit any of the Securities relating to the Raft River Interests to be or become uncertificated or to constitute a security not governed by Article 8 of the Uniform Commercial Code of the State of Delaware. The Pledgor will not cause or permit any of the Securities relating to the USG Oregon Holdings Interests to be or become certificated or to constitute a security governed by Article 8 of the Uniform Commercial Code of the State of Delaware.
1.4. Waiver of Certain Operating Agreement Provisions. The Pledgor irrevocably waives any and all provisions of its certificate of formation, limited liability company operating agreement and other constitutive documents or the limited liability company operating agreement or other constitutive document of either Pledged Subsidiary that (a) prohibit, restrict, condition or otherwise affect the grant hereunder of any Lien on any of the Pledged Collateral or any enforcement action which may be taken in respect of any such Lien or the transfer of the Pledged Collateral by the Collateral Agent or any of its designees or transferees, (b) would operate to limit or restrict the ability of the Collateral Agent or any of its designees or transferees from becoming a full voting member of such Pledged Subsidiary following an Event of Default, or (c) otherwise conflict with the terms of this Agreement. Each Pledged Subsidiary agrees that it shall not (and the Pledgor agrees that it shall not cause or permit such Pledged Subsidiary to) issue any equity interests to any Person other than the holders of its equity interests on the date hereof.
1.5. Authorization to File Statements. The Pledgor authorizes the Collateral Agent to file in any Uniform Commercial Code filing office financing statements naming the Collateral Agent as the secured party and indicating the Pledged Collateral as the collateral. Notwithstanding the foregoing, nothing herein shall require the Collateral Agent to file financing statements or continuation statements, or be responsible for maintaining the security interests purported to be created as described herein and such responsibility shall be solely that of the Pledgor.
ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS; WAIVERS AND
AUTHORIZATIONS, ETC.
2.1. Representations and Warranties. As of the date of this Agreement, the Pledgor represents and warrants to the Collateral Agent as follows:
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(a) Existence and Authority. It is a limited liability company duly formed, validly existing, and in good standing under the laws of the State of Delaware, is duly qualified to do business as a foreign limited liability company and is in good standing in each jurisdiction in which it is required by law to be qualified. It has all necessary rights, franchises and privileges and full limited liability power and authority to execute, deliver and perform this Agreement and to act as a member of each Pledged Subsidiary. It has taken all necessary limited liability company action to execute, deliver and perform this Agreement, and this Agreement has been duly executed and delivered by it and constitutes its legally valid and binding obligation, enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by general principles of equity;
(b) No Violations or Defaults. The execution, delivery and performance of this Agreement by it do not and will not (i) violate any applicable law, (ii) violate, or result in a default under its limited liability company operating agreement or other constitutive document or either Pledged Subsidiary’s limited liability company operating agreement or other constitutive document, (iii) violate, or result in a default under, any contractual obligation to which it or such Pledged Subsidiary is a party, or (iv) require an Approval or any consent from any Person that has not been obtained;
(c) Membership Interests. All of the Securities have been duly and validly issued and are fully paid and non-assessable, and all of the Securities relating to the Raft River Interests are certificated and constitute securities governed by Article 8 of the Uniform Commercial Code of the State of Delaware; the certificates representing such Securities have been delivered, together with transfer powers in substantially the form of Annex B, endorsed in blank, to the Collateral Agent; and the Securities identified on Annex A hereto constitute all of the outstanding limited liability company interests and other ownership interests of each Pledged Subsidiary;
(d) No Liens. (i) It is the sole, direct, legal and beneficial owner of, and has good and valid title to, the Pledged Collateral; (ii) none of the Pledged Collateral is subject to any Lien (except the Lien of this Agreement); and (iii) no effective security agreement (other than this Agreement), financing statement (except for financing statements in favor of the Collateral Agent) or other instrument similar in effect is on file or of record in the office of any Governmental Authority with respect to any of the Pledged Collateral;
(e) Name and Address. Its name set forth in the first paragraph of this Agreement is its true, correct and complete name; its legal address and the address of its principal place of business and chief executive office, its organizational number and its EIN are all as set forth below its name on Annex C hereto; its type of organization is a limited liability company, its jurisdiction of incorporation is Delaware;
(f) Perfection and Priority of Liens. The pledge and grant of a security interest in, and delivery of the Pledged Collateral pursuant to this Agreement, will create a valid and perfected Lien on and in the Pledged Collateral, and the proceeds thereof, securing the payment of the Secured Obligations, subject to no prior Lien, assuming continued possession of the original certificates evidencing the Securities relating to the Raft River Interests constituting Pledged Collateral by the Collateral Agent.
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(g) No Litigation. There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Pledgor, threatened against or affecting the Pledgor in any court or before any arbitrator or before or by any Governmental Authority;
(h) Blocked Person. It is not (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by the Office of Foreign Assets Control, United States Department of the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions under or engaged in any activity in violation of other United States economic sanctions, including but not limited to, the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Comprehensive Iran Sanctions, Accountability and Divestment Act (“CISADA”) or any similar law or regulation with respect to Iran or any other country, the Sudan Accountability and Divestment Act, any OFAC Sanctions Program, or any economic sanctions regulations administered and enforced by the United States or any enabling legislation or executive order relating to any of the foregoing (collectively, “U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person, entity, organization and government of a country described in clause (i), clause (ii) or clause (iii), a “Blocked Person”). The Pledgor has not been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in Iran or any other country that is subject to U.S. Economic Sanctions;
(i) Anti-Money Laundering Laws. It (i) has not been found in violation of, charged with, or convicted of, money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes under the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act or any other United States law or regulation governing such activities (collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions violations, (ii) to the Pledgor’s actual knowledge after making due inquiry, is not under investigation by any Governmental Authority for possible violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions violations, (iii) has not been assessed civil penalties under any Anti-Money Laundering Laws or any U.S. Economic Sanctions, or (iv) has not had any of its funds seized or forfeited in an action under any Anti-Money Laundering Laws. The Pledgor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Pledgor is and will continue to be in compliance with all applicable current and future Anti-Money Laundering Laws and U.S. Economic Sanctions.
(j) (1) The Pledgor (i) has not been charged with, or convicted of bribery or any other anti-corruption related activity under any applicable law or regulation in a U.S. or any non-U.S. country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the Pledgor’s actual knowledge after making due inquiry, is not under investigation by any U.S. or non-U.S. Governmental Authority for possible violation of Anti-Corruption Laws, (iii) has not been assessed civil or criminal penalties under any Anti-Corruption Laws or (iv) has not been or is not the target of sanctions imposed by the United Nations or the European Union;
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(2) To the Pledgor’s actual knowledge after making due inquiry, the Pledgor has not, within the last five years, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (i) influencing any act, decision or failure to act by such Government Official in his or her official capacity or such commercial counterparty, (ii) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (iii) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder; and
(3) The Pledgor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Pledgor is and will continue to be in compliance with all applicable current and future Anti-Corruption Laws.
2.2. Affirmative Covenants. The Pledgor covenants and agrees that it will perform and observe each of the following covenants:
(a) Existence. It will preserve and maintain its existence, rights, franchises and privileges and remain in good standing in the jurisdiction of its formation, and qualify and remain qualified as a foreign company in good standing in each jurisdiction in which such qualification is necessary in view of its current or proposed business and operations or the ownership of its properties;
(b) Compliance with Laws, Approvals, and Obligations. It will comply with all laws and Approvals to which it or its property is subject and with its limited liability company operating agreement or other constitutive document and all material contractual obligations to which it is a party. It will obtain and maintain in full force and effect all Approvals necessary (i) for its current and proposed business and operations and the ownership of its properties and (ii) for the execution, delivery, performance and enforcement of this Agreement; and
(c) Defend Title. (i) It will defend the rights of the Collateral Agent and security interest of the Collateral Agent in the Pledged Collateral against the claims and demands of all other persons whomsoever; and (ii) it will have like title to and the right to pledge and grant a security interest in the Pledged Collateral hereafter pledged or in which a security interest is granted to the Collateral Agent, for the benefit of the Secured Parties, hereunder and will likewise defend the rights, pledge and security interest thereof and therein of the Collateral Agent.
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2.3. Negative Covenants. The Pledgor covenants and agrees that it will perform and observe each of the following covenants:
(a) Business, Name and Address. It will not change its name, the address of its principal place of business or chief executive office, its type of organization, its jurisdiction of formation or its organizational identification number without giving the Collateral Agent and the holders of the Notes 30 days’ prior written notice of such change;
(b) Governing Documents. It will not permit or agree to any amendment of its limited liability company operating agreement or other constitutive document or the limited liability company operating agreement or other constitutive document of either Pledged Subsidiary, except in connection with the admission of a new member or substitution of an existing member of such Pledged Subsidiary in compliance with Section 2.3(d) . It will not sell, assign, lease, or otherwise dispose of (whether in one transaction or in a series of transactions), any or all of its rights, title or interest in the Pledged Collateral, except as provided in Section 2.3(d) ;
(c) Bankruptcy. It will not take or authorize any other Person to take any action that might result in the occurrence of a Bankruptcy Event (as defined below) with respect to it, either Pledged Subsidiary or any other Issuer Subsidiary. In addition, it will not solicit, consent to or join in any such action, nor will it consent to the appointment of a custodian, receiver, trustee or other official, or to any other relief, for itself or for either Pledged Subsidiary or any other Issuer Subsidiary or any of its or their respective property. “Bankruptcy Event” means, with respect to any Person, (i) such Person’s insolvency, inability to pay its debts as they become due, or admission in writing of its inability to pay its debts as they become due; (ii) a general assignment by such Person for the benefit of its creditors; (iii) any action taken or initiated by it for its winding-up, dissolution or liquidation or for the appointment of a receiver, trustee, custodian or similar officer for it or for any of its assets or revenues; (iv) the commencement by such Person of any bankruptcy, insolvency, moratorium, reorganization or liquidation case, action or proceeding or any other proceeding for relief under any bankruptcy law or any other law for the relief of debtors or affecting the rights of creditors generally; (v) the commencement against such Person by any other Person of a case, action or proceeding described in clause (iii) or (iv) or similar in effect, which action or proceeding, for purposes of the first sentence of this Section 2.3(c) , shall not be dismissed or vacated within 60 days thereof; (vi) any action by which a court takes jurisdiction of its assets or revenues; or (vii) any corporate, partnership, member, management or other action taken or initiated by such Person authorizing, approving, consenting to or indicating acquiescence in any case, action or proceeding described in clause (ii), (iii), (iv), (v), or (vi);
(d) New Members. Except as set forth in this Section 2.3(d) , the Pledgor will not permit or consent to the admission of any new or substitute members in either Pledged Subsidiary, except, following an Event of Default and the exercise by the Collateral Agent or its designee of remedies under the Financing Documents, a new or substitute member that is the Collateral Agent or a designee of the Collateral Agent; the Pledgor will not effect or permit any sale, transfer or encumbrance of the Pledged Collateral, except, following an Event of Default, in connection with an exercise of remedies by the Secured Parties. Notwithstanding the foregoing, the Pledgor may transfer its Securities in either Pledged Subsidiary to a new or substitute member so long as, in each case, after giving effect to such transaction (x) an Event of Default under the Note Agreement does not occur, (y) the Lien created by this Agreement continues to be a first-priority perfected Lien in all of the Pledged Collateral (to the extent this Agreement continues after such transfer and is not replaced by a new pledge and security agreement in accordance with clause (z) hereof), and (z) the new or substitute member (including any transferee of the Pledgor’s limited liability company interests in such Pledged Subsidiary) executes and delivers a pledge and security agreement on substantially the same terms and conditions as this Agreement and causes to be delivered an opinion of counsel with respect to the matters set forth in clause (y) above and the enforceability of the pledge and security agreement against such new member, which opinion shall otherwise be in form and substance reasonably satisfactory to the Required Holders.
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2.4. Protection of Secured Parties. The Pledgor agrees that:
(a) its liabilities and obligations under its limited liability company operating agreement or other constitutive document or either Pledged Subsidiary’s limited liability company operating agreement or other constitutive document will not be affected by this Agreement or the Lien on the Pledged Collateral created in favor of the Collateral Agent pursuant to this Agreement, or the exercise by the Collateral Agent of any of its rights under this Agreement;
(b) no Secured Party, unless it expressly agrees in writing, will have any liabilities or obligations under either Pledged Subsidiary’s limited liability company operating agreement or other constitutive document as a result of this Agreement or the exercise by the Collateral Agent of its rights under this Agreement; and
(c) no Secured Party has any obligation to enforce any contractual obligation or claim with respect to the Pledged Collateral, or to take any other action with respect to the Pledged Collateral except as expressly set forth in this Agreement and the other Financing Documents.
2.5. Waiver of Subrogation. Notwithstanding any payment made by the Pledgor under this Agreement or any set-off or application by any Secured Party of any funds of the Pledgor, until all of the Secured Obligations have been indefeasibly paid in full in cash, the Pledgor will not (a) be entitled to be subrogated to any of the rights of any Secured Party against either Pledged Subsidiary, any other Issuer Subsidiary or any guarantor or in any collateral security or guaranty or right of offset held by the Collateral Agent for the payment of any Secured Obligations; or (b) seek any reimbursement or contribution from either Pledged Subsidiary or any guarantor in respect of any payment made by it under this Agreement or any set-off or application of any of its funds.
2.6. Additional Waivers. The Pledgor waives diligence, presentment, demand of any kind, protests of any kind and notices of any kind, all set-offs and all counterclaims, to the extent permitted by applicable law, and all suretyship defenses to the extent otherwise applicable.
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ARTICLE III.
RIGHTS AND REMEDIES
3.1. Distributions and Voting Rights.
(a) So long as no Event of Default has occurred and is continuing, the Pledgor will be entitled to exercise any and all management, voting, consent and other rights with respect to the Pledged Collateral for any purpose not inconsistent with the terms of the Note Agreement or any of the Financing Documents and to receive and retain any and all cash distributions and other payments in respect of the Pledged Collateral made in accordance with the Note Agreement and the other Financing Documents.
(b) Upon the occurrence and during the continuation of an Event of Default, all rights of the Pledgor to exercise management, voting, consent and other rights with respect to the Pledged Collateral and to receive distributions and other payments in respect of the Pledged Collateral will cease, and all such rights will immediately become vested solely in the Collateral Agent or its nominee. After the occurrence and during the continuation of an Event of Default, any distributions and other payments in respect of the Pledged Collateral received by the Pledgor will be held in trust for the Collateral Agent, and the Pledgor will keep all such amounts separate and apart from all other funds and property so as to be capable of identification as the property of the Collateral Agent and the Pledgor will deliver such amounts promptly to the Collateral Agent or its designee in the identical form received, properly endorsed or assigned when required to enable the Collateral Agent or its designee to complete collection thereof.
3.2. Collateral Agent’s Rights Upon Default. Upon the occurrence and during the continuation of an Event of Default, the Collateral Agent (acting at the direction of the Required Holders) may, but shall not be obligated to, in its sole discretion, take any or all of the following actions, in each case at the Pledgor’s expense and without prior notice to the Pledgor except as required below or under applicable law:
(a) give notice of the Event of Default to any Person, collect distributions and other amounts constituting or payable in respect of the Pledged Collateral, and enforce all rights of the Pledgor in the Pledged Collateral;
(b) take possession of any or all of the Pledged Collateral, including through agents, wherever it may be found, and hold and manage the same;
(c) foreclose its Lien upon any or all of the Pledged Collateral;
(d) become, or cause its nominee or a transferee to become, a substitute or successor member of either Pledged Subsidiary;
(e) sell, lease, assign and deliver or otherwise dispose of any or all of the Pledged Collateral at public or private sale, with or without having any or all of the Pledged Collateral at the place of sale, upon terms, in such manner, at such time or times, and at such place or places as the Collateral Agent (acting at the direction of the Required Holders) may determine; and
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(f) exercise any or all other rights or remedies available to the Collateral Agent (acting at the direction of the Required Holders) under applicable law, the Note Agreement and the other Financing Documents, or any other agreement between the parties.
The Collateral Agent may, to the fullest extent permitted by law, exercise the foregoing rights and remedies in such order, at such times and in such manner as the Collateral Agent (acting at the direction of the Required Holders) may, in its sole and exclusive judgment, determine from time to time.
3.3. Power of Attorney. The Pledgor irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, with each full power of substitution, as the Pledgor’s true and lawful attorney-in-fact and proxy, in the Pledgor’s name or in such Collateral Agent’s name or otherwise, and at the Pledgor’s expense, to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default, without notice to or the consent of the Pledgor:
(a) take any or all of the actions described in Section 3.2 and exercise any other right or power granted to the Collateral Agent and any holder of a Note under this Agreement or any other Financing Document or by law;
(b) transfer to, or register in the name of, the Collateral Agent or its nominee any or all of the Pledged Collateral;
(c) exercise all voting, consent, management and other rights relating to any Pledged Collateral; and
(d) do any and all things necessary and proper to carry out the purposes of this Agreement.
The Pledgor recognizes and agrees that the power of attorney granted pursuant to this Section 3.3 is coupled with an interest and is not revocable until the termination of this Agreement in accordance with its terms. The Pledgor ratifies and confirms all actions taken by the Collateral Agent or its agents pursuant to this power of attorney in accordance herewith.
3.4. Other Rights of the Collateral Agent.
(a) The Collateral Agent will have, with respect to the Pledged Collateral, in addition to the rights and remedies set forth in this Agreement: (i) all of the rights and remedies available to a secured party under applicable law, as if such rights and remedies were fully set forth in this Agreement, and (ii) all of the rights, protections and indemnities set forth in the Collateral Agency Agreement, which provisions are incorporated by reference and made a part of this Agreement.
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(b) The Collateral Agent may at any time and from time to time release or relinquish any right, remedy or Lien it has with respect to a particular item of Pledged Collateral without thereby releasing, relinquishing or in any way affecting its rights, remedies or Lien with respect to any other item of Pledged Collateral.
3.5. Disposition of Collateral.
(a) Upon the written request by the Collateral Agent (acting at the direction of the Required Holders) or the Required Holders after the occurrence and during the continuation of an Event of Default, the Pledgor agrees, promptly and at its own expense, to assemble any or all of the Pledged Collateral and make it available to the Collateral Agent.
(b) The Collateral Agent will be entitled to sell the Pledged Collateral on any commercially reasonable terms, and the Pledgor agrees that a private sale or a sale on extended payment terms, or in exchange for property, stock or other consideration will not in and of itself be deemed to be commercially unreasonable. The Pledged Collateral may be sold in one lot as an entirety or in separate parcels. Any Secured Party may purchase any or all of the Pledged Collateral sold at any public sale and, to the extent permitted by applicable law, may purchase any or all of the Pledged Collateral sold at any private sale, including by a credit bid.
(c) The Collateral Agent may, at the direction of the Required Holders, restrict the prospective bidders or purchasers at any sale as to their number, nature of business, financial or business expertise, net worth or financial resources and investment intention or on the basis of any other factors that are commercially reasonable. Any sale of Pledged Collateral may be subject to the requirement that any purchase of all or any part of the Pledged Collateral constituting a security for purposes of the Securities Act or the Exchange Act must be for the purpose of investment and without any intention to make a distribution thereof.
(d) The Pledgor expressly agrees that the Collateral Agent need not give more than 10 days’ prior written notice to it of the time and place of any public sale of Pledged Collateral or of the time after which a private sale of the Pledged Collateral may take place, and that such notice will constitute reasonable notice under all circumstances. The Collateral Agent will not be obligated to hold any sale pursuant to any such notice and may, without notice or publication, adjourn any public or private sale by announcement at the time and place fixed for such sale, and a subsequent sale may be held at the time and place designated in such announcement without further notice or publication. To the extent permitted by applicable law, the Pledgor irrevocably waives any right it may have to demand performance or other demand, advertisement, judicial hearing or notice to it or any other Person in connection with the collection, sale or other disposition of, or realization upon, any or all of the Pledged Collateral.
(e) The Collateral Agent may settle, pay or discharge any or all taxes, Liens, claims and other charges with respect to Pledged Collateral. All sums expended by the Collateral Agent pursuant to this Section 3.5(e) will constitute Secured Obligations secured by the Liens created by the Financing Documents. Neither the Collateral Agent nor any other Secured Party will have any duty to take any action authorized by this Section 3.5(e) , and no sale of Pledged Collateral will be deemed to have been commercially unreasonable by reason of the Collateral Agent’s decision not to take any such action.
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3.6. No Marshaling or Right of Redemption.
(a) Except to the extent required by applicable law, neither the Collateral Agent nor any other Secured Party will be required to marshal any Pledged Collateral or any guaranties of the Secured Obligations, or to resort to any item of Pledged Collateral or any guaranty in any particular order, and the Collateral Agent’s rights with respect to the Pledged Collateral and any guaranties will be cumulative and in addition to all other rights, however existing or arising. To the extent permitted by applicable law, the Pledgor irrevocably waives, and agrees that it will not invoke or assert, any law requiring or relating to the marshaling of collateral or any other law which could reasonably be expected to cause a delay in or impede the enforcement of the Collateral Agent’s rights under this Agreement or any other Financing Document.
(b) To the extent permitted by applicable law, the Pledgor irrevocably waives, and agrees that it will not invoke or assert, any rights to equity of redemption or other rights of redemption, appraisement, valuation, stay, extension or moratorium that it may have in equity, at law, or otherwise with respect to any Pledged Collateral. The sale or other transfer pursuant to this Agreement of any right, title or interest of the Pledgor in any item of Pledged Collateral will operate to permanently divest the Pledgor and all Persons claiming under or through the Pledgor of such right, title or interest, and will be a perpetual bar, both at law and in equity, to any and all claims by the Pledgor or any such Person with respect to such item of Pledged Collateral.
3.7. Application of Proceeds. After the occurrence and during the continuation of an Event of Default, or after the exercise of remedies by the Collateral Agent, any cash held by the Collateral Agent as Pledged Collateral and all cash proceeds received by the Collateral Agent from any realization upon Pledged Collateral may, at the direction of the Required Holders, be held by the Collateral Agent as collateral security for the payment of the Secured Obligations or applied by the Collateral Agent in accordance with the Collateral Agency Agreement.
3.8. Collateral Agent’s Duties.
(a) The grant to the Collateral Agent under this Agreement of any right or power does not impose upon the Collateral Agent any duty to exercise such right or power. The Collateral Agent will have no obligation to take any steps to preserve any claim or other right against any Person or with respect to any Pledged Collateral.
(b) To the extent permitted by applicable law, the Pledgor waives all claims against the Collateral Agent or its agents arising out of the repossession, taking, retention, storage, operation or sale of the Pledged Collateral except to the extent such actions shall be determined to amount to gross negligence or willful misconduct on the part of the Collateral Agent. To the extent permitted by applicable law, the Pledgor waives any claim it may have based on the allegation or fact that the price obtained for Pledged Collateral sold at a private sale was less than could have been obtained for the same Pledged Collateral at a public sale. All risk of loss, damage, diminution in value, or destruction of the Pledged Collateral will be borne by the Pledgor. Notwithstanding anything contained herein to the contrary, the Collateral Agent will have no responsibility to the Pledgor for any act or omission of the Collateral Agent, except to the extent such act or failure to act shall be determined to be gross negligence or willful misconduct on the part of the Collateral Agent. Notwithstanding anything herein to the contrary, in no event shall the Collateral Agent be liable for special, punitive indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.
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(c) The Collateral Agent does not and will not make any express or implied representations or warranties with respect to any Pledged Collateral or other property released to the Pledgor or its successors and assigns.
(d) The Collateral Agent will be accountable only for such proceeds as the Collateral Agent actually receives as a result of the exercise of its rights under this Agreement, and delivery or other accounting of such proceeds or the Pledged Collateral by the Collateral Agent to the Pledgor or the assignee of the Secured Obligations will discharge the Collateral Agent of all liability therefor.
(e) Except as expressly set forth herein or as required under applicable law, the Collateral Agent will have no other duties or obligations under this Agreement or with respect to the Pledged Collateral.
3.9. Indemnity and Expenses. The Pledgor hereby indemnifies and holds harmless the Collateral Agent, each Secured Party, and each of their respective officers, directors, employees, agents and Affiliates (collectively, the “Indemnified Persons”) from and against any and all claims (including environmental claims), losses, and liabilities arising out of or resulting from this Agreement (including enforcement of this Agreement), except claims, losses, or liabilities determined to have been caused by the gross negligence or willful misconduct of such Indemnified Person. Within ten (10) days after receipt of an invoice, the Pledgor shall pay to the Collateral Agent or such Secured Party the amount of any and all documented expenses, including fees and disbursements of its counsel and of any experts and agents (including attorneys’ fees and costs) which the Collateral Agent or such Secured Party may incur in connection with (a) the custody, preservation, use, or operation of, or the sale of, collection from, or other realization upon, any of the Pledged Collateral, (b) the exercise or enforcement of any of the rights of the Collateral Agent or the Secured Parties hereunder, or (c) the failure by the Pledgor to perform or observe any of the provisions hereof. This Section 3.9 shall survive the termination of this Agreement and the earlier resignation or removal of the Collateral Agent.
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ARTICLE IV.
GENERAL PROVISIONS
4.1. Further Assurances.
(a) At any time and from time to time, including upon the request of the Collateral Agent (acting at the direction of the Required Holders) or the Required Holders, the Pledgor will, at the Pledgor’s expense, execute and deliver and/or file such further documents, financing statements, continuation statements, amendments and instruments and do such other acts as are, in each case, necessary or required by applicable law in order to create, perfect, maintain and preserve first-priority Liens on the Pledged Collateral in favor of the Collateral Agent for the benefit of the Secured Parties and to facilitate any sale of or other realization upon Pledged Collateral, to make any sale of or other realization upon Pledged Collateral valid, binding and in compliance with applicable law, and to provide for the payment of the Secured Obligations in accordance with the terms of the Financing Documents and this Agreement.
(b) The Pledgor shall pay all filing, registration and recording fees or re-filing, re-registration and re-recording fees, and all expenses incident to the execution and acknowledgment of this Agreement, and any instruments of further assurance, and all federal, state, county and municipal stamp taxes and other taxes, duties, imports, assessments and charges arising out of or in connection with the execution and delivery of this Agreement, any agreement supplemental hereto and any instruments of further assurance.
(c) The Collateral Agent shall (at the direction of the Required Holders) execute and deliver all such proxies, powers of attorney, distribution and other orders and instruments as the Pledgor may reasonably require for the purpose of enabling the Pledgor to exercise the voting rights to which it is entitled and to receive the distributions to which it is entitled to receive prior to the occurrence of an Event of Default.
4.2. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Pledgor may not assign or otherwise transfer any of its rights under this Agreement. The Collateral Agent may only assign or otherwise transfer and assign its rights and interests under this Agreement to a successor in accordance with Section 2.7 of the Collateral Agency Agreement. The holders of the Notes will have the right to transfer, assign, pledge and grant participations in their rights and interests under this Agreement in accordance with the terms of the Note Agreement.
4.3. Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision.
4.4. Construction, etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. The rules of interpretation set forth in Schedule B of the Note Agreement shall apply to this Agreement.
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4.5. Counterparts. This Agreement may be executed in one or more duplicate counterparts and when signed by all of the parties shall constitute a single binding agreement. A facsimile or electronic transmission of the signature page to this Agreement by any party hereto shall be effective as the signature page of such party and shall be deemed to constitute an original signature of such party to this Agreement and shall be admissible into evidence for all purposes.
4.6. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS OR REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
4.7. Waiver of Jury Trial. EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
4.8. Consent to Jurisdiction.
(a) The parties agree that any legal action or proceeding by or against the Pledgor or with respect to or arising out of this Agreement or any other Financing Document may be brought in or removed to the courts of the State of New York, in and for the County of New York, or of the United States of America for the Southern District of New York, in each case, in the Borough of Manhattan. By execution and delivery of this Agreement, each party accepts, for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Pledgor agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested to such party at its address for notices as specified herein. Each of the parties agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices under this Section 4.8(a) shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
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(b) In addition to and notwithstanding the provisions of Section 4.8(a) above, the Pledgor hereby irrevocably appoints CT Corporation System as its agent to receive on its behalf and its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Pledgor, in care of the process agent at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and the Pledgor hereby irrevocably authorizes and directs the process agent to accept such service on its behalf. Nothing in this Agreement will affect the right of any party hereto to serve legal process in any other manner permitted by law or affect the right of any party hereto to bring any action or proceeding in the courts of any other jurisdiction. If for any reason the process agent ceases to be available to act as process agent, the Pledgor agrees to immediately appoint a replacement process agent satisfactory to the Collateral Agent. Each of the parties hereby waives any right to stay or dismiss any action or proceeding under or in connection with any or all of this Agreement or any other Financing Document brought before the foregoing courts on the basis of forum non conveniens.
4.9. Release of Liens. Upon the payment in cash and satisfaction in full of all Secured Obligations, the Collateral Agent will, upon the written request of the Pledgor and at the Pledgor’s expense, execute documents necessary to effect or evidence the release of the Pledged Collateral from the Lien of this Agreement and return to the Pledgor all certificates evidencing the Pledged Collateral relating to the Raft River Interests and any transfer powers with respect to such certificates.
4.10. No Waiver by the Collateral Agent, Amendments.
(a) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the parties hereto, with the consent of the Required Holders, and then any such waiver, amendment or modification shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment or modification shall release all or substantially all of the Pledged Collateral in any transaction or series of related transactions, without the written consent of each holder.
(b) The Collateral Agent shall not be deemed to have waived any of its rights and remedies in respect of the Secured Obligations or the Pledged Collateral unless such waiver shall be in accordance with paragraph (a) above. No delay or omission on the part of the Collateral Agent in exercising any right or remedy shall operate as a waiver of such right or remedy or any other right or remedy. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. All rights and remedies of the Collateral Agent with respect to the Secured Obligations or the Pledged Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly, alternatively, successively or concurrently at such time or at such times as the Collateral Agent deems expedient.
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4.11. Overdue Amounts. Until paid, all amounts due and payable by the Pledgor under this Agreement shall be a debt secured by the Pledged Collateral and shall bear, whether before or after judgment, interest at the Default Rate.
4.12. Notice, etc. All notices and communications provided for hereunder shall be in writing and sent (a) by facsimile with confirmation of receipt, (b) by registered or certified mail with return receipt requested (postage prepaid), (c) by a recognized overnight delivery service (with charges prepaid) or (d) as a .pdf attachment to an email. Any such notice must be sent to the address set forth under the intended recipient’s name set forth on the signature pages hereto or at such other address as such Person shall have specified to the other party hereto in writing. Notices will be deemed given only when received.
4.13. Collateral Agency Agreement. The Collateral Agent shall act hereunder only in accordance with the terms and conditions of this Agreement and the Collateral Agency Agreement. Any and all actions the Collateral Agent takes or omits to take hereunder shall be covered by the indemnity provisions of the Collateral Agency Agreement which shall be deemed to be incorporated by reference herein. In the case of a conflict between this Agreement (including Section 3.8), and the Collateral Agency Agreement, the Collateral Agency Agreement shall govern the rights and obligations of the Collateral Agent.
4.14. Waiver of Suretyship Defenses. The obligations of the Pledgor shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim the Pledgor may have against either Pledged Subsidiary or any holder or otherwise, and shall remain in full force and effect without regard to, and (except by indefeasible payment in full in cash of all of the Secured Obligations) shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not the Pledgor shall have any knowledge or notice thereof), including, without limitation: (a) any amendment, modification of or supplement to the Notes, the Note Agreement or any other Financing Document or any assignment or transfer of any thereof or of any interest therein, or any furnishing, acceptance or release of any security for the Secured Obligations; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of the Notes or in respect of the Note Agreement or any other Financing Document; (c) any bankruptcy, insolvency, readjustment, composition, liquidation or similar proceeding with respect to either Pledged Subsidiary, any other Issuer Subsidiary or their property; (d) any merger, amalgamation or consolidation of the Pledgor or of either Pledged Subsidiary into or with any other Person or any sale, lease or transfer of any or all of the assets of such Pledged Subsidiary to any Person; (e) any failure on the part of either Pledged Subsidiary for any reason to comply with or perform any of the terms of any other agreement with the Pledgor; or (f) any other circumstance which might otherwise constitute a legal or equitable discharge, suretyship defense or other defense of a guarantor (whether or not similar to the foregoing). To the extent permitted by law, the Pledgor irrevocably and unconditionally waives any defense it might have to its performance hereunder, based on any of the foregoing.
4.15. USA PATRIOT Act. The parties hereto acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Collateral Agent such information as it may request, from time to time, in order for the Collateral Agent to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
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4.16. Force Majeure. The Collateral Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of the Collateral Agent (including but not limited to any act or provision of any present or future law or regulation or Governmental Authority, any act of God or war, civil unrest, local or national disturbance or disaster, any act of terrorism, or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility); it being understood that the Collateral Agent shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused this Agreement to be signed on the date first above written.
IDAHO USG HOLDINGS, LLC
| By: | ||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: | President |
Address for notices:
c/o U.S.
Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Issuer Pledge Agreement]
| (STATE OF | ) |
| ss. | |
| (COUNTY OF | ) |
On this ______day of ____________, 2016, before me, the undersigned notary public, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as President of Idaho USG Holdings, LLC, proved to me through satisfactory evidence of identification, which was ______________________, to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he signed it voluntarily for its stated purpose as President of Idaho USG Holdings, LLC.
__________________________________
Official signature and seal
of notary
My commission expires:
[Notary Page to Issuer Pledge Agreement]
WILMINGTON TRUST, NATIONAL
ASSOCIATION, not in its individual capacity but
solely in its
capacity as the Collateral Agent
| By: | ||
| Name: | ||
| Title: |
Address:
Wilmington Trust,
National Association
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Administrator for Idaho
USG Holdings,
LLC
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Issuer Pledge Agreement]
ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned hereby acknowledges receipt of a copy of the foregoing Pledge and Security Agreement (the “Agreement”) and agrees to be bound thereby and to comply with the terms thereof, any provisions of its limited liability company operating agreement or other constitutive document to the contrary notwithstanding. Each of the undersigned further agrees that the Collateral Agent (as that term is defined in the Agreement) referred to therein will not have any of the obligations of a member of the applicable Pledged Subsidiary unless the Collateral Agent affirmatively elects to undertake such obligations in accordance with the terms of the Agreement.
Dated as of May 19, 2016
[Acknowledgement Page to Issuer Pledge Agreement]
OREGON USG HOLDINGS LLC
| By: | ||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| Title: | President and CEO |
Address for notices:
c/o U.S.
Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
RAFT RIVER ENERGY I LLC
| By: | ||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| Title: | President and CEO |
Address:
c/o U.S.
Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Acknowledgement Page to Issuer Pledge Agreement]
ANNEX A TO PLEDGE AND SECURITY AGREEMENT
Neither Pledged Subsidiary has authorized, issued or outstanding shares of its capital stock, limited liability company interests, partnership interests or other equity interests of any class or any commitments to issue any shares of its capital stock, limited liability company interests, partnership interests or other equity interests of any class or any securities convertible into or exchangeable for any shares of its capital stock, limited liability company interests, partnership interests or other equity interests of any class, except as otherwise stated in this Annex A.
| Pledged Subsidiary |
Pledgor |
Certificate No. |
% Interest Held |
| Oregon USG Holdings LLC |
Idaho USG Holdings, LLC |
Not Applicable | 60% |
| Raft River Energy I LLC |
Idaho USG Holdings, LLC |
Nos. B-001 and C-001 |
95% |
ANNEX B TO PLEDGE AND SECURITY AGREEMENT
FORM OF TRANSFER POWER
(TO BE SIGNED IN BLANK)
FOR VALUE RECEIVED, __________________, a _______________(“Assignor”), hereby sells, assigns and transfers unto _______________________, all of its ownership interest(s) in Raft River Energy I LLC, a Delaware limited liability company (the “Pledged Subsidiary”), standing in its name on the books of the Pledged Subsidiary and represented by Certificate No. [__] and does hereby irrevocably constitute and appoint __________________, its attorney to transfer said ownership interests on the books of the Pledged Subsidiary with full power of substitution in the premises.
Dated: ____________ ____, 20___
[NAME]
| By: | ||
| Name: | ||
| Title: |
In the presence of:
__________________________________
Name:
ANNEX C TO PLEDGE AND SECURITY AGREEMENT
Idaho USG Holdings, LLC
Legal
address/address of principal place
of business and chief executive office:
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Organizational number: 5892913
EIN: ▇▇-▇▇▇▇▇▇▇
Exhibit S-5
Form of Security Agreement
Exhibit S-5 - 1
Execution Version
SECURITY AGREEMENT
This SECURITY AGREEMENT (this “Agreement”), dated as of May 19, 2016, is by and between Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), on the one hand, and Wilmington Trust, National Association, in its capacity as collateral agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”), for the benefit of itself, the holders from time to time of the Notes (as defined below) and Wilmington Trust, National Association, in its capacity as depositary (together with its successors and assigns in such capacity, the “Depositary”) under the Depositary and Security Agreement, dated as of the date hereof, among the Issuer, the Collateral Agent and the Depositary (as amended, modified or supplemented from time to time, the “Depositary Agreement”) (the holders, the Depositary and the Collateral Agent are referred to herein collectively as the “Secured Parties”).
RECITALS:
The Issuer has authorized the issue and sale of its 5.80% Senior Secured Notes due March 31, 2023 (as amended, modified or supplemented from time to time, the “Notes”), subject to and in accordance with the Note Purchase Agreement, dated as of the date hereof, among the Issuer and the holders of Notes party thereto from time to time (as amended, modified or supplemented from time to time, the “Note Agreement”).
It is a condition precedent to the purchase of the Notes pursuant to the Note Agreement that the Issuer grant the security interests described in this Agreement, and Issuer wishes to grant security interests in favor of the Collateral Agent, for the benefit of the Secured Parties, as herein provided.
The Issuer and the Collateral Agent therefore agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined in this Agreement have the meanings given to those terms in the Note Agreement, or if not defined in the Note Agreement, in the Uniform Commercial Code as in effect from time to time in the applicable jurisdiction (the “UCC”). However, if a term is defined in Article 9 of the UCC differently from another Article of the UCC, the term has the meaning specified in Article 9.
ARTICLE II
ASSIGNMENT AND GRANT OF SECURITY INTEREST
2.1. Grant. (a) As collateral security for the prompt and complete payment when due of the principal, interest (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) and Make-Whole Amount on all of the Notes issued and delivered and outstanding under the Note Agreement, and of all other sums owing under the Note Agreement and each other Financing Document (whether at stated maturity, by acceleration, because of mandatory prepayment, or otherwise, and including the payment of amounts which would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. §362(a)), and the performance of the covenants contained in the Note Agreement and each of the other Financing Documents (collectively, the “Secured Obligations”) and to induce the Purchasers to purchase the Notes, the Issuer hereby assigns, conveys, mortgages, pledges, hypothecates and transfers to the Collateral Agent, for the benefit of the Secured Parties, and grants to the Collateral Agent a continuing first priority Lien on and security interest in, its interests in all of its properties, assets and rights, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof, including: all personal and fixture property of every kind and nature, including all goods (including inventory, equipment and accessions thereto), instruments (including promissory notes), timber to be cut, extracted geothermal fluid and other geothermal substances, including all minerals, gases, salts, chemical, by-products and other substances in solution in geothermal fluid or otherwise produced by or from geothermal ▇▇▇▇▇, the waste heat from geothermal fluid, documents (including, if applicable, electronic documents), accounts (including health-care-insurance receivables), chattel paper (whether tangible or electronic), deposit accounts, letter of credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, securities and all other investment property, supporting obligations, any other contract rights or rights to the payment of money, insurance claims and proceeds, tort claims and all general intangibles (including payment intangibles), and any contractual obligations entered into from time to time (collectively, the “Collateral”). Notwithstanding anything herein to the contrary, the term “Collateral” shall not include, and the Lien and security interest granted under this Section 2.1 shall not attach to any lease, license, contract, property rights or agreement to which the Issuer is a party or any of its rights or interests thereunder if and for so long as the grant of such Lien or security interest shall constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of the Issuer therein or (ii) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract property rights or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law or principles of equity), provided, however, that such Lien and security interest shall attach immediately at such time as the condition causing such abandonment, invalidation or unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such lease, license, contract, property rights or agreement that does not result in any of the consequences specified in clauses (i) or (ii) above, including, without limitation, any proceeds of such lease, license, contract, property rights or agreement.
(b) Notwithstanding anything to the contrary contained herein, the Issuer shall remain liable under its contractual obligations, all in accordance with and pursuant to the terms and provisions thereof, and the Collateral Agent shall have no obligation or liability under any contractual obligation by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any obligations of the Issuer thereunder or to make any payment, or to make any inquiry as to the nature or sufficiency of any payment received by it, or present or file any claim, or take any action to collect or enforce the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.
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2.2. Continuing Security Interest. This Agreement creates a continuing security interest in the Collateral and will remain in full force and effect until the indefeasible payment in full in cash and performance of all Secured Obligations. If, at any time for any reason (including the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Issuer, any Issuer Subsidiary, any guarantor, or any other Person or the appointment of any intervenor or conservator of, or agent or similar official for the Issuer, any Issuer Subsidiary, any guarantor or any other Person or any of their respective properties), any payment received by the Collateral Agent or any holder of a Note in respect of the Secured Obligations is rescinded or must otherwise be restored or returned by such Person, this Agreement will continue to be effective or will be reinstated, if necessary, as if such payment had not been made.
2.3. Instruments. Notwithstanding any provision herein to the contrary, so long as no Event of Default has occurred and is continuing, the Issuer may retain for collection in the ordinary course of business any Instruments (as defined in Article 9 of the UCC) obtained by it in the ordinary course of business, and the Collateral Agent will, promptly upon the request of the Required Holders, and at the expense of the Issuer, make appropriate arrangements for making any Instruments pledged by the Issuer available to the Issuer for purposes of presentation, collection or renewal. Any such arrangement shall be effected, to the extent deemed appropriate by the Collateral Agent, against a trust receipt or like document.
2.4. Use of Collateral. So long as no Event of Default has occurred and is continuing, the Issuer shall be entitled to use and possess the Collateral, subject to the rights, remedies, powers and privileges of the Collateral Agent hereunder and the terms of the Financing Documents.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. Perfection Certificates. The Issuer has delivered to the Collateral Agent and each Purchaser a Perfection Certificate in the form of the certificate attached as Exhibit A to this Agreement. The Issuer represents and warrants to the Collateral Agent and each holder of a Note as of the date of this Agreement, that:
(a) the Issuer’s exact legal name is stated in its Perfection Certificate and on the signature page hereof;
(b) the Issuer is an organization of the type, and is organized in the jurisdiction, set forth in its Perfection Certificate;
(c) the Perfection Certificate accurately sets forth the Issuer’s organizational identification number or accurately states that the Issuer has none;
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(d) the Perfection Certificate accurately sets forth as of the date hereof the Issuer’s place of business or, if more than one, its chief executive office, and, if different, its mailing address; and
(e) all other information set forth in the Perfection Certificate is accurate and complete as of the date hereof.
3.2. Contractual Obligations; Authorization to File UCC Statements.
(a) The Issuer agrees that:
(i) it shall maintain the Liens created by this Agreement as first-priority Liens and, at the sole cost and expense of the Issuer, (i) give, execute, deliver, file and/or record any financing statement (x) to create, preserve, perfect or validate and maintain the Liens granted pursuant hereto or (y) to enable the Collateral Agent to exercise and enforce its rights hereunder with respect to such Liens; and (ii) in the case of Investment Property, Deposit Accounts, Letter-of-Credit Rights and any other relevant Collateral, take any actions necessary to enable the Collateral Agent to obtain “control” (within the meaning of the applicable UCC) with respect thereto;
(ii) unless it expressly agrees in writing, neither the Collateral Agent nor any holder of a Note will have any liabilities or obligations under any contractual obligation of the Issuer as a result of this Agreement, the exercise by the Collateral Agent of rights under this Agreement or otherwise; and
(iii) neither the Collateral Agent nor any holder of a Note has any obligation to collect or enforce any contractual obligation or claim which constitutes part of the Collateral, or to take any other action with respect to the Collateral except as expressly set forth in this Agreement and the other applicable Financing Documents.
(b) Subject to Section 6.1 hereof, the Issuer authorizes the Collateral Agent and each holder of a Note, in its own name, at any time and from time to time, to give notice to any Person of this Agreement and of the assignment of the Collateral to the Collateral Agent, for the benefit of the Secured Parties, and of the Collateral Agent’s Lien on and security interest in the Collateral. The Issuer further irrevocably authorizes the Collateral Agent, at any time and from time to time, to file, at the expense of the Issuer, in any UCC jurisdiction any financing statements and amendments thereto that describe the Collateral as all assets of the Issuer or words of similar effect, or with greater detail, and contain other information required by the UCC for the sufficiency of any financing statement or amendment. The Issuer agrees to promptly furnish any information necessary to prepare such financing statements and amendments to the Collateral Agent and each holder of a Note upon prior written request. The Issuer also ratifies its authorization for the Collateral Agent to have filed in any UCC jurisdiction any like financing statements or amendments thereto as set forth in this Section 3.2(b) if filed prior to the date hereof. Notwithstanding the foregoing, nothing herein shall require the Collateral Agent to file financing statements or continuation statements or be responsible for maintaining the security interest purported to be created as described herein, and such responsibility shall be solely the responsibility of the Issuer.
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3.3. Negative Covenants. The Issuer covenants and agrees that it will perform and observe each of the following covenants:
(a) Business, Name and Address. It will not change its name, the address of its principal place of business or chief executive office, its type of organization, its jurisdiction of formation or its organizational identification number without giving the Collateral Agent and the holders of the Notes 30 days’ prior written notice of such change; and
(b) Amendment of Operating Agreement; Transfer of Collateral. It will not permit or agree to any amendment of its limited liability company operating agreement, except in connection with the admission of a new member or substitution of an existing member as permitted under the Note Agreement and the other Financing Documents. It will not sell, assign, lease, or otherwise dispose of (whether in one transaction or in a series of transactions), any or all of its rights, title or interest in the Collateral, except as permitted under the Note Agreement and the other Financing Documents.
ARTICLE IV
RIGHTS AND REMEDIES
4.1. Collections Prior to Default. Unless the Collateral Agent (acting at the direction of the Required Holders) exercises its right after the occurrence and during the continuation of an Event of Default to collect proceeds and amounts in respect of the Collateral, the Issuer will collect with diligence, and at the Issuer’s own expense, any and all such proceeds and amounts in the ordinary course. Upon the occurrence and during the continuation of an Event of Default, or after an exercise of remedies by the Collateral Agent, any such collections made by the Issuer will be held in trust for the Collateral Agent for the benefit of the Secured Parties, and the Issuer will keep all such collections separate and apart from all other funds and property so as to be capable of identification as the property of the Collateral Agent and will deliver such collections at such time as the Collateral Agent (acting at the direction of the Required Holders) may request to the Collateral Agent in the identical form received, properly endorsed or assigned when required to enable the Collateral Agent to complete collection thereof.
4.2. Collateral Agent’s Rights Upon Default. Upon the occurrence and during the continuation of an Event of Default, the Collateral Agent (acting at the direction of the Required Holders) may, but shall not be obligated to, in its sole discretion, take any or all of the following actions, in each case at the Issuer’s expense and without prior notice to the Issuer except as specifically set forth below and except as required under applicable law:
(a) give notice of the Event of Default to any Person, collect proceeds and amounts in respect of the Collateral, and enforce all rights of the Issuer in the Collateral;
(b) take possession of any or all of the Collateral, wherever it may be found, using reasonable force to the extent permitted under applicable law, to do so, and hold, store, repair, improve, operate and manage the same;
(c) foreclose its Lien upon any or all of the Collateral;
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(d) sell, lease, assign, deliver or otherwise dispose of any or all of the Collateral at public or private sale, with or without having any or all of the Collateral at the place of sale, upon terms, in such manner, at such time or times, and at such place or places as the Collateral Agent (acting at the direction of the Required Holders) may reasonably determine and as required by law; and
(e) exercise any or all other rights or remedies available to the Collateral Agent (acting at the direction of the Required Holders) under applicable law, the Financing Documents or any other agreement between the parties.
The Collateral Agent may, to the fullest extent permitted by law, exercise the foregoing rights and remedies in such order, at such times and in such manner as the Collateral Agent (acting at the direction of the Required Holders) may, in its sole and exclusive judgment, determine from time to time.
4.3. Power of Attorney. The Issuer irrevocably constitutes and appoints the Collateral Agent and any officer or agent thereof, each with full power of substitution, as the Issuer’s true and lawful attorney-in-fact, in the Issuer’s name or in such Person’s name or otherwise, and at the Issuer’s expense, to take any or all of the following actions upon the occurrence and during the continuation of an Event of Default, without notice to or the consent of the Issuer:
(a) take any or all of the actions described in Section 4.2 of this Agreement, and exercise any other right or power granted to the Collateral Agent and any holder of a Note under this Agreement or any other Financing Document or by law;
(b) endorse or execute and deliver any check, draft, note, acceptance, or instrument, document, contract, agreement, receipt, release, bill of lading, invoice, endorsement, assignment, bill of sale, deed or instrument of conveyance or transfer constituting or relating to any Collateral;
(c) assert, institute, file, defend, settle, compromise or adjust any claim constituting or relating to any Collateral;
(d) perform or comply with any contractual obligation that constitutes part of the Collateral; and
(e) do any and all things necessary and proper to carry out the purposes of this Agreement.
The Issuer recognizes and agrees that the power of attorney granted pursuant to this Section 4.3 is coupled with an interest and is not revocable until the termination of this Agreement in accordance with its terms, at which time the power of attorney shall automatically terminate. The Issuer ratifies and confirms all actions taken by the Collateral Agent or its agents pursuant to this power of attorney in accordance herewith.
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4.4. Other Rights of Collateral Agent.
(a) The Collateral Agent will have, with respect to the Collateral, in addition to the rights and remedies set forth in this Agreement: (i) all of the rights and remedies available to a secured party under applicable law, as if such rights and remedies were fully set forth in this Agreement, and (ii) all of the rights, protections and indemnities set forth in the Collateral Agency Agreement, which provisions are incorporated by reference and made a part of this Agreement.
(b) The Collateral Agent may at any time and from time to time release or relinquish any right, remedy or Lien it has with respect to a particular item of Collateral without thereby releasing, relinquishing or in any way affecting its rights, remedies or Lien with respect to any other item of Collateral.
4.5. Disposition of Collateral.
(a) Upon the written request by the Collateral Agent (acting at the direction of the Required Holders) or the Required Holders after the occurrence and during the continuation of an Event of Default, the Issuer agrees, promptly and at its own expense, to assemble any or all of the Collateral and make it available to the Collateral Agent.
(b) The Collateral Agent will be entitled to sell the Collateral on any commercially reasonable terms, and the Issuer agrees that a private sale or a sale on extended payment terms, or in exchange for property, stock or other consideration will not in and of itself be deemed to be commercially unreasonable. The Collateral may be sold in one lot as an entirety or in separate parcels. Any Secured Party may purchase any or all of the Collateral sold at any public sale and, to the extent permitted by applicable law, may purchase any or all of the Collateral sold at any private sale, including by a credit bid.
(c) The Collateral Agent may, at the direction of the Required Holders, restrict the prospective bidders or purchasers at any sale as to their number, nature of business, financial or business expertise, net worth or financial resources and investment intention or on the basis of any other factors that are commercially reasonable. Any sale of Collateral may be subject to the requirement that any purchase of all or any part of the Collateral constituting a security for purposes of the Securities Act or the Exchange Act must be for the purpose of investment and without any intention to make a distribution thereof.
(d) The Issuer expressly agrees that the Collateral Agent need not give more than 10 days’ notice to the Issuer of the time and place of any public sale of Collateral or of the time after which a private sale of Collateral may take place, and that such notice will constitute reasonable notice under all circumstances. The Collateral Agent will not be obligated to hold any sale pursuant to any such notice and may, without notice or publication, adjourn any public or private sale by announcement at the time and place fixed for such sale, and a subsequent sale may be held at the time and place designated in such announcement without further notice or publication. To the extent permitted by applicable law, the Issuer irrevocably waives any right it may have to make a demand of performance or other demand, advertisement, judicial hearing or notice to it or any other Person in connection with the collection, sale or other disposition of, or realization upon, any or all of the Collateral.
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(e) Upon the occurrence and during the continuation of an Event of Default, before any sale or disposition of Collateral, the Collateral Agent at the direction of the Required Holders may cause any or all of such Collateral to be improved, repaired or reconditioned. The Collateral Agent (on behalf of the Secured Parties) may also settle, pay or discharge any or all taxes, Liens, claims and other charges with respect to Collateral, and may procure or continue insurance with respect to Collateral (it being understood that nothing contained herein shall be construed as requiring the Collateral Agent to expend its own funds or otherwise incur any financial liability in connection with the performance of any of its duties hereunder). All sums expended by the Secured Parties pursuant to this Section 4.5(e) will constitute Secured Obligations secured by the Liens created by the Financing Documents. Neither the Collateral Agent, nor any other Secured Party will have any duty to take any action authorized by this Section 4.5(e) , and no sale of Collateral will be deemed to have been commercially unreasonable by reason of the Collateral Agent’s decision not to take any such action.
4.6. No Marshaling or Right of Redemption.
(a) Except to the extent required by applicable law, neither the Collateral Agent nor any other Secured Party will be required to marshal any Collateral or any guaranties of the Secured Obligations, or to resort to any item of Collateral or any guaranty in any particular order, and the Collateral Agent’s rights with respect to the Collateral and any guaranties will be cumulative and in addition to all other rights, however existing or arising. To the extent permitted by applicable law, the Issuer irrevocably waives, and agrees that it will not invoke or assert, any law requiring or relating to the marshaling of collateral or any other law which could reasonably be expected to cause a delay in or impede the enforcement of the Collateral Agent’s rights under this Agreement or any other Financing Document.
(b) To the extent permitted by applicable law, the Issuer irrevocably waives, and agrees that it will not invoke or assert, any rights to equity of redemption or other rights of redemption, appraisement, valuation, stay, extension or moratorium that it may have in equity, at law, or otherwise with respect to any Collateral. The sale or other transfer pursuant to this Agreement of any right, title or interest of the Issuer in any item of Collateral will operate to permanently divest the Issuer and all Persons claiming under or through the Issuer of such right, title or interest, and will be a perpetual bar, both at law and in equity, to any and all claims by the Issuer or any such Person with respect to such item of Collateral.
4.7. Application of Proceeds. After the occurrence and during the continuation of an Event of Default or after an exercise of remedies by the Collateral Agent, any cash held by the Collateral Agent and all cash proceeds received by the Collateral Agent from any realization upon the Collateral may, at the direction of the Required Holders, be held by the Collateral Agent as collateral security for the payment of the Secured Obligations or applied by the Collateral Agent in accordance with the Collateral Agency Agreement.
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4.8. Collateral Agent’s Duties.
(a) The grant to the Collateral Agent under this Agreement of any right or power does not impose upon the Collateral Agent any duty to exercise such right or power. The Collateral Agent will have no obligation to take any steps to preserve any claim or other right against any Person or with respect to any Collateral.
(b) To the extent permitted by applicable law, the Issuer waives all claims against the Collateral Agent or its agents arising out of the repossession, taking, retention, storage, operation or sale of the Collateral except to the extent such claims shall be determined to be caused by the gross negligence or willful misconduct of the Collateral Agent. To the extent permitted by applicable law, the Issuer waives any claim it may have based on the allegation or fact that the price obtained for Collateral sold at a private sale made in accordance with this Agreement was less than could have been obtained for the same Collateral at a public sale. All risk of loss, damage, diminution in value or destruction of the Collateral will be borne by the Issuer. Notwithstanding anything contained herein to the contrary, the Collateral Agent will have no responsibility for any act or omission of any carrier, warehouseman, bailee, forwarding agency, broker, operator or any other Person. The Collateral Agent will have no responsibility to the Issuer for any act or omission of the Collateral Agent, except to the extent such act or failure to act shall be determined to be gross negligence or willful misconduct on the part of the Collateral Agent. Notwithstanding anything herein to the contrary, in no event shall the Collateral Agent be liable for special, punitive indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.
(c) The Collateral Agent will be accountable only for such proceeds as the Collateral Agent actually receives as a result of the exercise of its rights under this Agreement and the other Financing Documents, and delivery or other accounting of such proceeds or the Collateral by the Collateral Agent to the Issuer or the assignee of the Secured Obligations will discharge the Collateral Agent of all liability therefor.
(d) The Collateral Agent does not and will not make any express or implied representations or warranties with respect to any Collateral or other property released to the Issuer.
(e) Except as set forth in this Agreement or the Collateral Agency Agreement or as required under applicable law, the Collateral Agent will have no duties or obligations with respect to the Collateral.
ARTICLE V
OTHER SECURITY DOCUMENTS
5.1. Relation to Other Security Documents. The provisions of this Agreement supplement the provisions of any other Security Document that secures the payment or performance of any of the Secured Obligations. Nothing contained in any such Security Document shall derogate from any of the rights or remedies of the Collateral Agent hereunder.
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ARTICLE VI
GENERAL PROVISIONS
6.1. Further Assurances.
(a) At any time and from time to time, including upon the request of the Collateral Agent (acting at the direction of the Required Holders) or the Required Holders, the Issuer will, at the Issuer’s expense, execute and deliver and/or file such further documents, financing statements, continuation statements, amendments and instruments and do such other acts as are in each case necessary or required by applicable law in order to create, perfect, maintain and preserve first-priority Liens on the Collateral in favor of the Collateral Agent for the benefit of the Secured Parties, and to facilitate any sale of or other realization upon Collateral, to make any sale of or other realization upon Collateral valid, binding and in compliance with applicable law, and to provide for the payment of the Secured Obligations in accordance with the terms of the Financing Documents and this Agreement.
(b) The Issuer shall pay all filing, registration and recording fees or re-filing, re-registration and re-recording fees, and all expenses incident to the execution and acknowledgment of this Agreement, and any instruments of further assurance, and all federal, state, county and municipal stamp taxes and other taxes, duties, imports, assessments and charges arising out of or in connection with the execution and delivery of this Agreement, any agreement supplemental hereto and any instruments of further assurance.
6.2. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Issuer may not assign or otherwise transfer any of its rights under this Agreement. Any holder of a Note will have the right to transfer, assign, pledge and grant participations in its rights and interests under this Agreement in accordance with the terms of the Financing Documents. The Collateral Agent will have the right to transfer and assign its rights and interests under this Agreement in accordance with the terms of the Collateral Agency Agreement.
6.3. Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision.
6.4. Construction, etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. The rules of interpretation set forth in Schedule B of the Note Agreement shall apply to this Agreement.
6.5. Counterparts. This Agreement may be executed in one or more duplicate counterparts and when signed by all of the parties shall constitute a single binding agreement. A facsimile or electronic transmission of the signature page to this Agreement by any party hereto shall be effective as the signature page of such party and shall be deemed to constitute an original signature of such party to this Agreement and shall be admissible into evidence for all purposes.
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6.6. Governing Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD APPLY THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTERESTS OR REMEDIES HEREUNDER IN RESPECT OF ANY PARTICULAR COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
6.7. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
6.8. Consent to Jurisdiction.
(a) The parties agree that any legal action or proceeding by or against the Issuer or with respect to or arising out of this Agreement or any other Financing Document may be brought in or removed to the courts of the State of New York, in and for the County of New York, or of the United States of America for the Southern District of New York, in each case, in the Borough of Manhattan. By execution and delivery of this Agreement, each party accepts, for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The Issuer agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, (or any substantially similar form of mail) postage prepaid, return receipt requested to such party at its address for notices as specified herein. Each of the parties agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices under this Section 6.8(a) shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(b) In addition to and notwithstanding the provisions of Section 6.8(a) above, the Issuer hereby irrevocably appoints CT Corporation System as its agent to receive on its behalf and its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Issuer, in care of the process agent at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and the Issuer hereby irrevocably authorizes and directs the process agent to accept such service on its behalf. Nothing in this Agreement will affect the right of any party hereto to serve legal process in any other manner permitted by law or affect the right of any party hereto to bring any action or proceeding in the courts of any other jurisdiction. If for any reason the process agent ceases to be available to act as process agent, the Issuer agrees to immediately appoint a replacement process agent satisfactory to the Collateral Agent. Each of the parties hereby waives any right to stay or dismiss any action or proceeding under or in connection with any or all of this Agreement or any other Financing Document brought before the foregoing courts on the basis of forum non conveniens.
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6.9. Release of Liens. Upon the payment in cash of all Secured Obligations, the Collateral Agent will, upon the written request of the Issuer and at the Issuer’s expense, execute documentation necessary to effect or evidence the release of the Collateral from the Lien of this Agreement. The Lien of this Agreement shall also be automatically released with respect to any portion of the Collateral that is sold, transferred or otherwise disposed of in compliance with the terms and conditions of the Financing Documents. Without limiting the foregoing, the Issuer and the Collateral Agent hereby acknowledge and agree that the Liens granted hereunder on cash which is distributed by the Issuer to any Person in accordance with the terms of Section 4.1(g) of the Depositary Agreement shall be automatically released at the time and the amount of such distribution.
6.10. No Waiver by Collateral Agent, Amendments.
(a) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the parties hereto, with the consent of the Required Holders, and then any such waiver, amendment or modification shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment or modification shall release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each holder of Notes.
(b) The Collateral Agent shall not be deemed to have waived any of its rights and remedies in respect of the Secured Obligations or the Collateral unless such waiver shall be in accordance with paragraph (a) above. No delay or omission on the part of the Collateral Agent in exercising any right or remedy shall operate as a waiver of such right or remedy or any other right or remedy. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion. All rights and remedies of the Collateral Agent with respect to the Secured Obligations or the Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly, alternatively, successively or concurrently at such time or at such times as the Collateral Agent deems expedient.
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6.11. Overdue Amounts. Until paid, all amounts due and payable by the Issuer under this Agreement shall be a debt secured by the Collateral and shall bear, whether before or after judgment, interest at the Default Rate.
6.12. Notice, etc. All notices and communications provided for hereunder shall be in writing and sent (a) by facsimile or as a .pdf attachment to an email with confirmation of receipt, (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent to the address set forth under the intended recipient’s name set forth on the signature pages hereto or at such other address as such Person shall have specified to the other party hereto in writing. Notices will be deemed given only when actually received.
6.13. Collateral Agency Agreement. The Collateral Agent shall act hereunder only in accordance with the terms and conditions of this Agreement and the Collateral Agency Agreement. Any and all actions the Collateral Agent takes or omits to take hereunder shall be covered by the indemnity provisions of the Collateral Agency Agreement which shall be deemed to be incorporated by reference herein. In the case of a conflict between this Agreement (including Section 4.8), and the Collateral Agency Agreement, the Collateral Agency Agreement shall govern the rights and obligations of the Collateral Agent.
6.14. USA PATRIOT Act. The parties hereto acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Collateral Agent such information as it may request, from time to time, in order for the Collateral Agent to satisfy the requirements of the USA PATRIOT Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
6.15. Force Majeure. The Collateral Agent shall not incur any liability for not performing any act or fulfilling any duty, obligation or responsibility hereunder by reason of any occurrence beyond the control of the Collateral Agent (including but not limited to any act or provision of any present or future law or regulation or Governmental Authority, any act of God or war, civil unrest, local or national disturbance or disaster, any act of terrorism, or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility); it being understood that the Collateral Agent shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
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IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused this Agreement to be signed on the date first above written.
IDAHO USG HOLDINGS, LLC
| By: | ||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: | President |
Address for notices:
c/o
U.S. Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Security Agreement]
| (STATE OF | ) |
| ss. | |
| (COUNTY OF | ) |
On this ______day of ____________, 2016, before me, the undersigned notary public, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as President of Idaho USG Holdings, LLC, proved to me through satisfactory evidence of identification, which was ______________________, to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he signed it voluntarily for its stated purpose as President of Idaho USG Holdings, LLC.
________________________________
Official signature and seal of
notary
My commission expires:
[Notary Page to Security Agreement]
WILMINGTON TRUST, NATIONAL
ASSOCIATION, not in its individual capacity but
solely in its
capacity as the Collateral Agent
| By: | ||
| Name: | ||
| Title: |
Address:
Wilmington Trust,
National Association
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Administrator for Idaho USG Holdings, LLC
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Security Agreement]
)
Exhibit A
PERFECTION CERTIFICATE
Dated as of [________], 2016
The undersigned, the [__________] of Idaho USG Holdings, LLC, a Delaware limited liability company (the “Issuer”), hereby certifies as follows:
1. Name. The exact legal name of the Issuer is ___________________________.
2. Other Identifying Factors.
(a) The mailing address of the Issuer is ____________________________.
(b) If different from its mailing address, the Issuer’s place of business or, if more than one, its chief executive office is located at:
| Address | County | State |
(c) The type of organization of the Issuer is a _______________.
(d) The jurisdiction of the Issuer’s organization is _____________.
(e) The Issuer’s state issued organizational identification number [state “None” if the state does not issue such a number] is ________________.
(f) The Issuer’s EIN is _________________.
3. Other Names.
(a) The following is a list of all other names (including trade names or similar appellations) used by the Issuer, or any other business or organization to which the Issuer became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise, now or at any time during the past five years:
eement]
)
)
)
4. Other Current Locations.
(a) The following are all other locations in which the Issuer maintains any books or records relating to its accounts, instruments, chattel paper, general intangibles or mobile goods:
| Address | County | State |
(b) The following are all other places of business of the Issuer:
| Address | County | State |
(c) The following are all other locations where any of the Issuer’s inventory or equipment is located:
| Address | County | State |
(d) The following are the names and addresses of all persons or entities other than the Issuer, such as lessees, consignees, warehousemen or purchasers of chattel paper, which have possession or are intended to have possession of any of the Issuer’s instruments, chattel paper, inventory or equipment:
| Name | Mailing Address | County | State |
5. Prior Locations.
(a) Set forth below is each location or place of business maintained by the Issuer during the past five years:
| Address | County | State |
(b) Set forth below is each other location at which, or other person or entity with which, any of the Issuer’s inventory or equipment has been held during the past twelve months:
| Name | Address | County | State |
6. Fixtures. Set forth below is a description of the real property on which any of the Collateral consisting of fixtures are or are to be located (including reference to a book and page number in the applicable recording office and the name of the record owner of the real property) and the name and address of each real estate recording office where a mortgage on the real estate on which such fixtures are or are to be located would be recorded:
7. Intellectual Property. Set forth below is a complete list of all United States and foreign patents, copyrights, trademarks, trade names and service marks registered or for which applications are pending in the name of the Issuer:
8. Securities; Instruments. Set forth below is a complete list of all stocks, bonds, debentures, notes and other securities and investment property owned by the Issuer (provide name of Issuer, a description of security and value):
9. Bank Accounts. Set forth below is a complete list of all bank accounts (including securities and commodities accounts) maintained by the Issuer:
| Depositary Bank | Bank Address | Type of Account | Account No. |
10. Commercial Tort Claims. Set forth below is a brief written description of each commercial tort claim which the Issuer holds:
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned has signed this Certificate as of the date first set forth above.
| Name: | |
| Title: |
]
)
)
)
)
Exhibit S-6
Form of Recapture Indemnity Agreement
Exhibit S-6 - 1
Execution Version
INDEMNITY AGREEMENT
This INDEMNITY AGREEMENT, dated as of May 19, 2016 (this “Agreement”), is made and entered into by U.S. GEOTHERMAL INC., a Delaware corporation (“USG Delaware”), and U.S. GEOTHERMAL INC., an Idaho corporation (“USG Idaho” and, together with USG Delaware, each a “Sponsor” and collectively, the “Sponsors”), in favor of IDAHO USG HOLDINGS, LLC, a Delaware limited liability company (the “Issuer”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent (together with its successors and permitted assigns in such capacity, the “Collateral Agent”, and together with the Issuer and the Secured Parties, the “Beneficiaries”).
PRELIMINARY STATEMENTS
The Issuer has authorized the issue and sale of its 5.80% Senior Secured Notes due March 31, 2023 (the “Notes”), subject to and in accordance with the Note Purchase Agreement, dated as of the date hereof, among the Issuer and the holders of the Notes party thereto from time to time (as amended, modified or supplemented from time to time, the “Note Agreement”).
It is a condition precedent to the obligations of the holders under the Note Agreement that the parties enter into this Agreement.
In consideration of the foregoing premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, each Sponsor hereby agrees with the Beneficiaries, as follows:
AGREEMENT
SECTION 1. Definitions. Capitalized terms not otherwise defined in this Agreement have the meanings given to them in the Note Agreement. As used in this Agreement, the following terms shall have the following meanings:
“Indemnified Person” has the meaning given in Section 2 hereof.
“Losses” has the meaning given in Section 2 hereof.
“Recapture Liability” means any loss or liability of the Issuer or any Issuer Subsidiary resulting, directly or indirectly, from all or any portion of a Cash Grant being required to be repaid to the U.S. Treasury Department or any other Governmental Authority, including any interest and penalties related thereto. The term “Recapture Liabilities” has a correlative meaning.
SECTION 2. Recapture Indemnity. (a) Each Sponsor absolutely, irrevocably and unconditionally agrees to jointly and severally indemnify and hold harmless the Beneficiaries, their Affiliates and their officers, directors, employees, agents and controlling persons (each, an “Indemnified Person”) from and against any and all (i) Recapture Liabilities and (ii) demands, claims, suits, actions, causes of action, judgments, fines, penalties, assessments, taxes, out of pocket losses, damages, liabilities, settlement amounts, out of pocket costs and expenses, including without limitation attorneys’ fees and expenses incurred by any Beneficiary in the enforcement and/or preservation of any rights under this Agreement (collectively, “Losses”).
(b) Promptly after receipt by any Indemnified Person of notice of any claim, liability or the commencement of any action in respect of Losses under this Section 2, such Indemnified Person shall notify Sponsors in writing of the claim, liability or the commencement of such action; provided, however, that the failure by the Indemnified Person to so notify Sponsors shall not relieve either Sponsor from any liability which it may have under this Section 2. Sponsors shall reimburse each Indemnified Person for any and all Losses promptly and in any event no later than ten (10) Business Days after receiving demand therefor. Each Indemnified Party shall be entitled to make demand upon Sponsors at any time upon the incurrence of any Loss.
(c) The obligations of each Sponsor under this Section 2 are absolute and unconditional, irrespective of the value, genuineness, validity or enforceability of any Transaction Document or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of, or security for, any of the Obligations, and, to the fullest extent permitted by law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of their undertakings hereunder, it being the intent of this Section 2 that the obligations of each Sponsor hereunder shall be absolute and unconditional, under any and all circumstances. Without limiting the generality of the foregoing, it is agreed that the occurrence of one or more of the following shall not alter or impair the liability of either Sponsor hereunder which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to either Sponsor, the time for any performance of, or compliance with, any of the Obligations or any of the obligations of any Issuer Party under any Transaction Document shall be extended, or such performance or compliance shall be waived;
(ii) any failure or omission to assert or enforce or agreement or election not to assert or enforce, or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under the Transaction Documents, at law, in equity or otherwise) with respect to the Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Obligations;
(iii) any of the acts mentioned in any of the provisions of any Transaction Document or any other agreement or instrument referred to herein or therein shall be done or omitted;
(iv) any rescission, waiver, amendment or modification of, or any consent to departure from, any of the terms or provisions (including provisions relating to events of default) hereof, any of the other Transaction Documents or any agreement or instrument executed pursuant thereto, or of any other guaranty or security for the Obligations, in each case whether or not in accordance with the terms hereof or such Transaction Document or any agreement relating to such other guaranty or security;
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(v) the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, waived, supplemented or amended in any respect, or shall at any time be found to be illegal, invalid or unenforceable in any respect, or any right under any Transaction Document or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;
(vi) any Lien or security interest granted to, or in favor of, the Collateral Agent or any other Secured Party or any party to a Transaction Document as security for any of the Obligations (including without limitation Liens intended to be created by the Security Documents) shall fail to be perfected or shall be released;
(vii) the performance or failure to perform by either Sponsor of its obligations hereunder or by the Issuer or any Issuer Subsidiary of its obligations under any other agreement, or by the condition (financial, legal or otherwise), affairs, status, nature or actions of the Issuer or any Issuer Subsidiary;
(viii) any change in ownership of the Issuer or any Issuer Subsidiary;
(ix) the voluntary or involuntary liquidation, dissolution, sale of assets, marshaling of assets and liabilities, receivership, conservatorship, custodianship, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, readjustment or similar proceeding affecting any Person;
(x) any defenses, set offs or counterclaims which either Sponsor or the Issuer or any Issuer Subsidiary may allege or assert against any Beneficiary in respect of the Obligations, including failure of consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and satisfaction and usury; or
(xi) any other act or thing or omission, or delay to do any other act or thing, which may or might in any manner or to any extent vary the risk of either Sponsor as an obligor under this Agreement.
(d) Each Sponsor hereby expressly waives, for the benefit of the Beneficiaries, diligence, presentment, demand of payment, protest and all notices whatsoever (other than any notices required under this Agreement, but subject to the provisions hereof) and any requirement that the Collateral Agent or any other Secured Party or any party to a Transaction Document exhaust any right, power or remedy or proceed against the Issuer or any Issuer Subsidiary under any Transaction Document or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Obligations, or pursue any other remedy in the power of the Collateral Agent or such other Secured Party whatsoever. Each Sponsor hereby further expressly waives, for the benefit of the Beneficiaries, (i) any defense arising by reason of the incapacity, lack of authority or any disability or other defense of the Issuer or any Issuer Subsidiary including any defense based on or arising out of the lack of validity or the unenforceability of the Obligations or any agreement or instrument relating thereto or by reason of the cessation of the liability of the Issuer or any Issuer Subsidiary from any cause other than payment in full of the Obligations, (ii) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal, (iii) any defense based upon any Beneficiary’s errors or omissions in the administration of the Obligations, except behavior which amounts to gross negligence or willful misconduct (iv) (A) any principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms hereof and any legal or equitable discharge of either Sponsor’s obligations hereunder, (B) any rights to set offs, recoupments and counterclaims, and (C) promptness, diligence and any requirement that any Beneficiary protect, secure, perfect or insure any security interest or Lien or any property subject thereto, (v) notices, demands, presentments protests, notices of protest, notices of dishonor and notices of any action or inaction, including acceptance hereof, notices of default hereunder, under the other Transaction Documents or any agreement or instrument related thereto, notices of any renewal, extension or modification of the Obligations or any agreement related thereto, notices of any extension of credit to the Issuer or any Issuer Subsidiary and any right to consent to any thereof, and (vi) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.
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(e) The obligations of each Sponsor under this Section 2 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of either Sponsor under this Agreement is rescinded or must be otherwise restored by any Beneficiary to such Sponsor as a result of any proceedings in bankruptcy, and each Sponsor agrees that it will indemnify each Beneficiary on demand for all reasonable costs and expenses (including reasonable and documented fees and expenses of counsel) incurred by such Beneficiary in connection with such rescission or restoration. This Section 2(e) shall survive the termination of this Agreement.
(f) This Agreement is a primary obligation of each Sponsor and not merely a contract for surety.
SECTION 3. Representations and Warranties. Each Sponsor represents and warrants to the Beneficiaries that, as of the date of this Agreement:
(a) Such Sponsor is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation. Such Sponsor is not subject to any current orders for winding up, or appointment of a receiver or liquidator or to any notice of any proposed deregistration.
(b) The execution, delivery and performance by such Sponsor of this Agreement are within such Sponsor’s corporate powers, have been duly authorized by all necessary corporate action and do not conflict with or result in a breach of its organizational documents, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any material agreement or instrument to which such Sponsor is a party or by which such Sponsor is bound or to which such Sponsor is subject, or constitute a default under any such agreement or instrument, or result in the creation or imposition of any lien, charge, claim or encumbrance upon any of such Sponsor’s revenues or assets pursuant to the terms of any such agreement or instrument.
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(c) No consent, action of authorization or approval or registration, declaration or filing with, any governmental authority or regulatory body or any other third party is required for the due execution, delivery and performance by such Sponsor of this Agreement.
(d) This Agreement has been duly executed and delivered by such Sponsor. This Agreement is a legal, valid and binding obligation of such Sponsor, enforceable against such Sponsor in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally.
(e) There is no action, suit or proceeding now pending before any court, administrative body or arbitral tribunal, or, to the best of such Sponsor’s knowledge, threatened against such Sponsor, which could reasonably be expected to have an adverse effect on such Sponsor’s ability to perform its obligations under this Agreement.
(f) The obligations of such Sponsor under this Agreement rank pari passu with all other unsecured unsubordinated indebtedness of such Sponsor.
SECTION 4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA, WITHOUT REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
SECTION 5. Refunds. If either Sponsor pays any Losses hereunder and the U.S. Treasury Department refunds all or a portion of the Losses, the amount refunded shall be paid to such Sponsor together with any interest thereon paid by the U.S. Treasury Department.
SECTION 6. Consent to Jurisdiction; Waiver of Immunity; Joinder.
(a) The parties agree that any legal action or proceeding by or against either Sponsor or the Issuer or with respect to or arising out of this Agreement or any other Transaction Document may be brought in or removed to the courts of the State of New York, in and for the County of New York, or of the United States of America for the Southern District of New York, in each case, in the Borough of Manhattan. By execution and delivery of this Agreement, each party accepts, for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each of each Sponsor and the Issuer agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties hereto irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, (or any substantially similar form of mail) postage prepaid, return receipt requested to such party at its address for notices as specified herein. Each of the parties agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices under this Section 6(a) shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
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(b) In addition to and notwithstanding the provisions of Section 6(a) above, each of each Sponsor and the Issuer hereby irrevocably appoints CT Corporation System as its agent to receive on its behalf and its property service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to such Sponsor, the Issuer or such Issuer Subsidiary, in care of the process agent at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and each of such Sponsor and the Issuer hereby irrevocably authorizes and directs the process agent to accept such service on its behalf. Nothing in this Agreement will affect the right of any party hereto to serve legal process in any other manner permitted by law or affect the right of any party hereto to bring any action or proceeding in the courts of any other jurisdiction. If for any reason the process agent ceases to be available to act as process agent, each of each Sponsor and the Issuer agrees to immediately appoint a replacement process agent satisfactory to the Collateral Agent. Each of the parties hereby waives any right to stay or dismiss any action or proceeding under or in connection with any or all of this Agreement or any other Transaction Document brought before the foregoing courts on the basis of forum non conveniens.
(c) To the extent that a party hereto has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, such party hereby irrevocably waives such immunity in respect of its obligations under this Agreement.
SECTION 7. Waiver of Jury Trial. EACH OF THE PARTIES HERETO KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ANY RIGHT IT MAY NOW OR HEREAFTER HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED HEREIN, OR ARISING OUT OF, UNDER, OR IN RESPECT OF THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE BENEFICIARIES OR EITHER SPONSOR.
SECTION 8. Amendments, Etc. The terms of this Agreement may be waived, altered or amended only by an instrument in writing duly executed by each party hereto. Any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
SECTION 9. Addresses for Notices. All notices, requests and other communications provided for hereunder shall be in writing (including facsimile) and will be deemed to have been duly given if delivered personally, by facsimile transmission or as a .pdf attachment to an email with confirmation of receipt, by overnight courier service or by certified mail (postage prepaid) to each of the parties at the “Address for Notices” specified below each party’s name on the signature pages hereof.
SECTION 10. No Waiver; Remedies. No failure on the part of a party to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by a party of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
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SECTION 11. Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12. Counterparts. This Agreement may be executed in one or more counterparts. Delivery of an executed signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart thereof.
SECTION 13. Entire Agreement. This Agreement and any agreement, document or instrument referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect of the subject matter hereof.
SECTION 14. Benefit; Successors and Permitted Assigns.
(a) This Agreement is intended solely for the benefit of and is enforceable by the Beneficiaries and their respective successors or permitted assigns and is not for the benefit of or enforceable by any other Person. This Agreement shall be binding upon each Sponsor and its successors and permitted assigns and shall inure to the benefit of the successors and permitted assigns of the Beneficiaries.
(b) This Agreement and all obligations of each Sponsor hereunder to the Beneficiaries shall be assignable by such Sponsor only with the prior written consent of each Beneficiary.
[Signature pages follow]
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IN WITNESS WHEREOF, each of the parties, intending to be legally bound, has caused this Agreement to be signed on the date first above written.
U.S. GEOTHERMAL INC.,
a
Delaware corporation
| By: | ||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
| Title: | CEO |
Address for Notices:
▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇, Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
U.S. GEOTHERMAL INC.,
an
Idaho corporation
| By: | ||
| Name: | ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
| Title: | Treasurer |
Address for Notices:
▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
[Signature Page to Indemnity Agreement]
IDAHO USG HOLDINGS, LLC
| By: | ||
| Name: | ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
| Title: | President |
Address for notices:
c/o
U.S. Geothermal Inc.
▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Telephone:
▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
[Signature Page to Indemnity Agreement]
WILMINGTON TRUST, NATIONAL
ASSOCIATION, solely in its
capacity as Collateral Agent and
not individually
| By | ||
| Name: | ||
| Title: |
Address for notices:
Wilmington Trust, National Association
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Administrator for Idaho USG Holdings,
LLC
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇