Answering Statement and Request for Dismissal by Gainesville ..

In May 2011, Fagen participated in a construction financing for the Facility, contributing
capital in exchange for newly issued interest s in a special purpose entity (“SPE”) called GREC
Holdings, LLC, which was created to hold GREC in connection with the construction financing.
As a result of Fagen’s capital contributions to the Facility, Fagen received a newly-issued
17.706% interest in GREC Holdings on June 30, 2011, the date of construction financing
closing. Following the project completion date (
but not before then), Fagen has the right to
appoint an additional individual to the Board of Managers of GREC.
Also in connection with the construction fina ncing, in exchange fo r construction equity
commitments, EMI GREC, LLC (an affiliate of EMI Nacogdoches, LLC, collectively “EMI”),
Tyr GREC Holdings, LLC (an affiliate of Tyr Biomass, LLC, collectively “Tyr”) and BayCorp
GREC, LLC (an affiliate of
BayCorp Nacogdoches, LLC, collectively “BayCorp”) were
admitted to GREC Holdings as members. In
addition, the membership interests in GREC
Holdings held by American Renewables were distributed to its members EMI, BayCorp and Tyr,
effectively removing American Renewables as the entity holding GREC Holdings.
The result of these transactions is that the top-tier owners of GREC remained exactly as
they were, with only the addition of one ne w owner, Fagen, acquiring a newly-issued 17.706%
interest in connection with a construction financing (and the other owners’ interests being diluted
pro rata).
Press coverage of the construction financi ng in June 2011 quoted GREC’s President Jim
Gordon who noted the significance of reaching
this milestone: “Completion of construction
financing allows GREC to move forward without delay, ensuring that the Gainesville community
will receive the many environmental and economic benefits of this renewable energy facility.”
See Exhibit 4.
A/75508616.1
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