SEC FILE NO. 70-8369
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CERTIFICATE PURSUANT TO
RULE 24
OF PARTIAL COMPLETION OF
TRANSACTIONS
GENERAL PUBLIC UTILITIES CORPORATION
GENERAL PORTFOLIOS CORPORATION
ENERGY INITIATIVES, INC.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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In the Matter of )
)
GENERAL PUBLIC UTILITIES CORPORATION ) Certificate Pursuant
GENERAL PORTFOLIOS CORPORATION ) to Rule 24 of Partial
ENERGY INITIATIVES, INC. ) Completion of
) Transactions
SEC File No. 70-8369 )
)
(Public Utility Holding Company )
Act of 1935) )
)
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TO THE MEMBERS OF THE SECURITIES AND EXCHANGE COMMISSION:
The undersigned, General Public Utilities Corporation
("GPU") and Energy Initiatives, Inc. ("EI"), hereby certify
pursuant to Rule 24 of the Rules and Regulations under the Public
Utility Holding Company Act of 1935, that certain of the
transactions proposed in the Application, as amended, filed in SEC
File No. 70-8369, have been carried out in accordance with the
Commission's order, dated May 18, 1994 with respect thereto, as
follows:
1. On June 13, 1994, EI obtained a sufficient number of
required consents from third parties ("Requisite Consents") to
complete its purchase of all of the outstanding common stock of
North Canadian Power Incorporated ("NCP") from North Canadian
Resources, Inc. ("NCRI") pursuant to the Stock Purchase and Sale
Agreement, dated March 31, 1994 ("Stock Purchase Agreement").
Accordingly, on June 13, 1994, EI acquired from NCRI the NCP common
stock, together with NCP's indirect ownership interests in the
Lake, Pasco, Ada and Federal Paperboard Cogeneration Projects
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("Acquired Projects"). The Requisite Consents from third parties
with respect to NCP's indirect ownership interests in the Syracuse
Cogeneration Project have not yet been obtained and, consequently,
NCP's ownership interest in that Project have been transferred to
NCRI as Excluded Subsidiaries pursuant to the Stock Purchase
Agreement pending receipt of such Requisite Consents.
2. Immediately prior to EI's acquisition of the NCP
common stock, a 1% general partnership and an aggregate 56.95% of
limited partnership interests ("Lake Interests") in the Lake
Project were transferred to Lake Interest Holdings Inc. ("LIHI"), a
wholly-owned special purpose Delaware subsidiary of NCRI, and an
aggregate 3.15% of limited partnership interest ("Pasco Interests")
in the Pasco Project was transferred to Pasco Interest Holdings
Inc., another wholly-owned special purpose Delaware subsidiary of
NCRI. Pursuant to an Amended and Restated Lake Interest Option
Agreement, dated as of June 13, 1994, and a Pasco Interest Option
Agreement, dated as of June 13, 1994, EI will have until March 31,
1995 the exclusive option, which EI may assign to a third party, to
acquire all or specified portions of the Lake and Pasco Interests,
subject to the satisfaction of certain conditions precedent set
forth in these Option Agreements.
3. As contemplated by the Stock Purchase Agreement,
(a) GPU has entered into a certain Guarantee and Agreement, dated
as of June 13, 1994, with NationsBank of Florida, National
Association and TIFD III-C Inc., pursuant to which GPU has assumed
NCO's unconditional guarantee obligations with respect to the
payment of certain lease, foundation repair and contingent state
tax payments for the Lake Project and (b) EI has entered into a
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certain Equity Infusion and Undertaking Guaranty, dated June 13,
1994, with Pasco Cogen, Ltd. pursuant to which EI has, among other
things, assumed NCO's unconditional guarantee obligations with
respect to the payment of certain costs to install, if required, an
oxidation catalyst at the Pasco Project.
4. EI, NCRI and Harris Trust and Savings Bank ("Escrow
Agent") have entered into an amendment and restatement, dated June
13, 1994, of the Escrow Agreement, dated March 31, 1994. Pursuant
to the Escrow Agreement, as so amended and restated, on June 14,
1994, the Escrow Agent, at the direction of EI and NCRI, disbursed
a total of $53,517,590 to NCRI in respect of the allocated purchase
price for the NCP common stock and the Acquired Projects
($52,004,980), the agreed upon estimated working capital value and
estimated working capital closing adjustment (including
reimbursement for employee severance payments) ($1,332,610) and the
agreed upon delayed closing costs ($180,000), all as provided in
the Stock Purchase Agreement, GPU having made a capital
contribution to EI of such amounts. In addition, the Escrow Agent
dispersed a total of $1,611,000 to GPU representing the balance of
the estimated working capital adjustment and delayed closing costs
not payable to NCRI which GPU had initially deposited with the
Escrow Agent. The Escrow Agent simultaneously disbursed to EI the
escrow deposits with respect to the NCP common stock and the
Acquired Projects and retained the Lake and Pasco Interests,
together with the Syracuse Project deposits, in escrow, as Excluded
Subsidiaries under the Stock Purchase Agreement.
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5. The following exhibits are filed in Item 6:
B-1 - Amended and Restated Lake Interest
Option Agreement.
B-1(a) - First Amendment to Stock Purchase and
Sale Agreement.
B-2(a) - Amended and Restated Escrow
Agreement.
B-3(a) - First Amendment to Lake Cogen, Ltd.
Limited Partnership Agreement.
B-4(a) - Fourth Amendment to Pasco Cogen, Ltd.
Limited Partnership Agreement.
B-16 - Pasco Interest Option Agreement.
B-17 - GPU Guarantee and Agreement regarding
the Lake Project.
B-18 - Equity Infusion and Undertaking
Guaranty regarding the Pasco Project.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS CERTIFICATE TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
GENERAL PUBLIC UTILITIES CORPORATION
By:
Don W. Myers
Vice President and Treasurer
ENERGY INITIATIVES, INC.
By:
B. L. Levy, President
Date: June 21, 1994
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EXHIBITS TO BE FILED BY EDGAR
Exhibits:
B-1 - Amended and Restated Lake Interest
Option Agreement.
B-1(a) - First Amendment to Stock Purchase and
Sale Agreement.
B-2(a) - Amended and Restated Escrow
Agreement.
B-3(a) - First Amendment to Lake Cogen, Ltd.
Limited Partnership Agreement.
B-4(a) - Fourth Amendment to Pasco Cogen, Ltd.
Limited Partnership Agreement.
B-16 - Pasco Interest Option Agreement.
B-17 - GPU Guarantee and Agreement regarding
the Lake Project.
B-18 - Equity Infusion and Undertaking
Guaranty regarding the Pasco Project.
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EXHIBIT B-1
EXECUTION COPY
AMENDED AND RESTATED
LAKE INTEREST OPTION AGREEMENT
THIS AMENDED AND RESTATED LAKE INTEREST OPTION AGREEMENT, dated as
of June 13, 1994, is entered into by and among North Canadian
Resources, Inc., a Delaware corporation ("NCRI"), Lake Interest
Holdings Inc., a Delaware corporation ("LIHI"), and Energy
Initiatives, Inc., a Delaware corporation ("Buyer").
WHEREAS, NCRI, North Canadian Oils Limited, North Canadian Power
Incorporated ("NCP") and Buyer are parties to a Stock Purchase and
Sale Agreement, dated as of March 31, 1994, as amended by that
certain First Amendment, dated as of June 13, 1994 (as so amended,
the "Purchase Agreement"), whereby Buyer has agreed subject to the
terms and conditions stated therein to acquire all of the capital
stock of NCP (terms used and not otherwise defined herein shall
have the meanings set forth in the Glossary referenced as Annex A
hereto);
WHEREAS, NCP owns, among other things, all of the common stock of:
(a) NCP Lake Power Incorporated which in turn owns:
(i) a 1% general partnership interest in Lake Cogen,
Ltd., a Florida limited partnership ("Lake
Partnership"), and
(ii) a 1% general partnership interest in Lake
Investment, L.P., a Delaware limited partnership
("LIL") which in turn holds a 99% limited
partnership interest in Lake Partnership; and
(b) NCP Gem Incorporated, a Delaware corporation which in
turn holds a 99% limited partnership interest in LIL;
WHEREAS, the Purchase Agreement contemplates that:
(a) the First Amended and Restated Limited Partnership
Agreement of Lake Partnership dated as of July 24, 1992
("Partnership Agreement") will be amended to, among other
things, admit LIHI as a general partner and a limited
partner;
(b) LIL will transfer and assign to LIHI an initial 49%
partnership interest to be held by LIHI as a limited
partner and an initial 1% partnership interest to be held
by LIHI as a general partner (collectively, the "Lake
Interest");
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(c) LIL will transfer and assign to LIHI an additional 7.85%
partnership interest to be held by LIHI as a limited
partner (the "Lake Federal QF Interest"); and
(d) LIL will transfer and assign to LIHI an additional .1%
partnership interest to be held by LIHI as a limited
partner (the "Lake Florida QF Interest");
WHEREAS, NCRI owns all 1,000 issued and outstanding shares of
common stock, $.01 par value per share, of LIHI (the "LIHI Stock");
WHEREAS, pursuant to the Purchase Agreement LIHI has granted to
Buyer, for the period commencing on the date hereof and ending on
the Lake Option Expiration Date (as defined herein), the exclusive
right and option to purchase (A) the Lake Interest; and/or (B) the
Lake Federal QF Interest and/or (C) the Lake Florida QF Interest;
WHEREAS, pursuant to the Purchase Agreement NCRI has granted to
Buyer, for the period commencing on the date hereof and ending on
the Lake Option Expiration Date, the exclusive right and option to
purchase the LIHI Stock; and
WHEREAS, as contemplated by the Purchase Agreement the parties
desire to enter into this Amended and Restated Lake Interest Option
Agreement to more fully set forth the foregoing arrangements.
NOW, THEREFORE, in consideration of the above premises and the
agreements contained herein and in the Purchase Agreement, the
parties hereto, intending to be legally bound mutually agree as
follows:
1. Grant of Options.
1.1 For the period beginning on the date hereof and ending as of
the close of business on the Lake Option Expiration Date:
(a) LIHI hereby irrevocably grants to Buyer the exclusive
right and option to purchase all right, title and
interest of LIHI in and to: (A) the Lake Interest ("Lake
Interest Option"); (B) the Lake Federal QF Interest
("Lake Federal QF Interest Option") and/or (C) the Lake
Florida QF Interest ("Lake Florida QF Interest Option)";
and
(b) NCRI irrevocably grants to Buyer the exclusive right and
option to purchase all right, title and interest of NCRI
in and to the LIHI Stock ("LIHI Stock Option") (each of
the Lake Interest Option, Lake Federal QF Interest
Option, Lake Florida QF Interest Option and LIHI Stock
Option is referred to as an "Option.")
on the terms and conditions hereinafter set forth.
If any Option has not been exercised on or before the close of
business on the Lake Option Expiration Date (as the same may be
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extended by written agreement of the parties), such Option shall
expire.
1.2 The parties acknowledge that:
(a) Buyer has, pursuant to the terms of the Purchase
Agreement, deposited with the Escrow Agent (A) $7,000,000
in respect of the Lake Interest Option, (B) $1,562,000
in respect of the Lake Federal QF Interest Option and (C)
$10.00 in respect of the Lake Florida QF Interest Option;
and
(b) NCRI has deposited with the Escrow Agent Sellers' Lake
Interest Deposits which includes executed Assignment
Instruments.
1.3 It is expressly agreed that Buyer shall have the right in its
sole discretion to assign any and all Options and all its rights
hereunder without the consent of NCO, NCRI or LIHI or any other
Person so long as such Person agrees in writing to be bound by all
the terms of this Agreement unless such assignment would cause the
Lake Project to lose its QF Status. The owner of any Option from
time to time is hereinafter referred to as an "Optionee".
2. Exercise of Option; Closing.
2.1 An Optionee may exercise any or all Options owned by it as to
each Option in whole but not in part from time to time on or before
the Lake Option Expiration Date by providing notice thereof to NCRI
and LIHI, which notice shall:
(a) state that Optionee is exercising an Option;
(b) identify the name of Optionee and Options which are being
exercised;
(c) state that all the conditions to the delivery of such
notice as set forth in Section 3 and elsewhere in this
Agreement have been fulfilled; and
(d) state the date of the purchase and sale of the interest
underlying such Options (each a "Lake Interest Closing"),
which shall be not earlier than the second Business Day
following notice of exercise.
2.2 At each Lake Interest Closing:
(a) the Escrow Agent shall:
(i) release and deliver to Buyer Sellers' applicable
Lake Interest Deposit, and
(ii) wire transfer to NCRI the applicable purchase prices
referred to in Section 1.2(a) above related to the
Options being exercised, and
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(b) the Escrow Agent or Buyer shall date the relevant
Assignment Instruments relating to the Options being
exercised the date of the relevant Lake Interest Closing,
insert the name of the Optionee into such Assignment
Instruments, and deliver a copy of the same to LIHI;
whereupon such Lake Interest Closing shall be completed.
(c) The purchase price payable in respect of the LIHI Stock
shall be equal to the sum of each purchase price
specified in Section 1.2(a) reduced by the purchase price
paid in respect of any Options theretofore exercised.
2.3 As used herein, "Lake Option Expiration Date" means, as to the
Lake Florida QF Interest Option, the date of exercise of such
Option (or, if earlier, termination of the Lake Partnership);
and as to each other Option, March 31, 1995.
3. Exercise Conditions.
3.1 (a) The right of an Optionee to deliver notice of exercise of
any Option as aforesaid shall be conditional on receipt
by Optionee and LIHI of all Requisite Consents to the
transfer of the applicable underlying partnership
interests to such Optionee including the consent of TIFD
III-C Inc. in accordance with the terms of the
Partnership Agreement, as amended.
(b) The right of an Optionee to deliver notice of exercise of
the Lake Federal QF Interest Option (and the LIHI Stock
Option if the Lake Federal QF Interest Option has not
theretofore been exercised) shall be further conditioned
on satisfaction of any one of the following conditions:
(i) The Lake Partnership shall have received an order
("FERC Order") issued by the U.S. Federal Energy
Regulatory Commission ("Commission") or the
Commission's staff by delegated authority, in form
and substance reasonably satisfactory to LIHI and
TIFD III-C Inc., to the effect that Buyer would own,
directly or indirectly, not more than a 50% "equity
interest" in the Lake Project, as such phrase is
used in Section 292.206 of the Commission's
Regulations (the "Regulations") implementing the
Public Utility Regulatory Policies Act of 1978, as
amended, after giving effect to (A) an election by
the Lake Partnership under Section 754 ("Section
754") of the Internal Revenue Code of 1986, as
amended ("Code"), with respect to the Lake
Partnership's tax year ending on September 30, 1994,
to adjust the Lake Partnership's basis in its assets
as provided therein (the "754 Election"), (B) the
acquisition by Buyer of the Lake Federal QF
Interest, and (C) the acquisition by Buyer of the
Lake Florida QF Interest; or
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(ii) An election by the Lake Partnership under Section
754 with respect to the Lake Partnership's tax year
ending on September 30, 1994 shall not have been
made and shall be precluded either because the time
within which such election must be made under the
Code shall have expired without the election having
been made or Buyer and LIHI shall have irrevocably
agreed that the Lake Partnership shall not make such
election; or
(iii) Buyer shall have assigned the Lake Federal QF
Interest Option to an entity which is not an
electric utility or electric utility holding company
as defined in 18 CFR Section 292.206, and the Lake
Federal QF Interest Option is exercised by such
assignee.
(c) The right of an Optionee to deliver notice of exercise of
the Lake Florida QF Interest Option (and the LIHI Stock
Option if the Lake Florida QF Interest Option has not
theretofore been exercised) shall be further conditioned
on the satisfaction of each of the following conditions:
(i) Lake Partnership shall have received a written order
of the Florida Public Service Commission ("PSC") in form
and substance satisfactory to LIHI and TIFD III-C Inc.
(the "Florida Interpretation"), to the effect that
ownership of as much as a 50% "equity interest" in the
Lake Partnership by a "utility, utility holding company,
or a subsidiary of them", as such terms are used in PSC
Rule 25-17.080, or any successor rule or regulation
thereto having a similar meaning and effect (the "Rule"),
would not cause the Lake Project to be owned by a "person
primarily engaged in the generation or sale of
electricity," as such phrase is used in the Rule; and
(ii) the Lake Partnership shall have delivered to TIFD
III-C Inc. and LIHI to an opinion of counsel (which
opinion and counsel shall each be reasonably satisfactory
to TIFD III-C Inc. and LIHI) to the effect that the
acquisition by Optionee of the Lake Florida QF Interest
would not adversely affect the status of the Lake Project
as a qualifying cogeneration facility under the Rule,
assuming Optionee also acquires the Lake Federal QF
Interest and the Partnership makes the 754 Election.
3.2 The Lake Partnership shall provide to TIFD III-C Inc. a copy
of any proposed application for the FERC Order or the Florida
Interpretation sufficiently in advance of the filing of such
applications to permit TIFD III-C Inc. to review such proposed
applications and provide their comments thereon to the Lake
Partnership prior to the filing thereof.
4. Further Assurances.
At the request of Buyer or an Optionee, NCRI and LIHI shall
promptly execute and deliver all such documents and instruments as
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Buyer or an Optionee may reasonably request in order to effect the
transfer of the interest underlying each Option to the Optionee and
otherwise to carry out the terms and provisions of this Agreement.
In addition, at each Lake Interest Closing, each party shall
execute and deliver to the other such other instruments and
documents as may be necessary or appropriate to carry out the
transactions contemplated by this Agreement and the Escrow
Agreement and to comply with the terms and conditions hereof and
thereof.
5. Covenants of NCRI and LIHI.
5.1 Between the date hereof and the first to occur of the final
Lake Interest Closing and the Lake Option Expiration Date, LIHI
shall maintain its existence as a corporation in good standing
under Delaware law, and except pursuant to the Assignment of
Partnership Interests, dated as of June 13, 1994 ("Assignment
Agreement"), between LIHI and TIFD III-C Inc. shall not:
(a) merge or consolidate with any Person, or sell or
otherwise transfer any Lake Partnership partnership
interest to any Person, or issue any additional shares of
capital stock, or any instruments convertible into or
exercisable for capital stock; or
(b) enter into any Commitment or incur any liability or
obligation whatsoever except for this Agreement, the
Partnership Agreement and the Lake Partnership Amendment,
or engage in any business other than holding the Lake
Partnership partnership interests;
(c) fail to comply with the terms and provisions of the
Partnership Agreement, or engage in any activity
prohibited thereunder; or
(d) create or suffer to exist any Encumbrance on any Lake
Partnership partnership interests.
5.2 Between the date hereof and the first to occur of the final
Lake Interest Closing and the Lake Option Expiration Date, NCRI
shall not sell, assign or otherwise transfer the LIHI Stock, or
except pursuant to the Pledge Agreement, dated as of June 13, 1994
("Pledge Agreement"), between NCRI and TIFD III-C Inc., create or
suffer to exist any Encumbrance on the LIHI Stock.
6. Amendment and Waiver.
No amendment or waiver of any provision of this Agreement shall be
effective unless the same shall be in writing and signed by the
parties hereto and consented by TIFD III-C Inc., and then such
amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
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7. Notices.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be personally delivered or sent by
facsimile transmission with confirming copy sent by overnight
courier (such as Express mail, Federal Express, etc.) and a
delivery receipt obtained and addressed to the intended recipient
as follows:
(a) If to NCRI or LIHI, to the address of NCRI set forth in
the Purchase Agreement.
(b) If to Buyer, to the address of Buyer set forth in the
Purchase Agreement.
Any party may change its address for receiving notice by giving
written notice to the others named above. All such notices shall
be given as provided above, and shall be effective immediately upon
confirmation of facsimile or completion of personal delivery.
8. Miscellaneous.
8.1 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same Agreement.
8.2 Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the
State of New York. Should any provision of this Agreement be
determined to be invalid, void or unenforceable by a court of
competent jurisdiction for any reason, the remaining provisions
shall remain in full force and effect. The parties consent to the
non-exclusive jurisdiction of the New York federal and state
courts.
8.3 Headings. The section and other headings contained in this
Agreement are for convenience of reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
8.4. Construction. This Agreement has been negotiated by Buyer
and by NCRI (for itself and on behalf of LIHI), and their
respective legal counsel, and legal or equitable principles that
might require the construction of this Agreement or any provision
hereof against the party drafting this Agreement shall not apply in
any construction or interpretation of this Agreement.
8.5 Currency. All references herein to dollars are to United
States dollars.
8.6 Time of Essence. Time is of the essence in this Agreement.
8.7 Assignment. This Agreement may not be assigned by NCRI or
LIHI.
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8.8 Termination Upon Foreclosure. Each Option shall be subject
and subordinate to the Liens of the Security Documents (each as
defined in Appendix A to the Participation Agreement dated as of
July 29, 1992, as amended, among Lake Partnership, Nationsbank of
Florida, National Association, TIFD III-C Inc. and General Electric
Capital Corporation). Each Option which has not theretofore been
exercised shall terminate upon the foreclosure (or transfer in lieu
of foreclosure) of the Partnership Interest Collateral by TIFD III-
C Inc., as agent, pursuant to, and as defined in, the Assignment
Agreement or the Pledge Collateral by TIFD III-C Inc., as agent,
pursuant to, and as defined in, the Pledge Agreement; provided,
however, that if any such foreclosure (or transfer in lieu of
foreclosure) is rescinded then such Lake Options shall re
reinstated in full force and effect under the terms of this
Agreement. If LIHI or NCRI receives any proceeds following a
foreclosure (for transfer in lieu of foreclosure) in excess of the
aggregate exercise prices of the unexercised Lake Options, such
proceeds shall be paid to Buyer.
8.9 Amendment and Restatement. This Agreement is an amendment and
restatement of the original Lake Interest Option Agreement, dated
as of March 31, 1994, and supersedes and replaces such Agreement in
its entirety.
8.10 Third Party Beneficiaries. Each party hereto recognizes that
TIFD III-C Inc. shall be a third party beneficiary under this
Agreement and that TIFD III-C Inc. may enforce the provisions of
this Agreement in its own name; provided that in no event shall
TIFD III-C Inc. be deemed to be liable or responsible for the
performance of any of the obligations of the parties under this
Agreement.
* * *
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IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
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IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
9
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IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
9
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IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
9
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
9
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
9
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
9
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
9
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
9
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
LAKE INTEREST HOLDINGS INC.
By:
Name:
Title:
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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be duly executed on this date first written above.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: /s/ Donald McKechnie By: /s/ David Brauer
Name: Donald McKechnie Name: David Brauer
Title: Vice President Title: Vice President
LAKE INTEREST HOLDINGS INC.
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: Vice President
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EXHIBIT B-1(a)
EXECUTION COPY
FIRST AMENDMENT TO
STOCK PURCHASE AND SALE AGREEMENT
FIRST AMENDMENT, dated as of June 13, 1994 (the "First
Amendment"), to STOCK PURCHASE AND SALE AGREEMENT, dated as of
March 31, 1994 (the "Original Agreement") by and among NORTH
CANADIAN OILS LIMITED, a Canadian corporation ("NCO"), NORTH
CANADIAN RESOURCES, INC., a Delaware corporation ("NCRI"), NORTH
CANADIAN POWER INCORPORATED, a California corporation ("NCP"), and
ENERGY INITIATIVES, INC., a Delaware corporation (the "Buyer").
Capitalized terms used in this First Amendment shall unless
otherwise defined herein have the meanings ascribed to them in the
Original Agreement and the Glossary attached as Annex A thereto.
WHEREAS, the parties desire to amend the Original
Agreement in certain respects.
NOW, THEREFORE, for good and valuable consideration, the
parties hereto, intending to be legally bound, mutually agree as
follows:
SECTION 1. Article I of the Original Agreement is hereby
amended as follows:
a. By amending Section 1.1.3 to read in its entirety as
follows:
1.1.3A. At each Lake Interest Closing, NCRI shall (or,
in the case of paragraph (a) of Subsection 1.6.1, shall
cause LIHI to) sell, transfer, assign and deliver to
Buyer or Buyer's assignee, as applicable, and Buyer or
Buyer's assignee, as applicable, shall purchase and
accept, all right, title and interest in and to:
(a) the LIHI Stock (i.e., 1,000 shares of common
stock, par value $.01 per share);
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b. the Lake Interest;
c. the Lake Federal QF Interest; or
d. the Lake Florida QF Interest (the Lake
Interest, Lake Federal QF Interest and Lake Florida QF
Interest are collectively referred to as the "Lake Option
Interest"), whichever of the foregoing shall be the
subject of the Lake Option to which such Lake Interest
Closing relates.
1.1.3B. At each Pasco Option Closing, NCRI shall (or, in
the case of paragraph (a) of Subsection 1.6.4, shall
cause PIHI to) sell, transfer, assign and deliver to Dade
Investment L.P. ("Dade") or Dade's assignee, as
applicable, and Dade or Dade's assignee, as applicable,
shall purchase and accept, all right, title and interest
in and to:
(a) the PIHI Stock (i.e., 1,000 shares of common
stock, par value $.01 per share);
(b) the Pasco Federal QF Interest; or
(c) the Pasco Florida QF Interest (the Pasco
Federal QF Interest and Pasco Florida QF Interest are
collectively referred to as the "Pasco Option Interest"),
whichever of the foregoing shall be the subject of the
Pasco Option to which such Pasco Option Closing relates.
(b) By amending Sections 1.5 and 1.6 to read in their
entirety as follows:
Section 1.5. Lake Interest Exclusion.
1.5.1.(a) At or prior to the date on which Buyer,
directly or indirectly, acquires the Lake Subsidiaries as
contemplated hereby, Sellers, NCP and the Lake
Subsidiaries, as necessary, shall take all such corporate
and other action as shall be necessary, appropriate or
advisable to amend the Lake Project Partnership Agreement
in substantially the form of Attachment XII (the "Lake
Partnership Amendment").
(b) At or prior to the date on which Buyer,
directly or indirectly, acquires the Pasco Subsidiaries
as contemplated hereby, Sellers, NCP and the Pasco
Subsidiaries, as necessary, shall take all such corporate
and other action as shall be necessary, appropriate or
advisable to amend the Pasco Project Partnership
Agreement in substantially the form of Attachment XIV
(the "Pasco Partnership Amendment").
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1.5.2.(a) Upon adoption of the Lake Partnership
Amendment, Lake Investment, L.P. shall transfer to LIHI,
the Lake Option Interest created as a result of the Lake
Partnership Amendment.
(b) Upon adoption of the Pasco Partnership
Amendment, Dade shall transfer to PIHI, the Pasco Option
Interest created as a result of the Pasco Partnership
Amendment.
1.5.3.(a) LIHI shall thereupon hold the Lake Interest,
the Lake Federal QF Interest and the Lake Florida QF
Interest, as applicable, until such time, if any, as each
such interest is acquired by exercises of the Lake
Options as provided herein and by the Lake Interest
Option Agreement or the Lake Options expire.
(b) PIHI shall thereupon hold the Pasco Federal QF
Interest and the Pasco Florida QF Interest, as
applicable, until such time, if any, as each such
interest is acquired by exercises of the Pasco Options as
provided herein and by the Pasco Option Agreement or the
Pasco Options expire.
1.6. Lake and Pasco Options.
1.6.1. For the period beginning on the date hereof and
ending as of the close of business on the Option
Expiration Date (as hereinafter defined):
(a) NCRI hereby irrevocably grants, and agrees to
cause LIHI to grant, to Buyer the exclusive right and
option to purchase from LIHI all right, title and
interest of LIHI in and to the: (i) Lake Interest ("Lake
Interest Option"); (ii) Lake Federal QF Interest ("Lake
Federal QF Interest Option") and (iii) Lake Florida QF
Interest ("Lake Florida QF Interest Option); and
(b) NCRI hereby irrevocably grants to Buyer the
exclusive right and option to purchase all right, title
and interest of NCRI in and to all 1,000 issued and
outstanding shares of common stock of LIHI (the "LIHI
Stock") ("LIHI Stock Option").
Each of the Lake Interest Option, Lake Federal QF
Interest Option, Lake Florida QF Interest Option and the
LIHI Stock Option is referred to as a "Lake Option." Any
Lake Option which has not been exercised on or before the
close of business on the Option Expiration Date shall
expire.
1.6.2. It is expressly agreed that Buyer shall have the
right in its sole discretion to assign, in whole or in
part, any or all Lake Options without the consent of NCO,
NCRI or LIHI to any Person unless such assignment would
3
<PAGE>
cause the Lake Project to lose its QF Status; provided,
however, that each Lake Option may only be exercised in
whole and not in part. The owner (including any such
assignee) of a Lake Option from time to time is
hereinafter referred to as a "Lake Interest Optionee."
1.6.3. A Lake Interest Optionee may exercise a Lake
Option on or before the Option Expiration Date by
providing notice thereof to NCRI and LIHI, which notice
shall:
(a) state that Lake Interest Optionee is exercising
a Lake Option;
(b) identify the name of Lake Interest Optionee and
the Lake Option which is being exercised; and
(c) state the date of the purchase and sale of the
Lake Option Interest underlying such Lake Option (each, a
"Lake Interest Closing"), which shall not be earlier than
the second Business Day following notice of exercise.
1.6.4. For the period beginning on the date hereof and
ending as of the close of business on the Option
Expiration Date:
(a) NCRI hereby irrevocably grants, and agrees to
cause PIHI to grant, to Dade the exclusive right and
option to purchase from PIHI all right, title and
interest of PIHI in and to the: (i) Pasco Federal QF
Interest ("Pasco Federal QF Interest Option") and (ii)
Pasco Florida QF Interest ("Pasco Florida QF Interest
Option"); and
(b) NCRI hereby irrevocably grants to Dade the
exclusive right and option to purchase all right, title
and interest of NCRI in and to all 1,000 issued and
outstanding shares of common stock of PIHI (the "PIHI
Stock") ("PIHI Stock Option").
Each of the Pasco Federal QF Interest Option, Pasco
Florida QF Interest Option and the PIHI Stock Option is
referred to as a "Pasco Option." Any Pasco Option which
has not been exercised on or before the close of business
on the Option Expiration Date shall expire.
1.6.5. It is expressly agreed that Dade shall have the
right in its sole discretion to assign, in whole or in
part, any or all Pasco Options without the consent of
NCO, NCRI or PIHI to any Person unless such assignment
would cause the Pasco Project to lose its QF Status;
provided, however, that each Pasco Option may only be
exercised in whole and not in part. The owner (including
any such assignee) of a Pasco Option from time to time is
hereinafter referred to as a "Pasco Optionee."
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<PAGE>
1.6.6. A Pasco Optionee may exercise a Pasco Option on
or before the Option Expiration Date by providing notice
thereof to NCRI and PIHI, which notice shall:
(a) state that Pasco Optionee is exercising a Pasco
Option;
(b) identify the name of Pasco Optionee and the
Pasco Option which is being exercised; and
(c) state the date of the purchase and sale of the
Pasco Option Interest underlying the Pasco Option (each,
a "Pasco Option Closing"), which shall not be earlier
than the second Business Day following notice of
exercise.
1.6.7. As used herein, "Option Expiration Date" as to
each of the Lake Florida QF Interest Option and the Pasco
Florida QF Interest Option, means the exercise date of
such option (or, if earlier, termination of the Lake
Project Partnership or Pasco Project Partnership, as
applicable), and for all other options means March 31,
1995.
1.6.8. Sellers, NCP, the Lake Subsidiaries, LIHI, PIHI
and Buyer shall execute and deliver all such instruments,
certificates, opinions and other documents as shall be
necessary, appropriate or advisable to carry out the
foregoing.
1.6.9 Buyer agrees that it will exercise or cause to be
exercised the Lake Florida QF Interest Option, Lake
Federal QF Interest Option, Pasco Florida QF Interest
Option and the Pasco Federal QF Interest Option promptly
following the satisfaction of each such option's
conditions to exercise.
SECTION 2. Article II of the Original Agreement is hereby
amended as follows:
(a) By amending Section 2.1.3 in its entirety to read as
follows:
2.1.3. In the event there are any Excluded Subsidiaries
and/or any Lake Option or Pasco Option is not exercised
at the NCP Closing, the Purchase Price payable to NCRI at
the NCP Closing shall be adjusted in accordance with the
allocations in Schedule 2.1 and paid to NCRI as provided
for in Subsection 2.2 in accordance with the allocations
in Schedule 2.1 at the Excluded Subsidiaries Closing, if
any, at which such Excluded Subsidiaries are purchased by
Buyer or NCP and, as applicable, at each Lake Interest
Closing or Pasco Option Closing.
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<PAGE>
(b) By amending Section 2.2.4 in its entirety to read as
follows:
2.2.4 All payments to NCRI pursuant to this Agreement
shall be by wire transfer payable to North Canadian
Resources, Inc. (Account No. 362-540-7) at Harris Trust
and Savings Bank, 111 West Monroe Street, Chicago,
Illinois (Bank Routing No. 071000288).
SECTION 3. Article III of the Original Agreement is hereby
amended as follows:
(a) By amending Section 3.3.2(f) to read in its entirety
as follows:
(f) The following deposits relating to the Lake Options
(each, a "Lake Interest Deposit"):
(i) LIHI Stock Deposit:
(A) By-laws, minute book and stock record books of
LIHI, together with a certificate of the
secretary or assistant secretary of such
corporation certifying the authenticity and
completeness thereof;
(B) Certificate of Incorporation of LIHI certified
as of a recent date by the Secretary of State
of Delaware; and
(C) Certificate representing all of the issued and
outstanding shares of LIHI Stock registered in
the name of NCRI.
(ii) Lake Interest Deposit:
(A) Lake Interest Assignment Instrument relating to
the Lake Interest
(iii) Lake Federal QF Interest Deposit:
(A) Lake Interest Assignment Instrument relating to
the Lake Federal QF Interest
(iv) Lake Florida QF Interest Deposit:
(A) Lake Interest Assignment Instrument relating to
the Lake Florida QF Interest
(b) By adding the following as a new subparagraph (g) to
Section 3.3.:
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(g) The following deposits relating to the Pasco Options
(each, a "Pasco Option Deposit"):
(i) PIHI Stock Deposit:
(A) By-laws, minute book and stock record books of
PIHI, together with a certificate of the
secretary or assistant secretary of such
corporation certifying the authenticity and
completeness thereof;
(B) Certificate of Incorporation of PIHI certified
as of a recent date by the Secretary of State
of Delaware;
(C) Certificate representing all of the issued and
outstanding shares of PIHI Stock registered in
the name of NCRI; and
(ii) Pasco Federal QF Interest Deposit:
(A) Pasco Interest Assignment Instrument relating
to the Pasco Federal QF Interest
(iii) Pasco Florida QF Interest Deposit:
(A) Pasco Interest Assignment Instrument relating
to the Pasco Florida QF Interest
(c) By amending Section 3.7 in its entirety to read as
follows:
3.7. Lake Interest and Pasco Option Closings.
3.7.1. Each Lake Interest Closing and Pasco Option
Closing shall, subject to the satisfaction of the
conditions precedent set forth in Article XII and Section
3.7.4(b), occur at the offices of McDermott, Will & Emery
and shall begin at 10:00 A.M. (Central Time) or at such
other time and place as the parties may mutually agree in
writing.
3.7.2. Each Lake Interest Closing and Pasco Option
Closing shall occur two Business Days following the later
of the following dates:
(a) receipt by NCRI of a written notice of exercise
of the relevant option; and
(b) receipt of all Requisite Consents required for
the contemplated transfer of the applicable Lake Option
Interest, LIHI Stock, Pasco Option Interest or PIHI
Stock, as the case may be, and satisfaction of such other
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<PAGE>
conditions as are set forth in the Lake Interest Option
Agreement and Pasco Option Agreement, as applicable; or
on such other date as the parties may mutually agree in
writing.
3.7.3. A preclosing shall occur at the offices of
McDermott, Will & Emery, at 10:00 A.M. (Central Time) on
the Business Day immediately preceding each closing or at
such other time or place as the parties may mutually
agree in writing.
3.7.4. (a) At each closing:
(i) NCRI and Buyer shall certify to the Escrow
Agent that a Lake Interest Closing or Pasco Option
Closing, as applicable, is occurring;
(ii) NCRI shall instruct the Escrow Agent to
release to Buyer the Seller's applicable Lake
Interest Deposit or Pasco Option Deposit; and
(iii) The Escrow Agent shall wire transfer from
Buyer's Cash Deposit to NCRI the applicable purchase
price specified on Schedule 2.1 hereto. (It is
understood that if the Lake Florida QF Interest or
Pasco Florida QF Interest closing occurs on or after
April 1, 1995 and the Escrow Agreement has
theretofore terminated, the parties shall
nevertheless be obligated to make the required
deliveries.)
(b) The right of a Lake Interest Optionee and Pasco
Optionee to deliver notice of exercise of any Lake Option
and Pasco Option as aforesaid shall be conditioned on:
(i) receipt by optionee and NCRI of all Requisite
Consents to the transfer of the interests to be acquired,
to such optionee; and (ii) satisfaction of such other
conditions as are set forth in the Lake Interest Option
Agreement and Pasco Option Agreement, as applicable.
3.7.5. At each Lake Interest Closing and Pasco Option
Closing, each party shall execute and deliver to the
other such other instruments and documents as may be
necessary or appropriate to carry out the Purchase and
Sale Transactions and the Escrow Agreement and to comply
with the terms and conditions hereof and thereof.
(c) By amending the first paragraph of Section 3.9.2. in
its entirety to read as follows:
3.9.2. In the event following the NCP Closing any
Excluded Subsidiaries have not been purchased by Buyer on
or prior to December 31, 1994 and/or the entire Lake
Option Interest and Pasco Option Interest has not been
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<PAGE>
purchased by the Lake Optionee(s) and Pasco Optionee(s)
on or prior to March 31, 1995, then unless the parties
shall otherwise agree in writing, on April 1, 1995 the
Escrow shall be terminated and the Escrow Agent shall:
SECTION 4. Article VI is hereby amended as follows:
(a) The first paragraph of Article VI is amended by
adding the following to the end of the first sentence thereof
before the period:
provided, however, that representations regarding
PIHI, Pasco Option Agreement, PIHI Stock and Pasco
Option Interest are made as of the date of the First
Amendment.
(b) By amending Section 6.1.2. to read in its entirety
as follows:
6.1.2. LIHI and PIHI each is a validly existing
corporation and in good standing under the laws of the
State of Delaware. LIHI and PIHI each has the corporate
power and authority required to own and dispose of the
Lake Option Interest and the Pasco Option Interest,
respectively. LIHI is duly qualified as a foreign
corporation in Florida, and neither LIHI nor PIHI is
otherwise qualified to do business as a foreign corpora-
tion in any jurisdiction. LIHI and PIHI each:
(a) has been formed for the sole purpose of
acquiring, holding and disposing of the Lake Option
Interest and Pasco Option Interest, respectively;
(b) is not engaged in any other business; and
(c) has no assets other than the Lake Option
Interest and Pasco Option Interest, respectively, nor any
liabilities or obligations other than those created by,
and is not a party to any Commitment except for, this
Agreement, and Commitments to enter into the Lake Project
Partnership Agreement and the Lake Interest Option
Agreement, and the Pasco Project Partnership Agreement
and Pasco Option Agreement, respectively.
(c) By adding "and PIHI each" after "LIHI" in the first
line of Section 6.2.2.
(d) By amending Sections 6.3.2 and 6.4 to read in their
entirety as follows:
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<PAGE>
6.3.2. All corporate and other actions required to be
taken by LIHI and PIHI to authorize the execution,
delivery and performance of this Agreement, the Escrow
Agreement, the Lake Interest Option Agreement, the Pasco
Option Agreement and the Closing Documents and the
Purchase and Sale Transactions have been duly and
properly taken.
(a) Except as disclosed in Schedule 5.3, no
Consent, approval or authorization of, or filing of any
certificate, notice, application, report or other
document with, any Government Authority; and
(b) Except as disclosed in Schedule 5.2, no Consent
of any Person under any Commitment to which it is a party
or by which its assets are bound or subject,
is required on the part of LIHI or PIHI in connection
with the valid execution and delivery of this Agreement,
the Escrow Agreement, the Lake Interest Option Agreement,
the Pasco Option Agreement and the Closing Documents or
the performance by LIHI or PIHI of any of its obligations
hereunder or thereunder.
6.4. Validity.
6.4.1. This Agreement, the Escrow Agreement, the Lake
Interest Option Agreement, the Pasco Option Agreement and
the Closing Documents have each been duly executed and
delivered by NCRI and are lawful, valid and legally
binding obligations of NCRI, enforceable in accordance
with their respective terms and conditions, except to the
extent limited by bankruptcy, insolvency, reorganiza-
tion, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles.
6.4.2. This Agreement, the Escrow Agreement, the Lake
Interest Option Agreement, the Pasco Option Agreement and
the Closing Documents have been duly executed and
delivered by or on behalf of LIHI and PIHI, as
applicable, and are the lawful, valid and legally binding
obligation of LIHI and PIHI, as applicable, enforceable
in accordance with their respective terms and conditions,
except to the extent limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable
principles.
(e) By amending Sections 6.5.1(d) and 6.5.2. to read in
their entirety as follows:
(d) except as disclosed in Schedule 5.2., any
Commitment to which NCRI is a party or by which any of
its assets are bound or subject relating to the sale of
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<PAGE>
the Stock or the LIHI Stock or the PIHI Stock or that
could result in a Third Party Injunction or impose a lien
on the Stock or assets of NCP or the Projects.
6.5.2. The execution, delivery and performance of this
Agreement and the transactions contemplated hereby are
not prohibited by, do not violate or conflict with any
provision of, or result in a default (or, constitute an
event which with notice or lapse of time or both, would
become a default) under or a breach of:
(a) LIHI's or PIHI's Certificate of Incorporation
or By-Laws;
(b) any order, decree or judgment of any court,
Government Authority, or arbitrative body to which LIHI
or PIHI is a party or by which it or any of its assets
are bound or subject;
(c) any law or regulation applicable to LIHI or
PIHI; or
(d) any Commitment to which LIHI or PIHI is a party
or by which any of its assets are bound or subject
relating to the sale of the Lake Option Interest, the
Pasco Option Interest or the LIHI Stock or the PIHI Stock
that could result in a Third Party Injunction or impose a
lien on the same.
(f) By amending Section 6.6.2. to read in its entirety
as follows:
6.6.2.(a) Upon acquisition from Lake Investment, L.P. of
the Lake Option Interest, LIHI will acquire and there-
after hold the same free and clear of all Encumbrances
and Claims (except as provided in Section 10.6), and at
each Lake Interest Closing will have the absolute right,
power and capacity to sell, assign, transfer and deliver
the applicable Lake Option Interest to the Lake Optionee
free and clear of any Encumbrances, voting trust arrange-
ments or Claims of any nature whatsoever (except as
provided in Section 10.6). Upon delivery and payment for
such Lake Option Interest pursuant hereto and the Lake
Interest Option Agreement, the Lake Interest Optionee
will acquire good and valid title thereto, free and clear
of all Encumbrances or Claims except as provided in
Section 10.6 and for Encumbrances or Claims that may be
imposed by the Lake Interest Optionee or on account of
the conduct of the Lake Interest Optionee.
(b) Upon acquisition from Dade of the Pasco Option
Interest, PIHI will acquire and thereafter hold the same
free and clear of all Encumbrances and Claims (except as
provided in Section 10.6), and at each Pasco Closing will
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<PAGE>
have the absolute right, power and capacity to sell,
assign, transfer and deliver the applicable Pasco Option
Interest thereof to the Pasco Optionee free and clear of
any Encumbrances, voting trust arrangements or Claims of
any nature whatsoever (except as provided in Section
10.6). Upon delivery and payment for such Pasco Option
Interest pursuant hereto and the Pasco Option Agreement,
the Pasco Optionee will acquire good and valid title
thereto, free and clear of all Encumbrances or Claims
except as provided in Section 10.6 for Encumbrances or
Claims that may be imposed by the Pasco Optionee or on
account of the conduct of the Pasco Optionee.
(g) By adding the following new Section 6.6.3.A.
immediately following Section 6.6.3.:
6.6.3.A. PIHI's capitalization consists solely of one
thousand (1,000) shares of common stock, $.01 par value
per share, all of which have been issued and outstanding.
The PIHI Stock is owned by NCRI free and clear of all
Encumbrances, voting trust arrangements and Claims. Upon
delivery and payment for the PIHI Stock pursuant hereto
and the Pasco Option Agreement, the Pasco Optionee will
acquire good and valid title to the PIHI Stock, free and
clear of all Encumbrances, voting trust arrangements or
claims of any nature whatsoever, except for Encumbrances
or Claims that may be imposed by the Pasco Optionee or on
account of the conduct of the Pasco Optionee.
(h) By adding "or PIHI" to the end of Section 6.7.2.
before the period.
SECTION 5. Article X is hereby amended as follows:
(a) By inserting the words "and PIHI" after "shall cause
LIHI" in the first line of Section 10.3. and the first line of
Section 10.4.
(b) By inserting the following in the second line of
Section 10.6(a) between "and" and "not permit":
, except pursuant to the Assignment of Partnership
Interests, dated as of June 13, 1994, between LIHI and
TIFD III-C, Inc,
(c) By inserting the following in the first line of
Section 10.6(b) between "or" and "create or":
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<PAGE>
except pursuant to the Pledge Agreement, dated as of
June 13, 1994, between NCRI and TIFD III-C, Inc.
(d) By adding the following to the end of Section 10.6.:
Except with the written consent of Buyer, between the
date hereof and the final Pasco Option Closing, or
termination of the Pasco Option, whichever shall first
occur:
(a) NCRI shall cause PIHI to maintain its existence
as a corporation in good standing under Delaware law and,
except pursuant to the Limited Partner Security Agreement
dated as of June 1, 1994 between PIHI and Bankers Trust
Company, as Collateral Agent, not permit PIHI to:
(i) merge or consolidate with any Person, or
sell or otherwise transfer the Pasco Option Interest
to any Person, or issue any additional shares of
capital stock or any instruments convertible into or
exercisable for capital stock;
(ii) enter into any Commitment or incur any
liability or obligation whatsoever, except for the
Pasco Partnership Amendment and the Pasco Option
Agreement, or engage in any business other than
holding the Pasco Option Interest;
(iii) fail to comply with the terms and
provisions of the Pasco Partnership Amendment, or
engage in any activity prohibited thereunder; or
(iv) create or suffer to exist any Encumbrance
on the Pasco Option Interest or the Pasco Option.
(b) NCRI shall not sell, assign or otherwise
transfer the PIHI Stock, or create or suffer to exist any
Encumbrance on the PIHI Stock.
SECTION 6. Article XI is hereby amended as follows:
(a) By replacing the words "the Lake Interest Closing"
in the fifth from the last line in Section 11.6.2. with "each Lake
Interest Closing or each Pasco Option Closing,".
(b) By replacing the words "the Lake Interest Closing
Date" with "each Lake Interest Closing Date and Pasco Option
Closing Date" in the first line of Section 11.9.
SECTION 7. Article XII is hereby amended as follows:
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<PAGE>
(a) By adding ", PIHI" after "LIHI" in the second line
of Section 12.1.(a), the fifth line of Section 12.1.(b), and the
second line of Section 12.2(a).
SECTION 8. Article XV is hereby amended as follows:
(a) By amending Section 15.1.2.(b) to read in its
entirety as follows:
(b) any breach of any covenant or agreement made or
to be performed by NCO, NCRI, LIHI, PIHI or NCP pursuant
to this Agreement, the Escrow Agreement, the Lake Option
Agreement, the Pasco Option Agreement or the Closing
Documents; or
(b) By replacing the words "the Lake Interest Closing"
with "a Lake Interest Closing or Pasco Option Closing" in the
second line of Section 15.1.2.(c) and in the second line of Section
15.2.2.(c).
SECTION 9. Article XVI is hereby amended as follows:
(a) By replacing the words "or the Lake Interest" in the
first line of clause (A) of Section 16.1.1(i) with "any portion of
the Lake Option Interest or Pasco Option Interest".
(b) By adding the following as a new subparagraph (l) to
Section 16.1.1:
(l) Notwithstanding the foregoing, Buyer may in its
discretion choose to exclude NCP Dade Power Incorporated
("NCP Dade") from the Elections, in which event: if and
to the extent that (i) the Allocation to the shares of
stock of NCP Dade is less than the pro rata share, based
on its 1% partnership interest in Pasco Cogen, Ltd., of
the total Allocation to interests in Pasco Cogen, Ltd.
purchased directly or indirectly by the Buyer and (ii) as
a result thereof NCRI pays more Taxes than it would have
paid if NCP Dade were not excluded from the Elections,
then the Buyer shall indemnify NCRI with respect to such
additional Taxes.
SECTION 10. Annex A (Glossary of Terms) is hereby amended as
follows:
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<PAGE>
(a) The defined term "Lake Interest Option" is changed
to "Lake Option," and "Lake Interest Option Expiration Date" to
"Option Expiration Date."
(b) The following defined terms in Annex A are amended
in their entirety to read as follows:
Escrow Agreement: Amended and Restated Escrow
Agreement, dated as of the date of the First Amendment, by and
among NCRI, Buyer and Escrow Agent.
Lake Interest: Initially, the 1% general partnership
interest and the 49% limited partnership interest in Lake
Cogen, Ltd. which shall be transferred by Lake Investment,
L.P. to LIHI and shall be the subject of the Lake Interest
Option Agreement.
Lake Interest Closing: The deliveries and
performances required by Section 3.7 of the Agreement, upon
exercise of each Lake Option.
Lake Option: Each exclusive option granted to Buyer
to purchase a portion of the Lake Option Interest or the LIHI
Stock set forth in Section 1.6 of the Agreement.
Option Expiration Date: Defined in Section 1.6.7 of
the Agreement.
Lake Interest Optionee: An owner of a Lake Option
from time to time.
(c) In the definition of "Third Party Injunction" the
word "PIHI" is added after "LIHI" in the sixth line.
(d) The following new definitions are hereby added to
Annex A:
Pasco Option: Each exclusive option granted to Dade
to purchase a portion of the Pasco Option Interest or PIHI
Stock set forth in Section 1.6 of the Agreement.
Pasco Option Closing: The deliveries and
performances required by Section 3.7 of the Agreement, upon
exercise of each Pasco Option.
Pasco Federal QF Interest: The 3.05% limited
partnership interest in Pasco Cogen, Ltd. which shall be
transferred by Dade to PIHI and shall be the subject of the
Pasco Option Agreement.
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Pasco Florida QF Interest: The .10% limited
partnership interest in Pasco Cogen, Ltd. which shall be
transferred by Dade to PIHI and shall be the subject of the
Pasco Option Agreement.
Pasco Optionee: An owner of a Pasco Option from time
to time.
Lake Federal QF Interest: The 7.85% limited
partnership interest in Lake Cogen Ltd. which shall be
transferred by Lake Investment, L.P. to LIHI and shall be the
subject of the Lake Interest Option Agreement.
Lake Florida QF Interest: The .10% limited
partnership interest in Lake Cogen, Ltd. which shall be
transferred by Lake Investment, L.P. to LIHI and shall be the
subject of the Lake Interest Option Agreement.
Pasco Option Assignment Instruments: Assignments of
partnership interests to be held by PIHI with respect to
interests in Pasco Cogen, Ltd.
PIHI: Pasco Interest Holdings, Inc., a Delaware
corporation.
SECTION 11. (a) Attachments XI (Lake Option Agreement) and
XII (Lake Partnership Amendment) are hereby amended and restated in
their entirety in the forms of Attachments XI and XII,
respectively, to this First Amendment.
(b) Attachments XIII (Pasco Option Agreement) and XIV
(Pasco Partnership Amendment) to this First Amendment are hereby
added as attachments to the Original Agreement.
(c) Schedule 2.1 (Cash Consideration Allocation) is
hereby amended in its entirety in the form of Schedule 2.1 to this
First Amendment.
SECTION 12. (a) The following are supplemental agreements of
the parties relating to personnel matters and supplement the provi-
sions in Section 11.5.1 of the Original Agreement:
(i) Prior to the NCP Closing, NCP agrees to
terminate the employment of all of its employees and, except
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as otherwise mutually agreed by the parties, all arrangements
by which it utilizes personnel of affiliates.
(ii) Pursuant to Section 11.5.1(b) of the Original
Agreement, Buyer agrees to reimburse Sellers on the NCP
Closing Date for US$332,870 which Seller has paid to U.S.
Other Personnel as severance compensation. At the NCP
Closing, Buyer and NCRI shall direct Escrow Agent to pay to
NCRI from Buyer's Cash Deposit US$643,610, representing the
sum of (i) the aforesaid US$332,870 and (ii) US$310,740 which
the parties anticipate Seller will pay as severance
compensation to Canadian Other Employees (it being understood
that if all or part of such payment by Buyer is not used by
Sellers to pay such severance compensation by June 30, 1994 it
shall be re-deposited by Sellers into escrow as part of
Buyer's Cash Deposit; if, thereafter, Sellers pay such
severance compensation Buyer and NCRI shall direct Escrow
Agent to pay NCRI from Buyer's Cash Deposit the amount of such
payment). The parties agree that Sellers will not be
reimbursed for any such severance payments through the Working
Capital Closing Adjustment provided in Section 4.2.1.
(iii) Sellers will, at or prior to time of
termination of the U.S. NCP employees, arrange for Great West
Life to make available under the insurance policy currently
maintained by NCP COBRA benefits for such U.S. NCP employees
on a basis where such U.S. NCP employees electing to receive
such benefits are required to pay the full costs of such
insurance coverage, and will provide or cause Great Western
Life to provide each such U.S. NCP employee with all notices
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<PAGE>
regarding his or her right to elect such COBRA coverage as may
be required under applicable law. Buyer agrees that following
the NCP Closing it will not take (or permit NCP to take) any
action that would cause such policy to terminate for so long
as such COBRA coverage is required by applicable law.
(b) Section 15.2.2 of the Original Agreement is hereby
amended by inserting "; or" at the end of paragraph (e)(ii) and the
following as a new paragraph (f):
(f) without limiting any other provision
hereof, any Claim by a Retained Personnel or Other
Personnel to the extent the Claim is based on the
termination of such employee constituting a
violation of applicable law.
SECTION 13. Except as expressly amended by this First
Amendment, the Original Agreement shall continue in full force and
effect in accordance with its terms.
SECTION 14. This First Amendment may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same document.
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IN WITNESS WHEREOF, each of the parties has caused this First
Amendment to be duly executed on this date first written above.
NORTH CANADIAN OILS LIMITED ENERGY INITIATIVES, INC.
By: /s/ D.W. Bruce Fenwick By: /s/ David Brauer
Name: D.W. Bruce Fenwick Name: David Brauer
Title: President Title: Vice President
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: Vice President
NORTH CANADIAN RESOURCES, INC.
on behalf of itself and Lake
Interest Holdings, Inc. and
Pasco Interest Holdings, Inc.
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: Vice President
19
<PAGE>
EXHIBIT B-2(a)
EXECUTION COPY
AMENDED AND RESTATED
ESCROW AGREEMENT
by and among
NORTH CANADIAN RESOURCES, INC.,
ENERGY INITIATIVES, INC.,
and
HARRIS TRUST AND SAVINGS BANK
dated
June 13, 1994
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
ESCROW
1.1. Creation of Escrow . . . . . . . . . . . . . . . . . 3
1.2. Buyer's Deposits . . . . . . . . . . . . . . . . . . 3
1.3. NCRI's Deposits . . . . . . . . . . . . . . . . . . . 3
1.4. Buyer's Cash Deposit . . . . . . . . . . . . . . . . 3
ARTICLE II
DISBURSEMENTS
2.1. Disbursement Certificate . . . . . . . . . . . . . . 3
2.2. Time of Disbursements . . . . . . . . . . . . . . . . 4
2.3. Procedure for Disbursements and Deliveries . . . . . 4
2.4. Delay in Receiving Disbursement Certificate . . . . . 5
ARTICLE III
INTEREST ON BUYER'S CASH DEPOSIT
3.1. Interest Disbursements . . . . . . . . . . . . . . . 5
3.2. Interest on Buyer's Cash Deposit. . . . . . . . . . . 5
ARTICLE IV
TERMINATION OF ESCROW
4.1. Termination of Escrow . . . . . . . . . . . . . . . . 6
4.2. Disbursement of Buyer's Cash Deposit and Escrow
Deposits upon Termination . . . . . . . . . . . . . . 6
ARTICLE V
SETTLEMENT
ARTICLE VI
ESCROW AGENT'S DUTIES
6.1. Standard of Care . . . . . . . . . . . . . . . . . . 7
6.2. Limitation of Liability . . . . . . . . . . . . . . . 7
6.3. Counsel to Escrow Agent . . . . . . . . . . . . . . . 8
6.4. Reliance . . . . . . . . . . . . . . . . . . . . . . 8
6.5. Receipt of Notices . . . . . . . . . . . . . . . . . 8
ARTICLE VII
SUCCESSOR ESCROW AGENT
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<PAGE>
ARTICLE VIII
EXPENSES
ARTICLE IX
INVESTMENT OF DEPOSITS
ARTICLE X
NOTICES
10.1. Method of Notice . . . . . . . . . . . . . . . . 9
10.2. Place for Delivery of Notices . . . . . . . . . 10
ARTICLE XI
MISCELLANEOUS
11.1. Entire Agreement . . . . . . . . . . . . . . . . 11
11.2. Parties in Interest . . . . . . . . . . . . . . 11
11.3. Counterparts . . . . . . . . . . . . . . . . . . 11
11.4. Applicable Law . . . . . . . . . . . . . . . . . 11
11.5. Amendment and Waiver . . . . . . . . . . . . . . 12
11.6. Severability . . . . . . . . . . . . . . . . . . 12
11.7. Headings . . . . . . . . . . . . . . . . . . . . 12
11.8. Currency . . . . . . . . . . . . . . . . . . . . 12
-ii-
<PAGE>
ANNEXES
Annex A Glossary
Annex B Articles I through IV of the Purchase and Sale
Agreement
EXHIBITS
Exhibit 1 Form of Purchase and Sale Disbursement Certificate
Exhibit 2 Form of Working Capital Closing Adjustment Disbursement
Certificate
Exhibit 3 Form of Lake Disbursement Certificate
Exhibit 3A Form of Pasco Disbursement Certificate
Exhibit 4 Form of Termination Notice
Exhibit 5 Form of Disbursement Notice
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<PAGE>
AMENDED AND RESTATED ESCROW AGREEMENT
THIS AMENDED AND RESTATED ESCROW AGREEMENT is made this 13th day of
June, 1994 (the "Escrow Agreement"), by and among NORTH CANADIAN
RESOURCES, INC., a Delaware corporation ("NCRI"), ENERGY
INITIATIVES, INC., a Delaware corporation ("Buyer") and HARRIS
TRUST AND SAVINGS BANK (the "Escrow Agent"). Capitalized terms
used in this Escrow Agreement shall unless otherwise defined herein
have the meanings ascribed to them in the Glossary referenced as
Annex A hereto.
WHEREAS, NCRI, Buyer and the Escrow Agent are parties to the Escrow
Agreement dated March 31, 1994 (the "Original Escrow Agreement");
WHEREAS, NCRI, Buyer and Escrow Agent have agreed to amend and
restate the Original Escrow Agreement;
WHEREAS, pursuant to a Stock Purchase and Sale Agreement dated
March 31, 1994 among NCRI, North Canadian Power Incorporated, a
California corporation ("NCP"), North Canadian Oils Limited, a
Canadian corporation ("NCO") and Buyer, as amended by the First
Amendment to the Stock Purchase and Sale Agreement of even date
herewith (collectively, the "Purchase and Sale Agreement"), Buyer
has agreed to purchase the NCP Stock, and the stock of the Excluded
Subsidiaries, and NCRI has agreed to sell such securities to Buyer
and NCRI has agreed to sell (or cause the sale of) the Lake
Interest, the Lake Federal QF Interest, the Lake Florida QF
Interest and the LIHI Stock to the Lake Interest Optionee and the
Pasco Federal QF Interest, the Pasco Florida QF Interest and the
PIHI Stock to the Pasco Optionee, all as more specifically set
forth in Article I, and subject to the terms and conditions of, the
Purchase and Sale Agreement;
WHEREAS, the Purchase and Sale Agreement contemplates that prior to
consummation of the NCP Closing:
(a) NCP may adopt a plan of liquidation pursuant to which, under
certain specified circumstances, certain of the NCP
Subsidiaries (i.e., subsidiaries directly and wholly owned by
NCP) could be distributed to NCRI,
(b) the Lake Option Interest (i.e., a 1% general partnership
interest and 56.95% limited partnership interest in Lake
Cogen, Ltd.) would be distributed to LIHI prior to the NCP
Closing and subsequently sold to NCP, Buyer or the Lake
Interest Optionee, as the case may be, and
(c) the Pasco Option Interest (i.e., a 3.15% limited partnership
interest in Pasco Cogen Ltd.) would be distributed to PIHI
prior to the NCP Closing and subsequently sold to Dade
Investment, L.P. or the Pasco Optionee, as the case may be,
all as contemplated in Article I of the Purchase and Sale
Agreement;
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WHEREAS, the parties hereto desire to facilitate the deliveries
required at the several closings contemplated by the Purchase and
Sale Agreement and to assure themselves that each party will be
ready and able to make its respective deliveries as and when
required pursuant to Articles II, III, IV and XII of the Purchase
and Sale Agreement as set forth herein;
WHEREAS, to facilitate the deliveries required at such closings,
the parties hereto desire to establish the Escrow, contemplated by
Article III of the Purchase and Sale Agreement, as follows:
Buyer's Cash Deposit, consisting of $74,975,000 which is being
funded simultaneously with the execution hereof;
NCP Deposit, consisting of two packages of documents to be
delivered as indicated at the NCP Closing:
. one marked "Buyer's NCP Deposit" to be delivered to
NCRI, and
. one marked "Sellers' NCP Deposit" to be delivered to
Buyer;
Lake Deposit, consisting of two packages of documents to be
delivered as indicated at whatever closing is certified in
accordance with the provision hereof to include the Lake
Subsidiaries:
. one marked "Buyer's Lake Deposit" to be delivered to
NCRI, and
. one marked "Sellers' Lake Deposit" to be delivered
to Buyer;
Pasco Deposit, consisting of two packages of documents to be
delivered at whatever closing is certified in accordance with
the provisions hereof to include the Pasco Subsidiaries:
. one marked "Buyer's Pasco Deposit" to be delivered
to NCRI, and
. one marked "Sellers' Pasco Deposit" to be delivered
to Buyer;
Syracuse Deposit, consisting of two packages of documents to
be delivered at whatever closing is certified in accordance
with the provisions hereof to include the Syracuse
Subsidiaries:
. one marked "Buyer's Syracuse Deposit" to be
delivered to NCRI, and
. one marked "Sellers' Syracuse Deposit" to be
delivered to Buyer;
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Ada Deposit, consisting of one package of documents marked
"Sellers' Ada Deposit" to be delivered to Buyer at whatever
closing is certified in accordance with the provisions hereof
to include the Ada Subsidiaries;
FPB Deposit, consisting of one package of documents marked
"Sellers' FPB Deposit" to be delivered to Buyer at whatever
closing is certified in accordance with the provisions hereof
to include the FPB Subsidiaries;
Lake Interest Deposits, consisting of four packages of
documents to be delivered to Buyer as indicated at whatever
closing is certified in accordance with the provisions hereof:
. one marked "Lake Interest Deposit",
. one marked "Lake Federal QF Interest Deposit",
. one marked "Lake Florida QF Interest Deposit", and
. one marked "LIHI Stock Deposit";
Pasco Option Deposits, consisting of three packages of
documents to be delivered to Buyer as indicated at whatever
closing is certified in accordance with the provisions hereof:
. one marked "Pasco Federal QF Interest Deposit",
. one marked "Pasco Florida QF Interest Deposit", and
. one marked "PIHI Stock Deposit";
NOW, THEREFORE, in consideration of the premises and promises
contained herein, the parties intending to be legally bound
mutually agree that the Original Escrow Agreement is hereby amended
and restated in its entirety as follows:
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<PAGE>
ARTICLE I
ESCROW
1.1. Creation of Escrow.
Buyer and NCRI hereby establish the Escrow and mutually acknowledge
that this is the Escrow Agreement contemplated by Section 3.1 of
the Purchase and Sale Agreement. The Escrow Agent agrees to act as
escrow agent for the benefit of Buyer and NCRI in accordance with
the terms of this Escrow Agreement.
1.2. Buyer's Deposits.
Buyer hereby delivers to the Escrow Agent into escrow hereunder,
and the Escrow Agent acknowledges and accepts receipt of, funds in
the amount of Buyer's Cash Deposit together with four packages of
documents, each marked as provided in the recitals hereto and
containing the documents as listed in Section 3.2. of Annex B
hereto ("Buyer's Escrow Deposits") .
1.3. NCRI's Deposits.
NCRI hereby delivers into escrow, and the Escrow Agent acknowledges
receipt of, seventeen packages of documents, each marked and
containing in each package the respective documents as listed in
Section 3.3 of Annex B ("Sellers' Escrow Deposits").
1.4. Buyer's Cash Deposit.
The Escrow Agent agrees to hold and disburse Buyer's Cash Deposit,
including all accrued and accumulated interest and earnings thereon
which shall be part of Buyer's Cash Deposit for all purposes
hereof, and the other Escrow Deposits received pursuant to the
terms hereof.
ARTICLE II
DISBURSEMENTS
2.1. Disbursement Certificate.
From time to time, as specified herein, the Escrow Agent shall
disburse from or otherwise deliver out of the Escrow to NCRI and
Buyer, as the case may be, such funds from Buyer's Cash Deposit and
the other Escrow Deposits as shall be specified in a Disbursement
Certificate, each of which shall be in substantially the forms of
Exhibit 1 or, in the case of the Working Capital Closing
Adjustment, Exhibit 2 or, in the case of the Lake Option Interest,
Exhibit 3 or, in the case of the Pasco Option Interest, Exhibit 3A
or, in the case of a Termination Notice, Exhibit 4. Each executed
Disbursement Certificate shall be completed by the party or parties
executing such certificate with the following information:
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<PAGE>
(a) the amount of Buyer's Cash Deposit to be disbursed; and
(b) the other Escrow Deposits to be delivered to the parties at
such time.
2.2. Time of Disbursements.
2.2.1. If the Disbursement Certificate is executed by both NCRI
and Buyer (referred to as a "Joint Disbursement Certificate"), then
the Escrow Agent shall make the disbursements required by such
Joint Disbursement Certificate on the second Business Day (or such
other date as may be specified in the Joint Disbursement
Certificate) following receipt by the Escrow Agent of such Joint
Disbursement Certificate.
2.2.2. If the Disbursement Certificate is executed by only NCRI or
Buyer, (a "Unilateral Disbursement Certificate"), then the Escrow
Agent shall:
(a) immediately deliver a Disbursement Notice in the form of
Exhibit 5, together with a copy of the Unilateral Disbursement
Certificate, in accordance with the notice provisions provided
for herein to the party not executing the Disbursement
Certificate, notify such other party of receipt of the
Unilateral Disbursement Certificate; and
(b) make the disbursements specified by the Unilateral
Disbursement Certificate on but not before the fifth Business
Day following the issuance by the Escrow Agent of the
Disbursement Notice.
2.3. Procedure for Disbursements and Deliveries.
2.3.1. All disbursements of funds from Buyer's Cash Deposit by the
Escrow Agent shall be made by wire transfer as follows:
(a) if to NCRI, then to North Canadian Resources, Inc. (Account
No. 362-540-7) at Harris Trust and Savings Bank, 111 West
Monroe Street, Chicago, Illinois (Bank Routing No. 071000288).
(b) if to Buyer, then to General Public Utilities Corporation
(Account No. 3878-3434) at Citibank Delaware, (Bank Routing
No. 0311-0029).
In each case, a copy of the wire transfer confirmation shall be
delivered to NCRI and to Buyer with the deliveries contemplated by
Subsection 2.3.2.
2.3.2. All other disbursements, consisting of delivery of the
various packages of documents comprising the other Escrow Deposits,
shall be delivered to the parties as follows: All Escrow Deposits
to be delivered to NCRI shall be delivered to the attention of:
William J. McGrath, Esq., McDermott, Will & Emery, 227 West Monroe
Street, Chicago, Illinois 60606-5096. All Escrow Deposits to be
delivered to Buyer shall be delivered to the attention of:
5
<PAGE>
Douglas E. Davidson, Esq., Berlack, Israels & Liberman, 120 West
45th Street, New York, NY 10036.
2.4. Delay in Receiving Disbursement Certificate.
The Escrow Agent shall, unless otherwise instructed in writing
jointly by Buyer and NCRI, disburse to NCRI from Buyer's Cash
Deposit, the Deferred Payment Consideration equal to $15,000 per
day from and after June 1, 1994 until the earlier to occur of the
following:
(a) the Escrow Agent receives a Disbursement Certificate pursuant
to Sections 2.1; or
(b) this Escrow Agreement terminates.
The Escrow Agent shall disburse to NCRI the Deferred Payment
Consideration on a bi-monthly basis on every other Friday
commencing on the second Friday following May 31, 1994.
ARTICLE III
INTEREST ON BUYER'S CASH DEPOSIT
3.1. Interest Disbursements.
Except to the extent set forth in a Joint Disbursement Certificate
or until the Escrow Agent is otherwise required to make a
disbursement from Buyer's Cash Deposit in accordance herewith, all
interest accrued and earnings on the Buyer's Cash Deposit shall be
retained by the Escrow Agent hereunder until this Escrow Agreement
is terminated.
3.2. Interest on Buyer's Cash Deposit.
Upon termination of this Escrow Agreement, Buyer shall be entitled
to receive all accrued interest and earnings on Buyer's Cash
Deposit.
6
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ARTICLE IV
TERMINATION OF ESCROW
4.1. Termination of Escrow.
The Escrow and this Escrow Agreement shall terminate in whole or in
part, as the case may be, upon the earlier to occur of the
following:
(a) disbursement of all Escrow Deposits hereunder;
(b) the date the Purchase and Sale Agreement is terminated by its
terms, as evidenced by a Termination Notice delivered to the
Escrow Agent by Buyer and NCRI;
(c) with respect to any Excluded Subsidiaries on January 1, 1995;
(d) with respect to the Lake Interest Deposit and the Pasco Option
Deposit on March 31, 1995; or
(e) joint written direction from NCRI and Buyer;
provided, however, that notwithstanding the foregoing, the Escrow
and this Escrow Agreement shall remain in effect until the Working
Capital Closing Adjustment Disbursement Certificate has been
received by the Escrow Agent and the Escrow Agent has disbursed
such amounts and Escrow Documents as provided therein.
4.2. Disbursement of Buyer's Cash Deposit and Escrow Deposits upon
Termination.
4.2.1. In the event the Escrow Agent receives from Buyer and NCRI
a Termination Notice in substantially the form attached hereto as
Exhibit 4, stating that the Purchase and Sale Agreement has
terminated prior to the NCP Closing for reasons other than due to
the failure or inability to satisfy on or before August 15, 1994
any of the conditions precedent in Section 12.1 of the Purchase and
Sale Agreement, then the Escrow Agent shall disburse to NCRI
$5,000,000 from Buyer's Cash Deposit within two Business Days of
the receipt by Escrow Agent of the Termination Notice. The Buyer's
Cash Deposit and the other Escrow Deposits shall be distributed by
the Escrow Agent as follows:
(a) the balance of Buyer's Cash Deposit remaining after payment of
the $5,000,000 to NCRI, including any accrued interest and
income thereon, and the other Buyer's Escrow Deposits to
Buyer; and
(b) the Sellers' Escrow Deposits to NCRI.
4.2.2. In the event on or after December 31, 1994 the Escrow Agent
receives written notice from both Buyer and NCRI following receipt
of a Disbursement Certificate certifying that the NCP Closing has
occurred, that an Excluded Subsidiaries Closing has not occurred as
7
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contemplated by Section 4.1(c), then the Escrow Agent shall
disburse from the Escrow the entire balance of Buyer's Cash Deposit
and Buyer's Escrow Deposits to Buyer and the entire balance of
Sellers' Escrow Deposits to NCRI, except for any portion of Buyer's
Cash Deposit and Buyer's and Seller's Lake Interest Deposits and
Pasco Option Deposits which such written notice states shall
continue to be held in escrow.
ARTICLE V
SETTLEMENT
Anything to the contrary herein notwithstanding, the Escrow Agent
may at any time disburse any portion of Buyer's Cash Deposit or
deliver any of the other Escrow Deposits held by it hereunder as
directed by a joint writing from Buyer and NCRI.
ARTICLE VI
ESCROW AGENT'S DUTIES
6.1. Standard of Care.
The Escrow Agent undertakes to perform such duties and only such
duties as are specifically set forth herein and to use the same
degree of care and skill in its exercise as an ordinary prudent man
would exercise or use under the circumstances in the conduct of his
own affairs.
6.2. Limitation of Liability.
The Escrow Agent shall not be liable except for the performance of
such duties as are specifically set forth herein and no implied
covenants or obligations shall be read into this Escrow Agreement
against the Escrow Agent. The Escrow Agent shall not be liable for
any error of judgment made in good faith by any of its officers,
unless it shall be proved that the Escrow Agent was negligent in
ascertaining the pertinent facts.
6.3. Counsel to Escrow Agent.
The Escrow Agent may consult with counsel selected by the Escrow
Agent and the advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action
taken or suffered under this Escrow Agreement in good faith and in
accordance with such advice or opinion of counsel.
6.4. Reliance.
In the absence of bad faith or negligence on its part, the Escrow
Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
instrument or signature reasonably believed by it to be genuine and
8
<PAGE>
correct and to have been signed or sent by the proper person or
persons.
6.5. Receipt of Notices.
The Escrow Agent is hereby expressly authorized and directed to
disregard in its sole discretion any and all notices or warnings
given by any of the parties hereto, or by any person or
corporation, excepting the notices provided for in this Escrow
Agreement.
ARTICLE VII
SUCCESSOR ESCROW AGENT
In the event that the Escrow Agent shall resign or in the event
that the Escrow Agent shall be removed by the mutual consent of
Buyer and NCRI, a successor Escrow Agent shall be appointed by
mutual agreement of Buyer and NCRI; provided, however, that failure
to agree upon any successor Escrow Agent in the event of any
vacancy shall not terminate this Escrow Agreement, and in such
event Buyer shall have the right to appoint as successor Escrow
Agent a national bank or trust company in good standing doing
business within the City of Chicago which shall, upon acceptance
thereof, be entitled to all the rights, powers and indemnities
hereunder as if originally named herein.
ARTICLE VIII
EXPENSES
The Escrow Agent shall be paid reasonable compensation for its
services, which amount shall be borne equally by Buyer and NCRI,
including attorneys fees, reasonably incurred by it in connection
with the performance of its duties and obligations under this
Escrow Agreement. NCRI and Buyer agree to indemnify the Escrow
Agent and hold it harmless against all proper charges and expenses
of the Escrow Agent, including reasonable charges and expenses of
its counsel, in defending any action brought against it by reason
of its acting as the Escrow Agent hereunder, unless it is
determined in such action that the Escrow Agent acted in violation
of its duties and obligations hereunder. The Escrow Agent costs
and expenses of enforcing this right of indemnification also shall
be paid by NCRI and Buyer.
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ARTICLE IX
INVESTMENT OF DEPOSITS
The Escrow Agent will invest the amounts deposited hereunder in
United States Government Treasury Bills having a maturity of 30
days or less; provided, however, that such investments shall be
limited to those which can be acquired through the Escrow Agent.
The interest and income from the investments with respect to
Buyer's Cash Deposit shall be allocated and disbursed in accordance
with Article IV. The Escrow Agent may use its own bond department
in executing purchases and sales of such permitted investments.
The parties acknowledge that the Escrow Agent shall not be
responsible for any diminution in escrow funds due to the losses
resulting from investments made pursuant to this Article IX.
For Federal income tax purposes, to the extent permitted by law,
income earned on or from the Buyer's Cash Deposit shall be treated
by the parties to this Escrow Agreement as income of the Buyer
under Section 468B(g) of the Internal Revenue Code of 1986, as
amended, through May 31, 1994, and thereafter of either Buyer or
NCRI as stated in a Joint Disbursement Certificate to Escrow Agent.
Buyer and, if applicable, NCRI, will provide to the Escrow Agent
such forms as are required to establish an exemption from backup
withholding tax on the income of Buyer's Cash Deposit.
ARTICLE X
NOTICES
10.1. Method of Notice.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be personally delivered or sent by
facsimile transmission with confirming copy sent by overnight
courier (such as Express Mail, Federal Express, etc.) and a
delivery receipt obtained and addressed to the intended recipient
as follows:
10.2. Place for Delivery of Notices.
(a) If to NCRI:
North Canadian Oils Limited Norcen Energy Resources
Limited
715 - 5th Avenue, S.W. 715 - 5th Avenue, S.W.
Calgary, Alberta, T2P 2X7 Calgary, Alberta, T2P 2X7
Canada Canada
Attn: Gordon B. Singer, Attn: E.A. Leew, Vice
Vice President and CFO President, Law
Telephone: 403-231-0111 Telephone: 403-231-0111
Facsimile: 403-231-0187 Facsimile: 403-231-0187
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In each case with a copy to:
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606-5096
Attn: William J. McGrath, P.C.
Telephone: 312-372-2000
Facsimile: 312-984-3669
(b) If to Buyer:
Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
Attention: Bruce L. Levy, President
Telephone: 201-263-6950
Facsimile: 201-263-6953
With a copy to:
Berlack, Israels & Liberman
120 West 45th Street
New York, New York 10036
Attn: Douglas E. Davidson, Esq.
Telephone: 212-704-0100
Facsimile: 212-704-0196
(c) If to the Escrow Agent, to:
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60690
Attn: Escrow Division, Marianne Cody
Telephone: 312-461-2420
Facsimile: 312-461-3525
10.3. Change of Address. Any party may change its address for
receiving notice by giving written notice to the others named
above. All such notices shall be given as provided in Section 10.1
and shall be effective immediately upon confirmation of facsimile
or completion of personal delivery.
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ARTICLE XI
MISCELLANEOUS
11.1. Entire Agreement.
This Escrow Agreement, including Annexes A and B, the Exhibits and
the certificates and other documents delivered pursuant hereto, the
Purchase and Sale Agreement, the Lake Interest Option Agreement and
the Pasco Interest Option Agreement constitute the entire agreement
among the parties with respect to the transactions contemplated
hereby and supersede all other agreements and understandings among
the parties.
11.2. Parties in Interest.
This Escrow Agreement shall bind and inure to the benefit of the
parties named herein, in each case with respect to the obligations
and rights applicable to them, and their respective, successors.
11.3. Counterparts.
This Escrow Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
11.4. Applicable Law.
This Escrow Agreement shall be governed by and construed in
accordance with the internal substantive laws of the State of
Illinois. Should any provision of this Escrow Agreement be
determined to be invalid, void or unenforceable by a court of
competent jurisdiction for any reason, the remaining provisions
shall remain in full force and effect.
11.5. Amendment and Waiver.
No amendment or waiver of any provision of this Escrow Agreement
shall in any event be effective, unless the same shall be in
writing and signed by the parties hereto, and then such amendment,
waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
11.6. Severability.
Any term or provision of this Escrow Agreement which is held
invalid or unenforceable by a court of competent jurisdiction,
shall be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining rights of the party intended to be benefitted by such
provision and provisions of this Escrow Agreement.
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11.7. Headings.
The section and other headings contained in this Escrow Agreement
are for convenience of reference purposes only and shall not affect
in any way the meaning or interpretation of this Escrow Agreement.
11.8. Currency.
All references herein to dollars are to United States dollars.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE TO AMENDED AND RESTATED ESCROW AGREEMENT
DATED JUNE 10, 1994]
IN WITNESS WHEREOF, the undersigned, have caused this Escrow
Agreement to be executed as of the day and year first above
written.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: /s/ Donald McKechie By:/s/ David Brauer
By: Donald McKechnie Name:David Brauer
Title: Vice President Title:Vice President
HARRIS TRUST AND SAVINGS BANK
Escrow Agent
By:/s/ J. Bartolini
Name:J. Bartolini
Title:Vice President
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ANNEX A
GLOSSARY OF TERMS
Affiliate: Affiliate of any Person shall mean any
Person which, directly or indirectly,
controls, is controlled by or is under
common control with such Person (excluding
any trustee under, or any commitment with
responsibility for administering, any
Pension Plan). A Person shall be deemed
to be "controlled by" any other Person if
such other Person possesses, directly or
indirectly, power:
(i) to vote 10% or more of the
securities (on a fully diluted
basis) having ordinary voting power
for the election of directors or
managing general partners; or
(ii) to direct or cause the
direction of the management and
policies of such Person whether by
contract or otherwise.
Ada Partnership: Ada Cogeneration Limited Partnership.
Ada Subsidiary: NCP Ada Power Incorporated.
Agreement: The Stock Purchase and Sale Agreement by
and among NCO, NCRI, NCP and Buyer dated
March 31, 1994, including the Annexes,
Schedules and Attachments thereto.
Allocations: The allocations of the "adjusted grossed-
up basis" of the Stock among the assets of
NCP as set forth in Schedule 2.1 of the
Agreement.
Asset Managers: The employees of NCP responsible for
management of the Projects.
Assumption Agreement: The Agreements in the form of Attachment
IA pursuant to which the NCO Obligations
are assumed by Buyer.
Audited Balance Sheet: The audited consolidated balance sheet of
NCP as of December 31, 1993.
Audited Financial
Statements: The audited consolidated balance sheet,
income statement and statements of cash
flow and stockholder's equity of NCP at
December 31, 1993 and for the 12 months
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then ended together with the notes related
thereto.
Beneficial Interest: The right to vote, receive the dividends
and distributions on or sell or cause the
sale, transfer or any other disposition
whatsoever of, and all other rights
incident to legal and beneficial ownership
of, the securities subject to such
interest.
Budget: NCP's operating budget for 1994.
Business: Developing, owning interests in and
managing cogeneration and other
independent power plants in the United
States and Canada using natural gas as the
primary fuel.
Business Day: Any day excluding Saturday, Sunday and any
other day which banks in New York are
permitted or authorized to close.
Buyer: Energy Initiatives, Inc., a Delaware
corporation and a wholly-owned indirect
subsidiary of Buyer's Parent.
Buyer's Cash Deposit: Buyer's Cash Deposit as set forth in
Section 3.2.1 of the Agreement, together
with all accrued interest and income
thereon.
Buyer's Escrow Deposit: The deposits by Buyer with the Escrow
Agent under the Escrow Agreement
consisting of the Buyer's Cash Deposit,
NCP Deposit and Subsidiaries Deposit set
forth in Section 3.2 of the Agreement.
Buyer's NCP Deposit: The deposits by Buyer of the Closing
Documents with the Escrow Agent under the
Escrow Agreement as set forth in
Section 3.2.2 of the Agreement.
Buyer's Parent: General Public Utilities Corporation, a
Pennsylvania corporation.
Buyer's Parent The guarantee of Buyer's Parent, in
Guarantee: substantially the form of Attachment IC,
of any NCO Obligation assumed by Buyer for
which a Release is not obtained.
Cash Deposit: Buyer's deposit of the Estimated Cash
Payment with the Escrow Agent.
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Cash Payment: The aggregate cash payable to NCRI in
connection with the Purchase and Sale
Transactions, consisting of an amount
equal to the sum of the Purchase Price,
the Working Capital Value, the Deferred
Payment Consideration, if any, and the
Working Capital Closing Adjustment.
Claim: An asserted claim, demand, action, suit,
charge or Proceeding for Damages or
equitable relief.
Closing Balance Sheet: The consolidated balance sheet of NCP and
its subsidiaries (excluding the Lake
Subsidiaries) as of the NCP Closing Date
prepared in a manner consistent with the
Audited Balance Sheet.
Closing Documents: The documents to be delivered by Sellers
and/or Buyer at the NCP Closing, an
Excluded Subsidiaries Closing and the Lake
Interest Closing, as the case may be, as
set forth in Articles III and XII of the
Agreement.
Code: The Internal Revenue Code of 1986, as
amended.
Commitments: Contracts, agreements, instruments, plans,
licenses, options, guarantees, leases and
purchase or sale orders, indentures and
mortgages, in each case whether written or
oral.
Company: NCP, the NCP Subsidiaries and the Limited
Partnerships.
Confidentiality Letter Letter agreement dated October 20, 1993 by
Agreement: and between NCO and Buyer.
Consents: Any approvals, consents and
acknowledgements required by any third
party or Government Authority or
instrumentality, whether written or oral.
Damages: All losses and damages (including
incidental and consequential damages)
together with related costs and expenses
(including court costs, reasonable
attorneys' fees and expenses, including
those related to investigation and expert
assistance, and amounts paid in
settlement).
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Deferred Payment
Consideration: The amount payable by Buyer to NCRI equal
to $15,000 per day for each day, if any,
that the NCP Closing does not take place
following May 31, 1994 until the NCP
Closing or the date of termination of the
Agreement, whichever shall first occur.
Development Projects: Projects in development identified in
Annex C to the Agreement.
Document Room: Room 937 at the NCP Premises containing
documents and material relating to the
Business and the Projects.
Election: Election under Section 338(h)(10) of the
Code.
Encumbrance: Any security interest, mortgage, pledge,
lien, equity, charge, restriction or other
encumbrance.
Environmental Laws: Any law, statute, ordinance, rule,
regulation, order, judgment, decree,
permit or license, in any way regulating
the storage, generation, manufacture,
refinement, transportation, production,
treatment or disposal of toxic or
hazardous wastes or substances of any kind
or which would require any remedial action
with respect thereto applicable to the
Company, the Projects or the Business.
ERISA: Employee Retirement Income Security Act of
1974, as amended.
ERISA Affiliate: Any entity (whether or not incorporated)
which would be treated as a single
employer with the Company under
Section 414(b), (c), (m) or (o) of the
Code and the regulations thereunder.
Escrow Agent: Harris Trust and Savings Bank, and any
successor Escrow Agent under the Escrow
Agreement.
Escrow Agreement: Amended and Restated Escrow Agreement
dated June __, 1994 by and among NCRI,
Buyer and Escrow Agent.
Estimated Cash Payment: $74,975,000.
Estimated Deferred
Payment Consideration: $1,350,000 (based on an estimate of 90
days at $15,000 per day).
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Estimated Working Capital
Closing Adjustment: $1,375,000, representing the Estimated
Working Capital Closing Adjustment (based
on 50% of assumed negative cash flow of
NCP at the rate of $500,000 per month from
March 1, 1994 to August 15, 1994).
Excluded Projects: Projects for which all Requisite Consents
have not been obtained as of the NCP
Closing.
Excluded Subsidiaries: NCP Subsidiaries which have direct or
indirect ownership interests in the
Excluded Projects.
Excluded Subsidiaries The deliveries and performances required
Closings: by Section 3.6 of the Agreement in
connection with the sale of stock of an
Excluded Subsidiary.
Excluded Subsidiaries
Pre-Closing Tax
Period: Any taxable period of an Excluded
Subsidiary that ends on or prior to the
Excluded Subsidiaries Closing for such
Excluded Subsidiary.
February 28 Balance
Sheet: The unaudited consolidated balance sheet
of NCP as of February 28, 1994 prepared as
provided in Section 4.1.1 of the
Agreement.
FPB Audited 1993 The audited balance sheet, statements of
Financial Statements: operations, partners equity and cash flows
and the related notes, as of December 31,
1993 and for the year then ended.
FPB Partnership: FPB Cogeneration Partners, L.P.
FPB Subsidiary: NCP Commerce Power Incorporated.
GAAP: Generally accepted accounting principles
as in effect for the United States from
time to time.
Glossary: This Glossary of Terms incorporated by
reference as Annex A to the Agreement.
Government Authority: Any foreign, federal, state or local
governmental commission, board, bureau,
agency or similar regulatory or
administrative body.
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H-S-R Act: Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the
applicable rules and regulations
thereunder.
Indemnified Party: Either Sellers or Buyer, as the case may
be, and their respective Affiliates as set
forth in Section 15.6 of the Agreement.
Indemnifying Party: Either NCO or Buyer, as the case may be,
as set forth in Section 15.6 of the
Agreement.
Intercompany Account: The balance owing between NCP and NCRI
resulting from accrual of expenses and
cash transfers.
Interim Operating Plan: The plan mutually agreed upon by Buyer,
NCRI and NCP (including budget and
strategy) and included as Annex E to the
Agreement to govern operations of the
Business between the date of the Agreement
and the NCP Closing.
IRS: Internal Revenue Service.
Lake Federal QF
Interest: The 7.85% limited partnership interest in
Lake Cogen, Ltd. which shall be
transferred by Lake Investment, L.P. to
LIHI and shall be the subject of the Lake
Interest Option Agreement.
Lake Florida QF
Interest: The .10% limited partnership interest in
Lake Cogen, Ltd. which shall be
transferred by Lake Investment, L.P. to
LIHI and shall be the subject of the Lake
Interest Option Agreement.
Lake Interest: Initially, the 1% general partnership
interest and the 49% limited partnership
interest in Lake Cogen, Ltd. which shall
be transferred by Lake Investment, L.P. to
LIHI and shall be the subject of the Lake
Interest Option Agreement.
Lake Interest Assignment
Instruments: Assignments of partnership interests to be
held by LIHI with respect to interests in
the Lake Partnerships and an assignment of
the LIHI Stock.
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Lake Interest Closing: The deliveries and performances required
by Section 3.7 of the Agreement, upon
exercise of each Lake Option.
Lake Option: Each exclusive option granted to Buyer to
purchase a portion of the Lake Option
Interest or the LIHI stock set forth in
Section 1.6 of the Agreement.
Lake Interest Optionee: An owner of a Lake Option from time to
time.
Lake Interest Option
Agreement: Agreement granting the Lake Interest
Option in the form of Attachment XI.
Lake Option: Each exclusive option granted to Buyer to
purchase a portion of the Lake Option
Interest or the LIHI Stock set forth in
Section 1.6 of the Agreement.
Lake Partnership The amendment of the Lake Project
Amendment: Partnership Agreement pursuant to which
the Lake Interest will be transferred to
LIHI.
Lake Partnerships: Lake Investment, L.P. and Lake Cogen, Ltd.
Lake Subsidiaries: NCP Lake Power Incorporated, NCP Gem
Incorporated and Umatilla Groves
Incorporated.
LIHI: Lake Interest Holdings Inc., a Delaware
corporation and a wholly owned subsidiary
of NCRI.
LIHI Stock: The outstanding 1,000 shares of common
stock, par value $.01 per share, of LIHI
owned of record and beneficially by NCRI.
Limited Partnerships: The limited partnerships listed on
Schedule 7.8 to the Agreement.
Management Agreement: Management Agreement to be entered into by
and between NCP and NCRI in the form of
Attachment IX to the Agreement, pursuant
to which NCP will manage the Excluded
Subsidiaries and related Projects for NCRI
following the NCP Closing.
Material Contracts: The Commitments listed on Schedule 7.14 to
the Agreement.
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Minimum Number of At least three of the five Projects,
Projects: including at least one of either the Lake
Project or the Pasco Project.
Multiemployer Plan: Any multiemployer pension plan, as defined
in Section 3(37) of ERISA.
NCM: North Canadian Marketing Corporation, a
California corporation and a wholly owned
subsidiary of NCRI.
NCO: North Canadian Oils Limited, a Canadian
corporation.
NCP: North Canadian Power Incorporated, a
California corporation and a wholly owned
subsidiary of NCRI.
NCP Closing: The deliveries and performances required
by Section 3.4 of the Agreement in
connection with the purchase and sale of
the Stock.
NCP Closing Date: The date that the NCP Closing occurs
relating to the purchase and sale of the
Stock.
NCP Estimate: Pro forma calculation estimating, based on
the best information then available to
NCRI, the amount of the Working Capital
Closing Adjustment which will exist at the
NCP Closing.
NCO Obligations: The obligations and guarantees of NCO
listed on Schedule 1.2 to the Agreement.
NCP Pre-Closing Tax
Period: Any taxable period other than an NCP
Short-Year Period that ends on or prior to
the NCP Closing.
NCP Short-Year Period: Any taxable period of NCP which ends as a
result of the sale of the Stock.
NCP Stock (or Stock): The outstanding 1,000 shares of common
stock, no par value, of NCP being
purchased from NCRI by Buyer pursuant to
the Purchase and Sale Agreement.
NCP Subsidiaries: The Subsidiaries of NCP listed on Schedule
7.7 to the Agreement.
NCP Working The Working Capital calculation
Capital Calculation: contemplated by Section 4.1 of the
Agreement.
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NCRI: North Canadian Resources, Inc. a Delaware
corporation and a wholly owned subsidiary
of NCO.
1935 Act: Public Utility Holding Company Act of
1935, as amended, and the rules and
regulations thereunder.
Non-Project
Subsidiaries: The NCP Subsidiaries which do not have
ownership interests in any Project.
Notice of Claim: A notice of existence of the Claim,
setting forth to the extent then known in
reasonable detail the facts and
circumstances pertaining thereto and the
basis for the Indemnified Party's right to
indemnification.
Option Expiration Date: Defined in Section 1.6.7 of the Agreement.
OSHA: Occupational Safety and Health Act, as
amended, and the applicable regulations
thereunder.
Partnership Financial
Statements: Audited balance sheets, income statements
and statements of cash flows and partners'
equity of each of the Ada, Syracuse and
Lake Partnerships as of December 31, 1993,
respectively, and (in the case of the
Pasco Partnerships, as of September 30,
1993), and for the twelve months then
ended, and the unaudited balance sheet,
income statement and statements of cash
flows and partners' equity of the FPB
Partnership as of December 31, 1993 and
for the twelve months then ended, and the
unaudited balance sheet, income statement
and statements of cash flows and partners'
equity as of December 31, 1993 and for the
three months then ended.
Pasco Audited
Financial Statements: The audited balance sheet, statements of
operations, December 31, 1993 partners'
equity and cash flows, and the notes
thereto Pasco Cogen, Ltd. of the Pasco
Cogen, Ltd. as at December 31, 1993 and
for the three months then ended.
Pasco Federal QF
Interest: The 3.05% limited partnership interest in
Pasco Cogen, Ltd. which shall be
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transferred by Dade to PIHI and shall be
the subject of the Pasco Option Agreement.
Pasco Florida QF
Interest: The .10% limited partnership interest in
Pasco Cogen, Ltd. which shall be
transferred by Dade to PIHI and shall be
the subject of the Pasco Option Agreement.
Pasco Option: Each exclusive option granted to Dade to
purchase a portion of the Pasco Option
Interest or PIHI Stock set forth in
Section 1.6 of the Agreement.
Pasco Option Assignment
Instruments: Assignments of partnership interest to be
held by PIHI with respect to interests in
Pasco Cogen, Ltd.
Pasco Option Closing: The deliveries and performances required
by Section 3.7 of the Agreement, upon
exercise of each Pasco Option.
Pasco Optionee: An owner of a Pasco Option from time to
time.
Pasco Partnerships: Dade Investment, L.P. and Pasco Cogen,
Ltd.
Pasco Subsidiaries: NCP Dade Power Incorporated and NCP Pasco
Incorporated.
PBGC: Pension Benefit Guaranty Corporation.
Pension Plan: Each "employee pension benefit plan" as
defined in section 3(2) of ERISA which is
not a Multiemployer Plan.
Person: Any individual, partnership, corporation,
association, firm, trust or any other
entity or organization.
Phase I Studies: The Phase I Studies delivered by Sellers
to Buyer referred to in Section 7.28.1 of
the Agreement.
PIHI: Pasco Interest Holdings Inc., a Delaware
corporation.
Plans: The employee benefit plans, collective
bargaining agreements and other
compensation arrangements set forth in
Schedule 7.16.1 of the Agreement.
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Proceeding: Any pending suit or other action,
proceeding, investigation or legal,
administrative, arbitration or other
method of settling disputes or
disagreements or governmental
investigation by or before any foreign,
federal, state or local governmental or
non-governmental court, department,
commission, board, bureau, arbitrator,
agency or instrumentality.
Projects: The operating cogeneration facilities
identified in Annex B to the Agreement.
Purchase Price: Seventy-one million seven hundred ninety-
one thousand ($71,791,000) dollars as
adjusted pursuant to the provisions of
Article II of the Agreement.
Purchase and Sale
Transactions: The purchase and sale transactions
contemplated by Section 1.1 of the
Agreement.
Qualifying Facility
(QF): A "qualifying cogeneration facility" as
that term is defined in the Public Utility
Regulatory Policies Act of 1978 and the
regulations of the Federal Energy
Regulatory Commission thereunder.
QF Status: Status as a Qualifying Facility.
Releases: With respect to any closing under the
Agreement, any and all releases of third
parties releasing NCO from the NCO
Obligations relating to the Projects which
are the subject of such closings.
Reporting Period: The taxable period for which a Return is
due.
Requisite Consents: All Consents required from third parties
under any Commitments with respect to each
Project which are required for the
transfer, directly or indirectly, of
ownership or management thereof and as a
condition precedent to the closings
including those consents included in
Schedule 5.2 to the Agreement.
Returns: All federal, state, local, foreign or
other governmental returns or reports with
respect to Taxes, including any
consolidated, combined, joint or other
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return that properly includes the income,
deductions or other tax information
concerning the Company.
Santa Ana Premises: Office space currently occupied by NCP
located at 1551 North Tustin Avenue, Santa
Ana, California 92701, as defined in the
terms of the Sublease.
SEC Order: An appropriate order of the Securities and
Exchange Commission under the 1935 Act
authorizing, to the extent necessary, the
transactions contemplated by the
Agreement.
Sellers: NCO and NCRI.
Sellers' Escrow Deposit: Sellers' NCP Escrow Deposit and Sellers'
Subsidiaries Deposits.
Sellers' NCP Deposit: The deposit by Sellers with the Escrow
Agent pursuant to the Escrow Agreement of
the Closing Documents set forth in Section
3.3 of the Agreement.
Sellers' Subsidiaries
Deposit: The deposit by Sellers with the Escrow
Agent pursuant to the Escrow Agreement of
the Closing Documents with respect to the
NCP Subsidiaries set forth in Section
3.3.2 of the Agreement.
Stipulated Damages: Set forth in Subsections 13.1.1 and 13.1.2
of the Agreement.
Stock: The outstanding 1,000 shares of common
stock, no par value, of NCP being
purchased from NCRI by Buyer pursuant to
the Agreement.
Sublease: Sublease by and between NCRI and NCP in
the form of Attachment X to the Agreement
pursuant to which NCP will sublet the
Santa Ana Premises from NCRI.
Subsidiary: A corporation of which a Person and/or
their respective Subsidiaries, as the case
may be, own directly or indirectly, such
number of shares as have more than 50% of
the ordinary voting power for the election
of directors.
Syracuse Partnerships: Syracuse Orange Partners, L.P. and Project
Orange Associate, L.P.
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Syracuse Subsidiaries: Syracuse Investment, Inc and NCP Syracuse,
Inc.
Tax Benefit: An amount equal to the actual tax savings
produced by any deduction, credit,
decrease in income or decrease in
recapture of credit and shall be deemed to
be realized in the taxable period for
which such deduction, credit, decrease in
income or decrease in recapture of credit
results in a reduction (and shall equal
the amount of such reduction) in the Taxes
paid or results in an increase in any
refund of Taxes received (including
interest thereon) (and shall equal the
amount of such increase), for such period
as compared to the Taxes that would have
been paid or the refund of Taxes that
would have been received for such period
in the absence of such deduction, credit,
decrease in income or recapture of credit.
Taxes: Taxes of any nature, including income,
profit, franchise, alternative, or add-on
or minimum sales, use, payroll,
withholding, occupation, property and
excise taxes imposed by any government or
instrumentality, whether federal, state,
local, foreign or other levies and
assessments imposed by any federal, state,
local or foreign taxing authority,
including but not limited to all income,
sales, use, ad valorem, value added,
franchise, severance, net or gross
proceeds, withholding payroll, employment,
excise or property taxes, together with
any interest thereon, any penalties,
additions to tax or additional amounts
applicable thereto, and any contractual or
other obligation to indemnify or reimburse
any person with respect to any such Taxes.
Target Corporations: NCP Subsidiaries which are qualified
purchasers by Buyer.
Third Party Injunction: Any preliminary or permanent injunction,
temporary restraining order or similar
restraint of any kind issued by a court of
competent jurisdiction or governmental or
administrative body obtained by or on
behalf of a third party which is not
Sellers, NCP, LIHI, PIHI or Buyer or an
Affiliate of the foregoing, the effect of
which is to prohibit or restrict in any
manner, the consummation of any of the
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transactions contemplated by the
Agreement.
Transaction Costs: Investment banking, legal, accounting,
consultant and other fees or costs
incurred by Buyer, on the one hand, and
NCO, NCRI and NCP, on the other hand, as a
result of the transactions contemplated by
the Agreement.
Violation: Any violation of any applicable laws,
rules, regulations, orders, judgments or
decrees of any federal, state, local and
foreign governments and governmental
agencies and instrumentalities or any
court or arbitrative body.
Working Capital: The sum of all current assets less the sum
of all current liabilities of NCP and the
NCP Subsidiaries determined on a
consolidated basis but excluding the Lake
Project prepared in a manner consistent
with the Audited Balance Sheet.
Working Capital The NCP Closing adjustment to Working
Capital
Closing Adjustment: required by Section 4.2 of the Agreement.
Working Capital Value: Value of the Working Capital as of
February 28, 1994.
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ANNEX B
ARTICLE I
TRANSACTION
1.1. Purchase and Sale Transactions.
1.1.1 At the NCP Closing, NCRI shall sell, transfer, assign and
deliver to Buyer, and Buyer shall purchase and accept, all right,
title and interest in and to the NCP Stock (i.e., one thousand
(1,000) shares of common stock, no par value, of NCP).
1.1.2 At each Excluded Subsidiaries Closing, NCRI shall sell,
transfer, assign, and deliver to Buyer, and Buyer shall purchase
and accept all right, title and interest in and to the shares of
stock of the respective NCP Subsidiary or NCP Subsidiaries being
sold to Buyer at such Closing.
1.1.3A At each Lake Interest Closing, NCRI shall (or, in the case
of paragraph (a) of Subsection 1.6.1, shall cause LIHI to) sell,
transfer, assign and deliver to Buyer or Buyer's assignee, as
applicable, and Buyer or Buyer's assignee, as applicable, shall
purchase and accept, all right, title and interest in and to:
(a) the LIHI Stock (i.e., 1,000 shares of common stock, par
value $.01 per share);
(b) the Lake Interest;
(c) the Lake Federal QF Interest; or
(d) the Lake Florida QF Interest (the Lake Interest, Lake
Federal QF Interest and Lake Florida QF Interest are
collectively referred to as the "Lake Option Interest"),
whichever of the foregoing shall be the subject of the Lake
Option to which such Lake Interest Closing relates.
1.1.3B At each Pasco Option Closing, NCRI shall (or, in the case
of paragraph (a) of Subsection 1.6.4, shall cause PIHI to) sell,
transfer, assign and deliver to Dade Investment L.P. ("Dade") or
Dade's assignee, as applicable, and Dade or Dade's assignee, as
applicable, shall purchase and accept, all right, title and
interest in and to:
(a) the PIHI Stock (i.e., 1,000 shares of common stock, par
value $.01 per share);
(b) the Pasco Federal QF Interest; or
(c) the Pasco Florida QF Interest (the Pasco Federal QF Interest
and Pasco Florida QF Interest are collectively referred to
as the "Pasco Option Interest"), whichever of the foregoing
shall be the subject of the Pasco Option to which such Pasco
Interest Closing relates.
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1.2. NCO Obligations and Releases.
1.2.1 At the NCP Closing, Buyer shall assume the NCO Obligations
(i.e., the obligations and guarantees disclosed in Schedule 1.2),
except for any of the NCO Obligations which relate to Projects
owned, directly or indirectly, by Excluded Subsidiaries which Buyer
shall not be obligated to assume at the NCP Closing.
1.2.2 At any Excluded Subsidiaries Closing at which Buyer
purchases any Excluded Subsidiary which owns, directly or
indirectly, a Project to which an NCO Obligation relates (as
disclosed on Schedule 1.2), Buyer shall assume such NCO Obligation
which relates to the Project owned by such Excluded Subsidiary.
1.2.3 Buyer shall forever defend, indemnify and hold harmless NCO
and its successors and assigns from and against any and all Claims
and Damages related to or arising from Buyer's failure to perform
fully and discharge completely the responsibilities of NCO with
respect to such assumed NCO Obligations.
1.2.4 Prior to the NCP Closing and thereafter until termination of
the Escrow Agreement, Buyer and Sellers shall fully cooperate with
each other to obtain all Consents required from third parties which
are necessary for the assumption by Buyer of all such NCO
Obligations and the release of NCO therefrom at the NCP Closing or
at the Excluded Subsidiaries Closing, as the case may be. In
connection therewith, Buyer agrees to:
(a) use its best efforts (but shall not be obligated to incur
additional liability or consent to any financially adverse
change in the terms of any Project agreements) to obtain
such Consents and Releases; and
(b) make the credit of Buyer's Parent available to support
Buyer's assumption of NCO Obligations.
1.3. Requisite Consents.
Prior to the NCP Closing and thereafter until termination of the
Escrow Agreement, Buyer and Sellers shall fully cooperate with each
other to obtain all Requisite Consents (i.e. all Consents required
from third parties under any Commitments with respect to the
Projects which are required for the transfer, directly or
indirectly, of ownership or management thereof). In connection
therewith, Buyer agrees to use its best efforts (but shall not be
obligated to incur additional liability or consent to any
financially adverse change in the terms of any Project agreements)
to obtain such Requisite Consents.
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1.4. Excluded Subsidiaries Exclusion.
1.4.1 In the event that there are any Requisite Consents that have
not been obtained at the NCP Closing, NCP shall at or prior to the
NCP Closing transfer to NCRI the stock of such NCP Subsidiaries
which own the Projects with respect to which the Requisite Consents
were not yet then obtained.
1.4.2 Prior to the NCP Closing, NCP shall deliver to Buyer the
audited December 31, 1993 Financial Statements of Pasco Cogen, Ltd.
In the event that such audited financial statements shall disclose
any material adverse change in the results of operations or
financial condition of Pasco Cogen, Ltd. from that shown on the
unaudited December 31, 1993 Financial Statements of Pasco Cogen,
Ltd. included as part of Schedule 7.11.2, except for any such
adverse change resulting from a circumstance or event reflected in
such audited December 31, 1993 financial statements that:
(a) occurs subsequent to March 31, 1994,
(b) is discovered subsequent to March 31, 1994,
(c) is disclosed in any of the Schedules hereto, or
(d) relates to Taxes or Environmental Laws for which Buyer is
indemnified hereunder,
then at Buyer's request NCP shall transfer to NCRI the stock of the
Pasco Subsidiaries and any right and obligation of Buyer to
purchase the Pasco Subsidiaries shall terminate.
1.4.3 Prior to the NCP Closing, NCP shall deliver to Buyer the FPB
audited 1993 Financial Statements of the FPB Partnership. In the
event that such audited financial statements shall disclose any
material adverse change in the results of operations or financial
condition of the FPB Partnership from that shown on the unaudited
1993 Financial Statements of the FPB Partnership included as part
of Schedule 7.11.2, except for any such adverse change resulting
from a circumstance or event reflected in such audited December 31,
1993 financial statements that:
(a) occurs subsequent to March 31, 1994,
(b) is discovered subsequent to March 31, 1994,
(c) is disclosed in any of the Schedules hereto, or
(d) relates to Taxes or Environmental Laws for which Buyer is
indemnified hereunder;
then at Buyer's request NCP shall transfer to NCRI the stock of the
FPB Subsidiary and any right and obligation of Buyer to purchase
the FPB Subsidiary shall terminate.
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1.5. Lake Interest Exclusion.
1.5.1 (a) At or prior to the date on which Buyer, directly or
indirectly, acquires the Lake Subsidiaries as contemplated hereby,
Sellers, NCP and the Lake Subsidiaries, as necessary, shall take
all such corporate and other action as shall be necessary,
appropriate or advisable to amend the Lake Project Partnership
Agreement in substantially the form of Attachment XII (the "Lake
Partnership Amendment").
(b) At or prior to the date on which Buyer, directly or
indirectly, acquires the Pasco Subsidiaries as contemplated hereby,
Sellers, NCP and the Pasco Subsidiaries, as necessary, shall take
all such corporate and other action as shall be necessary,
appropriate or advisable to amend the Pasco Project Partnership
Agreement in substantially the form of Attachment XIV (the "Pasco
Partnership Amendment").
1.5.2 (a) Upon adoption of the Lake Partnership Amendment, Lake
Investment, L.P. shall transfer to LIHI, the Lake Option Interest
created as a result of the Lake Partnership Amendment.
(b) Upon adoption of the Pasco Partnership Amendment, Dade shall
transfer to PIHI, the Pasco Option Interest created as a result of
the Pasco Partnership Amendment.
1.5.3 (a) LIHI shall thereupon hold the Lake Interest, the Lake
Federal QF Interest and the Lake Florida QF Interest, as
applicable, until such time, if any, as each such interest is
acquired by exercises of the Lake Options as provided herein and by
the Lake Interest Option Agreement or the Lake Options expire.
(b) PIHI shall thereupon hold the Pasco Federal QF Interest and
the Pasco Florida QF Interest, as applicable, until such time, if
any, as each such interest is acquired by exercises of the Pasco
Options as provided herein and by the Pasco Option Agreement or the
Pasco Options expire.
1.6. Lake and Pasco Options.
1.6.1 For the period beginning on the date hereof and ending as of
the close of business on the Option Expiration Date (as hereinafter
defined):
(a) NCRI hereby irrevocably grants, and agrees to cause LIHI to
grant, to Buyer the exclusive right and option to purchase
from LIHI all right, title and interest of LIHI in and to
the (i) Lake Interest ("Lake Interest Option"); (ii) Lake
Federal QF Interest ("Lake Federal QF Interest Option") and
(iii) Lake Florida QF Interest ("Lake Florida QF Interest
Option"); and
(b) NCRI hereby irrevocably grants to Buyer the exclusive right
and option to purchase all right, title and interest of NCRI
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in and to all 1,000 issued and outstanding shares of common
stock of LIHI (the "LIHI Stock") ("LIHI Stock Option").
Each of the Lake Interest Option, Lake Federal QF Interest Option,
Lake Florida QF Interest Option and the LIHI Stock Option is
referred to as a "Lake Option." Any Lake Option which has not been
exercised on or before the close of business on the Option
Expiration Date shall expire.
1.6.2 It is expressly agreed that Buyer shall have the right in
its sole discretion to assign, in whole or in part, any or all Lake
Options without the consent of NCO, NCRI or LIHI to any Person
unless such assignment would cause the Lake Project to lose its QF
Status; provided, however, that each Lake Option may only be
exercised in whole and not in part. The owner (including any such
assignee) of a Lake Option from time to time is hereinafter
referred to as a "Lake Interest Optionee".
1.6.3 A Lake Interest Optionee may exercise a Lake Option on or
before the Option Expiration Date by providing notice thereof to
NCRI and LIHI, which notice shall:
(a) state that Lake Interest Optionee is exercising a Lake
Option;
(b) identify the name of Lake Interest Optionee and the Lake
Option which is being exercised; and
(c) state the date of the purchase and sale of the Lake Option
Interest underlying such Lake Option (each, a "Lake Interest
Closing"), which shall not be earlier than the second
Business Day following notice of exercise.
1.6.4 For the period beginning on the date hereof and ending as of
the close of business on the Option Expiration Date:
(a) NCRI hereby irrevocably grants, and agrees to cause PIHI to
grant, to Dade the exclusive right and option to purchase
from PIHI all right, title and interest in PIHI in and to
the: (i) Pasco Federal QF Interest ("Pasco Federal QF
Interest Option") and (ii) Pasco Florida QF Interest ("Pasco
Florida QF Interest Option"); and
(b) NCRI hereby irrevocably grants to Dade the exclusive right
and option to purchase all right, title and interest of NCRI
in and to all 1,000 issued and outstanding shares of common
stock of PIHI (the "PIHI Stock") ("PIHI Stock Option").
Each of the Pasco Federal QF Interest Option, Pasco Florida QF
Interest Option and the PIHI Stock Option is referred to as a
"Pasco Option." Any Pasco Option which has not been exercised on
or before the close of business on the Option Expiration Date shall
expire.
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1.6.5 It is expressly agreed that Dade shall have the right in its
sole discretion to assign, in whole or in part, any or all Pasco
Options without the consent of NCO, NCRI or PIHI to any Person
unless such assignment would cause the Pasco Project to lose its QF
Status; provided, however, that such Pasco Option may only be
exercised in whole and not in part. The owner (including any such
assignee) of a Pasco Option from time to time is hereinafter
referred to as a "Pasco Optionee."
1.6.6 A Pasco Optionee may exercise a Pasco Option on or before
the Option Expiration Date by providing notice thereof to NCRI and
PIHI, which notice shall:
(a) state that Pasco Optionee is exercising a Pasco Option;
(b) identify the name of Pasco Optionee and the Pasco Option
which is being exercised; and
(c) state the date of the purchase and sale of the Pasco Option
Interest underlying the Pasco Option (each, a "Pasco Option
Closing"), which shall not be earlier than the second
Business Day following notice of exercise.
1.6.7 As used herein, "Option Expiration Date" as to each of the
Lake Florida QF Interest Option and the Pasco Florida QF Interest
Option, means the exercise date of such option (or, if earlier,
termination of the Lake Project Partnership or Pasco Project
Partnership, as applicable), and for all other options means
March 31, 1995.
1.6.8 Sellers, NCP, the Lake Subsidiaries, LIHI, PIHI and Buyer
shall execute and deliver all such instruments, certificates,
opinions and other documents as shall be necessary, appropriate or
advisable to carry out the foregoing.
1.6.9 Buyer agrees that it will exercise or cause to be exercised
the Lake Florida QF Interest Option, the Lake Federal QF Interest
Option, the Pasco Florida QF Interest Option and the Pasco Federal
QF Interest Option promptly following the satisfaction of each such
Option's conditions to exercise.
1.7. Management Agreement.
Prior to the NCP Closing, NCP and NCRI shall enter into the
Management Agreement in the form of Attachment IX, pursuant to
which NCP will, following the NCP Closing, manage on behalf of NCRI
any Excluded Subsidiaries until, as the case may be, the earlier of
the date on which;
(a) such Excluded Subsidiaries are acquired by NCP or Buyer, as
the case may be; and
(b) the Escrow Agreement terminates with respect thereto.
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1.8. Sublease.
Prior to the NCP Closing, NCP and NCRI shall enter into the
Sublease in substantially the form of Attachment X, pursuant to
which NCP will sublease the Santa Ana Premises.
1.9. Name Change.
1.9.1 At or prior to the NCP Closing, NCP shall amend its
Certificate of Incorporation to change its corporate name to delete
the words "North Canadian" therefrom and to adopt such name as
Buyer shall advise NCP in writing.
1.9.2 Any and all rights to the name "North Canadian" shall remain
with NCO and shall not be transferred to Buyer.
1.9.3 Following the NCP Closing, Buyer agrees not to use, and not
to permit NCP or any of Buyer's or NCP's directly or indirectly
owned Subsidiaries to use, the name "North Canadian" in their
respective corporate names or for any other purposes.
ARTICLE II
CONSIDERATION FOR TRANSFER OF THE STOCK
2.1. Consideration.
2.1.1 The aggregate Purchase Price payable to NCRI in connection
with the Purchase and Sale Transactions is Seventy-One Million
Seven Hundred Ninety-One Thousand Dollars ($71,791,000), which
shall be allocated and paid to NCRI in accordance with Schedule
2.1; provided, however that the Purchase Price shall be
automatically reduced in the amount of $2,000,000 in the event that
on or before the NCP Closing, North Canadian Marketing Corporation
has not delivered to Buyer a fully executed amendment to the
Participation Agreement dated as of July 29, 1992 among Lake Cogen,
ltd., Nationsbank of Florida, National Association (formerly known
as the Citizens and Southern National Bank of Florida), as owner
trustee, TIFD III-C, Inc. and General Electric Capital Corporation,
as amended to the date hereof, the Escrow Agreement dated July 29,
1992 among Lake Cogen, Ltd., TIFD III-C, Inc. and Nationsbank of
Florida, National Association (formerly known as The Citizens and
Southern National Bank of Florida), as owner trustee, as amended to
the date hereof and Gas Purchase Agreement dated as of July 29,
1992, between North Canadian Marketing Corporation and Lake Cogen,
Ltd. as amended to the date hereof which sets the initial gas price
under the Lake Project Gas Purchase Agreement, as amended, to $2.38
per MMBtu from $2.44 per MMBtu effective July 1, 1993.
2.1.2 In addition to the payment to NCRI of the Purchase Price:
(a) Buyer and/or Buyer's Parent shall assume, or provide for the
assumption at the NCP Closing (or at an Excluded
Subsidiaries Closing, as appropriate) of the NCO Obligations
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pursuant to one or more Assumption Agreements, in
substantially the form of Attachment IA; provided, however,
that Buyer (and/or Buyer's Parent) shall only be obligated
to assume:
(i) at the NCP Closing, those NCO Obligations relating to
Projects in which an ownership interest is acquired,
directly or indirectly, by Buyer at the NCP Closing,
and
(ii) at an Excluded Subsidiaries Closing, those NCO
Obligations relating to Excluded Subsidiaries in which
an ownership interest is acquired by Buyer at such
Excluded Subsidiaries Closing.
(b) Escrow Agent shall disburse from the Escrow (and, if and to
the extent Buyer's Cash Deposit is insufficient, Buyer shall
pay) to NCRI at the NCP Closing the sum of:
(i) the Working Capital Value, plus
(ii) the Deferred Payment Consideration, if any,
plus or minus
(iii) any amount owing to NCRI to reflect a positive
Working Capital Closing Adjustment as set forth
in Section 4.2, less any amount owing to Buyer
to reflect a negative Working Capital Closing
Adjustment.
2.1.3 In the event there are any Excluded Subsidiaries and/or any
Lake Option or Pasco Option is not exercised at the NCP Closing,
the Purchase Price payable to NCRI at the NCP Closing shall be
adjusted in accordance with the allocations in Schedule 2.1 and
paid to NCRI as provided for in Subsection 2.2 in accordance with
the allocations in Schedule 2.1 at the Excluded Subsidiaries
Closing, if any, at which such Excluded Subsidiaries are purchased
by Buyer or NCP and, as applicable, at each Lake Interest Closing
or Pasco Option Closing.
2.2. Payment of Consideration.
2.2.1 At the NCP Closing, the Escrow Agent shall deliver to NCRI
on behalf of Buyer (and Buyer shall pay to NCRI such amounts to the
extent that Buyer's Cash Deposit is insufficient) and NCRI shall
accept in immediately available funds
(a) the Purchase Price (as adjusted, if applicable, in accordance
with the provisions of Section 2.1 and Schedule 2.1), plus
(b) the Working Capital Value (provided, however, that if the
Working Capital Value has not been agreed or finally
determined in accordance with the provisions of Section 4.1 at
the time of the NCP Closing, then payment at the NCP Closing
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will be made in accordance with the provisions of Subsection
4.1.2), plus
(c) the Deferred Payment Consideration, if any, plus or minus
(d) the amount of the Working Capital Closing Adjustment pursuant
to the provisions relating to the Working Capital Closing
Adjustment set forth in Section 4.2 (provided, however, that
if the Working Capital Closing Adjustment has not been agreed
or finally determined in accordance with the provisions of
Section 4.2 at the time of the NCP Closing, then payment at
the NCP Closing will be made in accordance with the provisions
of Subsections 4.2.5 and 4.2.6).
2.2.2 At each Excluded Subsidiaries Closing, the Escrow Agent
shall deliver to NCRI on behalf of Buyer (and Buyer shall pay to
NCRI such amounts to the extent that Buyer's Cash Deposit is
insufficient) and NCRI shall accept in immediately available funds
the Purchase Price for such Excluded Subsidiary (as adjusted in
accordance with the provisions of Section 2.1 and Schedule 2.1).
2.2.3 At the NCP Closing and at any Excluded Subsidiaries Closing,
Buyer shall:
(a) assume pursuant to one or more Assumption Agreements, which
Assumption Agreements shall be substantially in the form of
Attachment IA, and dated as of the NCP Closing Date or the
Excluded Subsidiaries Closing Date (as the case may be) at
which they are delivered, the NCO Obligations relating to the
Projects in which an ownership interest is then being
acquired, directly or indirectly, by Buyer, and
(b) deliver to NCO a Release releasing NCO from such NCO
Obligations in substantially the form of Attachment IB or, if
such Release has not been obtained, a guarantee by Buyer's
Parent in substantially the form of Attachment IC.
2.2.4 All payments to NCRI pursuant to this Agreement shall be by
wire transfer payable to North Canadian Resources, Inc. (Account
No. 362-540-7) at Harris Trust and Savings Bank, 111 West Monroe
Street, Chicago, Illinois (Bank Routing No. 071000288).
ARTICLE III
THE ESCROW AND CLOSINGS
3.1. Escrow.
Simultaneously herewith, Buyer and NCRI are entering into the
Escrow Agreement with the Escrow Agent in the form of
Attachment II.
3.2. Buyer's Escrow Deposit.
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3.2.1 Simultaneously herewith, Buyer shall deposit with the
Escrow Agent, as Buyer's Cash Deposit, immediately available funds
by wire transfer in the amount of $74,975,000, representing the
Estimated Cash Payment equal to the sum of the following:
(i) $71,791,000, representing the Purchase Price, plus
(ii) $459,000, representing the Estimated Working Capital
Value, plus
(iii) $1,350,000, representing the Estimated Deferred
Payment Consideration (based on an estimate of 90
days at $15,000 per day), plus
(iv) $1,375,000, representing the Estimated Working
Capital Closing Adjustment (based on 50% of the
assumed negative cash flow at the rate of $500,000
per month from March 1, 1994 through August 15,
1994).
3.2.2 Simultaneously herewith, Buyer shall deposit with the
Escrow Agent, as Buyer's NCP Deposit, two fully executed (or in the
case of documents certified by governmental officials, one original
copy) of each of the following:
(a) An opinion of Buyer's counsel in the form of Attachment V; and
(b) A solvency certificate signed by Buyer's chief financial
officer in the form of Attachment VI.
3.2.3 Simultaneously herewith, Buyer shall also deposit with the
Escrow Agent, as Buyer's Subsidiaries Deposit (Buyer's Cash
Deposit, Buyer's NCP Deposit and Buyer's Subsidiaries Deposit being
referred to herein collectively as "Buyer's Escrow Deposit"), the
following:
(a) Lake Deposit:
(i) Assumption Agreement with respect to each of the NCO
Obligations relating to the Lake Project executed by
Buyer in form and substance substantially in the form of
Attachment IA;
(b) Pasco Deposit:
(i) Assumption Agreements with respect to the NCO Obligations
relating to the Pasco Project executed by Buyer in form
and substance substantially in the form of Attachment IA;
(c) Syracuse Deposit:
(i) Assumption Agreement with respect to the NCO Obligations
relating to the Syracuse Project executed by Buyer in
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form and substance substantially in the form of
Attachment IA.
3.3. Sellers' Escrow Deposit.
3.3.1 Simultaneously herewith, Sellers shall deposit (or cause
NCRI to deposit) with the Escrow Agent, as Sellers' NCP Deposit,
the following:
(a) Certificates evidencing the Stock endorsed by NCRI in blank
for transfer;
(b) By-laws, minute book and stock record book of NCP, together
with a certificate of the secretary of NCP certifying the
authenticity and completeness thereof;
(c) Current Articles of Amalgamation of NCO certified as of a
recent date by a duly authorized Canadian government official
or notarized by a duly authorized notary;
(d) Certificates of Incorporation of each of NCRI and NCP
certified as of a recent date by the Secretary of State of
Delaware and California, respectively;
(e) Certificate of Status of NCO certified as of a recent date by
a duly authorized Canadian government official.
(f) Certificates of good standing (and, where available,
indicating no past due franchise, capital stock or similar
taxes) as of a recent date with respect to each of NCRI and
NCP from the Secretary of State of Delaware and California,
respectively;
(g) Certificates of the Secretary of State of Michigan and Texas
dated a recent date to the effect that NCP is duly qualified
as a foreign corporation and in good standing in such states;
(h) Certificates of the Secretary of State of California and Texas
dated as of a recent date to the effect that NCRI is duly
qualified as a foreign corporation in good standing in such
states.
(i) Certificates of Incorporation of each Non-Project Subsidiary
(i.e., each NCP Subsidiary which does not have an ownership
interest in a Project) certified as of a recent date from the
Secretary of State of their respective states of
incorporation;
(j) Certificates of good standing (and, where available,
indicating no past due franchise, capital stock or similar
taxes) as of a recent date of each Non-Project Subsidiary from
the Secretary of State of their respective states of
incorporation;
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(k) Certificates representing all of the issued and outstanding
shares of stock of each Non-Project Subsidiary registered in
the name of NCP or the NCP Subsidiary that is the owner of
such shares of stock;
(l) Resignations of officers and directors of NCP and each Non-
Project Subsidiary;
(m) Certificates of NCO, NCRI and NCP with respect to board of
directors resolutions approving the transactions, their
respective By-laws, and the absence of amendments to their
respective certificates of incorporation since the date of the
certified copies;
(n) Opinion of Sellers' Canadian counsel in the form of
Attachment VII; and
(o) Opinion of Sellers' United States counsel in the form of
Attachment VIII.
3.3.2 Simultaneously herewith, Sellers shall also deposit (or
cause NCRI to deposit) with the Escrow Agent, as Sellers'
Subsidiaries Deposit (Sellers' NCP Deposit and Sellers'
Subsidiaries Deposit being referred to herein collectively as
"Sellers' Escrow Deposit"), the following with respect to the NCP
Subsidiaries which have ownership interests in the Projects:
(a) Lake Deposit:
(i) By-laws, minute books and stock record books of NCP Lake
Power Incorporated, NCP Gem Incorporated and Umatilla
Groves Incorporated (collectively, the "Lake
Subsidiaries"), in each case together with a certificate
of the secretary or assistant secretary of such
corporation certifying the authenticity and completeness
thereof;
(ii) Certificates of Incorporation of each Lake Subsidiary
certified as of a recent date from the Secretary of State
of Delaware;
(iii) Certificates of good standing (and, where applicable,
indicating no past due franchise, capital stock or
similar taxes), as of a recent date with respect to each
Lake Subsidiary from the Secretary of State of Delaware;
(iv) Certificates of Limited Partnership and good standing and
(and, where applicable, indicating no past due franchise,
capital stock or similar taxes), as of a recent date of
Lake Investment, L.P. and Lake Cogen Ltd. (collectively,
the "Lake Partnerships") from the Secretary of State of
their respective states of formation;
(v) Copies of the Partnership Agreements for each of the Lake
Partnerships, together with a certificate of the
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secretary or assistant secretary of NCP certifying the
authenticity and completeness thereof;
(vi) Certificates representing all of the issued and
outstanding shares of stock of each Lake Subsidiary
registered in the name of NCP (except the certificate for
outstanding shares of NCP Lake Power Incorporated, which
has been pledged to General Electric Capital
Corporation);
(vii) Resignations of officers and directors of the Lake
Subsidiaries;
(viii) Stock powers for each Lake Subsidiary endorsed in blank
for transfer;
(b) Pasco Deposit:
(i) By-laws, minute books and stock record books of NCP Dade
Power Incorporated and NCP Pasco Incorporated
(collectively, the "Pasco Subsidiaries"), in each case
together with a certificate of the secretary or assistant
secretary of such corporation certifying the authenticity
and completeness thereof;
(ii) Certificates of Incorporation of each Pasco Subsidiary
certified as of a recent date from the Secretary of State
of Delaware;
(iii) Certificates of good standing (and, where applicable,
indicating no past due franchise, capital stock or
similar taxes), as of a recent date with respect to each
Pasco Subsidiary from the Secretary of State of Delaware;
(iv) Certificate of Limited Partnership (and, where
applicable, indicating no past due franchise,
capitalization or similar taxes), certified as of a
recent date by the Secretary of State of Delaware for
each of Dade Investment, L.P. and Pasco Cogen, Ltd.
(collectively, the "Pasco Partnerships");
(v) Copies of the Partnership Agreements for each of the
Pasco Partnerships, together with a certificate of the
secretary or assistant secretary of NCP certifying the
authenticity and completeness thereof;
(vi) Certificates representing all of the issued and
outstanding shares of stock of each Pasco Subsidiary
registered in the name of NCP;
(vii) Resignations of officers and directors of the Pasco
Subsidiaries;
(viii) Stock powers for each Pasco Subsidiary endorsed in blank
for transfer;
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(c) Syracuse Deposit:
(i) By-laws, minutes books and stock record books of Syracuse
Investment, Inc. and NCP Syracuse, Inc. (collectively,
the "Syracuse Subsidiaries"), in each case together with
a certificate of the secretary or assistant secretary of
such corporation certifying the authenticity and
completeness thereof;
(ii) Certificates of Incorporation of each Syracuse Subsidiary
certified as of a recent date from the Secretary of State
of Delaware;
(iii) Certificates of good standing (and, where applicable,
indicating no past due franchise, capital stock or
similar taxes), as of a recent date with respect to the
Syracuse Subsidiary from the Secretary of State of
Delaware;
(iv) Certificates of Limited Partnership certified (and, where
applicable, indicating no past due franchise,
capitalization or similar taxes), as of a recent date by
the Secretary of State of Delaware for each of Syracuse
Orange Partners, L.P. and Project Orange Associates, L.P.
(collectively, the "Syracuse Partnerships");
(v) Copies of the Partnership Agreements for each of the
Syracuse Partnerships, together with a certificate of the
secretary or assistant secretary of NCP certifying the
authenticity and completeness thereof;
(vi) Certificates representing all of the issued and
outstanding shares of stock of each Syracuse Subsidiary
registered in the name of NCP;
(vii) Resignations of officers and directors of the Syracuse
Subsidiaries;
(viii) Stock powers for each Syracuse Subsidiary endorsed in
blank for transfer;
(d) Ada Deposit:
(i) By-laws, minute books and stock record books of NCP Ada
Power Incorporated (the "Ada Subsidiary"), together with
a certificate of the secretary or assistant secretary of
such corporation certifying the authenticity and
completeness thereof;
(ii) Certificate of Incorporation of the Ada Subsidiary
certified as of a recent date from the Secretary of State
of California;
(iii) Certificates of good standing (and, where applicable,
indicating no past due franchise, capital stock or
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similar taxes), as of a recent date with respect to the
Ada Subsidiary from the Secretary of State of California;
(iv) Certificates of Limited Partnership (and, where
applicable, indicating no past due franchise,
capitalization or similar taxes), certified as of a
recent date by the Secretary of State of Delaware for Ada
Cogeneration Limited Partnership (the "Ada Partnership");
(v) A copy of the Partnership Agreement for the Ada
Partnership, together with a certificate of the secretary
or assistant secretary of NCP certifying the authenticity
and completeness thereof;
(vi) Certificates representing all of the issued and
outstanding shares of stock of the Ada Subsidiary,
registered in the name of NCP;
(vii) Resignations of officers and directors of the Ada
Subsidiary;
(viii) Stock powers for the Ada Subsidiary endorsed by NCP in
blank for transfer;
(e) FPB Deposit:
(i) By-laws, minute books and stock record books of NCP
Commerce Power Incorporated ("FPB Subsidiary"), together
with a certificate of the secretary or assistant
secretary of such corporation certifying the authenticity
and completeness thereof;
(ii) Certificate of Incorporation of the FPB Subsidiary
certified as of a recent date from the Secretary of State
of California;
(iii) Certificates of good standing (and, where applicable,
indicating no past due franchise, capital stock or
similar taxes), as of a recent date with respect to the
FPB Subsidiary from the Secretary of State of California;
(iv) Certificates of Limited Partnership (and, where
applicable, indicating no past due franchise,
capitalization or similar taxes), certified as of a
recent date by the Secretary of State of Delaware for FPB
Cogeneration Partners, L.P. (the "FPB Partnership");
(v) Copies of the Partnership Agreement for the FPB
Partnership, together with a certificate of the secretary
or assistant secretary of NCP certifying the authenticity
and completeness thereof;
(vi) Certificates representing all of the issued and
outstanding shares of stock of the FPB Subsidiary
registered in the name of NCP;
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<PAGE>
(vii) Resignations of officers and directors of the FPB
Subsidiary;
(viii) Stock powers for the FPB Subsidiary endorsed by NCP in
blank for transfer;
(f) The following deposits relating to the Lake Options (each, a
"Lake Interest Deposit"):
(i) LIHI Stock Deposit:
(A) By-laws, minute book and stock record books of LIHI,
together with a certificate of the secretary or
assistant secretary of such corporation certifying
the authenticity and completeness thereof;
(B) Certificate of Incorporation by LIHI certified as of
a recent date by the Secretary of State of Delaware;
and
(C) Certificate representing all of the issued and
outstanding shares of LIHI Stock registered in the
name of NCRI.
(ii) Lake Interest Deposit:
(A) Lake Interest Assignment Instrument relating to the
Lake Interest.
(iii) Lake Federal QF Interest Deposit:
(A) Lake Interest Assignment Instrument relating to the
Lake Federal QF Interest.
(iv) Lake Florida QF Interest Deposit:
(A) Lake Interest Assignment Instrument relating to the
Lake Florida QF Interest.
(g) The following deposits relating to the Pasco Options (each, a
"Pasco Option Deposit"):
(i) PIHI Stock Deposit:
(A) By-laws, minute book and stock record books of PIHI,
together with a certificate of the secretary or
assistant secretary of such corporation certifying
the authenticity and completeness thereof;
(B) Certificate of Incorporation of PIHI certified as of
a recent date by the Secretary of State of Delaware;
and
44
<PAGE>
(C) Certificate representing all of the issued and
outstanding shares of PIHI Stock registered in the
name of NCRI.
(ii) Pasco Federal QF Interest Deposit:
(A) Pasco Interest Assignment Instrument relating to the
Pasco Federal QF Interest.
(iii) Pasco Florida QF Interest Deposit:
(A) Pasco Interest Assignment Instrument relating to the
Pasco Florida QF Interest.
3.4. NCP Closing.
3.4.1 The NCP Closing shall occur at the offices of McDermott,
Will & Emery, 227 West Monroe Street, Chicago, Illinois, and shall
begin at 10:00 A.M. (Central Time) or at such other time or place
as the parties may mutually agree in writing.
3.4.2 The NCP Closing shall, subject to the satisfaction of the
conditions precedent set forth in Article XII, occur four Business
Days following the later of the following dates:
(a) issuance of the required SEC Order;
(b) the termination of the waiting period under the H-S-R Act;
(c) receipt of all Requisite Consents with respect to the Minimum
Number of Projects; and
(d) delivery to Buyer of the NCP February 28 Balance Sheet;
or on such other date as the parties may mutually agree in writing.
3.4.3 At the NCP Closing, the Escrow Agent shall release and
deliver in each case in accordance with the terms of the Escrow
Agreement:
(a) to NCRI:
(i) the allocable portion of Buyer's Cash Deposit,
(ii) Buyer's NCP Deposit, and
(iii) the allocable portion of Buyer's Subsidiaries Deposit;
(b) to Buyer:
(i) Sellers' NCP Deposit, and
(ii) the allocable portion of Sellers' Subsidiaries Deposit;
45
<PAGE>
3.4.4 At the NCP Closing, each party shall execute and deliver to
the other such other instruments or documents as may be necessary
or appropriate to carry out the Purchase and Sale Transactions and
the Escrow Agreement and to comply with the terms hereof and
thereof.
3.5. Preclosing (NCP Closing).
A preclosing shall occur at the offices of McDermott, Will & Emery,
at 10:00 A.M. (Central Time) on the Business Day immediately
preceding the NCP Closing or at such other time or place as the
parties may mutually agree in writing.
3.6. Excluded Subsidiaries Closings.
3.6.1 The closings with respect to the Excluded Subsidiaries (the
"Excluded Subsidiaries Closings") shall occur at the offices of
McDermott, Will & Emery and shall begin at 10:00 A.M. (Central
Time) or at such other time or place as the parties may mutually
agree in writing.
3.6.2 Each Excluded Subsidiaries Closing shall, subject to the
satisfaction of the conditions precedent set forth in Article XII,
occur two Business Days following the date when all Requisite
Consents with respect to such Excluded Subsidiaries are obtained,
or such other date as the parties may mutually agree in writing.
3.6.3 A preclosing shall occur at the offices of McDermott, Will &
Emery, at 10:00 A.M. (Central Time) on the Business Day immediately
preceding an Excluded Subsidiaries Closing or at such other time or
place as the parties may mutually agree in writing.
3.6.4 At each Excluded Subsidiaries Closing, the Escrow Agent
shall release and deliver the allocable portion of the Buyer's
Escrow Deposit relating to such Excluded Subsidiaries and the
Sellers' Subsidiary Escrow Deposit relating to such Excluded
Subsidiaries, in each case in accordance with the terms of the
Escrow Agreement.
3.6.5 At each Excluded Subsidiaries Closing, each party shall
execute and deliver to the other such other instruments and
documents as may be necessary or appropriate to carry out the
Purchase Sale Transactions and the Escrow Agreement and to comply
with the terms and conditions hereof and thereof.
3.7. Lake Interest and Pasco Option Closings.
3.7.1 Each Lake Interest Closing and Pasco Option Closing shall,
subject to the satisfaction of the conditions precedent set forth
in Article XII and Section 3.7.4(b), occur at the offices of
McDermott, Will & Emery and shall begin at 10:00 A.M. (Central
Time) or at such other time and place as the parties may mutually
agree in writing.
46
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3.7.2 Each Lake Interest Closing and Pasco Option Closing shall
occur two Business Days following the later of the following dates:
(a) receipt by NCRI of a written notice of exercise of the
relevant option; and
(b) receipt of all Requisite Consents required for the
contemplated transfer of the applicable Lake Option Interest,
LIHI Stock, Pasco Option Interest or PIHI Stock, as the case
may be, and satisfaction of such other conditions as are set
forth in the Lake Interest Option Agreement and Pasco Option
Agreement, as applicable;
or on such other date as the parties may mutually agree in writing.
3.7.3 A preclosing shall occur at the offices of McDermott, Will &
Emery, at 10:00 A.M. (Central Time) on the Business Day immediately
preceding each closing or at such other time or place as the
parties may mutually agree in writing.
3.7.4 (a) At each closing:
(i) NCRI and Buyer shall certify to the Escrow Agent that a
Lake Interest Closing or Pasco Option Closing, as
applicable, is occurring;
(ii) NCRI shall instruct the Escrow Agent to release to Buyer
the Seller's applicable Lake Interest Deposit or Pasco
Option Deposit; and
(iii) The Escrow Agent shall wire transfer from Buyer's Cash
Deposit to NCRI the applicable purchase price specified
on Schedule 2.1 hereto. (It is understood that if the
Lake Florida QF Interest or Pasco Florida QF Interest
closing occurs on or after April 1, 1995 and the Escrow
Agreement has theretofore terminated, the parties shall
nevertheless be obligated to make the required
deliveries.)
(b) The right of a Lake Interest Optionee and Pasco Optionee to
deliver notice of exercise of any Lake Option and Pasco Option
as aforesaid shall be conditioned on: (i) receipt by optionee
and NCRI of all Requisite Consents to the transfer of the
interests to be acquired, to such optionee; and (ii)
satisfaction of such other conditions as are set forth in the
Lake Interest Option Agreement and Pasco Option Agreement, as
applicable.
3.7.5 At each Lake Interest Closing and Pasco Option Closing, each
party shall execute and deliver to the other such other instruments
and documents as may be necessary or appropriate to carry out the
Purchase and Sale Transactions and the Escrow Agreement and to
comply with the terms and conditions hereof and thereof.
47
<PAGE>
3.8. Excluded Subsidiaries Option.
3.8.1 NCRI hereby grants to Buyer (or, at Buyer's direction, to
NCP) the irrevocable, exclusive option to purchase (following the
NCP Closing) each of the Excluded Subsidiaries at the Purchase
Prices therefor set forth in Schedule 2.1 at any time after the NCP
Closing through December 31, 1994.
3.8.2 NCRI hereby grants to Buyer (or, at Buyer's discretion, to
NCP) the irrevocable, nonexclusive option to purchase each of the
Excluded Subsidiaries at the Purchase Prices therefor set forth in
Schedule 2.1 at any time after December 31, 1994 until the earlier
of:
(a) the date NCRI enters into a binding agreement to sell such
respective Excluded Subsidiary; and
(b) December 31, 1995.
3.9. Termination of Escrow.
3.9.1 In the event that the NCP Closing does not occur on or
before August 15, 1994, then unless the parties shall otherwise
agree in writing, the Escrow shall be terminated and the Escrow
Agent shall:
(a) disburse to NCRI,
(i) the Stipulated Damages, if any, owing to NCRI pursuant to
Section 13.1,
(ii) the Deferred Consideration, if any, owing to NCRI, and
(iii) interest on the Cash Deposit payable to NCRI pursuant to
Section 3.2 of the Escrow Agreement; and
(b) disburse to Buyer, the balance of the Cash Deposit;
(c) deliver to NCRI, the balance of Sellers' Escrow Deposit; and
(d) deliver to Buyer, the balance of Buyer's Escrow Deposit.
3.9.2 In the event following the NCP Closing any Excluded
Subsidiaries have not been purchased by Buyer on or prior to
December 31, 1994, and/or the entire Lake Option Interest and Pasco
Option Interest has not been purchased by the Lake Optionee(s) and
Pasco Optionee(s) on or prior to March 31, 1995, then unless the
parties shall otherwise agree in writing, on April 1, 1995 the
Escrow shall be terminated and the Escrow Agent shall:
(a) disburse to Buyer the entire balance of the Cash Deposit;
(b) deliver to NCRI the entire balance of the Sellers' Escrow
Deposit; and
48
<PAGE>
(c) deliver to Buyer the entire balance of the Buyer's Escrow
Deposit.
ARTICLE IV
CASH AMOUNT CALCULATIONS AND ADJUSTMENTS
4.1. Calculation of Working Capital Value.
4.1.1 Within forty-five (45) days following the date hereof (and
in any event at least four Business Days prior to the NCP Closing),
NCP shall prepare and deliver to Buyer and NCRI a consolidated
balance sheet of NCP as of February 28, 1994 (the "February 28
Balance Sheet") on a basis consistent with the Audited Balance
Sheet, but excluding the Lake Subsidiaries, and a computation based
on such February 28 Balance Sheet of the Working Capital Value as
of February 28, 1994 using the format set forth on Schedule 4.1
hereof (the "NCP Working Capital Value Calculation"); provided,
however, that representations regarding PIHI, Pasco Option
Agreement, PIHI Stock and Pasco Option Interest are made as of the
date of the First Amendment.
4.1.2 Buyer and NCRI shall have the right on or before the NCP
Closing to raise an objection to the NCP Working Capital Value
Calculation. If either Buyer or NCRI so object, then at the NCP
Closing:
(a) the amount not in dispute shall be paid by the Escrow Agent to
NCRI; and
(b) the balance shall continue to be held by the Escrow Agent.
If Buyer or NCRI do not so object, then the agreed amount of the
Working Capital Value shall be paid by the Escrow Agent to NCRI at
the NCP Closing.
4.1.3 If the amount of the Working Capital Value is in dispute at
the time of the NCP Closing, NCRI and Buyer shall cooperate with
each other to reach a mutual agreement thereon, or, failing such
agreement within 10 days, then the determination shall be made by
an independent certified public accounting firm ("Accountant")
reasonably acceptable to NCRI and Buyer, the cost of which shall be
paid equally by NCRI and Buyer. NCRI and Buyer shall deliver to
the Accountant copies of any schedules or documentation which may
be reasonably required by the Accountant to make its determination.
NCRI and Buyer shall use their best efforts to cause the Accountant
to promptly complete such determination. The determination of the
Accountant shall be final and binding on the parties.
4.1.4 In the event that the Working Capital Value as so determined
in accordance with the provisions of Subsection 4.1.3 is:
49
<PAGE>
(a) an amount greater than the amount paid with respect to the
Working Capital Value at the NCP Closing pursuant to paragraph
(b) of Subsection 2.2.1, Buyer shall pay NCRI such difference;
(b) an amount smaller than the amount paid with respect to the
Working Capital Value at the NCP Closing pursuant to paragraph
(b) of Subsection 2.2.1, NCRI shall pay to Buyer such
difference.
Such payment shall be made by check or wire transfer within five
Business Days of the resolution of any objection.
4.2. Calculation of Working Capital Closing Adjustment.
4.2.1 The Working Capital Closing Adjustment included as part of
the Cash Payment shall be calculated as follows:
(a) the amount of:
(i) the Intercompany Account, if any, owing by NCP to NCRI as
of the close of business on the day immediately preceding
the NCP Closing, plus
(ii) 50% of the increase, if any, in the Working Capital of
NCP during the period commencing March 1, 1994 through
the close of business on the day immediately preceding
the NCP Closing,
shall be added to the Cash Payment; and
(b) the amount of:
(i) the Intercompany Account, if any, owing by NCRI to NCP as
of the close of business on the day immediately preceding
the NCP Closing, plus
(ii) 50% of the decrease, if any, in the Working Capital of
NCP during the period commencing March 1, 1994 through
the close of business on the day immediately preceding
the NCP Closing,
shall be subtracted from the Cash Payment.
The net amount calculated in accordance with paragraphs (a) and (b)
of this Subsection 4.1.1 shall be the "Working Capital Closing
Adjustment."
4.2.2 The change in Working Capital referred to in items
(a)(ii) and (b)(ii) of Subsection 4.1.2 shall be calculated by
subtracting the positive or negative amount of Working Capital
reflected on the NCP Closing Balance Sheet from the positive or
negative amount of Working Capital reflected on the February 28
Balance Sheet. In each case such computations shall be made in
accordance with the format of Schedule 4.2 adjusted to exclude the
Lake Subsidiaries.
50
<PAGE>
4.2.3 For purposes of this calculation, the Intercompany
Account will be:
(a) adjusted to zero at February 28, 1994; and
(b) treated as a current receivable and payable and part of
Working Capital after February 28.
4.2.4 The Intercompany Account shall be satisfied and
extinguished at the NCP Closing by the adjustment in the Cash
Payment provided for by Subsection 4.2.1.
4.2.5 Prior to the NCP Closing, NCP shall provide to Buyer and
to NCRI an estimate of the status of Working Capital and
Intercompany Account balance at the NCP Closing Date and such
Working Capital and Intercompany Account balance shall be the basis
for the Working Capital Closing Adjustment to be made at the NCP
Closing as provided in paragraph (d) of Subsection 2.2.1.
4.2.6 Buyer and NCRI shall have the right on or before the NCP
Closing to raise an objection to the NCP Working Capital Closing
Adjustment Calculation. If either Buyer or NCRI so object, then at
the NCP Closing:
(a) the amount not in dispute shall be paid by the Escrow Agent to
NCRI; and
(b) the balance shall continue to be held by the Escrow Agent.
If Buyer or NCRI do not so object, then the amount of the NCP
Working Capital Closing Adjustment Calculation shall be paid by the
Escrow Agent to NCRI at the NCP Closing.
51
<PAGE>
4.3. Closing Balance Sheet.
4.3.1 Within 30 days following NCP Closing, NCRI shall prepare and
deliver to Buyer, and NCP shall assist NCRI to prepare, an
unaudited, consolidated balance sheet of NCP as of the NCP Closing
Date (the "Closing Balance Sheet") prepared in a manner consistent
with the Audited Balance Sheet but excluding the Lake Subsidiaries
and Lake Partnerships, setting forth on an accrual basis the
Working Capital and Intercompany Account balances as of the NCP
Closing.
4.3.2 Buyer shall have the right within 30 days following the
delivery of the Closing Balance Sheet to object to the calculation
of Working Capital and the Intercompany Account therein and the
resulting Working Capital Closing Adjustment. If Buyer does so
object, NCRI and Buyer shall cooperate with each other to reach a
mutual agreement thereon, or, failing such agreement within 10
days, then the determination shall be made by an Accountant
reasonably acceptable to NCRI and Buyer, the cost of which shall be
shared equally by NCRI and Buyer. NCRI and Buyer shall deliver to
the Accountant copies of any schedules or documentation which may
be reasonably required by the Accountant to make its determination.
NCRI and Buyer shall use their best efforts to cause the Accountant
to promptly complete such determination. The determination of the
Accountant shall be final and binding on the parties.
4.3.3 In the event that the actual Working Capital Closing
Adjustment as so determined is greater or less than the Estimated
Working Capital Closing Adjustment used in the calculation of the
Cash Payment pursuant to Subsection 2.2.1 then:
(a) if greater, then Buyer shall pay (or cause the Escrow Agent to
pay) NCRI such difference;
(b) if less, then NCRI shall pay to Buyer such difference.
Such payment shall be made by check or wire transfer within thirty-
five days after delivery by NCRI to Buyer of the computation of the
Working Capital Closing Adjustment or five Business Days after the
resolution of any objection pursuant to Section 4.3.2, whichever is
later.
52
<PAGE>
EXHIBIT 1
PURCHASE AND SALE DISBURSEMENT CERTIFICATE
The undersigned hereby certifies and directs the Escrow Agent,
pursuant to Section 2.1 of the Amended and Restated Escrow
Agreement dated June __, 1994 by and among North Canadian
Resources, Inc. ("NCRI") and Energy Initiatives, Inc. ("Buyer") and
the Escrow Agent (the "Escrow Agreement"), to disburse and deliver
such portion of Buyer's Cash Deposit and the other Escrow Deposits
held in Escrow as follows:
(a) The ______________ [NCP Excluded Subsidiaries] Closing has
occurred.
(b) Disbursements to NCRI:
(i) Escrow Agent shall disburse to NCRI from Buyer's Cash
Deposit an aggregate amount of $__________ (the "Cash
Payment") consisting of the following:
A. $__________ in respect of the Purchase Price; plus
B. $__________ in respect of the Working Capital Value;
plus
C. $__________ in respect of the Deferred Payment
Consideration.
(ii) Escrow Agent shall deliver to NCRI Buyer's NCP Deposit.
(c) Escrow Agent shall deliver to Buyer from the Sellers' Escrow
Deposits the following Deposits marked with a "X" applicable
to the relevant NCP Subsidiaries which are included in the
Closing(s) certified in (a) above:
(i) ________ Sellers' NCP Deposit
(ii) ________ Sellers' Lake Deposit
(iii) ________ Sellers' Pasco Deposit
(iv) ________ Sellers' Syracuse Deposit
(v) ________ Sellers' Ada Deposit
(vi) ________ Sellers' FPB Deposit
(d) Escrow Agent shall deliver to NCRI from the Buyer's Escrow
Deposits the following Deposits marked with a "X" applicable to
the relevant NCP Subsidiaries which are included in the
Closing(s) certified in (a) above:
Exh. 1-1
<PAGE>
(i) ________ Buyer's Lake Deposit
(ii) ________ Buyer's Pasco Deposit
(iii) ________ Buyer's Syracuse Deposit.
The Cash Payment shall be made by Escrow Agent to NCRI by wire
transfer in immediately available funds as provided by Section
2.3.1 of the Escrow Agreement.
All Escrow Deposits shall be delivered to the respective parties at
the addresses and in the manner set forth in Article X of the
Escrow Agreement.
Capitalized terms used in this Certificate shall, unless otherwise
defined herein, have the meanings ascribed to them in the Escrow
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this ___ day of __________, 1994.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
Exh. 1-2
<PAGE>
EXHIBIT 2
WORKING CAPITAL CLOSING ADJUSTMENT DISBURSEMENT CERTIFICATE
The undersigned hereby certifies and directs the Escrow Agent,
pursuant to Section 2.1 of the Amended and Restated Escrow
Agreement dated June __, 1994 by and among North Canadian
Resources, Inc. ("NCRI") and Energy Initiatives, Inc. ("Buyer") and
the Escrow Agent (the "Escrow Agreement"), to disburse and deliver
such portion of Buyer's Cash Deposit held in Escrow as follows:
(a) The NCP Closing has occurred and the Working Capital Value
Adjustment has been finally determined under the Purchase and
Sale Agreement
(b) Escrow Agent shall disburse to NCRI from the Cash Deposit an
aggregate amount of $_____________ (the "Working Capital Value
Adjustment")
[(c) Escrow Agent shall disburse to Buyer from the Cash Deposit an
aggregate amount of $_____________ (the "Working Capital
Closing Adjustment")]
The Cash Payment(s) shall be paid by Escrow Agent by wire transfer
in immediately available funds pursuant to Section 2.3.1 of the
Escrow Agreement.
Capitalized terms used in this Certificate shall, unless otherwise
defined herein, have the meanings ascribed to them in the Escrow
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this ___ day of __________, 1994.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
Exh. 2-1
<PAGE>
EXHIBIT 3
LAKE DISBURSEMENT CERTIFICATE
The undersigned hereby certifies and directs the Escrow Agent,
pursuant to Section 2.1 of the Amended and Restated Escrow
Agreement dated June __, 1994 by and among North Canadian
Resources, Inc. ("NCRI") and Energy Initiatives, Inc. ("Buyer") and
the Escrow Agent (the "Escrow Agreement"), to disburse from Buyer's
Cash Deposit and deliver the applicable Lake Interest Deposit held
in Escrow as follows (terms used herein, unless otherwise defined
herein shall have the meaning ascribed to them in the Escrow
Agreement):
(a) All of the conditions precedent to the Lake Option Closing
relating to the [Lake Interest], [Lake Federal QF Interest]
[Lake Florida QF Interest] [LIHI Stock] as provided in the
Purchase and Sale Agreement have occurred.
(b) Disbursements to NCRI:
(i) Escrow Agent shall disburse to NCRI from Buyer's Cash
Deposit an aggregate amount of $_________ (the "Cash
Payment") consisting of the following:
A. $_____ in respect to the Lake Interest;
B. $_____ in respect to the Lake Federal QF
Interest;
C. $_____ in respect to the Lake Florida QF
Interest; plus
D. $_____ in respect to the LIHI Stock.
(c) Deliveries to Buyer:
(i) Escrow Agent shall deliver to Buyer from the Sellers'
Escrow Deposit the following Deposits marked with an "X"
applicable to the relevant interests in the Lake Project
which are included in the Closing(s) certified in (a)
above:
A. ______ Lake Interest Deposit;
B. ______ Lake Federal QF Interest Deposit;
C. ______ Lake Florida QF Interest Deposit; and/or
D. ______ LIHI Stock Deposit.
Exh. 3-1
<PAGE>
The Cash Payment shall be made by Escrow Agent to NCRI by wire
transfer in immediately available funds pursuant to Section 2.3.1
of the Escrow Agreement.
All Escrow Deposits shall be delivered to Buyer at the address set
forth in Article X of the Escrow Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this ___ day of __________, 199_.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
Exh. 3-2
<PAGE>
EXHIBIT 3A
PASCO DISBURSEMENT CERTIFICATE
The undersigned hereby certifies and directs the Escrow Agent,
pursuant to Section 2.1 of the Amended and Restated Escrow
Agreement dated June __, 1994 by and among North Canadian
Resources, Inc. ("NCRI") and Energy Initiatives, Inc. ("Buyer") and
the Escrow Agent (the "Escrow Agreement"), to disburse from Buyer's
Cash Deposit and deliver the applicable Pasco Option Deposit held
in Escrow as follows (terms used herein, unless otherwise defined
herein shall have the meaning ascribed to them in the Escrow
Agreement):
(a) All of the conditions precedent to the Pasco Option Closing
relating to the [Pasco Federal QF Interest] [Pasco Florida QF
Interest] [PIHI Stock] Closing as provided in the Purchase and
Sale Agreement have occurred.
(b) Disbursements to NCRI:
(i) Escrow Agent shall disburse to NCRI from Buyer's Cash
Deposit an aggregate amount of $_________ (the "Cash
Payment") consisting of the following:
A. $_____ in respect to the Pasco Federal QF
Interest;
B. $_____ in respect to the Pasco Florida QF
Interest; plus
C. $_____ in respect to the PIHI Stock.
(c) Deliveries to Buyer:
(i) Escrow Agent shall deliver to Buyer from Sellers' Escrow
Deposit the following Deposits marked with an "X"
applicable to the relevant interests in the Pasco Project
which are included in the Closing(s) certified in (a)
above:
A. ______ Pasco Federal QF Interest;
B. ______ Pasco Florida QF Interest Deposit;
C. ______ Pasco Interest Deposit; and/or
D. ______ PIHI Stock Deposit.
The Cash Payment shall be made by Escrow Agent to NCRI by wire
transfer in immediately available funds pursuant to Section 2.3.1
of the Escrow Agreement.
Exh. 3A-1
<PAGE>
All Escrow Deposits shall be delivered to Buyer at the address set
forth in Article X of the Escrow Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Certificate
this ___ day of __________, 199_.
NORTH CANADIAN RESOURCES, INC. ENERGY INITIATIVES, INC.
By: By:
Name: Name:
Title: Title:
Exh. 3A-2
<PAGE>
EXHIBIT 4
TERMINATION NOTICE
The undersigned hereby certifies and directs the Escrow Agent,
pursuant to Section 2.1 of the Amended and Restated Escrow
Agreement dated June __, 1994 by and among North Canadian
Resources, Inc. ("NCRI") and Energy Initiatives, Inc. ("Buyer") and
the Escrow Agent (the "Escrow Agreement"), to disburse and deliver
such portion of Buyer's Cash Deposit and the other Escrow Deposits
held in Escrow as follows:
(a) Disbursement of the Cash Deposit:
(i) The Escrow Agent shall disburse to NCRI from Buyer's
Cash Deposit, by wire transfer in immediately
available funds in accordance with Section 2.3.1 of
the Escrow Agreement, an aggregate amount of
$___________ (the "Cash Deposit") consisting of the
following:
A. [$5,000,000] Stipulated Damages determined
pursuant to Subsection 13.1.2 of the Purchase
and Sale Agreement and Section 4.2.1 of the
Escrow Agreement;
B. $__________ Deferred Payment Consideration
determined pursuant to Section 14.1.4 of the
Purchase and Sale Agreement and Section 2.4 of
the Escrow Agreement.
(ii) Escrow Agent shall disburse by wire transfer in
immediately available funds to Buyer the entire
balance of Buyer's Cash Deposit in accordance with
Section 2.3.1 of the Escrow Agreement.
(b) Delivery of Sellers' Escrow Deposit:
The Escrow Agent shall deliver to NCRI Sellers' NCP
Deposit, Sellers' Subsidiaries Deposits, Sellers'
Lake Interest Deposits and Sellers' Pasco Option
Deposits to the extent the Escrow Agent is holding
the same in Escrow.
(c) Delivery of Buyer's Escrow Deposit:
The Escrow Agent shall deliver to Buyer Buyer's NCP
Deposit and Buyer's Subsidiaries Deposit to the
extent the Escrow Agent is holding the same in
Escrow.
The Escrow Agent shall deliver the Escrow Deposits to the
respective parties at the addresses and in the manner set forth in
Article X of the Escrow Agreement.
Exh. 4-1
<PAGE>
Capitalized terms used in this Certificate shall, unless otherwise
defined herein, have the meaning ascribed to them in the Escrow
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Termination
Notice as of __________, 199_.
ENERGY INITIATIVES, INC.
By:
Name:
Title:
NORTH CANADIAN RESOURCES, INC.
By:
Name:
Title:
Exh. 4-2
<PAGE>
EXHIBIT 5
FORM OF DISBURSEMENT NOTICE
In accordance with Section 2.2.2(a) of the Amended and
Restated Escrow Agreement, dated June __, 1994, by and among North
Canadian Resources Inc., ("NCRI") and Energy Initiatives, Inc.
("Buyer") and the undersigned, as Escrow Agent thereunder (the
"Escrow Agent"), the Escrow Agent hereby notifies [NCRI or Buyer]
that it received a Unilateral Disbursement Certificate from [NCRI
or Buyer] on ________, 19__, a copy of which is attached hereto.
As provided by Section 2.2.2(b) of the Amended and Restated Escrow
Agreement, the undersigned, as Escrow Agent, will make the
disbursements specified by such Unilateral Disbursement Certificate
on [the fifth Business Day following Escrow Agent's issuance of the
Disbursement Notice].
Harris Trust and Savings Bank,
as Escrow Agent
Date: By:
Exh. 5-1
<PAGE>
EXHIBIT B-3(a)
Attachment 1
FIRST AMENDMENT
TO
FIRST AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT OF
LAKE COGEN, LTD.
This Agreement (the "Amendment Agreement"), dated as of June,
13, 1994 (the "Amendment Date"), by and among NCP Lake Power
Incorporated, a Delaware corporation ("NCP Lake"), Lake Investment,
L.P., a Delaware limited partnership ("LIL"), and Lake Interest
Holdings Inc., a Delaware corporation ("LIHI").
W I T N E S S E T H:
WHEREAS, Lake Cogen, Ltd. ("Partnership") is a Florida limited
partnership existing on the Amendment Date under and pursuant to
that certain First Amended and Restated Limited Partnership
Agreement of Lake Cogen, Ltd., a Florida Limited Partnership, dated
as of July 24, 1992 (the "Partnership Agreement");
WHEREAS, immediately prior hereto, NCP Lake was the sole
general partner, and LIL was the sole limited partner, of the
Partnership;
WHEREAS, NCP Lake and LIL desire to admit LIHI, and LIHI
desires to be admitted, as a general partner and a limited partner
in the Partnership on the terms set forth herein;
WHEREAS, the parties hereto desire to amend the Partnership
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:
1. References herein to Recitals, Articles, Sections and Exhibits
are to the Recitals, Articles, Sections, Subsections and Exhibits
of the Partnership Agreement.
2. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned to them in the Partnership Agreement.
3. LIHI is hereby admitted as a general partner and a limited
partner in the Partnership.
4. NCP Lake and LIL hereby acknowledge that LIL has transferred
to LIHI, as of the date hereof, the following interests in the
Partnership:
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<PAGE>
(i) a .10% Partnership Interest to be held by LIHI as a
Limited Partner (the "Florida QF Interest");
(ii) a 7.85% Partnership Interest to be held by LIHI as a
Limited Partner (the "Federal QF Interest");
(iii) a 49% Partnership Interest to be held by LIHI as a
Limited Partner (the "LIHI Limited Partnership
Interest"); and
(iv) a 1% Partnership Interest to be held by LIHI as a
General Partner.
5. The Partnership Agreement is hereby amended, effective as of
the Amendment Date, as follows:
(a) "NCP Lake" is substituted for the term "the General
Partner" in each place where the term "the General
Partner" appears in the following places in the
Partnership Agreement:
Preamble
Recital A
Recital C
The fifth and sixth lines of Section 2.1
The second line and clause (iv) of Section 10.1
(b) The following shall be added immediately following
Section 2.3 as a new Section 2.4.
"Section 2.4 Additional General Partner.
(a) Effective as of the Amendment Date, Lake
Interest Holdings Inc., a Delaware corporation
("LIHI"), is admitted to the Partnership as a
general partner.
(b) Upon the earlier to occur of (i) the
consummation of the transfer of the Lake Interest,
as defined in and pursuant to the exercise of the
Lake Option, or (ii) receipt by the Partnership of
an order issued by the Commission in which it is
determined that the Cogeneration Facility would
continue to meet the ownership requirements set
forth in Section 292.206(a) of the Regulations for a
Qualifying Cogeneration Facility as defined in
Section 201 of PURPA notwithstanding the removal of
LIHI as a General Partner, LIHI shall be removed as
a General Partner without any further action by
LIHI, the Partnership or any Partner and any
Partnership Interest then held by LIHI as a General
Partner shall thereafter be held by LIHI as a
Limited Partner and shall constitute a Limited
Partnership Interest.
2
<PAGE>
(c) The foregoing provisions of Section 2.4(b)
of this Agreement shall apply to any assignee or
other transferee of the Lake Interest."
(c) The following shall be added immediately following
Section 6.5 as a new Section 6.6:
"Section 6.6 True-Up Payment.
(a) Upon (i) the dissolution of the Partnership, and
(ii) each sale, assignment or other transfer of all or
any part of the Partnership Interests held, directly or
indirectly, by NCP Lake and LIL to a Person or Persons
other than an Affiliate of NCP Lake or LIL (each, a
"True-Up Date") NCP Lake and LIL shall jointly pay to the
other Partners (each, a "True-Up Payment") an amount
equal to 50% of the amount, if any, by which the present
value, as of the Amendment Date, calculated using a
reasonable discount rate, of the economic benefits
included in the "stream of benefits", as such term is
used and defined by the Federal Energy Regulatory
Commission ("Commission") in connection with determining
the equity interest in a qualifying cogeneration facility
held by a person primarily engaged in the generation and
sale of electricity under Section 292.206 of the
Commission's regulations implementing the Public Utility
Regulatory Policies Act of 1978, as amended, received by
NCP Lake and LIL from the Partnership from the Amendment
Date through and including the True-Up Date, exceeds 50%
of such present value of the total "stream of benefits"
from the Partnership from the Amendment Date through and
including the True-Up Date.
(b) True-up Payments shall be divided proportionately
among the Partners receiving them in accordance with
their relative Partnership Interests.
(c) The obligations, if any, to make True-Up Payments
shall automatically terminate and shall be of no further
force or effect without any further action being taken by
the Partnership or the Partners, other than confirmation
that the order referred to below is acceptable, in form
and substance, to LIHI and the Owner-Participant and
receipt of such consents as may be required under the
Participation Agreement, upon the receipt by the Partner-
ship of an order issued by the Federal Energy Regulatory
Commission or its staff by delegated authority (collec-
tively, the "Commission") in which the Commission finds
or confirms that, based on the Partnership's reasonable
projections of distributions of cash and allocations of
profits, losses and deductions to be made after the
Amendment Date to the Partners, fees to be paid to the
Partners after the Amendment Date and the fair market
price of the services to be provided for such fees, at no
time between the Amendment Date and the expiration of the
3
<PAGE>
Partnership's contract with Florida Power and Light
Company for the sale of electricity generated by the
Cogeneration Facility will NCP Lake and LIL have
received, collectively and cumulatively, more than 50% of
the Cogeneration Facility's "stream of benefits."
(d) The word "and" immediately preceding clause (iii) in
Section 7.1 is deleted and the following is added after
said clause (iii):
"; and (iv) no Distributions shall be made prior to
the earlier of (A) the consummation of the transfer
of LIHI's aggregate Partnership Interest pursuant to
the exercise of the Lake Option, or (B) the
expiration or termination of the Lake Option."
(e) The first sentence of Section 8.2 is amended to read in
its entirety as follows:
"NCP Lake is designated as the tax matters partner
("Tax Matters Partner") as provided in Section
6231(a)(7)(A) of the Code and any comparable
provision of state or local law."
(f) The Title of Article XI is amended to read in its
entirety as follows:
"MANAGEMENT OF THE PARTNERSHIP"
(g) Section 11.1 is deleted and the following shall be added
preceding Section 11.2 which shall be renumbered Section
11.4:
"Section 11.1 Rights and Obligations of the General
Partners.
(a) Except as otherwise specifically provided
herein, the General Partners shall have full and
exclusive control of the management and operation of
the Partnership and its business. The General
Partners shall have, subject to the limitations
imposed elsewhere herein, the power and authority on
behalf of the Partnership to do or cause to be done
any and all acts deemed by the General Partners to
be necessary or appropriate in connection with the
management and operation of the business of the
Partnership.
(b) Except as otherwise specifically provided
herein, the authority and discretion granted to the
General Partners in Section 11.1(a) is hereby
delegated to, and shall be exercised solely by, the
Management Committee.
4
<PAGE>
(c) Except for those actions taken by the
Management Committee pursuant to the authority
delegated to it herein, all actions to be taken by
the General Partners or by the Partnership or the
other Partners shall be taken only with the prior
approval in writing of all of the General Partners.
No General Partner shall have the authority to act
on behalf of the Partnership or any Partner without
the prior written approval of all of the General
Partners.
(d) At such time, and from time to time, as
and when the Partnership shall have only one General
Partner, action which may be taken by the General
Partners may be taken by such General Partner alone.
Section 11.2 The Management Committee.
(a) Except as otherwise specifically provided
herein, the management and control of the
Partnership and its business is hereby delegated by
the General Partners to a committee (the "Management
Committee") consisting of two representatives of
each General Partner selected as provided in Section
11.2(b). The Management Committee shall have full
discretion and authority to act on behalf of the
General Partners in the management and operation of
the Partnership and its business.
(b) Each General Partner shall designate two
(2) individuals employed by such General Partner to
serve as members of the Management Committee
(individually, a "Member" and collectively, the
"Members"). Such designation shall be in writing
from the President of the respective General
Partner. Each General Partner may substitute
another individual or individuals employed by such
General Partner to act in place of the Member or
Members designated by such General Partner, or a
Member may substitute another individual employed by
such General Partner to act in his place (if so
authorized by the General Partner which designated
the Member and if such General Partner gives notice
to the other General Partners of such
authorization). Any such substitution shall be
evidenced in writing by the General Partner, or the
Member, as the case may be, making the substitution.
Immediately upon the removal of a General Partner,
the individuals designated by such General Partner
as Members shall cease to be Members.
(c) Action by the Management Committee shall
require the affirmative vote of not less than three
Members (or duly designated substitutes therefor).
5
<PAGE>
(d) Action at a meeting of the Management
Committee may be taken only if not less than three-
quarters of the Members (or duly designated
substitutes) are present in person or by means of a
telephone conference call and vote on the action to
be taken. Meetings of the Management Committee may
be called by any General Partner or by any Member by
providing at least twenty-four (24) hours notice of
such meeting to each of the other General Partners
and to the other Members stating the time, date, and
place of the meeting, which shall be reasonably
convenient to all Members, and the purpose or
purposes for which it is to be held. Once a meeting
has commenced, however, any business appropriate for
the Management Committee's consideration may be
conducted at such meeting whether or not set forth
in the notice.
(e) Notice of a meeting need not be given to
any General Partner or Member who signs a waiver of
notice either before or after the meeting.
Attendance of a Member at a meeting shall not alone
constitute a waiver of notice by such Member.
(f) Notwithstanding the terms of Section
11.2(d), action may be taken without a meeting of
the Management Committee if such action is taken by
written consent of all of the Members.
Section 11.3. Managing General Partner.
(a) The Management Committee, or the General
Partners in the event there shall be no Management
Committee, from time to time shall select a General
Partner as the managing general partner ("Managing
General Partner") to control and manage the
operation of the Cogeneration Facility and to
provide administrative services to the Partnership
and shall delegate to the Managing General Partner
such authority as the Management Committee or the
General Partners shall deem appropriate. NCP Lake
is hereby selected as the initial Managing General
Partner, effective as of the Amendment Date, and is
hereby initially authorized, acting in its discre-
tion on behalf of the Management Committee, to:
(i) borrow money under the Operative Documents and,
as security for the performance by the Partnership
of its obligations under the Operative Documents, to
mortgage, pledge or otherwise encumber any and all
assets of the Partnership, including the rights of
the Partnership under any agreements;
(ii) (reserved)
6
<PAGE>
(iii) cause to be paid all amounts due and payable
by the Partnership and collect on behalf of the
Partnership all amounts due to the Partnership;
(iv) employ such agents, employees, managers,
attorneys, consultants and other Persons as the
Managing General Partner may deem necessary or
appropriate to carry out the business and affairs of
the Partnership;
(v) pay any and all fees and to make any and
all expenditures which it reasonably deems necessary
or appropriate in connection with the management of
the business and affairs of the Partnership;
(vi) enforce all rights of the Partnership on
behalf of the Partnership;
(vii) with the consent and approval of the Owner-
Participant, enter into, execute, acknowledge and
deliver any and all contracts, agreements or other
instruments necessary or appropriate to carry out
the business of the Partnership in which the
Partnership is engaged on March 30, 1994;
(viii) with the consent and approval of the Owner-
Participant, amend the Operation and Maintenance
Agreement;
(viii) to acquire and enter into any contract of
insurance which the Managing General Partner deems
to be necessary and proper for the protection of the
Partnership, the conservation of the Partnership's
assets or for any other purpose beneficial to the
Partnership;
(ix) invest, subject to any restrictions
contained in the Operative Documents, any
Partnership funds not immediately needed in the
conduct of the Partnerships business in such readily
marketable securities as the Project Manager deems
appropriate;
(x) prepare and file any and all tax returns
that may be required by applicable law and cause to
be paid any and all taxes, charges and assessments
that may be levied, assessed or imposed upon the
Partnership or its assets;
(xi) establish, increase, decrease and maintain
reasonable reserves for the operating expenses of
the Partnership and for repairs, maintenance and
capital improvements and replacements consistent
with good business and operating practice in the
steam production and electric power generating
7
<PAGE>
business, provided, however, that this clause shall
not be interpreted or deemed to permit any amendment
of the Operative Documents other than as may
otherwise be permitted in accordance with their
terms;
(xii) establish and maintain one or more accounts on
behalf of the Partnership in such financial
institutions and the Project Manager may select
provided, however, that this clause shall not be
interpreted or deemed to permit any amendment of the
Operative Documents other than as may otherwise be
permitted in accordance with their terms;
(xiii) establish and maintain the books and records
of the Partnership as contemplated by Article X
hereof and prepare and provide to the Partners the
reports described therein;
(xiv) make periodic Distributions to the Partners in
accordance with this Agreement;
(xv) cause the Partnership to pay to NCP Lake the
administrative management fees due and payable
pursuant to Section 10.1(iv) hereof;
(xvi) apply for, execute, file, prosecute, obtain,
appeal and challenge such permits, approvals,
authorizations, consents, notices, certifications
and other documents with such Federal, state or
local governmental agencies as may be necessary or
appropriate in connection with the Partnership's
business or affairs;
(xvii) prepare and file on behalf of the
Partnership and in accordance with the Operative
Documents such applications with the Commission with
respect to the status of the Cogeneration Facility
as a qualifying cogeneration facility under PURPA
and the Regulations as the Managing General Partner
shall deem appropriate; and
(xviii) file or cause to be filed the certificates
and other documents contemplated by Article III
hereof.
(b) Notwithstanding anything to the contrary
set forth herein, the Managing General Partner shall
not have the authority to take any action not
specifically authorized in paragraph (a), above,
including, but not limited to:
(i) amending the Operative Documents, other than the
Operations and Maintenance Agreement;
8
<PAGE>
(ii) borrowing money, other than under the Operative
Documents;
(iii) changing the nature of the Partnership's
business;
(iv) selling, assigning or otherwise transferring
the Cogeneration Facility or any interest therein;
(v) selling, assigning or otherwise transferring all
or substantially all of the Partnership's assets or
any substantial part thereof so as to cause the
Partnership to be unable to carry on its business;
or
(vi) admitting Persons as additional Limited
Partners or General Partners."
(h) Sections 11.3, 11.4, 11.5 and 11.6 shall be renumbered
Sections 11.5, 11.6, 11.7 and 11.8, respectively.
(i) Section 11.7 shall be renumbered Section 11.9 and the
following shall be added following subsection (c)(ii)
thereof:
"(iii) enter into any agreement or transaction with,
or make any payment to, NCP Lake or any Affiliate
thereof, other than administrative management fees
due and payable pursuant to Section 10.1(iv),
Distributions made in respect of NCP Lake's or LIL's
Partnership Interests, or transactions with NCP Lake
or LIL in their capacities as a General Partner and
a Limited Partner, respectively."
(j) Section 13.4(a) is amended to read in its entirety as
follows:
"(a) Both Owner Participant and the General
Partners consent thereto, which consent shall be in
the sole and absolute discretion of the Owner
Participant and the General Partners."
(k) Section 14.1 is amended to read in its entirety as
follows:
"Section 14.1 Removal for Good Cause Only. A
General Partner may be removed as a general partner
of the Partnership only for "Good Cause" upon the
affirmative vote of a Majority in Interest of the
Limited Partners required under Section 14.2 hereof.
For purposes of this Section, the term "Good Cause"
shall mean either (a) willful and continued neglect
by such General Partner of its duties under this
Agreement, which neglect has a material adverse
effect on the Partnership or (b) a willful breach by
9
<PAGE>
such General Partner of its fiduciary duties to the
Partnership or the Limited Partners including
without limitation misappropriation of Partnership
assets, fraud, dishonesty or bad faith exercise of
management authority; provided, however, that with
respect to any neglect or breach under clause (a) or
(b) above, the effects of such neglect or breach has
not been cured by such General Partner within forty-
five (45) days after receipt of written notice from
a Majority in Interest of the Limited Partners
specifying such neglect or breach (the "Removal
Notice") or, if the effects of such neglect or
breach cannot be cured within such forty-five (45)-
day period, the failure by such General Partner to
take good faith reasonable efforts within such
period to commence a cure of the efforts of such
neglect or breach and to continue such efforts until
such effects are cured."
(l) Section 14.2 is amended to read in its entirety as
follows:
"Section 14.2 Vote. Subject to the provisions
of Section 14.1 hereof, the vote of the majority in
Interest of the Limited Partners, without the
necessity for concurrence by the General Partners
may remove a General Partner for "Good Cause" as a
general partner of the Partnership. The Removal
Notice delivered to such General Partner shall
specify, in addition to the actions deemed to
constitute "Good Cause" for removal, the effective
date for removal (the "Removal Date") which
effective date may not be prior to the date upon
which a Person has agreed to become a Substitute
General Partner and the Owner Participant shall have
approved the selection of such Person in accordance
with the provisions of this Article."
(m) Section 14.3 is amended to read in its entirety as
follows:
"Section 14.3 Dispute Regarding Removal.
(a) In the event that a Majority in Interest
of the Limited Partners cause delivery of a Removal
Notice to remove a General Partner for "Good Cause"
pursuant to Section 14.1 hereof, such General
Partner shall have a period of thirty (30) days to
provide notice to all of the Limited Partners of its
intention to dispute the removal, in which case the
Removal Date shall be tolled pending the resolution
of the dispute. If, upon resolution of the dispute,
the removal is overturned, such General Partner
10
<PAGE>
shall remain as a general partner of the
Partnership.
(b) If a General Partner does not dispute
removal or, upon resolution of the dispute, such
removal is upheld, such General Partner shall cease
to be a general partner effective on the Removal
Date (as may be extended by the period required to
secure the agreement by a Person to become a
Substitute General Partner). The Partnership shall
cause an accounting to be prepared at the expense of
such General Partner from the end of the preceding
fiscal year to the Removal Date. After receiving
the Removal Notice, and prior to the Removal Date,
such General Partner shall not transact any business
on behalf of the Partnership other than in the
ordinary course of business unless pursuant to a
contract entered into and binding upon the
Partnership prior to the date of receipt of the
Removal Notice by such General Partner."
(n) Section 14.4 is amended to read in its entirety as
follows:
"Section 14.4 Voluntary Withdrawal. So long
as a General Partner has given written notice to the
other Partners (and the Owner Participant, if
applicable) and a Person has been selected and has
agreed to become a Substitute General Partner in
accordance with Sections 14.5 and 14.6 hereof, such
General Partner may voluntarily withdraw from the
Partnership as a general partner effective ninety
(90) days after written notice (the "Withdrawal
Notice") to the Limited Partners (the "Withdrawal
Date"); provided, however, that (i) if such General
Partner shall be the sole remaining General Partner
such Withdrawal Date may not be prior to the date
upon which a Person has agreed to become a
Substitute General Partner in accordance with the
terms hereof and (ii) so long as the Participation
Agreement remains in effect, such General Partner
may not withdraw without the prior written approval
of the Owner Participant."
(o) Section 14.5 is amended to read in its entirety as
follows:
"Section 14.5 Selection of a Substitute
General Partner. The vote of a Majority in Interest
of the Limited Partners is necessary to select a
Substitute General Partner; provided, however, that
so long as the Participation Agreement remains in
effect, such selection of a Substitute General
Partner shall be subject to the reasonable approval
of the Owner Participant."
11
<PAGE>
(p) Section 14.6 is amended to read in its entirety as
follows:
"Section 14.6 Substitution. A Person shall
become a Substitute General Partner and assume the
rights, powers and responsibilities of a General
Partner, for whom such Person is a Substitute
General Partner, as provided in this Agreement when
such Person delivers to the Partners a written
agreement (the "Substitute General Partner
Agreement") executed by such Person within ten (10)
days after such Person's selection as a proposed
Substitute General Partner, which Substitute General
Partner Agreement shall set forth the following
agreements by such Person: (a) to be bound by this
Agreement; (b) to assume the rights, powers and
responsibilities of a General Partner pursuant to
the terms of this Agreement accruing after such
selection; (c) to amend this Agreement to reflect
the withdrawal of the withdrawn General Partner and
the appointment of such Substitute General Partner;
(d) to perform the duties and the responsibilities
of a General Partner; and (e) to record, file and
publish any certificates or documents as may be
appropriate to evidence or effect such withdrawal,
substitution and release, including a Certificate of
Amendment."
(q) Paragraphs (c), (f) and (g) of Section 15.1 are
amended to read in their entirety as follows:
"(c) The removal or withdrawal of a
General Partner, unless either (i) there is at least
one other general partner and that general partner
elects to continue the business of the Partnership
or (ii) if there is no other general partner or
there is a general partner but such general partner
does not elect to continue the business of the
Partnership, then, within 90 days after the
withdrawal, all Limited Partners agree in writing to
continue the business of the Partnership and a
successor General Partner is elected and admitted
pursuant to the provisions of Article XIV hereof;
(f) All of the General Partners file
petitions in bankruptcy or are adjudged bankrupts
(each a "GP Bankruptcy Event") unless a Substitute
General Partner is selected and admitted pursuant to
the provisions of Article XIV and all the other
Partners agree to continue the Partnership within 90
days after the GP Bankruptcy; or
(g) The entry of a judicial decree of
dissolution. Except as expressly set forth in (f)
above, it is specifically agreed that the events
12
<PAGE>
described in Section 620.124(4)(a)-(f) and (5)(a)-
(c) of the Act, if applicable to the last remaining
General Partner which is the sole general partner of
the Partnership, will not cause such General Partner
to cease to be the general partner of the
Partnership and will not cause the dissolution of
the Partnership. The involuntary dissolution of the
last remaining General Partner which shall not cause
a dissolution of the Partnership if such General
Partner is reinstated within 90 days after such
involuntary dissolution."
(r) The following shall be added immediately following
Section 14.9 as a new Section 14.10.
"Section 14.10 Assignment of General Partnership
Interest.
The transferee of any General Partner Interest shall
become a Substitute General Partner only with the consent
of the other General Partners and of the Owner
Participant, which consents shall be in the sole and
absolute discretion of each such Person."
(s) The following definition shall be added in Exhibit C
immediately following the definition of Agreement:
"Amendment Date" shall mean the date of the First
Amendment to First Amended and Restated Limited
Partnership Agreement of Lake Cogen, Ltd.
(t) The following definition shall be added in Exhibit C
immediately following the definition of Cogeneration
Facility:
"Commission" shall mean the United States Federal
Energy Regulatory Commission or its staff acting
pursuant to delegated authority.
(u) The definition of General Partner in Exhibit C shall
be amended to read in its entirety as follows:
"General Partner" shall mean those Persons from
time to time admitted as general partners in the
Partnership in accordance with this Agreement and
not removed or who have not withdrawn as general
partners, except where the context clearly indicates
that "General Partner" means a single general
partner, in which case "General Partner" shall mean
a single general partner."
(v) The following definition shall be added in Exhibit C
immediately following the definition of Gross Asset
Value:
13
<PAGE>
"Lake Option" shall mean the Amended and Restated
Lake Interest Option Agreement, dated as of the
Amendment Date, by and among North Canadian
Resources, Inc., a Delaware corporation, LIHI and
Energy Initiatives, Inc., a Delaware corporation.
(w) "LIHI" shall mean Lake Interest Holdings Inc., a Delaware
corporation.
(x) The definition of "Partnership Interest" contained in
Exhibit C is amended to read in its entirety as follows:
"Partnership Interest" for each Partner shall be as
follows:
(i) on and after July 24, 1992, but prior to
the Amendment Date, the Partnership Interest for
each Partner shall be as set forth on Exhibit B
hereof;
(ii) on and after the Amendment Date, subject to
adjustment as set forth in subparagraphs (A), (B),
(C) and (D) below, the Partnership Interest for each
Partner shall be as follows:
General Partners: Partnership Interest
NCP Lake Power Incorporated 1%
Lake Interest Holdings Inc. 1%
Limited Partners:
Lake Investment, L.P. 41.05%
Lake Interest Holdings Inc. 56.95%
(A) Capitalized terms used in this definition
of Partnership Interest and not otherwise
defined herein shall have the meanings
assigned to them below:
"Present Value" of a payment, distribution or
allocation, or series thereof, shall be the
present value thereof as of the Amendment Date,
calculated using a discount rate of 12% per
annum.
"Projected" shall mean as projected in the pro
forma spreadsheet attached hereto as Exhibit E.
"Stream of Benefits" shall mean the
distributions, payments, allocations and other
14
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payments and benefits included by the Commission
in determining the Equity Interest of a party in
a Qualifying Cogeneration Facility under PURPA.
"Equity Interest" shall mean equity interest as
defined in Section 292.206(b) of the
Commission's regulations under PURPA and
relevant Commission precedent.
"Commission" shall mean the Federal Energy
Regulatory Commission.
"Administrative Management Fees" means the
administrative management fees payable to the
Managing General Partner under Section 10.1(iv)
of the Partnership Agreement.
(B) Upon receipt by the Partnership of an
order issued by the Commission in which it
is determined that some or all of the
Administrative Management Fees paid and
projected to be paid to NCP Lake on and
after the Amendment Date should or should
not be included in the Stream of Benefits
received and projected to be received by
NCP Lake for purposes of determining NCP
Lake's Equity Interest in the Cogeneration
Facility (such fees so determined to be
included in such Stream of Benefits, the
"Included Administrative Management
Fees"), LIL's Partnership Interest shall
be increased or decreased, as appropriate,
by an amount which would cause the Present
Value of all distributions and allocations
of profits, losses and deductions made and
Projected to be made on and after the
Amendment Date to NCP Lake and LIL in
respect of their Partnership Interests,
together with all payments of Included
Administrative Management Fees made and
Projected to be made to NCP Lake on and
after the Amendment Date, if any, to be
50% of the Present Value of all such
distributions, allocations and payments
made and Projected to be made to the
Partners and the Partnership Interest of
LIHI shall be decreased or increased, as
appropriate, by an equal amount.
(C) In the event the Commission shall not have
determined on or before March 30, 1995
(whether as a result of any failure of the
Partnership to apply for or request such
determination, or otherwise) that some or
all of the Administrative Management Fees
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<PAGE>
paid and Projected to be paid to NCP Lake
on and after the Amendment Date need not
be included in the Stream of Benefits
received and projected to be received by
NCP Lake for purposes of determining NCP
Lake's Equity Interest in the Cogeneration
Facility, LIL's Partnership Interest shall
be decreased by an amount which would
cause the Present Value of all
distributions and allocations of profits,
losses and deductions made and Projected
to be made on and after the Amendment Date
to NCP Lake and LIL in respect of their
Partnership Interests, together with such
portion, if any, of Administrative
Management Fees made and Projected to be
made to NCP Lake on and after the
Amendment Date which NCP Lake and LIHI
agree are in excess of the fair market
price for the services provided to the
Partnership by NCP Lake for which the
Administrative Management Fees are paid
("Included Percentage Administrative
Management Fees" and the balance of the
Administrative Management Fees, "Excluded
Percentage Management Fees") to be 50% of
the Present Value of all such
distributions, allocations and payments of
Included Percentage Administrative
Management Fees made and Projected to be
made to the Partners, and the Partnership
Interest of LIHI shall be increased by an
equal amount.
(D) Upon any determination by the Commission
that all or any part of the consideration,
if any, received by NCP Lake or any
Affiliate thereof for the assignment of
the Lake Option must be included in the
Stream of Benefits from the Cogeneration
Facility for purposes of determining the
Equity Interest of NCP Lake and its
Affiliates in the Cogeneration Facility
(the "Included Option Consideration"),
then the Partnership Interest of LIL shall
be reduced by an amount which would cause
the Present Value of all distributions and
allocations of profits, losses and
deductions made and Projected to be made
to NCP Lake and LIL in respect of their
Partnership Interests, all payments of
Included Administrative Management Fees,
if any, and Included Percentage
Administrative Management Fees, if any,
and the payment of the Included Option
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<PAGE>
Consideration, to be 50% of the Present
Value of all such distributions,
allocations and payments made and
Projected to be made to the Partners, and
the Partnership Interest of LIHI shall be
increased by an equal amount.
(E) In the event that any decrease in the
Partnership Interest of LIL required by
paragraphs (B), (C) or (D) above shall
reduce LIL's Partnership Interest to zero
and the Present Value of the respective
distributions, allocations, and payments
made and Projected to be made to NCP Lake
and LIL shall not be thereby reduced to
50% of the Present Value of all such
distributions, allocations and payments
made and Projected to be made to the
Partners, then NCP Lake and LIL shall
refund to the Partnership such portion of
any distributions or payments, or the
value of any allocations, made to NCP Lake
or LIL after the Amendment Date as may be
required to cause such Present Value of
the distributions, payments and
allocations made and Projected to be made
to NCP Lake and LIL to be 50% of the
Present Value of all such distributions,
payments and allocations made and
Projected to be made to the Partners.
6. (a) NCP Lake hereby consents to the substitution of LIHI as a
Limited Partner and a substitute Limited Partner of the Partnership
as required under Section 13.4.
(b) Pursuant to Section 13.4, LIHI hereby agrees to be bound
by the terms and conditions of the Partnership Agreement, as
amended by the Amendment Agreement.
7. NCP Lake and LIL hereby consent to the amendment of the
Partnership Agreement as set forth herein, as contemplated by
Section 16.1 of the Partnership Agreement.
8. The undersigned hereby confirms that (i) its obligations under
the Agreement remain in full force and effect on the date hereof
and (ii) each reference to any Operative Document or other
agreement or instrument in the Agreement or in any defined term
appearing in the Agreement includes such Operative Document or
other agreement or instrument as amended, modified or supplemented
through the date hereof.
9. This Amendment Agreement, and the application or
interpretation hereof, shall be governed, construed and enforced in
accordance with the laws of the State of Florida.
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<PAGE>
10. Headings in this Amendment Agreement are solely for
convenience and are not a part of this Amendment Agreement.
11. This Amendment Agreement shall be binding on and inure to the
benefit of the respective successors, assigns and personal
representatives of the parties hereto, except to the extent of any
contrary provision of this Amendment Agreement.
12. This Amendment Agreement is expressly amendatory to the
Partnership Agreement and, except as specifically amended hereby,
the Partnership Agreement shall remain in full force and effect in
accordance with the terms thereof.
13. Each party to this Amendment Agreement, upon request of the
Project Manager, agrees to perform all further acts and execute,
acknowledge and deliver any documents which may be reasonably
necessary, appropriate or desirable to carry out the provisions of
this Amendment Agreement.
14. This Amendment Agreement may be executed in counterparts by
each of the parties hereto, all of which taken together shall be
deemed one original.
15. LIHI represents to the Partnership and the General Partners
that: (a) it is acquiring its Partnership Interests for its own
account for investment and not with a view to or for sale in
connection with any distribution of such Partnership Interests (but
subject, nevertheless, to any requirement of law that the
disposition of its property remain within its control at all
times); (b) it understands that the interests in the Partnership
have not been registered under the Securities Act or the applicable
securities laws of Florida or any other state, and must be held
indefinitely unless the interests are so registered or an exemption
from such registration is available; (c) it has such knowledge and
experience in business matters that it is capable of evaluating the
risks and merits of its investment in the Partnership; and (d) it
has received and reviewed the material agreements and other
documents relating to the Partnership and/or its business and such
other information, oral or written, as it has requested, having
been afforded the opportunity to ask questions of the General
Partners and to obtain any additional information that it has
deemed appropriate.
16. No waiver of any provision of this Amendment Agreement shall
be deemed effective unless contained in a writing signed by the
party against whom the waiver is sought to be enforced. No failure
or delay by any party in exercising any right, power or remedy
under this Amendment Agreement shall operate as a waiver of any
such right, power or remedy, and no waiver of any breach or failure
to perform shall be deemed a waiver of any subsequent breach or
failure to perform or of any other right arising under this
Amendment Agreement.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first above written.
NCP LAKE POWER INCORPORATED,
a Delaware corporation
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: President
LAKE INVESTMENT, L.P.,
a Delaware limited partnership
By NCP Lake Power Incorporated,
its general partner
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: President
LAKE INTEREST HOLDINGS INC.
a Delaware corporation
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: President
19
<PAGE>
EXHIBIT B-4(a)
Attachment 1
FOURTH AMENDMENT TO
AGREEMENT OF LIMITED PARTNERSHIP
OF PASCO COGEN, LTD.
This Fourth Amendment to Agreement of Limited Partnership
of Pasco Cogen, Ltd. ("Fourth Amendment"), dated as of June 13,
1994 (the "Amendment Date"), by and among PAS POWER CO., a Florida
corporation ("PAS"), NCP DADE POWER INCORPORATED, a Delaware
corporation ("NDP"), DADE INVESTMENT, L.P., a Delaware limited
partnership ("DIL") and PASCO INTEREST HOLDINGS INC., a Delaware
corporation ("PIHI").
W I T N E S S E T H :
WHEREAS, PAS, NDP and DIL entered into an Agreement of
Limited Partnership of Pasco Cogen, Ltd., dated as of August 28,
1991 (the "LP Agreement"), as amended by (i) the First Amendment to
Agreement of Limited Partnership of Pasco Cogen, Ltd., dated as of
January 15, 1992; (ii) the Second Amendment to Agreement of Limited
Partnership of Pasco Cogen, Ltd., dated as of October 15, 1992, and
(iii) the Third Amendment to Agreement of Limited Partnership of
Pasco Cogen, Ltd., dated as of July 15, 1993 (the LP Agreement, as
so amended, the "Partnership Agreement");
WHEREAS, Pasco Cogen, Ltd., a Florida limited partnership
(the "Partnership"), was formed on March 13, 1991 and the formation
thereof was ratified by PAS, NDP and DIL under the Partnership
Agreement;
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WHEREAS, PAS, NDP and DIL desire to admit PIHI, and PIHI
desires to be admitted, as a limited partner in the Partnership;
and
WHEREAS, the parties hereto desire to amend the
Partnership Agreement as set forth herein.
NOW THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:
1. References herein to Articles, Sections and Exhibits
are to the Articles, Sections and Exhibits of the Partnership
Agreement.
2. Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to them in the Partnership
Agreement.
3. PIHI is hereby admitted as a limited partner to the
Partnership.
4. PAS, NDP and DIL hereby acknowledge that DIL has
transferred to PIHI, as of the date hereof, the following interests
in the Partnership:
(i) a .10% Partnership Interest to be held by
PIHI as a Limited Partner (the "Florida QF
Interest"); and
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<PAGE>
(ii) a 3.05% Partnership Interest to be held by
PIHI as a Limited Partner (the "Federal QF
Interest").
5. PAS and NDP, as General Partners, hereby consent to
the foregoing transfers of the Florida QF Interest and the Federal
QF Interest from DIL to PIHI, and to the admission of PIHI as a
limited partner to the Partnership.
6. The following shall be added to the Partnership
Agreement as Section 5.10:
Section 5.10. True-Up Payment.
(a) Upon the (i) the dissolution of the Partnership, and
(ii) each sale, assignment or other transfer, directly or
indirectly, of all or any part of the Partnership
Interests held by NDP and DIL to a Person or Persons
other than Affiliates of NDP or DIL (each a "True-Up
Date"), NDP and DIL shall jointly pay to the other
Partners (each, a "True-Up Payment") an amount equal to
50% of the amount, if any, by which the present value, as
of the Amendment Date, calculated using a reasonable
discount rate, of the economic benefits included in the
"stream of benefits", as such term is used and defined by
the Federal Energy Regulatory Commission ("Commission")
in connection with determining the equity interest in a
qualifying cogeneration facility held by a person
primarily engaged in the generation or sale of
electricity under Section 292.206 of the Commission's
regulations implementing the Public Utility Regulatory
Policies Act of 1978, as amended, received by NDP and DIL
from the Partnership from the Amendment Date through and
including the respective True-Up Date, exceeds 50% of
such present value of the total "stream of benefits" from
the Partnership from the Amendment Date through and
including such True-Up Date.
(b) True-up Payments shall be divided proportionately
among the Partners receiving them in accordance with
their relative Partnership Interests.
(c) The obligations, if any, to make True-Up Payments
shall automatically terminate and shall be of no further
force or effect without any further action being taken by
the Partnership or the Partners, other than confirmation
that the order referred to below is acceptable, in form
and substance, to PAS and the Agent, upon the receipt by
the Partnership of an order issued by the Commission or
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<PAGE>
its staff by delegated authority in which the Commission
finds or confirms that, based on the Partnership's
reasonable projections of distributions of cash and
allocations of profits, losses and deductions to be made
after the Amendment Date to the Partners, fees to be paid
to the Partners after the Amendment Date and the fair
market price of the services to be provided for such
fees, at no time between the Amendment Date and the
expiration of the Partnership's contract with Florida
Power Corporation for the sale of electricity generated
by the Project will NDP and DIL have received,
collectively and cumulatively, more than 50% of the
Project's "stream of benefits".
7. Section 7.01(a) of the Partnership Agreement is
hereby amended to read in its entirety as follows:
"(a) Net Cash Flow, if any, shall be distributed to the
Partners under the terms of Section 7.01(b), in proportion to
their Interests in the Partnership, provided however, that any
such distributions to be made on or before March 31, 1995 in
respect of any Interest, or part thereof, held by Pasco
Interest Holdings Inc. on the date when such distribution
would otherwise be made shall be withheld by the Partnership
until the earlier of (i) March 31, 1995, or (ii) the transfer
by PIHI of such Interest, or part thereof, and shall be made
promptly thereafter to the holder of such Interest, or part
thereof, on the date when such distribution is made.
8. Section 14.01(e) of the Partnership Agreement is
hereby amended to read in its entirety as follows:
"(e) Neither NDP nor any of its Affiliates:
(i) will acquire any interest in other entities
which would cause the Partnership to exceed the
FERC Ownership Criteria or otherwise cause the
Project to lose its QF status; or
(ii) will transfer any of their Interests in the
Partnership in a manner which would cause the
Project to lose its QF status."
9. Exhibit A to the Partnership Agreement is hereby
amended to read in its entirety as follows:
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<PAGE>
"Exhibit A
Partnership Interests
The respective Partnership Interests
of the Partners are as follows:
PAS as General Partner 1%
PAS as Limited Partner 49%
NDP as General Partner 1%
DIL as Limited Partner 45.85%
PIHI as Limited Partner 3.15%
10. Except as amended hereby, the Partnership Agreement
shall continue in full force and effect.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment by the undersigned thereto duly authorized.
GENERAL PARTNERS
NCP DADE POWER INCORPORATED
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: President
LIMITED PARTNERS
DADE INVESTMENT, L.P.
By: NCP Dade Power Incorporated,
General Partner
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: President
PAS POWER CO.
By: /s/ Jack E. Uhl
Name: Jack E. Uhl
Title: Treasurer
SUBSTITUTED LIMITED PARTNER
PASCO INTEREST HOLDINGS INC.
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: Vice President
6
<PAGE>
EXHIBIT B-16
EXECUTION COPY
PASCO INTERESTS OPTION AGREEMENT
This Pasco Interests Option Agreement ("Option Agreement")
dated as of June 13, 1994, by and among North Canadian Resources,
Inc., a Delaware corporation ("NCRI"), Pasco Interest Holdings
Inc., a Delaware corporation ("PIHI"), Dade Investment L.P., a
Delaware limited partnership ("DIL") and PAS Power Co., a Florida
corporation ("PAS").
W I T N E S S E T H :
WHEREAS, PAS, DIL and NCP Dade Power Incorporated, a
Delaware corporation ("NDP"), entered into an Agreement of Limited
Partnership of Pasco Cogen, Ltd. (the "LP Agreement") under which
the formation of Pasco Cogen, Ltd., a Florida limited partnership
(the "Partnership"), was ratified and the Partnership continued
(the LP Agreement, as amended from time to time, the "Partnership
Agreement");
WHEREAS, the Partnership owns and operates an
approximately 102 mw gas-fired cogeneration plant located in Dade
City, Florida (the "Pasco Project");
WHEREAS, as of the date hereof, Energy Initiatives, Inc.,
a Delaware corporation ("EI"), has purchased (the "Acquisition")
all of the outstanding stock of North Canadian Power Incorporated,
a California corporation ("NCP"), pursuant to the Stock Purchase
and Sale Agreement, dated March 31, 1994, as amended by the first
amendment thereto dated the date hereof (as so amended, the "Stock
Purchase Agreement") by and among EI, on the one hand, and North
Canadian Oils Limited, a Canadian corporation, NCRI, and NCP on the
other hand;
WHEREAS, NDP is a direct subsidiary, and DIL is
indirectly wholly-owned, by NCP;
WHEREAS, immediately prior to the Acquisition, DIL
transferred to PIHI a .10% partnership interest (the "Florida QF
Interest") and a 3.05% partnership interest (the "Federal QF
Interest") in the Partnership;
WHEREAS, PAS is a general partner of the Partnership;
WHEREAS, the Partnership is a party to the Amended and
Restated Master Agreement, dated July 15, 1993, by and among the
Partnership, the bank lenders party thereto, the financial
institutions party thereto, the Prudential Insurance Company of
America, as agent for such bank lenders and financial institutions
(in such capacity, including any successor thereto, the "Agent")
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<PAGE>
and Bankers Trust Company as collateral agent (in such capacity,
including any successor thereto, the "Collateral Agent") (as
amended from time to time, the "Master Agreement");
WHEREAS, NCRI owns 1,000 shares of common stock, par
value $.01 per share, of PIHI which constitutes all of the issued
and outstanding stock of PIHI (the "PIHI Stock");
WHEREAS, PIHI desires to irrevocably grant to DIL the
exclusive right and option to purchase the Florida QF Interest and
the Federal QF Interest on the terms and subject to the conditions
set forth herein;
WHEREAS, NCRI desires to irrevocably grant to DIL the
exclusive right and option to purchase the PIHI stock on the terms
and subject to the conditions set forth herein;
WHEREAS, PIHI has executed and delivered to the
Collateral Agent a Limited Partner Security Agreement dated as of
the date hereof (the "PIHI Limited Partner Security Agreement")
pursuant to which, among other things, PIHI has granted to the
Collateral Agent a lien on the Florida QF Interest and the Federal
QF Interest;
NOW THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, the parties hereto agree as follows:
1. Grant of Options.
1.1 PIHI hereby irrevocably grants to DIL the exclusive right and
option (the "Florida QF Interest Option") to purchase all right,
title and interest of PIHI in and to the Florida QF Interest from
the date hereof until the termination of the Florida QF Interest
Option.
1.2 PIHI hereby irrevocably grants to DIL the exclusive right and
option (the "Federal QF Interest Option") to purchase all right,
title and interest of PIHI in and to the Federal QF Interest from
the date hereof until the termination of the Federal QF Interest
Option.
1.3 NCRI hereby irrevocably grants to DIL the exclusive right and
option (the "PIHI Stock Option") to purchase all right, title and
interest of NCRI in and to the PIHI Stock from the date hereof
until the termination of the PIHI Stock Option.
1.4 The Florida QF Interest Option shall terminate upon the
earlier to occur of:
(a) the exercise of the PIHI Stock Option;
(b) the dissolution of the Partnership; and
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<PAGE>
(c) the exercise by the Collateral Agent of its remedies
under the PIHI Limited Partner Security Agreement,
provided, however, that in the event the Collateral Agent
shall rescind such exercise of such remedies, the Florida
QF Interest Option, if not theretofore terminated under
Section 1.4(a) or 1.4(b), shall be reinstated in full
force and effect, and provided further, that PIHI shall
pay to DIL any proceeds from any sale or other transfer
of the Florida QF Interest in connection with an exercise
by the Collateral Agent of such remedies received by PIHI
(after application of such proceeds pursuant to Section
10.14 of the Master Agreement) in excess of the purchase
price for the Florida QF Interest, notwithstanding the
termination of the Florida QF Interest Option pursuant to
this Section 1.4(c).
1.5 The Federal QF Interest Option shall terminate upon the
earlier to occur of:
(a) March 31, 1995;
(b) the exercise of the PIHI Stock Option; and
(c) the exercise by the Collateral Agent of its remedies
under the PIHI Limited Partner Security Agreement,
provided, however, that in the event the Collateral Agent
shall rescind such exercise of such remedies, the Federal
QF Interest Option, if not theretofore terminated under
Section 1.5(a) or 1.5(b), shall be reinstated in full
force and effect, and provided further, that PIHI shall
pay to DIL any proceeds from any sale or other transfer
of the Federal QF Interest in connection with an exercise
by the Collateral Agent of such remedies received by PIHI
(after application of such proceeds pursuant to Section
10.14 of the Master Agreement) in excess of the purchase
price for the Federal QF Interest, notwithstanding the
termination of the Federal QF Interest Option pursuant to
this Section 1.5(c).
1.6 The PIHI Stock Option shall terminate upon the earlier to
occur of:
(a) the exercise or termination of both the Florida QF
Interest Option and the Federal QF Interest Option;
(b) the dissolution of the Partnership; and
(c) the exercise by the Collateral Agent of its remedies
under the PIHI Limited Partner Security Agreement,
provided, however, that in the event the Collateral Agent
shall rescind such exercise of such remedies, the PIHI
Stock Option, if not theretofore terminated under Section
1.6(a) or 1.6(b), shall be reinstated in full force and
effect, and provided further, that PIHI shall pay to DIL
any proceeds from any sale or other transfer of the PIHI
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<PAGE>
Stock Option in connection with an exercise by the
Collateral Agent of such remedies received by PIHI (after
application of such proceeds pursuant to Section 10.14 of
the Master Agreement) in excess of the purchase price for
the PIHI Stock Option, notwithstanding the termination of
the PIHI Stock Option pursuant to this Section 1.6(c).
1.7 The Florida QF Interest Option, the Federal QF Interest Option
and the PIHI Stock Option are each referred to herein as an
"Option", and are collectively referred to herein as the "Options".
2. Exercise of Options.
2.1 The parties hereto acknowledge that:
(a) EI has, pursuant to the terms of the Stock Purchase
Agreement, deposited with the Escrow Agent (as defined in
the Stock Purchase Agreement) (i) $1,323,000 in respect
of the Federal QF Interest Option, and (ii) $10 in
respect of the Florida QF Interest Option (collectively,
the "Pasco Interest Deposit");
(b) PIHI has deposited with the Escrow Agent certain
documents which, when delivered, will effect an
assignment and transfer of the Federal QF Interest and
the Florida QF Interest from PIHI to DIL (the "PIHI
Deposit");
(c) NCRI has deposited with the Escrow Agent certain
documents which, when delivered, will effect a transfer
of the PIHI Stock from NCRI to DIL ("NCRI Deposit").
2.2 The parties agree that the foregoing escrow arrangements shall
not in any way affect or limit the Collateral Agent's rights or
remedies under the PIHI Limited Partner Security Agreement, and
immediately upon exercise by the Collateral Agent of any such
rights or remedies, the Escrow Agent shall, and each of the parties
hereto shall direct the Escrow Agent in writing to, cancel and
render void the PIHI Deposit and the NCRI Deposit.
2.3 Subject to Article 3, below, DIL may exercise the Florida QF
Interest Option, the Federal QF Interest Option or the PIHI Stock
Option by giving notice thereof in writing to PIHI or NCRI, as
appropriate, the Escrow Agent and the Agent which notice shall:
(a) state that DIL is exercising an Option;
(b) identify the Option or Options being exercised; and
(c) state the date of the transfer of the interest or stock
being purchased (each, a "Pasco Interest Closing"), which
shall not be earlier then the second business day
following the giving of such notice.
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2.4 At each Pasco Interest Closing the Escrow Agent shall:
(a) wire transfer to PIHI or NCRI, as appropriate, the
respective Pasco Interest Deposit (which, in the case of
the exercise of the PIHI Stock Option, shall be the
aggregate Pasco Interest Deposit, less the portion of the
Pasco Interest Deposit, if any, attributable to an Option
previously exercised or terminated); and
(b) appropriately date and deliver to DIL the respective PIHI
Deposit or NCRI Deposit.
3. Conditions to the Exercise of the Options.
3.1 The right of DIL to exercise the Florida QF Interest Option,
the Federal QF Interest Option or the PIHI Stock Option and the
obligation of PIHI or NCRI, as appropriate, to transfer the
respective partnership interest or PIHI Stock, as applicable, to
DIL shall be subject to the receipt by North Canadian Oils Limited,
a Canadian corporation, and EI of such consents, approvals and
waivers as are required with respect to the respective transaction
from the Agent under the NCO Ownership Maintenance Agreement and
the EI Ownership Maintenance Agreement, each as defined in the
Master Agreement.
3.2 The right of DIL to exercise the Florida QF Interest Option
and the obligation of PIHI to transfer the Florida QF Interest
shall additionally be subject to the satisfaction of both of the
following conditions: (i) the Partnership shall have received a
written order of the Florida Public Service Commission ("PSC"), in
form and substance satisfactory to PAS (the "Florida
Interpretation"), to the effect that ownership of as much as a 50%
"equity interest" in the Partnership by a "utility, utility holding
company, or a subsidiary of them", as such terms are used in PSC
Rule 25-17.080, or any successor rule or regulation thereto having
a similar meaning and effect (the "Rule"), would not cause the
Pasco Project to be owned by a "person primarily engaged in the
generation or sale of electricity", as such phrase is used in the
Rule, and (ii) the Partnership shall have provided to PAS an
opinion of counsel, in form and substance satisfactory to PAS, to
the effect that the status of the Pasco Project as a qualifying
cogeneration facility under the Rule would not be adversely
affected by the acquisition of the Florida QF Interest by DIL,
assuming DIL shall have acquired the Federal QF Interest and the
Partnership shall have made the 754 Election, as defined below.
3.3 The right of DIL or its assignee to exercise the Federal QF
Interest Option and the obligation of PIHI to transfer the Federal
QF Interest to DIL or its assignee shall additionally be subject to
the satisfaction any one of the following conditions:
(a) The Partnership shall have received an order (the "FERC
Order") issued by the U.S. Federal Energy Regulatory
Commission ("Commission") or the Commission's staff by
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<PAGE>
delegated authority, in form and substance reasonably
satisfactory to PAS, to the effect that EI would own,
directly and directly, not more than a 50% "equity
interest" in the Pasco Project, as such phrase is used in
Section 292.206 of the Commission's Regulations (the
"Regulations") implementing the Public Utility Regulatory
Policies Act of 1978, as amended, after giving effect to
(i) any adjustment in the Partnership's basis in its
assets which would result from an election by the
Partnership under Section 754 ("Section 754") of Internal
Revenue Code of 1986, as amended ("Code"), with respect
to the Partnership's tax year ending on September 30,
1994 or a technical termination of the Partnership in
connection with the Acquisition under Section 708 of the
Code, and (ii) the acquisition by DIL of the Federal QF
Interest and the Florida QF Interest; or
(b) Neither an election by the Partnership under Section 754
with respect to the Partnership's tax year ending on
September 30, 1994 nor an election under Section 338(h)
of the Code by EI for NDP in connection with the
Acquisition shall have been made and such elections shall
be precluded either because the time within which such
elections must be made under the Code shall have expired
without the elections having been made or PAS and NDP
shall have irrevocably agreed that EI or the Partnership
as appropriate shall not make such elections; or
(c) DIL shall have received the consent of PAS and the Agent
to the assignment of the Federal QF Interest Option in
accordance with section 9.7, below, and the Federal QF
Interest Option is exercised by DIL's assignee.
3.4 The right of DIL to exercise the PIHI Stock Option and the
obligation of NCRI to transfer the PIHI Stock to DIL shall be
subject to the condition that the conditions to the exercise of the
Florida QF Interest Option shall have been satisfied, if the
Florida QF Interest Option shall not have previously terminated or
been exercised, and to the condition that the conditions to the
exercise of the Federal QF Interest Option shall have been
satisfied if the Federal QF Interest Option shall not have
previously terminated or been exercised.
3.5 NDP shall provide or cause the Partnership to provide to PAS
and the Agent a copy of any proposed application for the FERC Order
or the Florida Interpretation sufficiently in advance of the filing
of such applications to permit PAS and the Agent to review such
proposed applications and, if they so choose, provide their
comments thereon to the Partnership prior to the filing thereof.
4. Consent to Transfers.
Subject to the satisfaction of the conditions to each transfer set
forth in Article 3, above, PAS hereby consents under Section 12.01
of the Partnership Agreement to the transfer to DIL of (i) the
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Florida QF Interest upon the exercise of the Florida QF Interest
Option, (ii) the Federal QF Interest upon the exercise of the
Federal QF Interest Option, and (iii) the PIHI Stock upon the
exercise of the PIHI Stock Option, and to the substitution of DIL
as a limited partner of the Partnership in place of PIHI.
5. Further Assurances.
At the request of DIL, NCRI and PIHI shall promptly execute and
deliver all such documents and instruments as DIL may reasonably
request in order to effect the transfer of the Florida QF Interest,
the Federal QF Interest or the PIHI Stock to DIL and otherwise to
carry out the terms and provisions of this Option Agreement. In
addition, upon the exercise of the Florida QF Interest Option, the
Federal QF Interest Option or the PIHI Stock Option, each party
shall execute and deliver to the other such other instruments and
documents as may be necessary or appropriate to carry out the
transactions contemplated by this Option Agreement and to comply
with the terms and conditions hereof.
6. Covenants of NCRI and PIHI.
6.1 Between the date hereof and the expiration hereof, PIHI shall
maintain its existence as a corporation in good standing under
Delaware law, and shall not:
(a) merge or consolidate with any corporation or other legal
entity, or sell or otherwise transfer the Pasco Interest
(except pursuant to the Loan Documents, as defined in the
Master Agreement), or issue any additional shares of
capital stock, or any instruments convertible into or
exercisable for capital stock; or
(b) enter into any commitment or incur any liability or
obligation whatsoever except for this Option Agreement,
the Partnership Agreement and the PIHI Limited Partner
Security Agreement, or engage in any business other than
holding the Pasco Interest;
(c) fail to comply with the terms and provisions of the
Partnership Agreement, or engage in any activity
prohibited thereunder; or
(d) create or suffer to exist any lien or other encumbrance
on the Pasco Interest (other than pursuant to the PIHI
Limited Partner Security Agreement).
6.2 Between the date hereof and the expiration hereof, NCRI shall
maintain its existence as a corporation in good standing under
Delaware law and shall not sell, assign or otherwise transfer the
PIHI Stock, or create or suffer to exist any lien or other
encumbrance on the PIHI Stock.
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7. Amendment and Waiver.
No amendment or waiver of any provision of this Option Agreement
shall be effective unless the same shall be in writing and signed
by the parties hereto and consented to in writing by the Agent, and
then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
8. Notices.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be personally delivered or sent by
facsimile transmission with confirming copy sent by recognized
overnight courier and a delivery receipt obtained and addressed to
the intended recipient as follows:
(a) If to NCRI or PIHI, to:
c/o North Canadian Oils Limited
715 Fifth Avenue, S.W.
Calgary, Alberta, T2P 2X7
Canada
Attention: Gordon B. Singer, Vice President and CFO
with copies (which shall not constitute notice) to:
McDermott, Will & Emery
227 West Monroe Street
Chicago, Illinois 60606-5096
Attention: William J. McGrath, P.C.
and
Norcen Energy Resources Limited
715 Fifth Avenue, S.W.
Calgary, Alberta, T2P 2X7
Canada
Attention: E.A. Leew, Vice President, Law
(b) If to DIL, to:
Dade Investment, L.P.
c/o Energy Initiatives, Inc.
One Upper Pond Road
Parsippany, New Jersey 07054
Attention: Bruce Levy
with a copy (which shall not constitute notice) to:
Douglas E. Davidson, Esq.
Berlack, Israels & Liberman
120 West 45th Street
New York, New York 10036
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(c) If to PAS, to:
PAS Power Co.
220 East Madison Street
Tampa, Florida 33602
Attention: E. Elliott White
with a copy (which shall not constitute notice) to:
Nathan B. Simpson, Esq.
MacFarlane Ausley Ferguson & McMullen
111 Madison Street
Tampa, Florida
(d) If to the Agent, to:
c/o Prudential Power Funding Associates
Four Gateway Center
100 Mulberry Street
Newark, New Jersey
Attention: Project Management Team
Any party may change its address for receiving notice by giving
written notice to the others named above. All such notices shall
be given as provided above, and shall be effective immediately upon
confirmation of facsimile or completion of personal delivery.
9. Miscellaneous.
9.1 Counterparts. This Option Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same Option Agreement.
9.2 Applicable Law. This Option Agreement shall be governed by
and construed in accordance with the internal substantive laws of
the State of New York. Should any provision of this Option
Agreement be determined to be invalid, void or unenforceable by a
court of competent jurisdiction for any reason, the remaining
provisions shall remain in full force and effect. The parties
consent to the non-exclusive jurisdiction of the New York federal
and state courts.
9.3 Headings. The section and other headings contained in this
Option Agreement are for convenience of reference purposes only and
shall not affect in any way the meaning or interpretation of this
Option Agreement.
9.4 Construction. This Option Agreement has been negotiated by
PAS, DIL and NCRI (for itself and on behalf of PIHI), and their
respective legal counsel, and legal or equitable principles that
might require the construction of this Option Agreement or any
provision hereof against the party drafting this Option Agreement
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shall not apply in any construction or interpretation of this
Option Agreement.
9.5 Currency. All references herein to dollars are to United
States dollars.
9.6 Time of Essence. Time is of the essence in this Option
Agreement.
9.7 Assignment. This Option Agreement may not be assigned by PIHI
or NCRI and may be not be assigned by DIL absent the written
consent of PAS and the Agent which may be withheld in the sole
discretion of PAS and/or the Agent.
9.8 Third Party Beneficiary. Each party hereto recognizes that
the Agent and the Collateral Agent shall be third party
beneficiaries under this Agreement and that each of the Agent and
the Collateral Agent may enforce the provisions of this Agreement
in their own name; provided that in no event shall the Agent or the
Collateral Agent be deemed to be liable or responsible for the
performance of any of the obligations of the parties under this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Option Agreement by the undersigned thereunto duly authorized as of
the date first above written.
NORTH CANADIAN RESOURCES, INC.
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: Vice President
PASCO INTEREST HOLDINGS INC.
By: /s/ Donald McKechnie
Name: Donald McKechnie
Title: Vice President
PAS POWER CO.
By: /s/ Jack E. Uhl
Name: Jack E. Uhl
Title: Treasurer
DADE INVESTMENT, L.P.
By: NCP Dade Power Incorporated,
General Partner
By:/s/ Donald McKechnie
Name: Donald McKechnie
Title: President
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Exhibit B-17
EXECUTION COPY
GUARANTEE AND AGREEMENT dated as of June 13,
1994, among GENERAL PUBLIC UTILITIES CORPORATION, a
Pennsylvania corporation ("Guarantor"), NATIONSBANK
OF FLORIDA, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee
("Owner Trustee"), and TIFD III-C INC., a Delaware
corporation ("Owner Participant").
WHEREAS, certain of the parties hereto have entered into a
Participation Agreement dated as of July 29, 1992, among Lake
Cogen, Ltd., Owner Trustee, Owner Participant and General Electric
Capital Corporation ("GECC"), as amended (the "Participation
Agreement"), in connection with the sale and leaseback financing of
a gas-fired cogeneration facility in Umatilla, Florida ("Lake
Project").
WHEREAS, in order to induce the Owner Trustee, Owner
Participant and GECC to enter, and as partial consideration for
Owner Trustee, Owner Participant and GECC entering, into the
Participation Agreement and consummating the transactions
contemplated thereby, the Owner Trustee and the Owner Participant
have entered into a certain (i) Guarantee and Agreement dated as of
July 29, 1992 ("Original Guarantee and Agreement") and (ii) letter
agreement dated as of July 29, 1992 ("NCO Side Letter"), whereby
North Canadian Oils Limited, a Canadian corporation ("NCO"), agreed
to make certain payments upon the occurrence of certain events;
WHEREAS, pursuant to a Stock Purchase and Sale Agreement dated
March 31, 1994 by and among NCO, North Canadian Resources, Inc.
("NCRI"), North Canadian Power Incorporated ("NCP") and Energy
Initiatives, Inc. ("EI"), a wholly owned subsidiary of the
Guarantor, EI has agreed to acquire the outstanding Common Stock of
NCP, the indirect owner of Lake Cogen, Ltd., the lessee of the Lake
Project (such transaction being referred to herein as the
"Acquisition");
WHEREAS, as a result of transactions in connection with the
Acquisition, EI will effectively acquire a general and limited
partnership interest in Lake Cogen, Ltd. with the remaining
interest being retained indirectly by NCRI and/or, subject to the
consent of the Owner Trustee and/or Owner Participant pursuant to
the Operative Documents, transferred to a third party not
affiliated with an electric utility;
WHEREAS, NCO has agreed to continue to cause the initial price
for natural gas for the Lake Project to be set at $2.38/MMBTU
thereby satisfying obligations under Section 2 of the Original
Guarantee and Agreement;
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NOW, THEREFORE, to induce each of Owner Trustee, Owner
Participant and GECC to continue as parties to, and as partial
consideration for Owner Trustee, Owner Participant and GECC to
continue as parties to, the Operative Documents after the
Acquisition and to release NCO from the Original Guarantee and
Agreement pursuant to a certain Release, a form of which has been
delivered to Owner Trustee and Owner Participant, the parties
hereto hereby agree as follows:
SECTION 1. Definitions. Unless the context shall
otherwise require, the capitalized terms used herein (and not
otherwise defined herein) shall have the meanings assigned to them
in Appendix A to the Participation Agreement, which also contains
rules as to usage that shall be applicable herein.
SECTION 2. Certain Payments Relating to Lease, Foundation
and Additional Mortgage and Transfer Taxes.
(a) Lease Reserve Guarantee. If no foreclosure (or exercise
of similar remedies) by Owner Participant has occurred under the
Mortgage or the Security Documents, Guarantor hereby
unconditionally and irrevocably guarantees, as primary obligor and
not merely as a surety, the full payment of all Rent to Owner
Trustee under the Lease; provided, however, that the amount of such
guarantee (the "Available Guarantee Amount") shall be limited to an
amount, subject to adjustment as provided in the next sentence,
equal to the lesser of (i) the Six Month Average Rent or (ii)
$10,000,000. At any time a payment is made by Guarantor to Owner
Trustee pursuant to this paragraph (a), the Available Guarantee
Amount shall thereupon be reduced by the amount of such payment,
and thereafter the Available Guarantee Amount shall be increased by
the amount of cash disbursed to Partnership pursuant to Section
4.04(viii) of the Escrow Agreement during the period from and after
the time such payment is made until such time as the Available
Guarantee Amount shall be equal to the lesser of (i) the Six Month
Average Rent or (ii) $10,000,000. Notwithstanding anything to the
contrary set forth herein, if Partnership shall for any reason fail
to exercise its renewal option pursuant to Section 4.01 of the
Lease, Guarantor hereby unconditionally and irrevocably agrees to
pay to Owner Participant or as Owner Participant may direct the
Available Guarantee Amount on the date the Lease terminates.
Payment under the prior sentence shall with no further act
discharge and release Guarantor from all its obligations under this
paragraph (a).
(b) Foundation Repair Payments. Guarantor agrees
unconditionally and irrevocably to pay from time to time to Escrow
Agent for deposit into the Repair Account an amount equal to the
aggregate of all costs and expenses that may be incurred by
Partnership (as a result of the inadequacy due to geological
conditions of the spread footing foundations used to support the
steam turbine) (1) to replace the spread footing foundations
installed by Contractor for the steam turbine with pilings or other
more substantial foundations, (2) to repair the spread footing
foundations for the steam turbine or (3) to repair or replace any
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equipment; provided, however, that: (x) the costs and expenses
referred to above shall have been incurred (or the event or events
giving rise to such costs and expenses shall have occurred and
notice thereof shall have been given to Guarantor by Owner
Participant or Owner Trustee) prior to the second anniversary of
the date that the Facility achieves Commercial Operation; (y) the
amount to be paid by Guarantor hereunder shall be reduced by (i)
any amounts paid by Contractor pursuant to Section 6.1(a)(viii) of
the Construction Contract, (ii) any amounts paid by Zurn pursuant
to the Zurn Guarantee, (iii) any amounts paid by the bonding
company pursuant to the Payment Bond and/or the Performance Bond
and/or (iv) the proceeds of any insurance policies; and (z) the
aggregate amount required to be paid by Guarantor pursuant to this
paragraph (b) shall in no event exceed $2,000,000.
(c) Additional Mortgage and Transfer Tax Payments. Guarantor
hereby unconditionally and irrevocably guarantees, as primary
obligor and not merely as a surety, the full payment of any Florida
documentary stamp taxes and intangible personal property taxes,
together with any interest and penalties thereon, due at any time
from Partnership or from Owner Participant, Owner Trustee or any of
their Affiliates, as the case may be, in connection with (i) the
Loans, the Mortgage, the Security Documents or the filing of any
notice of future advance under the Mortgage, (ii) the transfer of
real or personal property from Partnership to Owner Trustee on the
Lease Commencement Date or (iii) otherwise in connection with the
transactions contemplated by the Operative Documents and which are
in addition to those Florida documentary stamp taxes and intangible
personal property taxes paid on the Construction Loan Closing Date
and on the Lease Commencement Date in connection with such
transactions; provided, however, that Guarantor and Partnership
shall have the right in accordance with the terms of the Operative
Documents to contest such taxes prior to the payment thereof,
subject to the limitation that if non-payment would interfere in
any way with the enforcement of rights or remedies by Owner
Participant, Owner Trustee or any of their Affiliates, Guarantor or
Partnership shall pay any such contested taxes and seek a refund
thereof (in which case Owner Participant, Owner Trustee and their
Affiliates shall cooperate in seeking such refund at Partnership's
or Guarantor's expense); provided further, however, that Guarantor
shall not be liable hereunder for any other Taxes for which
Partnership has not undertaken any indemnity obligation pursuant to
Section 11.03 of the Participation Agreement.
(d) Guarantor unconditionally and irrevocably waives
promptness, diligence, presentment to, demand of payment from and
protest to Partnership or any other Person of any of Partnership's
obligations guaranteed hereunder, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment.
Guarantor further agrees that its guarantee constitutes a guarantee
of payment when due and not of collection, and waives any right to
require that any resort be had by Owner Trustee, Owner Participant
or GECC to any security held for payment of Partnership's
obligations guaranteed hereunder or to any balance of any deposit
or trust account or credit on the books of any of the Secured
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Parties, Escrow Agent or any other Person in favor of Partnership
or any other Person. Guarantor agrees that the obligations of
Partnership guaranteed hereunder may be extended or renewed, in
whole or in part, without notice to or further assent from
Guarantor, and that Guarantor will remain bound by its obligations
hereunder notwithstanding any extension or renewal of any of the
obligations guaranteed hereunder.
(e) The obligations of Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for
any reason whatsoever, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to
any defense or setoff, abatement, counterclaim or recoupment, or
any impairment, reduction or termination whatsoever by reason of
the dissolution, bankruptcy, insolvency or reorganization of
Partnership or any other Transaction Party or the pendency of any
case, suit or proceeding under any bankruptcy or insolvency law or
any other law providing for the relief of debtors, the invalidity,
illegality or unenforceability of Partnership's obligations
guaranteed hereunder or otherwise or for any other reason
whatsoever. Without limiting the generality of the foregoing, the
obligations of Guarantor hereunder shall not be discharged or
impaired or otherwise affected by the failure of Owner Trustee,
Owner Participant or any other Person to assert any claim or demand
or to enforce any right or remedy under the provisions of any
Operative Document or any other guarantee or agreement, any
extension or renewal of any thereof, any rescission, waiver,
amendment or modification of, or any release from, any of the terms
or provisions of any Operative Document or of any other agreement,
the release of any security held by or on behalf of Owner Trustee,
Owner Participant or any other Person for performance of
Partnership's obligations guaranteed hereunder, the failure of
Owner Trustee, Owner Participant or any other Person to exercise
any right or remedy against any party to any Operative Document or
against any other guarantor of any of the Obligations, any default,
failure or delay, wilful or otherwise, in the performance of
Partnership's obligations guaranteed hereunder or by 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
Guarantor or would otherwise operate as a discharge of Guarantor as
a matter of law or equity.
(f) Guarantor further agrees that this Guarantee and
Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any of Partnership's obligations
guaranteed hereunder, or any part thereof, are rescinded or must
otherwise be restored by Owner Trustee, Owner Participant or any
other Person upon the dissolution, bankruptcy, insolvency or
reorganization of Partnership or otherwise.
(g) In furtherance of the foregoing and not in limitation of
any other right which Owner Trustee or Owner Participant may have
at law or in equity against Guarantor by virtue hereof, upon the
failure of Partnership to pay any of Partnership's obligations
guaranteed hereunder, when and as the same shall become due
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(whether upon maturing, by acceleration or otherwise), Guarantor
hereunder promises to and will, upon receipt of a written notice by
Owner Trustee or Owner Participant, demanding that Guarantor
forthwith pay, or cause to be paid, in cash, to or as directed by
Owner Trustee or Owner Participant, as the case may be, an amount
equal to the sum of (i) the unpaid amount of such obligations and
(ii) interest thereon from the date of demand at the Stipulated
Rate.
SECTION 3. Waiver of Subrogation. Notwithstanding any
payment or payments made hereunder by or on behalf of Guarantor and
notwithstanding any cost, expense or loss of economic benefit
incurred by Guarantor or any of respective Affiliates pursuant to
Section 2 hereof, neither Guarantor nor any of its Affiliates shall
have any claim against Partnership with respect to any such
payments, expenses or loss of economic benefits, including by way
of any subrogation or similar right, or any rights any of the
collateral held by or for the benefit of any of Owner Trustee,
Owner Participant or GECC, and Guarantor hereby waives any claim it
or any of its Affiliates may have against Owner Trustee, Owner
Participant, GECC or Partnership in respect thereof.
SECTION 4. Representations and Warranties of Guarantor.
Guarantor represents and warrants at and as of the date hereof
that:
(a) Organization, etc. It is duly organized and validly
existing under the laws of the Commonwealth of Pennsylvania and it
has the power and authority to carry on its business as then
conducted, to own or hold under lease its properties and to enter
into and perform its obligations under this Guarantee and
Agreement.
(b) Authorization; No Conflict. It has duly authorized by
all necessary action the execution, delivery and performance of
this Guarantee and Agreement, and neither its execution and
delivery thereof nor its consummation of the transactions
contemplated thereby nor its compliance with any of the terms and
provisions thereof (i) does or will contravene any existing
Governmental Rule applicable to or binding on it or any of its
properties, (ii) does or will contravene or result in any breach
of or constitute any default under, or result in the creation of
any Lien upon any of its property under, any indenture, mortgage,
chattel mortgage, deed of trust, conditional sales contract, loan
or credit agreement, corporate charter, by-law or other agreement
or instrument to which it is a party or by which it or any of its
properties are bound or affected or (iii) does or will require the
taking of any Governmental Action, except such as have been duly
obtained, made or taken.
(c) Enforceability. It has duly executed and delivered this
Guarantee and Agreement, and this Guarantee and Agreement
constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
5
<PAGE>
and judicial decisions of general applicability relating to or
affecting creditors' rights and to general principles of equity.
(d) No Adverse Proceedings. There is no action, suit or
proceeding at law or in equity or by or before any court or
administrative agency pending or threatened against or affecting it
or its properties, the adverse determination of which, individually
or in the aggregate, is reasonably likely to have a material
adverse effect on the ability of Guarantor to enter into and carry
out its obligations under this Guarantee and Agreement except such
as may be set forth in the Guarantor's 1993 Annual Report on Form
10-K and Quarterly Report on Form 10-Q for the quarter ended March
31, 1994, filed with the Securities and Exchange Commission under
the Securities Exchange Act of 1934, copies of which have been
heretofore furnished to the Owner Trustee and the Owner
Participant.
(e) Financial Statements. The consolidated financial
statements for the fiscal year ended December 31, 1993 filed with
the Securities and Exchange Commission have been prepared in con-
formity with GAAP applied on a consistent basis and present fairly
its consolidated financial condition as of the dates therein
specified and the consolidated results of its operations for the
periods therein specified. No material adverse change in its
consolidated assets, liabilities, operations, financial condition
or prospects has occurred from the date of such financial
statements that would impair its ability to perform its obligations
hereunder.
(f) No Material Adverse Effect. No event or circumstance
has occurred which could have a material adverse effect on its
ability to perform its obligations hereunder.
SECTION 5. Covenants of Guarantor. Guarantor covenants
that:
(a) Corporate Existence. Guarantor will maintain its
corporate existence in good standing in its jurisdiction of
incorporation and register and qualify and remain registered and
qualified to do business in each jurisdiction in which the nature
of any material business conducted by it or the character of any
material properties and assets owned or leased by it requires such
registration and qualification.
(b) Maintenance of Books and Records. Guarantor will and
will cause each of its Consolidated Subsidiaries to keep proper and
adequate records and books of account in which true and complete
entries will be made in a manner sufficient to enable the
preparation of financial statements in accordance with GAAP.
(c) Notice of Defaults. Guarantor will provide Owner
Participant and Owner Trustee with prompt, and in all cases within
five Business Days, notice of any event of default under the Credit
Agreement dated as of March 19, 1992 among Guarantor, Jersey
Central Power & Light Company, Metropolitan Edison Company and
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Pennsylvania Electric Company as borrowers and the banks named
therein, as banks and Chemical Bank and Citibank, N.A. as co-agents
and Chemical Bank as administrative agent ("GPU Revolving Credit
Agreement") providing the lender or lenders thereunder with the
right to accelerate its debt obligations under such agreement.
(d) Year End Consolidated Financial Statements. Guarantor
will furnish to Owner Participant as soon as available and in any
event within 120 days after the end of each fiscal year of
Guarantor, a consolidated balance sheet of Guarantor as at the
close of such fiscal year, a consolidated statement of income and
retained earnings and a consolidated statement of cash flows of
Guarantor for such fiscal year, setting forth in comparative form
the corresponding figures of the preceding fiscal year together
with an auditor's report, containing:
(i) such auditor's confirmation that its examinations of
such consolidated financial statements were made in
accordance with GAAP and accordingly included such
tests and other procedures as they considered
necessary in the circumstances; and
(ii) such auditor's opinion that such consolidated
financial statements present fairly the consolidated
financial position of Guarantor as of the close of
such fiscal year and the results of its operations
and the changes in its financial position for the
year then ended in accordance with GAAP consistently
applied.
(e) Quarterly Consolidated Financial Statements. Guarantor
will furnish to Owner Participant as soon as available and in any
event within 60 days after the end of each of the first three
fiscal quarters of each fiscal year of Guarantor, a consolidated
balance sheet of Guarantor and its Consolidated Subsidiaries as at
end of such quarter, a consolidated statement of income and a
consolidated statement of cash flows of Guarantor and its
Consolidated Subsidiaries for such period, prepared on a basis
consistent with the corresponding period of the preceding fiscal
year.
(f) Officer's Certificate. Guarantor shall furnish to Owner
Participant and Owner Trustee, within 120 days after the end of
each fiscal year of Guarantor and within 60 days after the end of
each of the first three fiscal quarters of each fiscal year of
Guarantor, an Officer's Certificate of Guarantor certifying that
(i) Guarantor has complied with each of the covenants and
agreements set forth herein and (ii) except as disclosed pursuant
to Section 5(c), no event of default under the GPU Revolving Credit
Agreement has occurred.
(g) Additional Information. If Owner Participant shall have
determined, acting reasonably, that a material adverse change has
occurred in respect of the business, affairs, operations or
financial condition of Guarantor and its Consolidated Subsidiaries
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taken as a whole, Guarantor shall furnish to Owner Participant any
additional information regarding the business, affairs, operations
and financial condition of Guarantor and its Consolidated
Subsidiaries as Owner Participant may reasonably request but only
if such information is available to the public or to any lender
under the GPU Revolving Credit Agreement.
(h) Consolidated Net Worth. Guarantor will maintain its
consolidated stockholders equity, as reported from time to time in
Guarantor's periodic reports filed pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 at not less than
$250,000,000.
(i) Ownership of Guarantor's Subsidiaries. Guarantor shall
maintain at all times beneficial ownership of at least 75% of all
outstanding shares of common stock of each of Jersey Central Power
& Light Company, Metropolitan Edison Company and Pennsylvania
Electric Company.
Notwithstanding any of the foregoing, in the event that
Guarantor shall not meet the covenants contained in Sections 5(h)
or 5(i), the Guarantor shall within 15 days after the occurrence of
such event, either (A) offer credit support for the payment in full
of the then outstanding obligations of Guarantor hereunder by
delivering a letter of credit or other credit support or (B) pay to
Owner Trustee to be held for the purposes herein specified such
amounts as will be sufficient in the reasonable determination of
the Owner Participant to provide for the payment in full of the
then outstanding obligations of Guarantor hereunder.
SECTION 6. Rights and Powers. Guarantor hereby
irrevocably authorizes and empowers each of Owner Trustee and Owner
Participant, in its sole and absolute discretion, to take such
proceedings, in its own name or otherwise, for the enforcement of
or collection of any amounts due under this Guarantee and
Agreement, as Owner Trustee or Owner Participant may deem necessary
or desirable. Each of Owner Trustee or Owner Participant may
proceed, either in its own name or otherwise, to protect and
enforce any or all of its rights under this Guarantee and Agreement
in equity, at law or by other appropriate proceedings, whether for
the specific performance of any covenants or agreements contained
in this Guarantee and Agreement or otherwise, and shall be entitled
to require and enforce the performance of all acts and things
required to be performed hereunder by Guarantor.
SECTION 7. Further Assurances. Guarantor, at its own
cost and expense, will cause to be promptly and duly taken,
executed, acknowledged and delivered all such further acts,
documents and assurances as Owner Trustee or Owner Participant may
from time to time reasonably request in order to carry out more
effectively the intent and purposes of this Guarantee and Agreement
and the transactions contemplated hereby.
SECTION 8. Remedies Cumulative, etc. No right, power or
remedy herein conferred upon or reserved to Owner Trustee or Owner
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Participant is intended to be exclusive of any other right, power
or remedy and, to the extent permitted by law, each and every
right, power and remedy of Owner Trustee or Owner Participant
pursuant to this Guarantee and Agreement or the other Operative
Documents or now or hereafter existing at law, in equity, by
statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy pursuant to
this Guarantee and Agreement or the other Operative Documents or
now or hereafter existing at law, in equity, by statute or
otherwise, and the exercise or beginning of the exercise by Owner
Trustee or Owner Participant of any one or more of such rights,
powers or remedies shall not preclude the simultaneous or later
exercise by Owner Trustee or Owner Participant of any or all such
rights, powers or remedies.
SECTION 9. Assignment. Guarantor may not assign this
Guarantee and Agreement. Each of Owner Trustee and Owner
Participant may freely assign its rights and obligations hereunder;
provided, however, that neither of Owner Trustee nor Owner
Participant shall have the right to assign its rights and
obligations hereunder to a Person to whom shall not have the right
to assign its rights and obligations under the Participation
Agreement and the Construction Loan Agreement, as specified in
Sections 12.05 and 12.07 of the Participation Agreement and Section
7.01 of the Construction Loan Agreement. Any purported assignment
made in violation of this Section shall for all purposes be deemed
null and void.
SECTION 10. Attorneys' Fees; Late Payments. In the event
Owner Trustee or Owner Participant should employ attorneys or incur
other fees or expenses for the collection of payments or the
performance of obligations under this Guarantee and Agreement
(including reasonable documented fees or expenses incurred in
connection with any investigations, negotiations or discussions of
any claims or alleged claims reasonably believed to exist
hereunder), Guarantor agrees that it will on demand therefor pay to
Owner Trustee or Owner Participant, as the case may be, all such
expenses (with interest at the Stipulated Rate on such amounts
following demand therefor) so incurred by Owner Trustee or Owner
Participant. Any amounts due hereunder which shall not be paid
when due shall be paid with interest thereon from the date due
through the date paid at a rate per annum equal to the Stipulated
Rate.
SECTION 11. Operative Documents. Guarantor acknowledges
that this Guarantee and Agreement constitutes an Operative
Document.
SECTION 12. Documentary Conventions. Except as expressly
provided herein, this Guarantee and Agreement shall be governed by
all the Documentary Conventions.
SECTION 13. Termination. This Guarantee and Agreement and
all obligations of the parties set forth herein shall terminate on
the later of (i) one year and one day after the Lease Termination
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Date and (ii) the indefeasible payment in full of all amounts that
may from time to time become due hereunder.
SECTION 14. Submission to Jurisdiction; Service of Process.
(a) With respect to any claim hereunder (i) Guarantor
irrevocably submits to the nonexclusive jurisdiction of the courts
of the State of New York and the United States District Court
located in the Borough of Manhattan in New York City, and (ii)
Guarantor irrevocably waives any objection which it may have at any
time to the laying of venue of any suit, action or proceeding
arising under or relating to this Guarantee and Agreement brought
in any such court, irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in
an inconvenient forum and further irrevocably waives the right to
object, with respect to such claim, suit, action or proceeding
brought in any such court, that such court does not have
jurisdiction over such party; provided, however, that nothing
herein shall be deemed to preclude any of the Secured Parties from
bringing an action or proceeding in respect of this Guarantee and
Agreement in any other jurisdiction.
(b) Guarantor agrees that, so long as any of the Operative
Documents are in effect, it will maintain an agent for service of
process in New York City and give prompt notice to each other party
hereto of the address of such agent and of the name and address of
any new agent appointed by it. Guarantor further agrees that the
failure of its agent for service of process to give to Guarantor
notice of any service of process will not impair or affect the
validity of such service or of any judgment based thereon. If,
despite the foregoing, there is for any reason no agent for service
of process of a party available to be served, then Guarantor
irrevocably consents to service of process by registered or certi-
fied mail, postage prepaid, to it at its address set forth below.
(c) Guarantor initially and irrevocably designates Douglas E.
Davidson, Esq., Berlack, Israels & Liberman, 120 West 45th Street,
New York, New York 10036 to receive for and on behalf of Guarantor
service of process in New York City with respect to this Guarantee
and Agreement.
IN WITNESS WHEREOF, the parties hereto, by their respective
duly authorized officers, have caused this Guarantee and Agreement
to be executed, all as of the day and year first above written.
GENERAL PUBLIC UTILITIES CORPORATION
By: /s/ Don W. Myers
Name: Don W. Myers
Title: Vice President & Treasurer
100 Interpace Parkway
Parsippany, New Jersey 07054
(201) 263-6016
(201) 263-6397 (Fax)
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NATIONSBANK OF FLORIDA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Owner Trustee,
By: /s/ L. Collins Proctor
Name: L. Collins Proctor
Title: Trust Officer
TIFD III-C INC.,
as Owner Participant,
By: /s/ Donald F. Peterson
Name: Donald F. Peterson
Title: Vice President
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Exhibit B-18
EXECUTION COPY
EQUITY INFUSION AND UNDERTAKING GUARANTY
(ENERGY INITIATIVES, INC.)
This EQUITY INFUSION AND UNDERTAKING GUARANTY (this
"Guaranty"), dated June 13, 1994, is made by ENERGY INITIATIVES,
INC., a Delaware corporation (the "Guarantor"). Except as
otherwise defined herein, terms used herein and defined in the
Master Agreement (as hereinafter defined) shall be used herein as
so defined.
WITNESSETH:
WHEREAS, North Canadian Oils Limited, a Canadian
corporation ("NCO"), indirectly owns 100% of the issued and
outstanding shares of capital stock of NCP Dade Power Incorporated,
a Delaware corporation ("NCP Dade") and NCP Pasco Incorporated, a
Delaware corporation ("NCP Pasco"), and NCP Dade and NCP Pasco
together own all of the partnership interests in Dade Investment,
L.P., a Delaware limited partnership ("Dade");
WHEREAS, NCP Dade owns a 1% general partnership interest
in Pasco Cogen, Ltd., a Florida limited partnership (the
"Borrower") and Dade owns a 45.85% limited partnership interest in
the Borrower;
WHEREAS, the Borrower owns and operates a gas-fired
cogeneration facility located in Dade City, Florida (as more
particularly defined in the Master Agreement, the "Project");
WHEREAS, in order to finance the development, construc-
tion, start-up and equipping of the Project and certain related
expenditures, the Borrower, among other things, entered into (i)
the Note Purchase Agreement, dated as of January 15, 1992, (the
"Note Purchase Agreement") with the financial institutions that are
or may from time to time become party thereto (collectively, the
"Institutional Lenders"), pursuant to which the Institutional
Lenders have purchased the Institutional Notes of the Borrower,
(ii) the Amended and Restated Master Agreement, dated as of July
15, 1993, with the Bank Lenders that are or may from time to time
become party thereto, the Institutional Lenders, The Prudential
Insurance Company of America, as Agent, and the Collateral Agent
and (iii) the Credit and Reimbursement Agreement, dated as of March
22, 1993, as amended by a First Amendment thereto, dated as of July
15, 1993 (together, the "Credit Agreement"), with the banks that
may from time to time become party thereto (collectively, the "Bank
Lenders"), the letter of credit bank named therein, and the bank
agent named therein, as agent, pursuant to which the Bank Lenders
have made the Loans to the Borrower and have issued the Term Period
Letters of Credit;
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WHEREAS, (i) Dade (in its capacity as a limited partner
of the Borrower), the Borrower and the Collateral Agent have
entered into an Equity Infusion Agreement, dated as of January 15,
1992 (as amended, modified or supplemented from time to time, the
"LP Equity Infusion Agreement") and (ii) NCP Dade (in its capacity
as a general partner of the Borrower), the Borrower and the
Collateral Agent have entered into an Equity Infusion and
Undertaking Agreement, dated as of January 15, 1992 (as amended,
modified or supplemented from time to time, the "GP Equity Infusion
Agreement", and together with LP Equity Infusion Agreement, the
"Equity Infusion Agreements"), pursuant to which Dade and NCP Dade
have agreed (A) to make, or cause NCO make, certain payments
directly to the Collateral Agent and (B) in the case of the GP
Equity Infusion Agreement, among other things, to make, or cause
NCO to make, certain payments directly to the Collateral Agent or
take, or cause NCO to take, other actions for the benefit of FPC,
all as more specifically set forth in the Equity Infusion
Agreements;
WHEREAS, it was a condition precedent to the making of
the Loans and the issuance of the Term Period Letters of Credit by
the Bank Lenders under the Credit Agreement and the purchase of the
Institutional Notes by the Institutional Lenders under the Note
Purchase Agreement that NCO shall have executed and delivered the
NCO Equity Infusion Guaranty; and
WHEREAS, Guarantor has agreed, pursuant to a Stock
Purchase and Sale Agreement dated March 31, 1994 with NCO, North
Canadian Resources, Inc. and North Canadian Power Incorporated
("NCP"), to acquire the outstanding Common Stock of NCP, an
indirect wholly-owned subsidiary of NCO and the holder of the
common stock of NCP Dade and NCP Pasco (the "Acquisition");
WHEREAS, in connection with the Acquisition, Guarantor
has agreed to assume certain of the obligations of NCO under the
NCO Equity Infusion Guaranty;
WHEREAS, consummation of the Acquisition requires the
consent of the Collateral Agent pursuant to the provisions of the
Loan Documents;
WHEREAS, it is a condition precedent to obtaining the
Collateral Agent's consent to the Acquisition and to the release of
NCO from the obligations assumed by the Guarantor hereunder that
this Agreement be executed and delivered by the Guarantor;
WHEREAS, the Guarantor will obtain benefits as a result
of certain payments required to be made by Dade and NCP Dade under
the respective Equity Infusion Agreements and, accordingly, also
desires to execute and deliver this Guaranty in order to satisfy
the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and
other benefits accruing to the Guarantor, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby
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makes the following representations and warranties to the Borrower
and to the Collateral Agent (on behalf of and for the benefit of
the Secured Parties) and hereby covenants and agrees with the
Borrower and the Collateral Agent (on behalf of and for the benefit
of the Secured Parties) as follows:
1. The Guarantor irrevocably and unconditionally
guarantees to the Borrower and the Collateral Agent (on behalf of
and for the benefit of the Secured Parties) and their respective
successors and assigns, (a) the full and prompt payment when due of
all amounts payable by Dade and NCP Dade in respect of the
installation of an oxidation catalyst in the Facility pursuant to
Section 2.1(c) of the respective Equity Infusion Agreements and (b)
the due performance and compliance by Dade and NCP Dade of all of
their obligations pursuant to Section 2.1(c) under the respective
Equity Infusion Agreements (all such amounts and obligations,
collectively, the "Guaranteed Obligations"), it being understood
that clause (b) above is not intended to obligate the Guarantor to
guarantee that the Borrower take or omit to take any action to
maintain its status as a Qualifying Facility or to otherwise impose
any obligation on the Guarantor to purchase, or cause any
subsidiary or affiliate of the Guarantor to purchase, steam from
the Facility in the event the Steam Host fails to purchase a
sufficient quantity of steam to enable the Facility to maintain its
status as a Qualifying Facility. The Guarantor agrees, and the
Borrower directs the Guarantor, to pay all amounts payable by the
Guarantor hereunder directly to the Collateral Agent for deposit
into the appropriate Accounts specified in the respective Equity
Infusion Agreements, such payments to be applied by the Collateral
Agent in the manner specified in the Disbursement Agreement.
Payments made by the Guarantor hereunder shall be made by wire
transfer of immediately available funds in Dollars to the
Collateral Agent's office specified in Section 2.2 of the LP Equity
Infusion Agreement or Section 2.3 of the GP Equity Infusion
Agreement, as applicable.
2. This Guaranty is a guarantee of payment and not a
guarantee of collection and the Guarantor hereby acknowledges and
agrees that, if Dade or NCP Dade, as the case may be, shall fail to
pay any amounts payable under Section 2.1(c) of either of the
Equity Infusion Agreements at the time due, the Borrower or the
Collateral Agent acting on behalf of the Secured Parties may
proceed against the Guarantor hereunder without first proceeding in
any manner against Dade, NCP Dade or any other Person.
3. The Guarantor hereby waives notice of acceptance of
this Guaranty and notice of any liability to which it may apply,
and waives presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liability, suit or taking of
other action by the Borrower or the Collateral Agent against, and
any other notice to, any party liable thereon (including the
Guarantor or any other guarantor).
4. The Borrower, the Collateral Agent and/or any other
Secured Party may at any time and from time to time, to the full
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extent permitted by the Project Documents, without the consent of,
or notice to, the Guarantor, without incurring responsibility to
the Guarantor and without impairing or releasing the obligations of
the Guarantor hereunder, upon or without any terms or conditions
and in whole or in part:
(a) change the manner, place or terms of payment of
and/or change or extend the time of payment of, renew or alter
any of the Guaranteed Obligations, any security or guaranty
therefor or any liability incurred directly or indirectly in
respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or
altered;
(b) sell, exchange, release, surrender, realize
upon or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Guaranteed Obligations or
any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or
any offset thereagainst;
(c) exercise or refrain from exercising any rights
against Dade, NCP Dade or others or otherwise act or refrain
from acting;
(d) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including
any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability
(whether due or not) of Dade or NCP Dade to creditors of Dade
or NCP Dade, as the case may be, other than the Secured
Parties and the Guarantor;
(e) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of Dade or NCP Dade,
as the case may be, under the Loan Documents to the Borrower,
the Collateral Agent or the other Secured Parties regardless
of what liability or liabilities of Dade or NCP Dade, as the
case may be, remain unpaid (other than amounts paid by the
Guarantor hereunder, which amounts shall be applied to the
Guaranteed Obligations);
(f) consent to or waive any breach of or default
under, or take or omit to take any action under, any of the
Project Documents (including, without limitation, the Equity
Infusion Agreements), or otherwise amend, modify or supplement
any of the Project Documents (including, without limitation,
the Equity Infusion Agreements) or any of such other
instruments or agreements; and
(g) amend, modify, terminate, suspend, release or
otherwise alter in any manner any term, covenant, condition or
provision of or any right or obligation arising from or under
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any Loan Document or other Project Document or any security
therefor or guaranty thereof.
5. The obligations of the Guarantor under this Guaranty
are absolute and unconditional and to the fullest extent permitted
by law shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever,
including, without limitation: (a) any action or inaction by the
Borrower, the Collateral Agent or any other Secured Party as
contemplated in Section 4 of this Guaranty or otherwise; or (b) any
invalidity, irregularity or unenforceability of all or part of the
Guaranteed Obligations or any other Project Document or of any
security or guaranty therefor. This Guaranty is a primary
obligation of the Guarantor.
6. The Guarantor hereby waives all rights of
subrogation which it may at any time have as a result of this
Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, under common law or otherwise) to the claims of
the Borrower, the Collateral Agent and the other Secured Parties
against Dade and/or NCP Dade, as applicable, and all contractual,
statutory or common law rights of reimbursement, contribution or
indemnity or any similar such right from Dade and/or NCP Dade, as
applicable, in any case which it may at any time otherwise have as
a result of this Guaranty. The Guarantor hereby further waives any
right to enforce any other remedy which the Borrower, the
Collateral Agent or any other Secured Party now has or may
hereafter have against Dade and/or NCP Dade, as applicable, and any
benefit of, and any right to participate in, any security or
collateral given to or for the benefit of the Borrower, the
Collateral Agent or any other Secured Party to secure payment of
the Guaranteed Obligations. The provisions of this paragraph shall
survive the term of this Guaranty and any satisfaction or discharge
of Dade, NCP Dade and/or the Guarantor by virtue of any payment,
court order or any federal or state law.
7. The Guarantor makes the following representations,
warranties and covenants to the Borrower and each of the Secured
Parties:
(a) The Guarantor (i) is a duly organized and
validly existing corporation in good standing under the laws
of Delaware, (ii) has the power and authority to own its
property and assets and to transact the business in which it
is engaged and (iii) is duly qualified as a foreign
corporation and in good standing in each jurisdiction where
the ownership, leasing or operation of property or the conduct
of its business requires such qualification except where the
failure to be so qualified would not have a material adverse
effect on the Guarantor's business and financial condition;
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(b) The Guarantor has the corporate power to
execute, deliver and perform the terms and provisions of this
Guaranty and the other Project Documents to which it is a
party and has taken all necessary corporate action to
authorize the execution, delivery and performance by it of
this Guaranty and the other Project Documents to which it is a
party. The Guarantor has duly executed and delivered this
Guaranty and the other Project Documents to which it is a
party and this Guaranty and the other Project Documents to
which it is a party constitutes legal, valid and binding
obligations of the Guarantor enforceable in accordance with
their respective terms, except to the extent the enforcement
hereof or thereof may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting
creditors' rights generally or by general principles of
equity;
(c) Neither the execution, delivery or performance
by the Guarantor of this Guaranty or any other Project
Document to which it is a party, nor compliance by it with the
terms and provisions hereof or thereof, (i) will contravene
any provision of any law, statute, rule or regulation
applicable to the Guarantor or any order, writ, injunction or
decree of any court or governmental instrumentality binding
upon the Guarantor, (ii) will conflict or be inconsistent with
or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets
of the Guarantor or any of its Subsidiaries pursuant to the
terms of, any indenture, mortgage, deed of trust, credit
agreement, loan agreement or any other agreement, contract or
instrument to which the Guarantor or any of its Subsidiaries
is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any
provision of the charter documents of the Guarantor or any of
its Subsidiaries;
(d) No order, consent, approval, license, autho-
rization or validation of, or filing, recording or
registration with, or exemption by, any governmental or public
body or authority, or any subdivision thereof is required to
authorize, or is required in connection with, (i) the
execution, delivery and performance of this Guaranty or any
other Project Document to which it is a party or (ii) the
legality, validity, binding effect or enforceability of this
Guaranty or any other Project Document to which it is a party,
except for an appropriate order of the Securities and Exchange
Commission under the Public Utility Holding Company Act of
1935 which order has been obtained and is in full force and
effect and is not subject to any pending appeal or, to our
knowledge, threatened appeal;
(e) The consolidated financial statements (and
accompanying notes) of the Guarantor and its Consolidated
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Subsidiaries for the twelve-month period ending December 31,
1993 ("1993 Financial Statements") filed with the Securities
and Exchange Commission and heretofore delivered to the
Borrower and the Agent have been prepared in accordance with
GAAP consistently applied and present fairly in all material
respects the consolidated financial condition of the Guarantor
and its Consolidated Subsidiaries as of the date thereof and
the consolidated results of operations and cash flows of the
Guarantor and its Consolidated Subsidiaries for the twelve-
month period then ended. Since December 31, 1993, there has
been no material adverse change in the assets, liabilities or
financial condition of Guarantor.
(f) The Guarantor does not know of any reasonable
basis for the assertion against the Guarantor or any of its
Subsidiaries of any liability or obligation of any nature
whatsoever that is not fully reflected in the financial
statements delivered pursuant to clause (e) above which, in
the aggregate, could have a material adverse effect on the
ability of Guarantor to perform its obligations under this
Guaranty, the EI Ownership Maintenance Agreement or the Tax
Election Agreement ("Tax Election Agreement") dated as of June
13, 1994 by and among EI, Pas Power Co., NCP Dade Power
Incorporated, Dade Investment, L.P., and Pasco Interest
Holdings Inc. (this Guaranty, the EI Ownership Maintenance
Agreement and the Tax Election Agreement are collectively
referred to herein as the "Guarantor Agreements").
(g) The Guarantor and each of its Subsidiaries is
in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property
(including applicable statutes, regulations, orders and
restrictions relating to environmental standards and
controls), except for such noncompliances as would not, in the
aggregate, have a material adverse effect on the ability of
the Guarantor to perform its obligations under the Guarantor
Agreements.
(h) Other than as set forth in the 1993 Financial
Statements, there are no actions, suits, proceedings or
investigations pending or, to the best knowledge of the
Guarantor, threatened against Guarantor or any of its
Subsidiaries that are reasonably likely to materially and
adversely affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of the
Guarantor or of the Guarantor and its Subsidiaries taken as a
whole.
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(i) Neither the Guarantor nor any of its Subsid-
iaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(j) The Guarantor indirectly owns 100% of the
capital stock of NCP Dade and NCP Pasco, and NCP Dade and NCP
Pasco together own all of the partnership interests in Dade,
in each case free and clear of all Liens (other than Permitted
Liens).
8. This Guaranty is a continuing one and all liabili-
ties to which it applies or may apply under the terms hereof shall
be conclusively presumed to have been created in reliance hereon.
No failure or delay on the part of the Borrower or the Collateral
Agent in exercising any right, power or privilege hereunder and no
course of dealing between the Guarantor, the Borrower, the
Collateral Agent or any other Secured Party shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights, powers and remedies herein expressly
provided are cumulative and not exclusive of any rights, powers or
remedies which the Borrower or the Collateral Agent would otherwise
have. No notice to or demand on the Guarantor in any case shall
entitle the Guarantor to any other further notice or demand in
similar or other circumstances or constitute a waiver of the rights
of the Borrower or the Collateral Agent to any other or further
action in any circumstances without notice or demand.
9. This Guaranty shall be binding upon the Guarantor
and its successors and assigns and shall inure to the benefit of
the Borrower and the Collateral Agent (on behalf of and for the
benefit of the Secured Parties) and their respective successors and
assigns, provided that the Guarantor may not assign any of its
rights or obligations hereunder without the express written consent
of the Collateral Agent (acting upon the instructions of the
Lenders).
10. Neither this Guaranty nor any provision hereof may
be changed, waived, discharged or terminated except with the
express written consent of the Collateral Agent (acting upon the
instructions of the Lenders).
11. The Guarantor acknowledges that an executed (or
conformed) copy of each of the Equity Infusion Agreements has been
made available to at least one officer of the Guarantor, and such
officer is familiar with the contents thereof.
12. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of
any such rights, upon the failure of the Guarantor to perform any
of its obligations hereunder, each Secured Party is hereby
authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Guarantor or to
any other Person, any such notice being hereby expressly waived, to
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set off and to appropriate and apply any and all deposits (general
or special) and any other indebtedness at any time held or owing by
such Secured Party (including without limitation by branches and
agencies of such Secured Party wherever located) to or for the
credit or the account of the Guarantor against and on account of
the obligations of the Guarantor to such Secured Party under this
Guaranty, irrespective of whether or not such Secured Party shall
have made any demand hereunder and although said obligations, or
any of them, shall be contingent or unmatured.
13. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications
hereunder shall be duly given or made if sent in writing or by
tested or otherwise authenticated telex or telecopy and shall be
deemed to have been duly given or made upon the transmittal thereof
by telex or telecopier, or on the third Business Day following the
deposit thereof in the mails, postage prepaid, in each case
addressed to the party to which such notice is requested or
permitted to be given or made, at the address specified beneath the
heading "Address for Notices" under the name of the applicable
party on the signature pages hereof, or at such other address of
which such Person shall have notified in writing the party giving
such notice.
14. If a claim is ever made upon the Borrower, the
Collateral Agent or any other Secured Party for repayment or
recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid
payees repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (b)
any settlement or compromise of any such claim effected by such
payee with any such claimant (including Dade or NCP Dade, as the
case may be), then and in such event the Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be
binding upon it, notwithstanding any revocation hereof or of any
obligation of Dade or NCP Dade, as the case may be, under either or
both of the Equity Infusion Agreements, and the Guarantor shall be
and remain liable to the aforesaid payees hereunder for the amounts
so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
15. Any acknowledgment or new promise, whether by
partial payment or otherwise and whether by Dade or NCP Dade, as
the case may be, or others (including the Guarantor), with respect
to any of the Guaranteed Obligations shall, if the statute of
limitations in favor of the Guarantor against the Borrower or the
Collateral Agent shall have commenced to run, toll the running of
such statute of limitations, and if the period of such statute of
limitations shall have expired, prevent the operation of such
statute of limitations.
16. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
BORROWER, THE COLLATERAL AGENT, THE OTHER SECURED PARTIES AND THE
GUARANTOR HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
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GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW EXCEPT
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT
IN A COURT OF RECORD IN THE COURTS OF THE STATE OF NEW YORK OR IN
THE COURTS OF THE UNITED STATES OF AMERICA LOCATED IN SUCH STATE,
AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTOR
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES,
APPOINTS AND EMPOWERS BERLACK, ISRAELS & LIBERMAN, 120 WEST 45TH
STREET, NEW YORK, NEW YORK 10036, ATTENTION: DOUGLAS E. DAVIDSON,
ESQ., AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF
FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE
AVAILABLE TO ACT AS SUCH, THE GUARANTOR AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR
THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE COLLATERAL
AGENT. AS AN ALTERNATE METHOD OF SERVICE, THE GUARANTOR FURTHER
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 THE GUARANTOR AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
BORROWER OR THE COLLATERAL AGENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY OTHER JURISDICTION.
THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS GUARANTY BROUGHT IN THE COURTS REFERRED TO ABOVE AND
HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE
GUARANTOR FURTHER WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT.
17. The obligation of the Guarantor to make payment in
Dollars of any Guaranteed Obligations due hereunder shall not be
discharged or satisfied by any tender, or any recovery pursuant to
any judgment, which is expressed in or converted into any currency
other than Dollars, except to the extent such tender or recovery
shall result in the actual receipt by the Collateral Agent at its
payment office of the full amount of Dollars expressed to be pay-
able in respect of any such Guaranteed Obligations. The making of
payment in Dollars as aforesaid shall be enforceable as an
alternative or additional cause of action for the purpose of
recovery in Dollars of the amount, if any, by which such actual
receipt shall fall short of the full amount of Dollars expressed to
be payable in respect of any such Guaranteed Obligations, and shall
not be affected by judgment being obtained for any other sums due
under this Guaranty.
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18. The Guarantor agrees that the Collateral Agent
(acting for the benefit of the Secured Parties) and any assignee
thereof shall be entitled to exercise any and all rights under this
Guaranty in accordance with the terms hereof (in its name or in the
name of the Borrower), and the Guarantor and the Borrower shall
comply and cooperate in all respects with such exercise. Without
limiting the generality of the foregoing, the Collateral Agent and
any assignee shall have the full right and power to enforce
directly against the Guarantor all obligations of the Guarantor
under this Guaranty and otherwise to exercise all remedies
hereunder and to make all demands and give all notices and make all
requests required or permitted to be made under this Guaranty. If
the Guarantor shall receive inconsistent directions from the
Borrower and the Collateral Agent, the directions from the
Collateral Agent shall be deemed the effective directions, and the
Guarantor shall accordingly comply with such directions of the Col-
lateral Agent.
19. Subject to Sections 6 and 14 hereof, this Guaranty
shall terminate, and the obligations of the Guarantor hereunder
shall cease, at such time (and only at such time) as the
Termination Date shall have occurred.
20. Conflicts. In the event of any conflict or
inconsistency between the terms of any Loan Document and the terms
of those provisions of the Project Documents that were added to
such Project Documents to implement the provisions of the MEGA-NOPR
Capacity Agreement Backstop and Coal Price Fix Agreement dated as
of January 18, 1992 among NCO, LEI, NCM, Pas Power, the Borrower,
NCP Dade, Peoples Cogeneration Company and Gator (which agreement
has been terminated), as such provisions may be amended, restated
or modified from time to time, the terms of such Loan Document
shall govern.
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IN WITNESS WHEREOF, the Guarantor has caused this
Guaranty to be executed and delivered as of the date first above
written.
ENERGY INITIATIVES, INC.
By /s/ David Brauer
Name: David Brauer
Title: Vice President
Address for Notices
Energy Initiatives, Inc.
One Upper Pond Road
Telecopy No.: 201-263-6977
Parsippany, New Jersey 07054
Attention: Vice President -
Administration
Accepted and Agreed
PASCO COGEN, LTD.
By: PAS POWER CO.,
as General Partner
By /s/ Jack E. Uhl
Name: Jack E. Uhl
Title: Treasurer
By: NCP DADE POWER INCORPORATED,
as General Partner
By /s/ Donald McKechnie
Name: Donald McKechnie
Title: President
Address for Notices:
220 East Madison Street
Tampa, Florida 33602
Telecopy No.: (813) 272-0192
Attention: E. Elliott White
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BANKERS TRUST COMPANY,
as Collateral Agent
By /s/ Robert Caporale
Authorized Trust Officer
Address for Notices:
Four Albany Street
New York, New York 10015
Telecopy No.: (212) 250-6961
Attention: Corporate Trust and Agency Group
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