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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): November 19, 1999
BAYCORP HOLDINGS, LTD.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-12527 02-0488443
(Commission File Number) (I.R.S. Employer Identification Number)
20 International Drive, Suite 301
Portsmouth, New Hampshire 03801-6809
(Address of Principal Executive Offices) (Zip Code)
(603) 431-6600
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On November 19, 1999, Little Bay Power Corporation, a wholly owned
subsidiary of BayCorp Holdings, Ltd., completed its previously announced
acquisition of Montaup Electric Company's 2.9% interest in the Seabrook Nuclear
Power Project in Seabrook, New Hampshire. A press release describing the
acquisition in greater detail is attached as Exhibit 99.1 to this Form 8-K.
In connection with this acquisition, Little Bay Power Corporation
entered into an escrow agreement with Citizens Bank New Hampshire, dated
November 10, 1999. Pursuant to the escrow agreement, Little Bay Power
Corporation deposited $2.5 million as cash reserves sufficient to cover Little
Bay Power Corporation's share of budgeted cash requirements for Seabrook
expenses arising during plant shutdowns lasting up to six months. A copy of the
escrow agreement is attached as Exhibit 10.1 to this Form 8-K.
Pursuant to an Assignment dated August 28, 1998 between Little Bay
Power Corporation and Great Bay Power Corporation, a wholly owned subsidiary of
BayCorp Holdings, Ltd., Great Bay Power Corporation assigned its rights under an
Asset Purchase Agreement between Great Bay Power Corporation and Montaup
Electric Company to Little Bay Power Corporation. A copy of the assignment is
attached as Exhibit 10.3 to this Form 8-K.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(a) Financial statements of businesses acquired:
Not Applicable.
(b) Pro forma financial information:
Not Applicable.
(c) Exhibits:
See Exhibit Index attached hereto.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BAYCORP HOLDINGS, LTD.
December 3, 1999 By: /s/ Frank W. Getman Jr.
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Frank W. Getman Jr.
President and Chief Executive Officer
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
10.1 Escrow Agreement by and between Little Bay Power Corporation, a
wholly owned subsidiary of BayCorp Holdings, Ltd., and Citizens
Bank New Hampshire dated November 10, 1999.
10.2 Asset Purchase Agreement by and between Montaup Electric Company
and Great Bay Power Corporation, a wholly owned subsidiary of
BayCorp Holdings, Ltd., dated as of June 24, 1998. (1)
10.3 Assignment by and between Great Bay Power Corporation and
Little Bay Power Corporation dated as of August 28, 1998.
99.1 Press Release of BayCorp Holdings, Ltd. dated November 29, 1999.
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(1) Filed as an exhibit to the Quarterly Report on Form 10-Q of BayCorp
Holdings, Ltd. for the quarter ended June 30, 1998 (File No. 1-12527)
on August 13, 1998 and incorporated herein by reference.
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Exhibit 10.1
ESCROW AGREEMENT
ESCROW AGREEMENT made this 10th day of November, 1999, by and between
Little Bay Power Corporation, a New Hampshire corporation with a principal place
of business of 20 International Drive, Suite 301, Portsmouth, New Hampshire
03801, ("Little Bay") and Citizens Bank New Hampshire (the "Escrow Agent").
WHEREAS, Little Bay has agreed to acquire Montaup Electric Company's
("Montaup") approximate 2.9% ownership interest in Seabrook Station Unit No. 1
("Seabrook") pursuant to an Asset Purchase Agreement dated as of June 24, 1998
by and between Montaup and Great Bay Power Corporation, which was subsequently
assigned to Little Bay (the "Asset Purchase Agreement"); and
WHEREAS, Little Bay and Montaup requested regulatory approvals for the
consummation of the sale of Montaup's ownership interest in Seabrook to Little
Bay (the "Sale") from the Nuclear Regulatory Commission ("NRC"), the
Massachusetts Department of Telecommunications and Energy ("MDTE"), the New
Hampshire Public Utilities Commission ("NHPUC"), among other Federal and State
regulatory authorities; and
WHEREAS, in connection with the settlement of certain regulatory
proceedings and consistent with a June 21, 1999 Order of the NHPUC, Little Bay
desires to set aside, at the time of the closing of the Sale, in an escrow
account held by the Escrow Agent, cash reserves sufficient to cover Little Bay's
share of budgeted cash requirements for a six-month period to pay for Little
Bay's Share of Seabrook costs of operations and capital expenditures during
periods of Seabrook shutdowns; and
WHEREAS, the Escrow Agent desires to hold funds of Little Bay in escrow
and to invest and distribute such funds in accordance with this Agreement;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. ESCROW AGENT. Little Bay hereby appoints Citizens Bank New
Hampshire as Escrow Agent, and the Escrow Agent hereby accepts appointment as
such, all upon the terms and provisions set forth in this Escrow Agreement. The
Escrow Agent shall charge Little Bay, and Little Bay shall promptly pay, fees
for its services rendered pursuant to this Agreement, in accordance with
attached Appendix A, which may be modified by Escrow Agent from time to time
upon reasonable written notice of such to Little Bay.
2. ESCROW FUNDS. Little Bay shall forecast its cash requirements
in connection with its ownership of 2.89989% ownership interest in Seabrook, for
each calendar year, in its good faith judgment and based upon the operating and
capital budgets adopted by the operator of Seabrook, such cash requirements to
include but not be limited to costs of operation, maintenance, fuel, fuel
procurement, and capital additions (the "Cash Requirements Budget"). The initial
Cash Requirements Budget is attached to this Agreement as Appendix B, and by
January 31 of each year Little Bay
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shall deliver to the Escrow Agent the Cash Requirement Budget for that calendar
year, and each such budget shall constitute an amendment to Appendix B. One-half
of the Cash Requirements Budget, as amended from time to time, shall constitute
the Initial Escrow Amount.
3. DEPOSIT WITH ESCROW AGENT. Pursuant to the terms and
conditions of the Settlement Agreement, Little Bay agrees to deposit the Initial
Escrow Amount with the Escrow Agent at the time of the Closing as defined in the
Asset Purchase Agreement. Such deposit, along with earnings credited and all
additional deposits made pursuant to the terms of this Agreement, shall
constitute the Escrow Fund.
4. INVESTMENT OF ESCROW FUND. Escrow Agent shall hold and invest
the Escrow Fund monies pursuant to investment guidelines provided to it in
writing by Little Bay (and which Little Bay may modify from time to time) and
shall credit all earnings on monies invested to the Escrow Fund.
5. DISBURSEMENT OF ESCROW FUND. Promptly upon receipt of and as
specified in written instructions from Little Bay, Escrow Agent shall disburse
funds from the Escrow Fund to North Atlantic Energy Service Corporation or to
any successor operator of Seabrook. The Escrow Agent shall have no obligation to
disburse monies in excess of the amount of the Escrow Fund.
6. RESTORATION OF ESCROW FUNDS. On or before January 31 of each
year, Little Bay will deliver to the Escrow Agent for deposit to the Escrow Fund
monies sufficient to cause the Escrow Fund to equal the Initial Escrow amount
for that year. In addition, at such time as the Escrow Fund is equal to less
than 50% of the Initial Escrow Amount (as amended), Little Bay will within sixty
(60) days of such event deliver to the Escrow Agent for deposit to the Escrow
Fund monies sufficient to cause the Escrow Fund to equal the Initial Escrow
amount for that year.
7. LIMITATION OF ESCROW AGENT'S DUTIES.
a. Little Bay acknowledges that the duties of the Escrow
Agent hereunder are solely ministerial in nature, and have been
requested for their convenience. The Escrow Agent shall not be deemed
to be the agent of Little Bay, or to have any legal or beneficial
interest in any of the Escrow Fund. Little Bay agrees that the Escrow
Agent is a party to the Escrow Agreement only and has no duties or
responsibilities in connection with any other agreements related
hereto. Little Bay agrees that the Escrow Agent shall not be liable for
any act or omission taken or suffered in good faith with respect to
this Agreement unless such act or omission is the result of the gross
negligence or willful misconduct of the Escrow Agent.
b. The Escrow Agent may consult with legal counsel and
shall be fully protected and incur no liability relative to any action
or inaction taken in good faith in accordance with the advice of such
counsel. The Escrow Agent shall have no responsibility for determining
the genuineness or validity of any certificate, document, notice or
other instrument or item presented to or deposited
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with it, and shall be fully protected in acting in accordance with any
written instruction given to it by Little Bay and reasonably believed
by the Escrow Agent to have been signed by the proper representatives
of Little Bay.
c. The Escrow Agent shall not be responsible for any
losses relative to the investment or liquidation of the Escrow Fund,
provided such Escrow Fund are invested and held in accordance with
Section 4. The Escrow Agent further shall not be responsible for
assuring that the Escrow Fund are sufficient for the disbursements
contemplated under Section 5 hereof.
d. The Escrow Agent shall not be required to institute
legal proceedings of any kind. The Escrow Agent shall not be required
to defend any legal proceedings which may be instituted against it with
respect to this Agreement unless requested to do so in writing by
Little Bay, and unless and until it is indemnified by Little Bay to the
satisfaction of the Escrow Agent, in its sole discretion, against the
cost and expense of such defense, including without limitation the
reasonable fees and expenses of its legal counsel.
8. INDEMNIFICATION. Little Bay agrees to indemnify the Escrow
Agent for, and to hold it harmless against, any loss, liability, cost or expense
(including without limitation reasonable attorney's fees, costs, and expenses)
incurred by the Escrow Agent (or any of its agents or employees) in connection
with its entering into and carrying out its duties under this Escrow Agreement,
including without limitation any cost and expense of defending itself against
any claim of liability which arises in connection with disputes or controversies
arising hereunder other than those relating to the administration of the Escrow
Fund. Little Bay's obligations under this Section 8 shall survive any
resignation of the Escrow Agent or termination of this Agreement.
9. REMOVAL AND RESIGNATION; SUCCESSOR.
a. GENERAL. Little Bay may remove the Escrow Agent at
any time for any reason (or for no reason) by giving written notice of
such removal to the Escrow Agent or any successor to the Escrow Agent
("Successor Escrow Agent"), which shall specify the date (not earlier
than thirty (30) days after the giving of such notice) upon which such
removal shall take effect. The Escrow Agent or any Successor Escrow
Agent may resign at any time for any reason (or for no reason) by
giving written notice to the Little Bay specifying the date (not
earlier than ninety (90) days after the giving of such notice) upon
which it desires that such resignation shall take effect.
b. EFFECTIVE TIME. Such removal or resignation shall
take effect on the date specified in the notice of removal or
resignation; provided, however, that such removal or resignation shall
not be effective before a Successor Escrow Agent has been appointed and
accepted its obligations under this Agreement; and provided, further,
that if Little Bay shall have sooner appointed a Successor Escrow Agent
pursuant to subsection (c) below and such Successor Escrow Agent shall
have accepted such appointment, then such removal or resignation shall
take effect upon the acceptance by such Successor Escrow Agent.
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c. SUCCESSOR ESCROW AGENT. In the event of the
resignation or removal of the Escrow Agent or a Successor Escrow Agent,
Little Bay shall promptly appoint a Successor Escrow Agent by a written
instrument delivered to the Escrow Agent (or Successor Escrow Agent)
and the Successor Escrow Agent being appointed. Upon the effectiveness
of the resignation or removal of the Escrow Agent (or Successor Escrow
Agent), the Successor Escrow Agent being appointed shall become vested
with all the rights, powers, duties and obligations of its predecessor
hereunder. If no Successor Escrow Agent shall have been appointed as of
the effective date of the resignation or removal of the Escrow Agent as
set forth in the notice provided for in subsection (a) above, then the
Escrow Agent, or Little Bay may petition a court of competent
jurisdiction for the appointment of a successor.
10. TERMINATION. This Agreement may be terminated at the election
of Little Bay by delivery of written notice of termination to the Escrow Agent,
specifying the date of termination. Upon termination, Escrow Agent shall pay all
amounts held in or credited to the Escrow Fund to Little Bay, and all
obligations under this Agreement shall cease other than Little Bay's
indemnification obligations under Section 7.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof, and any
prior or simultaneous promises, agreements, conditions, understandings, or
representations, oral or written, relating to the subject matter hereof are
merged herein and no longer of any force or effect. This Agreement may not be
modified or amended except by a written agreement signed by all parties hereto.
12. THIRD PARTY BENEFICIARIES. Notwithstanding the fact that the
establishment and maintenance of the Escrow Fund is consistent with any
agreements binding Little Bay or orders of governmental regulatory bodies, there
are no intended third party beneficiaries of this Agreement, and this Agreement
is not intended to establish any rights with respect to any persons other than
Little Bay and the Escrow Agent.
13. NOTICES. All notices given under this Escrow Agreement shall
be in writing and shall be sufficient if delivered, sent or mailed registered or
certified mail, return receipt requested, postage prepaid, to the addresses set
forth above, or to such other address as a party may specify in a notice
complying with this provision and sent to the other party.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
15. SEVERABILITY. All provisions contained in this Agreement are
severable. In the event that any of them shall be held to be invalid or
unenforceable by a court of competent jurisdiction, then this Agreement shall be
interpreted as if such invalid or unenforceable provision were not contained
herein.
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16. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their successors and assigns.
17. GOVERNING LAW. This Agreement shall be construed and enforced
in accordance with the laws of the State of New Hampshire.
18. TITLES AND SECTION HEADINGS. Titles and section headings are
for convenience of reference only and neither form a part of this Agreement or
are to be used as an aid in its interpretation.
IN WITNESS WHEREOF, the parties have set their hands to this Agreement
as of the date first above written.
LITTLE BAY POWER CORPORATION
/s/ Patrycia Barnard By: /s/ FRANK W. GETMAN
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Witness Frank W. Getman, President
CITIZENS BANK NEW HAMPSHIRE
/s/ [illegible] By: /s/ KATHLEEN CALDWELLL TADDEL
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Witness , duly authorized
Kathleen Caldwell Taddel
Senior Vice President
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EXHIBIT B
1999 CASH REQUIREMENTS BUDGET
LITTLE BAY ESCROW ACCOUNT
SEABROOK FUNDING REQUIREMENTS:
1999
(ACT JAN-NOV;
BDGT DEC)*
GBPC (12.1324%) LBPC (2.899%)
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$21,036,567 $5,028,184
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ESCROW AMOUNT = $2,514,092 (1/2 OF ANNUAL CASH REQUIREMENTS)
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*1999 INFORMATION IS BASED UPON ACTUAL SEABROOK FUNDING TO DATE AND THE 1999
SEABROOK BUDGET
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Exhibit 10.3
ASSIGNMENT
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THIS ASSIGNMENT, dated as of August 28, 1998 is made by and between
GREAT BAY POWER CORPORATION, a New Hampshire corporation (the "Assignor") and
LITTLE BAY POWER CORPORATION, a New Hampshire corporation (the "Assignee"), both
wholly-owned subsidiaries of BayCorp Holdings, Ltd.
W I T N E S S E T H
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WHEREAS, pursuant to Section 11.5 of the Asset Purchase Agreement and
Section 7 of the Nuclear Decommissioning Fund Assignment and Assumption
Agreement, each dated as of June 24, 1998, by and between the Assignor and
Montaup Electric Company, a Massachusetts corporation ("Montaup"), the Assignor
is permitted to assign all of its respective right, title, interest, and
obligation in such Asset Purchase Agreement (the "Asset Purchase Agreement") and
Nuclear Decommissioning Fund Assignment and Assumption Agreement (the
"Decommissioning Fund Agreement") to the Assignee, and the Assignee has agreed
to accept such right, title, interest, and obligation from the Assignor,
provided that Montaup is given written notice of the assignment and Assignor
delivers a guaranty to Montaup.
NOW THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1. ASSIGNMENT. The Assignor does hereby assign, convey, transfer, and
deliver to the Assignee all of the Assignor's right, title, interest, and
obligation in the Asset Purchase Agreement and the Decommissioning Fund
Agreement, and the Assignee hereby accepts such assignment and assumes all such
right, title, interest, and obligation.
2. NOTICE AND GUARANTY. The Assignor agrees that it will notify Montaup
and execute and deliver to Montaup its guaranty, pursuant to Section 11.5 of the
Asset Purchase Agreement.
3. APPOINTMENT. The Assignor hereby constitutes and appoints the
Assignee, and its successors and assigns, as the Assignor's true and lawful
attorney, with full power of substitution, in the Assignor's name and stead, by,
on behalf of and for the benefit of the Assignee, and its successors and
assigns, to demand and receive any and all of the Assignor's right, title,
interest, and obligation in the Asset Purchase Agreement and the Decommissioning
Fund Agreement and to give receipts and releases for and in respect of the same,
and any part thereof, and from time to time to institute and prosecute, at the
expense and for the benefit of the Assignee, and its successors and assigns, any
and all proceedings at law, in equity or otherwise, which the Assignee, and its
successors or assigns, may deem proper for the collection or reduction to
possession of any of the right, title, interest, and obligation in the Asset
Purchase Agreement and the Decommissioning Fund Agreement transferred hereunder
or for the collection and enforcement of any claim or right of any kind hereby
sold, assigned, conveyed, transferred and delivered, and to do all acts and
things in relation to the right, title, interest, and obligation in the
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Asset Purchase Agreement and the Decommissioning Fund Agreement transferred
hereunder that the Assignee, and its successors or assigns, shall deem
desirable.
4. NO THIRD PARTY BENEFICIARIES. Nothing in this instrument, express or
implied, is intended or shall be construed to confer upon, or give to, any
person other than the Assignee any remedy or claim under or by reason of this
instrument or any agreements, terms, covenants or conditions hereof, and all the
agreements, terms, covenants and conditions in this instrument contained shall
be for the sole and exclusive benefit of the Assignee and its successors and
permitted assigns.
5. BINDING EFFECT; ASSIGNMENT. This Assignment and all of the
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
6. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of New Hampshire (regardless of the laws
that might otherwise govern under applicable New Hampshire principles of
conflicts of laws).
7. CONSTRUCTION. This Assignment is delivered pursuant to and is
subject to the Asset Purchase Agreement and the Decommissioning Fund Agreement.
In the event of any conflict between the terms of the Asset Purchase Agreement
or the Decommissioning Fund Agreement and the terms of this Assignment, the
terms of the Asset Purchase Agreement or the Decommissioning Fund Agreement,
respectively, shall prevail.
IN WITNESS WHEREOF, this Assignment has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date
first above written.
GREAT BAY POWER CORPORATION
By: /s/ Frank W. Getman, Jr.
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Frank W. Getman, Jr.
President and Chief Executive Officer
LITTLE BAY POWER CORPORATION
By: /s/ Frank W. Getman, Jr.
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Frank W. Getman, Jr.
President and Chief Executive Officer
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Exhibit 99.1
BayCorp Holdings, Ltd.
20 International Drive, Suite 301 *
Portsmouth, New Hampshire 03801-6809 Phone
(603) 431-6600 * Fax (603) 431-8877
BAYCORP HOLDINGS, LTD. COMPLETES ACQUISITION OF ADDITIONAL SEABROOK INTEREST
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CONTACT:
Frank W. Getman Jr.
President and CEO
(603) 431-6600
PORTSMOUTH, New Hampshire, November 29, 1999 -- BayCorp Holdings, Ltd.
("BayCorp") (AMEX: MWH) announced today that it recently completed its
acquisition of an additional 2.9% interest in the Seabrook Nuclear Power Project
in Seabrook, New Hampshire. This additional 2.9% interest represents
approximately 34 megawatts of the plant's power output.
BayCorp's wholly owned subsidiary, Little Bay Power Corporation,
purchased this additional 2.9% interest from Montaup Electric Company, a
subsidiary of Eastern Utilities Associates, for a purchase price of $3.2
million, plus approximately $1.7 million for certain prepaid items, primarily
nuclear fuel and capital expenditures. In addition, Montaup prefunded the
decommissioning liability associated with Little Bay's 2.9% share of Seabrook by
transferring approximately $12.4 million into Little Bay's decommissioning
account, an irrevocable trust earmarked for Little Bay's share of Seabrook Plant
decommissioning expenses.
Through its Little Bay and Great Bay Power Corporation subsidiaries,
BayCorp now owns 15% of the Seabrook facility, entitling BayCorp to
approximately 174 megawatts of the plant's power output.
"We are very excited about completing our acquisition of Montaup's
interest in Seabrook," said BayCorp's president and CEO, Frank Getman. "We are
delighted that the plant has operated at full capacity for the past six months
and continues to run well," Getman added.
BayCorp is an unregulated holding company incorporated in Delaware with
headquarters in Portsmouth, New Hampshire. BayCorp currently operates three
wholly owned subsidiaries, Great Bay Power Corporation, Little Bay Power
Corporation and Houston Street Exchange, Inc.
Great Bay Power Corporation is an electric generating company whose
principal asset is a 12.1% joint ownership in the Seabrook Nuclear Power Plant.
LittleBay Power Corporation is an electric generating company whose
principal asset is a 2.9% joint ownership in the Seabrook Nuclear Power Plant,
purchased in this transaction from Montaup Electric Company. Little Bay and
Montaup obtained the final regulatory approval required in connection with this
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acquisition on November 4, 1999. On November 19, 1999, the companies closed the
transaction in accordance with their June 1998 agreement.
Houston Street Exchange, Inc. operates the first Web portal for trading
wholesale electric power, HoustonStreet.com, which allows power marketers to
trade power over the Internet.
The statement in this press release regarding Seabrook
continuing to run well is a forward-looking statement. There are a number of
important factors that could cause this forward-looking statement to be
materially inaccurate in the future. These factors include, without limitation,
that (i) Seabrook may not continue to operate at current levels, (ii) Seabrook
may experience unexpected outages, of which neither the cost nor duration can be
predicted with certainty, (iii) terms under which utilities purchase electricity
from wholesale electricity suppliers may change in the future, (iv) changes to
the extensive government regulation affecting nuclear power plants may occur,
(v) if a nuclear accident occurred, the consequences can be severe and (vi)
competition in the wholesale electricity market, particularly in the
northeastern United States, is intense. Additional risks are described in
BayCorp's Annual Report on Form 10-K as filed with the Securities and Exchange
Commission on March 31, 1999.
