SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 31, 1996
THE NEW WORLD POWER CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-18260 52-1659436
(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.)
INCORPORATION)
The Farmhouse, 558 Lime Rock Road, 06039
Lime Rock, Connecticut
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (860) 435-4000
Exhibit Index is on page 3
Total number of pages including exhibits is 217.
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ITEM 5. OTHER EVENTS
On May 31, 1996, The New World Power Corporation (the
"Registrant") closed a series of agreements with its lenders to restructure
certain of its debt obligations. The Registrant entered into a Forbearance,
Warrant Exchange, Note Conversion and Amendatory Agreement (the "Agreement"),
dated as of March 1, 1996, among The Sundial International Fund Limited
("Sundial"), the Registrant, The New World Power Company Limited ("NWP Ltd."),
and Wolverine Power Corporation ("Wolverine") regarding the Registrant's 0%
Senior Secured Note in the amount of $550,000, dated December 20, 1995 and due
March 31, 1996 issued by NWP Ltd. to Sundial (the "Senior Secured Note") and the
Wolverine Power Corporation First Mortgage Note in the outstanding principal
amount as of March 1, 1996 of $3,434,692, dated December 31, 1992, issued by
Wolverine to the Registrant and assigned by the Registrant to Sundial (the
"Wolverine Note" and together with the Senior Secured Note, the "Notes").
Pursuant to the terms of the Agreement, the maturity of the Senior Secured Note
was extended to December 1, 1996 and the maturities of certain installments of
the Wolverine Note were extended. Also pursuant to the Agreements certain
warrants of which Sundial is the owner or the agent for the owners have been
re-priced from exercise prices ranging from $7.50 to $15.00 per share to an
exercise of $1.75 per share. Also pursuant to the Agreement, Sundial has been
given an option to exchange the Notes for certain Exchange Notes to be issued by
the Registrant. The Registrant is required also to effect certain asset sales
and offer to redeem the Notes with the proceeds from such sales. Sundial also
received additional security from the Registrant in connection with the
Agreement.
The Registrant also entered into Amendment No. 3 to Note and
Warrant Purchase Agreement, and Modification of Letter Agreement, dated as of
March 1, 1996 by and between NWP Corp. and each of the Purchasers thereto
whereby the Registrant and the Purchasers agreed to modify certain of the terms
of the Note and Warrant Purchase Agreement, dated as August 15, 1995, amended by
Amendment No. 1 to Note and Warrant Purchase Agreement dated as of October 13,
1995 by and between the Registrant and the Purchasers and by Amendment No. 2 to
Note and Warrant Purchase Agreement ("Amendment No. 2") dated as February 29,
1996 by and between the Registrant and the Purchasers.
On June 3, 1996, the Registrant issued a Press Release
announcing that it had restructured certain of its indebtedness with its lenders
and outlining the terms thereof. On May 16, 1996, the Registrant received a
letter from the Nasdaq Stock Market Inc. ("Nasdaq") informing the Registrant
that Nasdaq had decided to deny the Registrant's request for continued listing
on the Nasdaq National Market. The Registrant is appealing the Nasdaq's decision
and a hearing is scheduled for June 6, 1996.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
EXHIBIT DOCUMENT
INDEX
(10.1) Forbearance, Warrant Exchange, Note Conversion
and Amendatory Agreement, dated as of March 1,
1996, among The Sundial International Fund
Limited ("Sundial"), New World Power
Corporation ("NWP Corp."), The New World Power
Company Limited ("NWP Ltd."), and Wolverine
Power Corporation ("Wolverine") including the
following Exhibits: Resolutions of Directors
and/or Shareholders of NWP Corp., NWP Ltd. and
Wolverine; Form of New Warrant; Form of New
NWP Ltd. Note; Form of Amended Wolverine Note;
Form of Amended Wolverine Mortgage and
Security Agreement Covering Real Property
located in Gladwin County, Michigan; Form of
Amended Wolverine Mortgage and Security
Agreement Covering Real Property located in
Midland County, Michigan; Form of Amended
Support and Pledge Agreement; Form of Amended
Guarantee; Form of Amended Charge; Form of
Exchange Note; Form of Registration Rights
Agreement; and Form of NWP Ltd.
(10.2) Amendment No. 3 to Note and Warrant Purchase
Agreement, and Modification of Letter
Agreement, dated as of March 1, 1996 by and
between NWP Corp. and the Purchasers thereto
and Fleming & Co., Ltd as agent for the
purchasers ("Fleming")
(10.3) Intercreditor Agreement, dated as of March 1,
1996 by and between NWP Corp., Sundial and
Fleming
(20) Press Release of NWP Corp., dated June 3, 1996
(99) Letter, dated May 16, 1996, from The Nasdaq
Stock Market, Inc. to NWP Corp. denying NWP
Corp.'s request for continued listing on the
Nasdaq National Market
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE NEW WORLD POWER CORPORATION
By: /s/ George Petrenko
--------------------
George Petrenko
Chief Executive Officer
DATE: June 3, 1996
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EXHIBIT 10.1
FORBEARANCE, WARRANT EXCHANGE,
NOTE CONVERSION AND AMENDATORY AGREEMENT
among
THE SUNDIAL INTERNATIONAL FUND LIMITED,
THE NEW WORLD POWER CORPORATION,
THE NEW WORLD POWER COMPANY LIMITED
and WOLVERINE POWER CORPORATION
Dated As Of March 1, 1996
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T A B L E O F C O N T E N T S
Section 1. DEFINITIONS................................................ 4
Section 2. AMENDMENT AND/OR EXCHANGE OF CERTAIN DOCUMENTS............. 22
Section 3. WARRANT EXCHANGE........................................... 23
Section 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES............ 24
Section 5. AFFIRMATIVE COVENANTS...................................... 27
Section 6. NEGATIVE COVENANTS......................................... 32
Section 7. U.K. WINDFARM COLLATERAL; NWP LTD. SHARES;
REIL SHARES; OTHER PERMITTED SALES OF ASSETS;
EARNINGS AND CASH FLOW OF WOLVERINE AND NWP LTD.......... 35
Section 8. NOTE EXCHANGE OPTION....................................... 38
Section 9. PREPAYMENT OF EXCHANGE NOTES; RESTRICTIONS ON TRANSFER..... 42
Section 10. SUBORDINATION OF EXCHANGE NOTES............................ 43
Section 11. LIQUIDATION; DISSOLUTION; BANKRUPTCY....................... 43
Section 12. DEFAULT ON SENIOR INDEBTEDNESS............................. 44
Section 13. PAYMENTS IN VIOLATION...................................... 45
Section 14. NO PREJUDICE OR IMPAIRMENT................................. 45
Section 15. SUBROGATION................................................ 46
Section 16. RELATIVE RIGHTS; OBLIGATIONS UNAFFECTED.................... 46
Section 17. DEFINITION OF SENIOR INDEBTEDNESS.......................... 47
Section 18. REIMBURSEMENT OF EXPENSES.................................. 47
Section 19. EVENT OF DEFAULT........................................... 48
Section 20. NO IMPAIRMENT.............................................. 50
Section 21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES................. 51
Section 22. INDEMNIFICATION BY THE COMPANIES........................... 51
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Section 23. FAILURE TO ACT NOT A WAIVER................................ 51
Section 24. INDEBTEDNESS; COLLATERAL................................... 51
Section 25. MISCELLANEOUS.............................................. 52
Section 26. NOTICES.................................................... 52
Section 27. GOVERNING LAW.............................................. 53
Section 28. MODIFICATION............................................... 53
Section 29. SEVERABILITY............................................... 54
Section 30. COUNTERPARTS............................................... 54
Section 31. HEADINGS................................................... 54
Section 32. CONSENT TO JURISDICTION AND SERVICE OF PROCESS............. 54
Section 33. WAIVER OF JURY TRIAL....................................... 55
Section 34. SUCCESSORS................................................. 55
Section 35. TERMINATION. ............................................ 55
E X H I B I T S
EXHIBIT A Resolutions of Directors and/or Shareholders of NWP Corp., NWP
Ltd.and Wolverine
EXHIBIT B Form of New Warrant
EXHIBIT C Form of New NWP Ltd. Note
EXHIBIT D Form of Amended Wolverine Note
EXHIBIT E E-1 Form of Amended Wolverine Mortgage Covering Real Property
located in Gladwin County Michigan
E-2 Form of Amended Wolverine Mortgage Covering Real Property
located in Midland County, Michigan
EXHIBIT F Form of Amended Support and Pledge Agreement
EXHIBIT G Form of Amended Guarantee
EXHIBIT H Form of Amended Charge
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EXHIBIT I Form of Exchange Note
EXHIBIT J Form of Registration Rights Agreement
EXHIBIT K Form of NWP Ltd. Charge
SCHEDULES
SCHEDULE 1 List of Options, etc.
SCHEDULE 2 List of Existing Liens and Payables
SCHEDULE 3 List of Minimum Sale Prices of Certain Assets
SCHEDULE 4 Material Litigation
<PAGE>
FORBEARANCE, WARRANT EXCHANGE,
NOTE CONVERSION AND AMENDATORY AGREEMENT
THIS AGREEMENT, dated as of March 1, 1996, by and among THE
SUNDIAL INTERNATIONAL FUND LIMITED ("SUNDIAL"), a Cayman Islands corporation on
the one hand, THE NEW WORLD POWER CORPORATION f/k/a Wolverine Holdings Inc.
("NWP CORP."), a Delaware corporation, THE NEW WORLD POWER COMPANY LIMITED ("NWP
LTD."), a company incorporated under the laws of England and Wales, and
WOLVERINE POWER CORPORATION ("WOLVERINE"), a Delaware corporation, jointly and
severally, on the other hand.
W I T N E S S E T H:
WHEREAS, the parties hereto are variously parties to the
following instruments and agreements:
(i) 0% Senior Secured Note in the amount of U.S. $550,000.00
("NWP LTD. NOTE") dated December 20, 1995 and due March 31, 1996
heretofore issued by NWP Ltd. to Sundial;
(ii) Wolverine Power Corporation First Mortgage Note in the
outstanding principal amount as of March 1, 1996 of $3,434,602.00 dated
December 31, 1992 heretofore issued by Wolverine to NWP Corp. and duly
assigned by NWP Corp. to Sundial as amended by that certain letter
agreement ("LETTER AGREEMENT") dated as of December 1, 1995 among
Messrs. Gilmartin, Poster & Shafto ("GPS"), NWP Corp., Wolverine and
Sundial (said First Mortgage Note as assigned and amended being herein
referred to as to the "WOLVERINE NOTE");
(iii) those two certain Mortgage and Security Agreements dated
31st December, 1992 issued by Wolverine to NWP Corp. as security for the
Wolverine Note and assigned by NWP Corp. to Sundial pursuant to those
two certain Assignments of Mortgage dated 31st December 1992 (said
Mortgage and Security Agreements as so assigned pursuant to said
Assignments of Mortgage being herein referred to as the "WOLVERINE
MORTGAGES");
(iv) that certain Support and Pledge Agreement dated December 31,
1992 by and between NWP Corp. and Sundial ("SUPPORT AND PLEDGE
AGREEMENT") pursuant to which, among other things, NWP Corp. pledged to
Sundial all of the issued and outstanding stock of Wolverine consisting
of 200 shares of Wolverine without par value (the "WOLVERINE STOCK") as
security for, among other things, the obligations of Wolverine to
Sundial under and in respect of the Wolverine Note and the Wolverine
Mortgages;
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(v) Continuing Guarantee dated the 20th day of December, 1995
("GUARANTEE") from NWP Ltd. in favor of Sundial pursuant to which, among
other things, NWP Ltd. irrevocably and unconditionally guaranteed to
Sundial payment and performance by Wolverine of Wolverine's obligations
under the Wolverine Note and the Wolverine Mortgages, and the
obligations of NWP Corp. to Sundial under the Support and Pledge
Agreement;
(vi) that certain Charge Over Shares ("CHARGE") dated December
20, 1995 among NWP Ltd., Sundial and Oakes, Fitzwilliams & Co. Limited
("ESCROW AGENT") providing, among other things, for the pledge to
Sundial by delivery to the Escrow Agent of 700,000 ordinary shares of
IR(pound) 1.00 each of Renewable Energy Ireland Limited ("REIL"), a
company formed under the laws of the Republic of Ireland, registered in
the name of NWP Ltd. constituting 80.46% of the issued and outstanding
shares of REIL, there presently being issued and outstanding 870,000
ordinary shares of 1R(pound) each (250,000 preference shares having been
converted into 70,000 ordinary shares subject to the completion of
certain formalities) ("REIL CHARGED SHARES);
WHEREAS, NWP Corp., NWP Ltd. and Wolverine have jointly and
severally requested that (i) the maturity of the NWP Ltd. Note be extended to
December 1, 1996 and (ii) that the maturities of certain installments of the
Wolverine Note be extended, each in order to ease certain cash flow problems
which are presently being encountered by NWP Corp., NWP Ltd. and Wolverine
(hereinafter sometimes together referred to as the "COMPANIES" and individually
as a "COMPANY"), and Sundial is willing to accommodate such requests and to
forbear in requiring compliance with the existing terms of the NWP Ltd. Note and
the Wolverine Note and to waive the defaults existing as of April 1, 1996 under
the NWP Ltd. Note upon the terms and conditions hereinafter and in the Exhibits
and Schedules hereto set forth, and the Companies have determined that it is in
the Companies' joint and several mutual interests to enter into and perform the
terms of this Agreement and the Exhibits hereto and each of the Companies has
independently determined that the provisions of said Agreement, Exhibits and
Schedules constitute receipt of fair consideration for the agreements of the
Companies herein and therein contained, it being understood that Sundial would
not enter into such Agreement, Exhibits and Schedules unless each of the
Companies had independently made such determination, evidence whereof is set
forth in the resolutions of the directors and/or shareholders of the Companies
annexed hereto as EXHIBIT A and made a part hereto;
WHEREAS, it is understood that the consent of the Fleming
Majority Noteholders under the "FLEMING DOCUMENTS" (defined below) is or may be
required prior to the execution, delivery and performance of this Agreement, the
other "Transaction Documents" (defined below) and the Exhibits and Schedules
hereto to which the Companies are party and the Fleming Majority Noteholders
have indicated such consent and their agreement with the provisions thereof
affecting the Fleming Noteholders, including, without limitation, the provisions
of Section 7 of this Agreement by the execution and delivery by the
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Fleming Majority Noteholders through their duly authorized officers or
representatives of the Consent of Noteholders;
WHEREAS, Sundial is the owner or agent for the owners of the
following warrants to purchase the common stock of NWP Corp.:
(i) 250,000 $7.50 warrants ("$7.50 WARRANTS") registered in the
name of Sundial;
(ii) 451,921 $8.00 warrants ("$8.00 WARRANTS") registered in the
name of Sundial;
(iii) 318,000 $15.00 warrants ("$15.00 WARRANTS") registered in
the name of Sundial;
(iv) 50,000 $15.00 Warrants registered in the name of Jan Chr.G.
Sundt ("SUNDT");
(v) 9,000 $7.50 Warrants registered in the name of Jens A.
Wilhelmsen ("WILHELMSEN"); and
(vi) 1,000 $15.00 Warrants, registered in the name of Wilhelmsen;
aggregating 259,000 $7.50 Warrants, 451,921 $8.00 Warrants and 369,000 $15.00
Warrants, and NWP Corp. is willing, concurrently with the execution and delivery
hereof, to create, issue and deliver a new class of Warrants to Purchase the
Common Stock of The New World Power Corporation designated Class 21 ("NEW
WARRANTS") substantially in the form of EXHIBIT B annexed hereto and made a part
hereof and to exchange such New Warrants for the said existing $7.50 Warrants,
$8.00 Warrants and $15.00 Warrants to the persons and on the terms hereinafter
set forth;
WHEREAS, the parties hereto have agreed that Sundial shall be
granted an option to exchange the whole or any portion of the "Notes"
(hereinafter defined) for certain Exchange Notes to be issued by NWP Corp.,
which Exchange Notes are at the option of the holder convertible into shares of
NWP Corp., which Exchange Notes are subject and subordinate in all respects to
Senior Indebtedness.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants hereinafter set forth, and other good and valuable consideration, the
parties hereto hereby agree as follows:
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SECTION 1. DEFINITIONS AND INDEX OF DEFINITIONS.
(a) Capitalized terms used herein are used with the following
meanings (unless the context shall otherwise require};
"$7.50 WARRANTS" shall have the meaning set forth in subdivision (i) of the
fourth recital hereof.
"$8.00 WARRANTS" shall have the meaning set forth in subdivision (ii) of the
fourth recital hereof.
"$15.00 WARRANTS" shall have the meaning set forth in subdivision (iii) of the
fourth recital hereof.
"ADVISOR" shall mean Sundt & Co. Ltd., a company registered under the laws of
England and Wales, which acts as advisor to Sundial.
"AFFILIATE", when used with respect to any Person, means (i) if such Person is
a corporation, any officer or director thereof (other than a director of NWP
Corp. nominated by or on behalf of the Fleming Noteholders or the Fleming
Majority Noteholders or any director or Observer nominated to any of the
Companies by Sundial pursuant to this Agreement) and any Person (other than a
Fleming Noteholder, Sundial, the Advisor, Wilhelmsen or Sundt) which is,
directly or indirectly, the beneficial owner (by itself or as part of any group)
of more than five percent (5%) of any class of any equity security thereof
(within the meaning of the Securities Exchange Act), and, if such beneficial
owner is a partnership, any general or limited partner thereof, or if such
beneficial owner is a corporation, any Person controlling, controlled by or
under common control with such beneficial owner, or any officer or director of
such beneficial owner or of any corporation occupying any such control
relationship, (ii) if such Person is a partnership, any general or limited
partner thereof, and (iii) any other Person which, directly or indirectly,
controls or is controlled by or is under common control with such Person. For
purposes of this definition, "control" (including the correlative terms
"controlling", "controlled by" and "under common control with"), with respect to
any Person, shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise.
The holding of securities, Warrants (or of shares of Common Stock obtained upon
conversion of Exchange Notes or the exercise of Warrants, and the rights under
any Fleming Documents, Transaction Document, or any agreement contemplated by
any thereof (or the exercise of any such rights, including, without limitation,
the nomination of a director to the Board (or executive committee) of NWP Corp.
or any Subsidiary or the sending of an Observer to any Board (or executive
committee) meetings of NWP Corp. or any Subsidiary), shall not cause any such
holder or Person exercising such rights to be deemed to be an "Affiliate" of NWP
Corp. or of any Subsidiary.
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"AGREEMENT" shall mean this Agreement as executed and delivered (together with
the exhibits and schedules hereto) and as from time to time assigned,
supplemented or amended or as the terms hereof may be waived.
"AMENDED CHARGE" shall have the meaning set forth in 2(f) hereof.
"AMENDED GUARANTEE" shall have the meaning set forth in Section 2(e) hereof.
"AMENDED SUPPORT AND PLEDGE AGREEMENT" shall have the meaning set forth in
Section 2(d) hereof.
"AMENDED WOLVERINE MORTGAGES" and "AMENDED WOLVERINE MORTGAGE" shall have the
meaning set forth in Section 2(c) hereof.
"AMENDED WOLVERINE NOTE" shall have the meaning set forth in Section 2(b)
hereof.
"BNM" shall have the meaning set forth in the definition of "REIL Shareholders
Agreement" contained in this Section 1(a).
"BUSINESS DAY" and "BUSINESS DAYS" means any day, other than a Saturday, Sunday
or legal holiday, on which banks in the states of Connecticut or New York are
open for business.
"CAPITALIZED LEASES" means any lease to which NWP Corp. or a Subsidiary is party
as lessee, or by which it is bound, under which it leases any property (real,
personal or mixed) from any lessor other than NWP Corp. or a Subsidiary, and
which either is required to be capitalized in accordance with GAAP consistently
applied, or, even if not so required to be capitalized, shall have (or have
had), at the time first entered into, an initial term of more than three (3)
years (including leases of shorter duration which are or were extendible to a
total term of more than three (3) years at the option of the lessor). The value
of Capitalized Leases, as of the time of any determination thereof, shall mean
the sum of the then present values, determined as hereinafter provided, of
future obligations of lessees under then existing Capitalized Leases. To compute
the value of any Capitalized Lease, the following methods shall be used, as
applicable:
(i) values of leases required to be capitalized in
accordance with GAAP shall be computed in accordance with GAAP;
and
(ii) values of other leases (and values of
contracts or other items which this Agreement provides are to be
valued as if they were Capitalized Leases) shall be computed by
discounting, to the date of determination, at an assumed interest
rate of eight percent (8%) per annum, the minimum amount of
future rental payments that will be due under the related
documentation, including rental payments that may be due during
extensions which are at the other party's option, but excluding
any amounts in respect of insurance on,
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taxes on and/or maintenance of the properties subject to such
leases (provided that such amounts are owed and paid only to the
extent actually incurred).
"CATON MOOR" shall mean New World Power (Caton Moor) Limited, a company
incorporated under the laws of England and Wales.
"CATON MOOR COLLATERAL" shall mean (i) all of the Caton Moor Shares, all of
which are owned beneficially and of record by NWP Ltd., (ii) all assets and
proceeds of all assets of Caton Moor, (iii) all proceeds of the Caton Moor
Shares, and (iv) all other monies, securities or other property at any time and
from time to time receivable or otherwise distributed in respect of, or in
exchange for, or in liquidation of, any of the Caton Moor Shares, subject only
to the prior rights of Hambros Bank in respect of the foregoing.
"CATON MOOR SHARES" shall mean all of the issued and outstanding share capital
of Caton Moor.
"CHANGE OF CONTROL EVENT" means the occurrence of any of the following events:
(a) any consolidation of NWP Corp. with, or merger of NWP Corp. into,
any other Person, any merger of another Person into NWP Corp.,
any sale of stock of NWP Corp. or any other business combination
or transaction involving NWP Corp. which results in the holders
of NWP Corp.'s stock immediately prior to giving effect to such
transaction owning shares of capital stock of the surviving
Person in such transaction representing(x) fifty percent (50%) or
less of the total voting power of all shares of capital stock of
such surviving Person entitled to vote generally in the election
of directors or (y) fifty percent (50%) or less of the total
value of all capital stock of such surviving Person; or
(b) NWP Corp. proceeds to acquire its common stock (or undertakes a
corporate reorganization or recapitalization or a consolidation
or merger or other action) if the effect of such acquisition (or
other action) would be (i) to reduce substantially or to
eliminate any public market for the shares of NWP Corp.'s common
stock, (ii) to remove NWP Corp. from registration with the
Commission under the Securities Exchange Act, (iii) to require
NWP Corp. to make a filing under Section 13(e) of the Securities
Exchange Act or (iv) to cause a delisting of NWP Corp.'s common
stock from the NASDAQ Stock Market (unless such stock is delisted
as a result of being listed on a national securities exchange) or
to cause a delisting of NWP Corp.'s common stock from a national
securities exchange; or
(c) the sale, lease, transfer or other disposition of any of the
Collateral, for less than the minimum prices set forth on
SCHEDULE 3, without the prior written approval of Sundial, or the
sale, lease, transfer or other disposition of all or
substantially all of the consolidated assets of NWP Corp. and its
Subsidiaries in
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a single transaction or a series of related transactions (other
than the sale of Photocomm Inc. or the shares thereof owned by
NWP Corp. or the sale of assets required by the Fleming
Documents) without the prior written approval of Sundial.
(d) at any time, a majority of the members of the Board of Directors
of NWP Corp. are persons other than persons (A) each of whom was
both (i) nominated as a director for his or her then current term
by NWP Corp.'s Board of Directors and was recommended by the
Board to NWP Corp.'s shareholders for election as a member of the
Board and (ii) a member of the Board for the term immediately
prior to his or her then current term as a member of the Board
(except that a person chosen by the Board as a successor to a
director who died in office or resigned from the Board because of
a disability, shall be deemed to have satisfied this clause
(ii)), (B) who were nominated to the Board by Sundial, (C) who
may in the future be nominated to the Board by or on behalf of
any Fleming Noteholder, or (D) who are such other persons as
shall be acceptable to Sundial; or
(e) the commencement by NWP Corp. or either of the other Companies of
a voluntary case under the United States federal bankruptcy laws
or any other applicable federal or state bankruptcy, insolvency
or similar law of any jurisdiction, including, in the case of NWP
Ltd. the law of England and Wales; the consent by NWP Corp. or
either of the other Companies to the entry of an order for relief
in an involuntary case under such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of NWP Corp. or either of the other
Companies or of any substantial part of its property; any
assignment by NWP Corp. or either of the other Companies for the
benefit of its creditors; any admission by NWP Corp. or either of
the other Companies in writing of its inability to pay its debts
generally as they become due; the entry of a decree or order for
relief in respect of NWP Corp. or either of the other Companies
by a court having jurisdiction in the premises in an involuntary
case under United States Federal bankruptcy laws or any other
applicable federal or state bankruptcy, insolvency or similar law
of any jurisdiction, including, in the case of NWP Ltd. the law
of England and Wales appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of
NWP Corp. or either of the other Companies or of any substantial
part of its property, or ordering the winding up or liquidation
of its affairs, and on account of any such event NWP Corp. or
either of the other Companies shall liquidate, dissolve or wind
up; or the liquidation, dissolution or winding up of NWP Corp. or
either of the other Companies under any other circumstances; or
(f) if for any reason Mr. George Petrenko ceases to be the chief
executive officer of any of the Companies and is not replaced
within 30 calendar days by a chief
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executive officer reasonably acceptable to Sundial or by a Person
who is a member of the Turnaround Management Association Inc. who
has successfully completed The Association of Certified
Turnaround Professionals certification program;
"CHARGE" shall have the meaning set forth in subdivision (vi) of the first
recital hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations and interpretations promulgated thereunder.
"COLLATERAL" shall mean the 50% interest of Sundial in the U.K. Windfarm
Collateral and, the NWP Ltd. Collateral, and 100% of any and all other security
interests or rights in property created in favor of or granted to Sundial by, in
accordance with, under, or pursuant to, the Transaction Documents.
"COMMISSION" shall mean the Securities and Exchange Commission of the United
States.
"COMMON STOCK" shall have the meaning assigned thereto in the Registration
Rights Agreement.
"COMPANY" and "COMPANIES" shall have the meanings set forth in the second
recital hereof.
"CONDOR AGREEMENT" shall mean that certain Consulting Agreement dated as of
January 1, 1996 as amended by Amendment 1 thereto by and between Condor
Management Consultants and NWP Corp. as executed and delivered and in effect on
the date of execution and delivery hereof as the same may be amended or
supplemented hereafter with the consent of Sundial.
"CONSENT OF NOTEHOLDERS" shall mean that certain consent dated as of the date
hereof from the of the Fleming Noteholders constituting not less than the
Fleming Majority Noteholders in respect of this Agreement and the other
Transaction Documents set forth in Amendment No. 3 to the Note and Purchase
Agreement constituting a portion of the Fleming Documents.
"DYFFRYN BRODYN" shall mean New World Power Company (Dyffryn Brodyn) Limited, a
company incorporated under the laws of England and Wales.
"DYFFRYN BRODYN COLLATERAL" shall mean (i) all of the Dyffryn Brodyn Shares, all
of which are owned beneficially and of record by NWP Ltd., (ii)all assets and
proceeds of all assets of Dyffryn Brodyn, (iii) all proceeds of the Dyffryn
Brodyn Shares and (iv) all other monies, securities or other property at any
time and from time to time receivable or otherwise distributed in respect of, or
in exchange for, or in liquidation of, any of the Dyffryn Brodyn Shares, subject
only to the prior rights of Hambros Bank in respect of the foregoing.
"DYFFRYN BRODYN SHARES" shall mean all of the issued and outstanding share
capital of Dyffryn Brodyn.
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"ELSAMPROJEKT" shall have the meaning set forth in the definition of "REIL
Shareholders Agreement" contained in this Section 1(a).
"ENVIRONMENTAL LAWS" shall mean all current and future, federal, state, local,
foreign, civil and criminal laws, statutes, ordinances, orders, codes,
Environmental Permits, rules, policies, and regulations and common law relating
to the protection of the environment and human health or relating to the
handling, use, generation, treatment, storage, transportation or disposal of
Hazardous Materials, of any Governmental Authority or quasi Governmental
Authority having jurisdiction over the Companies, their Subsidiaries, or their
respective operations, including but not limited to the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. ss. 6901 et seq.; the Toxic Substances
Control Act, 15 U.S.C. ss. 2601 et seq.; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et sec.;
the Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; the Clean
Air Act, 42 U.S.C. ss. 7401 et seq.; the Hazardous Materials Transportation Act,
49 U.S.C. ss. 1801 et seq.; The Occupational Safety and Health Act, 29 U.S.C.
ss. 651; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ss.
136y et seq.; and the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq., all
as may be amended or superseded from time to time.
"ENVIRONMENTAL LIEN" shall mean any Lien created by or as a consequence of or
pursuant to any Environmental Law.
"ENVIRONMENTAL PERMITS" shall mean all permits, licenses, approvals,
authorizations or consents required by any Governmental Authority under any
applicable Environmental Law and includes any and all orders, consent orders or
binding agreements issued or entered into by a Governmental Authority under any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute.
"ERISA AFFILIATE" means each "person" (as defined in Section 3(9) of ERISA)
which is under "common control" with NWP Corp. or any of its Subsidiaries
(within the meaning of Section 414(b), (c), (m) or (o) of the Code).
"ERISA EVENT" shall mean, with respect to any Person, (a) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan of such Person or any of its ERISA Affiliates unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; (b) the
provision by the administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan pursuant to Section
4041(a)(2) of ERISA with respect to a termination described in Section
4041(c)(2) of ERISA (including any such notice with respect to a plan amendment
referred to in Section 4041(e) of ERISA; (c) the cessation of operations at a
facility of such Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such Person or any
of its ERISA Affiliates from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section
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4001(a)(2) of ERISA; (e) failure by such Person or any of its Affiliates to make
a payment to a Plan required under Section 302(f)(1)(A) and (B) of ERISA; (f)
the adoption of an amendment to a Plan of such Person or any of its ERISA
Affiliates requiring the provision of security to such Plan, pursuant to Section
307 of ERISA; or (g) the institution by the PBGC of proceedings to terminate a
Plan of such Person or any of its ERISA Affiliates, pursuant to Section 4042 of
ERISA.
"ESCROW AGENT" shall have the meaning set forth in subdivision (vi) of the first
recital hereof.
"EVENTS OF DEFAULT" shall have the meaning set forth in Section 19 hereof.
"EXCHANGE NOTE" shall have the meaning set forth in the first sentence of
Section 8(a) hereof.
"EXCHANGE NOTE CONVERSION PRICE" shall have the meaning set forth in Section
8(c)(ii) hereof.
"EXCHANGE NOTE MARKET PRICE" shall have the meaning set forth in the paragraph
second succeeding Section 8(c)(ii) hereof.
"EXCHANGE NOTE PREPAYMENt" shall mean the rights of NWP Corp., to prepay the
Exchange Notes upon the occurrence of certain events described in Section 9
hereof.
"EXCHANGE OPTION" shall have the meaning set forth in the first sentence of
Section 8(a) hereof.
"EXISTING LIENS" shall have the meaning set forth in subdivision (ii) of Section
6(a) hereof.
"FEDERAL BANKRUPTCY CODE" shall mean the United States Bankruptcy Code, 11
U.S.C. ss.ss.101- 1330, as the same may be amended or superseded from time to
time.
"FLEMING DOCUMENTS" shall mean the Note and Warrant Purchase Agreement dated as
of August 15, 1995 as amended by Amendments Numbered One, Two and 3 thereto by
and among NWP Corp. and the Fleming Noteholders, the notes (referred to
therein), the Warrants (referred to therein), the Pledge Agreement and the
Escrow Agreement (each referred to therein), as amended and in effect on the
date of the execution and delivery of this Agreement and as the same may be
further amended, modified, supplemented or restated with the consent of Sundial
but not otherwise.
"FLEMING MAJORITY NOTEHOLDERS" shall mean the holder or holders, at the time, of
at least 65% of the principal amount of the notes then outstanding under the
Fleming Documents.
"FLEMING NOTEHOLDERS" shall mean the holder or holders, at the time, of the
principal amount of the notes then outstanding under the Fleming Documents.
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"FLEMING PURCHASE AGREEMENT" shall mean the Note and Warrant Purchase Agreement
as amended by Amendments Numbered One, Two and 3 thereto included within the
definition of Fleming Documents.
"FOUR BURROWS" shall mean New World Power Company (Four Burrows) Limited, a
company incorporated under the laws and England and Wales.
"FOUR BURROWS COLLATERAL" shall mean (i) all of the Four Burrows Shares, all of
which is owned beneficially and of record by NWP Ltd., (ii) all assets and
proceeds of all assets of Four Burrows; (iii) all proceeds of the Four Burrows
Shares, and (iv) all other monies, securities or other property at any time and
from time to time receivable or otherwise distributed in respect of, or in
exchange for, or in liquidation of, any of the Four Burrows Shares, subject only
to the prior rights of Hambros Bank in respect of the foregoing.
"FOUR BURROWS SHARES" shall mean all of the issued and outstanding share capital
of Four Burrows.
"GAAP" shall mean generally accepted accounting principles as in effect in the
United States, consistently applied.
"GLASS ASSOCIATES AGREEMENT" shall mean those certain Agreements engaging the
services of Glass & Associates, Inc. as Interim Manager dated February 7 and
April 18, 1996 by and between Glass & Associates, Inc. and NWP Corp. as executed
and delivered and as in effect on the date of execution and delivery hereof and
as the same may be amended or supplemented with the consent of Sundial.
"GPS" shall have the meaning set forth in subdivision (ii) of the first recital
hereof.
"guarantee" means (i) any guarantee or endorsement of the payment or performance
of, or any contingent obligation in respect of, any Indebtedness or other
obligation of any other Person, (ii) any other arrangement whereby credit is
extended to one obligor (directly or indirectly) on the basis of any promise or
undertaking of another Person (a) to pay the Indebtedness of such obligor, (b)
to purchase an obligation owed by such obligor, (c) to purchase or lease assets
(or to provide funds, goods or services) under circumstances that would enable
such obligor to discharge one or more of its obligations or (d) to maintain the
capital, working capital, solvency or general financial condition of such
obligor, in each case whether or not such arrangement is disclosed in the
balance sheet of such other Person or is referred to in a footnote thereto and
(iii) any liability as a general partner of a partnership in respect of
Indebtedness or other obligations of such partnership; PROVIDED, HOWEVER, that
the term "guarantee" shall not include (1) endorsements for collection or
deposit in the ordinary course of business or (2) obligations of NWP Corp. or
its Subsidiaries which would constitute guarantees solely by virtue of the
continuing liability of a Person which has sold assets subject to liabilities
for the liabilities which were assumed by the Person acquiring the assets,
unless such liability is required to be carried on the consolidated balance
sheet of NWP Corp.
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The amount of any guarantee and the amount of Indebtedness or of Investment
resulting from such guarantee shall be the maximum amount of the guarantor's
potential obligation in respect of such guarantee.
"GUARANTEE" shall have the meaning set forth in subdivision (v) of the first
recital hereof.
"GOVERNMENTAL AUTHORITY" means any federal, state, or local governmental agency
or authority (including any regulatory authority) of any jurisdiction having
jurisdiction over NWP Corp. or any of its Subsidiaries or any of its respective
assets, businesses or operations.
"HAMBROS BANK" shall mean Hambros Bank P.L.C., a company incorporated under the
laws of England and Wales or any Subsidiary thereof.
"HAMBROS DOCUMENTS" shall mean all of the documentation evidencing or relating
in any way to the financing of the Caton Moor, Dyffryn Brodyn and Four Burrows
wind farms.
"HAZARDOUS MATERIALS" means any petroleum, petroleum hydrocarbons, petroleum
waste or petroleum products, underground storage tanks, asbestos or
asbestos-containing materials, pesticides, lead and lead-containing materials,
urea formaldehyde insulation and polychlorinated or polybrominated biphenyls
(PCBs and PPBs), ionizing and non-ionizing radiation including radon and
electromagnetic frequency radiation; and any chemicals, materials, substances or
wastes in any amount or concentration which are now or hereafter "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants"
or words of similar import, under any Environmental Law.
"INDEBTEDNESS" of any Person means, without duplication, as of any date as of
which the amount thereof is to be determined, (i) all obligations of such Person
to repay money borrowed (including, without limitation, all notes payable and
drafts accepted representing extensions of credit, all obligations under letters
of credit, all obligations evidenced by bonds, debentures, notes or other
similar instruments and all obligations upon which interest charges are
customarily paid), (ii) all Capitalized Leases in respect of which such Person
is liable as lessee or as the guarantor of the lessee, (iii) all monetary
obligations which are secured by any Lien existing on property owned by such
Person whether or not the obligations secured thereby have been incurred or
assumed by such Person, (iv) all conditional sales contracts and similar title
retention debt instruments under which such Person is obligated to make
payments, (v) with respect to NWP Corp. and its Subsidiaries, all preferred
stock of NWP Corp. or any Subsidiary held by any Person other than NWP Corp. or
another Subsidiary, which preferred stock either (A) has a fixed maturity or
redemption or repurchase date on or before July 31, 2001 with respect to such
preferred stock, (B) provides for a dividend rate that can be adjusted or reset
through an auction or remarketing method or by a remarketing agent or
underwriter on or before July 31, 2001 or (C) is subject to redemption or
repurchase (in whole or in part) by NWP Corp. or any Subsidiary either (I) at
the option of the holder thereof (whether or not after a specified date or after
the happening of certain events or
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conditions), if such option could be exercisable on or before July 31, 2001 or
(II) automatically upon the happening of specified events or conditions, if such
events or conditions could happen on or before July 31, 2001, (vi) all
guarantees by such Person and (vii) all contractual obligations (whether
absolute or contingent) of such Person to repurchase goods sold or distributed.
"Indebtedness" shall not include, however, (1) Indebtedness of NWP Corp. to any
of its wholly-owned Subsidiaries or Indebtedness of any wholly-owned Subsidiary
to NWP Corp. or to another wholly-owned Subsidiary, and (2) any unfunded
obligations in any employee pension benefit plan (as defined in ERISA) of NWP
Corp. or of any Subsidiary. For purposes of this Agreement, the value of
Indebtedness at any time shall be determined as follows with respect to
Indebtedness under each of the foregoing respective categories in this
definition: (a) with respect to the preceding clause (i), the value of such
Indebtedness shall be the then principal amount of, any then accrued interest on
and (without duplication) any amounts then due, with respect to such
Indebtedness; (b) with respect to the preceding clause (ii), the value of such
Indebtedness shall be determined as provided in the definition herein of
"Capitalized Leases"; (c) with respect to the preceding clause (iii), the value
of such Indebtedness shall be the then principal amount of, any then accrued
interest on and (without duplication) any amounts then due, with respect to such
secured monetary obligations; (d) with respect to the preceding clause (iv), the
value of such contracts and instruments shall be calculated as if such contracts
and instruments were valued as Capitalized Leases under clause (ii) of the
definition herein of Capitalized Leases; (e) with respect to the preceding
clause (v), the value of such preferred stock shall be equal to, at the time of
determination thereof, the maximum aggregate amount which would be payable to
the holders of such shares of preferred stock upon any maturity, redemption or
repurchase; (f) with respect to the preceding clause (vi), the value of such
guarantees shall be determined as provided in the last sentence of the
definition herein of "guarantee"; and (g) with respect to the preceding clause
(vii), the value of such repurchase obligations at any time shall be the maximum
amount which would be payable if all then outstanding potential repurchase
obligations became due.
"INTERCREDITOR AGREEMENT" shall mean that certain agreement dated as of the date
of execution and delivery hereof among NWP Corp., Robert Fleming & Co. Ltd. as
agent for the Fleming Noteholders and Sundial concerning, among other things,
the joint administration of the U.K. Windfarm Collateral and the NWP Ltd. Share
Collateral.
"INVESTMENT" means, with respect to any Person, (i) any loan, advance or
extension of credit by such Person to, and any contributions to the capital of,
any other Person, (ii) any guaranty by such Person, (iii) any interest in any
capital stock or other Securities of any other Person, (iv) any transfer or sale
of property of such Person to any other Person other than upon full payment, in
cash, or not less than the agreed sale price or the fair value of such property,
whichever is higher, (v) any acquisition by such other Person or the assets
comprising such business or such part thereof and (vi) any commitment or option
to make an Investment if, in the case of an option, the consideration therefor
exceeds $10,000, and any of the foregoing under clauses (i) through (vi) shall
be considered an Investment whether such Investment is acquired by purchase,
exchange, merger or any other method; PROVIDED, that the term
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"Investment" (1) shall not include an Investment in NWP Corp. or in a
wholly-owned Subsidiary of NWP Corp. (2) shall not include current trade and
customer accounts receivable and allowances, provided they relate to goods or
services furnished in the ordinary course of business and are given in
accordance with the customary practices of NWP Corp. or a Subsidiary, (3) shall
not include temporary investments of excess cash of NWP Corp. or of any
Subsidiary in any of the following: (A) investment grade obligations maturing
within one year of their issuance which as to principal and interest constitute
direct obligations of, or obligations guaranteed by, the United States of
America, (B) negotiable certificates of deposit of banks or trust companies
which are organized under the laws of the United States of America or any state
thereof and which have capital and surplus of at least $500,000,000, (C)
commercial paper which is rated not less than prime-one or A-1 or their
equivalents by Moody's Investor Service, Inc. or Standard & Poor's Corporation
or their successors, (D) any repurchase agreement secured by any one or more of
the foregoing and (E) money market funds primarily investing in any of the
foregoing securities and sponsored by or affiliated with nationally recognized
brokerage or investment advisory firms, and (4) shall not include Investments of
NWP Corp. or any Subsidiary existing on March 1, 1996.
"KUHNS EMPLOYMENT AGREEMENT" shall mean that certain Employment Agreement dated
as of August 1, 1995 by and between Mr. John D. Kuhns and NWP Corp. as amended
by Amendments Nos. 1 and 2 thereto as executed and delivered and in effect on
the date of execution and delivery hereof and as the same may be further amended
with the prior written consent of Sundial.
"LETTER AGREEMENT" shall have the meaning set forth in subdivision (ii) of the
first recital hereof.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security interest of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same effect as any of the foregoing,
any assignment or other conveyance of any right to receive income and any
assignment of receivables with recourse against the assignor), any filing of a
financing statement as debtor under the Uniform Commercial Code of any
jurisdiction in the United States or of any similar statute of any other
jurisdiction and any agreement to give or make any of the foregoing.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the
business, condition (financial or otherwise), operations or properties of any of
the Companies or any Material Subsidiary of any thereof, (b) the rights and
remedies of Sundial under the Transaction Documents or (c) the ability of any of
the Companies to perform their respective Obligations under the Transaction
Documents.
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"MATERIAL SUBSIDIARY" shall mean any of NWP Ltd. or any of its Subsidiaries,
Wolverine or any of its Subsidiaries, REIL or any of its Subsidiaries, and
"MATERIAL SUBSIDIARIES" shall mean all such Companies, other companies, and the
aforesaid Subsidiaries, collectively.
"MAXIMUM CONVERSION PRICE" shall have the meaning set forth in the paragraph
immediately succeeding Section 8(c)(ii) hereof.
"MINIMUM CONVERSION PRICE" shall have the meaning set forth in the paragraph
immediately succeeding Section 8(c)(ii) hereof.
"MULTIEMPLOYER PLAN" shall mean any multiemployer plan (within the meaning of
Section 3(37) of ERISA) to which either NWP Corp., any Subsidiary, or any ERISA
Affiliate has an obligation to contribute.
"NASDAQ" shall mean The National Association of Securities Dealers Inc.
"NASDAQ STOCK MARKET" shall mean the NASDAQ Automated Quotation System.
"net proceeds" shall mean the gross cash consideration received by any of the
Companies from the sale of the relevant asset less (i) reasonable legal and
accounting fees and disbursements, (ii) reasonable investment banking and
consultant fees (other than Consultant Fees payable to Affiliated Persons),
(iii) transfer and capital gains taxes, but excluding sales taxes, (iv) the
payment of any principal and/or interest on Indebtedness secured by such asset,
(v) amounts payable to Affiliated Persons but only to the extent of the
commissions referred to in Section 5(n), and (vi) any other closing costs not
payable to Affiliated Persons reasonably incurred by any such Company in
connection with such sale.
"NEW NWP LTD. NOTE" shall have the meaning set forth in Section 2(a) hereof.
"NEW WARRANTS" shall have the meaning set forth in the last clause of the fourth
recital hereof.
"NORDTANK" shall have the meaning set forth in the definition of "REIL
Shareholders Agreement" contained in this Section 1(a).
"NORDTANK AF" shall have the meaning set forth in the definition of "REIL
Shareholders Agreement" contained in this Section 1(a).
"NOTE PREPAYMENT EVENTS" shall have the meaning set forth in Section 7 of this
Agreement.
"NOTES" shall mean the New NWP Ltd. Note and the Amended Wolverine Note as set
forth in the first sentence of Section 8(a) hereof.
"NWP LTD. COLLATERAL" shall mean (i) the NWP Ltd. Shares all of which are owned
beneficially and of record by NWP Corp., (ii) all proceeds of the NWP Ltd.
Shares and (iii)
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all other monies, securities or other property at any time and from time to time
receivable or otherwise distributed in respect of, or in exchange for, or in
liquidation of, any of the NWP Ltd. Shares, subject only to the prior rights of
Hambros Bank.
"NWP LTD. NOTE" shall have the meaning set forth in subdivision (i) of the first
recital hereof.
"NWP CORP." shall have the meaning set forth in the first paragraph of this
Agreement.
"NWP LTD." shall have the meaning set forth in the first paragraph of this
Agreement.
"NWP LTD. CHARGE" shall have the meaning set forth in Section 2(g).
"NWP LTD. SHARES" shall mean all of the issued and outstanding share capital of
NWP Ltd. constituting 1000 ordinary shares of (pound)1 each.
"OBLIGATIONS" shall mean each and every obligation, duty, agreement, and
undertaking of the Companies or any of them under, in respect of, or pursuant
to, the Transaction Documents, and "OBLIGATION" shall mean any of them.
"OBSERVER" shall have the meaning set forth in Section 5(k) hereof.
"PAYMENT DEFAULT" shall have the meaning set forth in Section 12(b) hereof.
"PBGC" shall mean the United States Pension Benefit Guaranty Corporation.
"PERMITTED LIENS" means (i) Liens for taxes not yet due or Liens for taxes being
contested in good faith and by appropriate proceedings, for which adequate
reserves have been established, and provided that any proceedings commenced for
the enforcement of such Liens have been duly suspended, (ii) Liens in respect of
property or assets of NWP Corp. or any Subsidiary imposed by law (such as
carriers', warehousemen's, landlords' and mechanics' liens), which in each case
(x) were incurred in the ordinary course of business and were not incurred in
connection with the borrowing of money, (y) do not in the aggregate materially
detract from the value of such property or assets or materially impair the use
thereof in the operation of the business of NWP Corp. or any Subsidiary and (z)
either relate to sums not yet delinquent or are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to such Lien, provided that
adequate reserves have been established for any such Liens being contested,
(iii) pledges or deposits (other than any Lien imposed by ERISA) in the ordinary
course of business in connection with worker's compensation, unemployment
insurance and other social security legislation, (iv) easements, rights-of-way
and minor defects or irregularities in title not interfering in any material
respect with the ordinary conduct of the business of NWP Corp. or any of its
Subsidiaries (v) Liens securing the performance of bids, tenders, contracts,
statutory obligations, surety, customs and appeal bonds and other obligations of
like nature, incurred as an incident to and in the ordinary course of business
and not to secure the
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repayment of borrowed money, (vi) Liens in favor of the Fleming Noteholders
under the Fleming Documents in existence on the date of execution and delivery
hereof or contemplated to be created in favor of the Fleming Noteholders by this
Agreement, (vii) Liens in favor of Sundial in existence on the date of execution
and delivery hereof or contemplated to be created in favor of Sundial by this
Agreement and the other Transaction Documents, (viii) Liens created after the
execution and delivery hereof with the joint approval of Sundial and the Fleming
Majority Noteholders, (ix) Liens created under or pursuant to the Hambros
Documents, and (x) Existing Liens.
"PERSON" or PERSON" means any individual, corporation, limited liability
company, partnership, firm, association, joint venture, trust, unincorporated
organization, government, governmental body, agency, political subdivision or
other entity, howsoever denominated, whether formally or informally existing
under the laws of any jurisdiction.
"PLAN" shall mean any employee benefit plan (within the meaning of Section 3(3)
of ERISA) maintained or contributed to by NWP Corp., any Subsidiary, or any
ERISA Affiliate, other than a Multiemployer Plan.
"PREPAYMENT LEVEL OF PUBLIC TRADING" shall have the meaning set forth in Section
9 hereof.
"PURCHASE MONEY LIENS" shall mean any Lien on property, real or personal,
acquired or constructed by NWP Corp. or any Subsidiary of NWP Corp. after March
1, 1996:
(i) to secure the purchase price of such property;
(ii) that was existing on such property at the time of
acquisition thereof by NWP Corp. or such Subsidiary and assumed in
connection with such acquisition;
(iii) to secure Indebtedness otherwise incurred to finance the
acquisition or construction of such property (including, without
limitation, Indebtedness incurred to finance the cost of acquisition or
construction of such property within 24 months after such acquisition or
the completion of such construction); or
(iv) the secure any Indebtedness incurred in connection with any
extension, refunding or refinancing of Indebtedness (whether or not
secured and including Indebtedness under this Agreement) incurred,
maintained or assumed in connection with, or otherwise related to, the
acquisition or construction of such property;
PROVIDED in each case that (1) such Liens do not extend to or cover or otherwise
encumber any property other than property acquired or constructed by NWP Corp.
and its Subsidiaries after March 1, 1996, and (2) such Liens do not cover
current assets of NWP Corp. or any of its Subsidiaries other than current assets
that relate solely to other property subject to such Lien.
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"REGISTERED NUMBER" shall have the meaning set forth in Section 8(c) hereof.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement between
NWP Corp. and Sundial as executed and delivered, substantially in the form of
EXHIBIT J hereto.
"REIL" shall have the meaning set forth in subdivision (vi) of the first recital
hereof.
"REIL CHARGED SHARES" shall have the meaning set forth in subdivision (vi) of
the first recital hereof.
"REIL SHAREHOLDERS AGREEMENT" shall mean that certain Shareholders Agreement
dated April 2, 1992 by and among Nordtank Holding A/S ("NORDTANK"), Elsamprojekt
A/S ("ELSAMPROJEK"), Bord na Mona ("BNM") and REIL, as amended by that certain
Deed of Adherence (referring therein to a "Shareholders Agreement the 2nd day of
March 1992" [sic] dated December 23, 1993 by and among REIL, Nordtank and
Nordtank af 1987 A/S ("NORDTANK AF"), as amended by that certain Deed of
Adherence and Supplemental Shareholders Agreement dated February 2, 1995 by and
among Nordtank af, NWP Ltd., Elsamproject, BNM and REIL.
"REPORTABLE EVENT" shall mean, with respect to any Single Employer Plan, an
event described in Section 4043(b) of ERISA, other than an event as to which the
notice requirement is waived under applicable PBGC regulations.
"RESTRICTED PERIOD" shall have the meaning set forth in Section 3 of this
Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to time,
and the rules, regulations and interpretations thereunder.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules, regulations and interpretations thereunder.
"SENIOR INDEBTEDNESS" shall have the meaning set forth in Section 17.
"SUBSIDIARY" and "SUBSIDIARIES" , with respect to any Person, means any
corporation, association or other entity of which 50% or more of the total
voting power of shares of stock or other equity interests entitled (without
regard to the occurrence of any contingency or any pledge of shares) to vote in
the election of directors, managers or trustees thereof is, at the time as of
which any determination is being made, owned or controlled, directly or
indirectly, by such Person or one or more of its Subsidiaries, or both. The term
"SUBSIDIARY" or "SUBSIDIARIES" when used herein without reference to any
particular Person, means a Subsidiary or Subsidiaries of NWP Corp.
Notwithstanding the foregoing, Photocomm, Inc. shall be considered a Subsidiary
of NWP Corp. without regard to the percentage of share ownership in NWP Corp.
therein.
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"SUNDIAL" shall have the meaning set forth in the first paragraph of this
Agreement.
"SUNDT" shall have the meaning set forth in the fourth recital hereof.
"SUPPORT AND PLEDGE AGREEMENT" shall have the meaning set forth in subdivision
(iv) of the first recital hereof.
"TAX" or "TAXES" means all federal, state, local or foreign net or gross income,
gross receipts, net proceeds, sales, use, AD VALOREM, value added, franchise,
bank shares, withholding, payroll, employment, excise, property, alternative or
add-on minimum, environmental or other taxes, assessments, duties, fees, levies
or other governmental charges of any nature whatsoever, whether disputed or not,
together with any interest, penalties, additions to tax or additional amounts
with respect thereto.
"TAXING AUTHORITY" means any governmental agency, board, bureau, body,
department or authority of any United States federal, state or local
jurisdiction, or any foreign jurisdiction, having or purporting to exercise
jurisdiction with respect to any Tax.
"TERMINATION EVENT" shall mean (a) a Reportable Event, (b) the withdrawal by NWP
Corp. or any ERISA Affiliate from a Single Employer Plan during a plan year in
which it was a substantial employer (within the meaning of Section 4001(a)(2) or
4062(e) of ERISA), (c) the termination of, or the filing of a notice of intent
to terminate, a Single Employer Plan under Section 4041(c) of ERISA, (d) the
institution of proceedings to terminate, or the appointment of a trustee with
respect to, a Single Employer Plan by the PBGC, (e) any other event or condition
which could constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Single
Employer Plan, or (f) the imposition of a Lien pursuant to Section 412 of the
Code or Section 302 of ERISA as to NWP Corp. or any ERISA Affiliate.
"TRANSACTION DOCUMENTS" shall mean this Agreement, the Amended Charge, the
Amended Guarantee, the Amended Support and Pledge Agreement, the Amended
Wolverine Mortgages, the Amended Wolverine Note, the New NWP Ltd. Note, the New
Warrants, the Registration Rights Agreement, and each and every certificate,
resolution, affidavit, document or other writing, entered into pursuant to or in
connection with the foregoing documents, including, without limitation, any and
all agreements or instruments relating to the U.K. Windfarm Collateral or the
NWP Ltd. Shares.
"U.K. WINDFARM COLLATERAL" shall mean the Dyffryn Brodyn Collateral, the Four
Burrows Collateral and the Caton Moor Collateral.
"UNENCUMBERED ASSETS" shall mean any and all assets of NWP Corp. and any of its
Subsidiaries which have not been charged or pledged to, or in respect of which
no security interest has been created in favor of, Sundial pursuant to the
Transaction Documents or the Fleming Noteholders pursuant to the Fleming
Documents and which are not subject to any
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other Existing Liens or which may in the future become free of Existing Liens;
and "UNENCUMBERED ASSET" shall mean any such asset.
"WARRANT TRANSFER AGENT" shall have the meaning set forth in the first sentence
of Section 3 hereof.
"WELFARE PLANS" shall have the meaning of welfare plans, as defined in Section
3(1) of ERISA.
"WILHELMSEN" shall have the meaning set forth in subdivision (v) of the fourth
recital hereof.
"WITHDRAWAL LIABILITY" shall have the meaning set forth in Part 1 of Subtitle E
of Title V of ERISA.
"WOLVERINE" shall have the meaning set forth in the first paragraph of this
Agreement.
"WOLVERINE MORTGAGES" shall have the meaning set forth in subdivision (iii) of
the first recital hereof.
"WOLVERINE NOTE" shall have the meaning set forth in subdivision (ii) of the
first recital hereof.
"WOLVERINE STOCK" shall have the meaning set forth in subdivision (iv) of the
first recital hereof.
(b) For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Agreement (or if used therein, to the
particular Note in which used) as a whole and not to any particular
Section or other subdivision;
(ii) all accounting terms not otherwise defined herein have the
meanings assigned to them by GAAP consistently applied (except as
otherwise expressly provided herein or except as otherwise required by
the Companies' auditors);
(iii) all computations provided for herein shall be made in
accordance with GAAP consistently applied (except as otherwise expressly
provided herein or except as otherwise required by the Companies'
auditors);
(iv) any uses of the masculine, feminine or neuter gender shall
also be deemed to include any other gender, as appropriate;
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(v) all references herein to actions by NWP Corp. or any
Subsidiary, such as "create", "sell", "transfer", "dispose of", etc.,
means such action, whether voluntary or involuntary, by operation of law
or otherwise;
(vi) the exhibits and schedules to this Agreement shall be deemed
a part of this Agreement;
(vii) each of the representations of the Companies contained in
Section 4 hereof is separate and is not limited, qualified or modified
by the existence, wording or satisfaction of any other representation of
any of the Companies in Section 4 or otherwise;
(viii) each of the covenants of the Companies contained in
Section 5 or Section 6 hereof or otherwise contained in any of the
Transaction Documents is separate and is not limited or satisfied by the
existence, wording or satisfaction of any other covenant of any of the
Companies in Section 5, in Section 6 or otherwise; and
(ix) all references herein (in covenants or otherwise) to any
action(s) which are to be taken (or which are prohibited from being
taken) by any Person, NWP Corp. or any Subsidiary shall apply to such
Person, NWP Corp. or such Subsidiary, as the case may be, whether such
action is taken directly or indirectly.
SECTION 2. AMENDMENT AND/OR EXCHANGE OF CERTAIN DOCUMENTS. Concurrently
with the execution and delivery hereof:
(a) Sundial shall exchange the NWP Ltd. Note for a new 0% Senior Secured
Note of NWP Ltd. dated April 1, 1996 maturing December 1, 1996 in the principal
amount of $579,851.13 (herein as executed and delivered called the "NEW NWP LTD.
NOTE") substantially in the form of EXHIBIT C annexed hereto and made a part
hereof;
(b) Wolverine shall execute and deliver to Sundial that certain Amended
and Restated Wolverine Power Corporation First Mortgage Note dated as of March
1, 1996 (herein as executed and delivered called the "AMENDED WOLVERINE NOTE")
substantially in the form of EXHIBIT D annexed hereto and made a part hereof
pursuant to which the Wolverine Note is amended and restated in full;
(c) Wolverine shall execute and deliver to Sundial those two certain
Amended Mortgage and Security Agreements dated as of March 1, 1996 (individually
as executed and delivered called an "AMENDED WOLVERINE MORTGAGE" and together
the "AMENDED WOLVERINE MORTGAGES") substantially in the form of EXHIBITS E-1 and
E-2, respectively, annexed hereto and made a part hereof pursuant to which each
of the Wolverine Mortgages is amended and concurrently therewith duly recorded
at the expense of Wolverine in the Office of the Registrar of Deeds of Gladwin
County and Midland Counties, Michigan, respectively.
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(d) NWP Corp. and Sundial shall execute an deliver that certain Amended
and Restated Support and Pledge Agreement dated as of March 1, 1996 (herein as
executed and delivered called the "AMENDED SUPPORT AND PLEDGE AGREEMENT")
substantially in the form of EXHIBIT F annexed hereto and made a part hereof
pursuant to which the Support and Pledge Agreement is amended in certain
respects and restated;
(e) NWP Ltd. shall execute and deliver to Sundial that certain Amended
and Restated Continuing Guarantee dated as of March 1, 1996 (herein as executed
and delivered called the "AMENDED GUARANTEE") substantially in the form of
EXHIBIT G annexed hereto and made a part hereof pursuant to which the Guarantee
is amended in certain respects and restated;
(f) NWP Ltd., Sundial and the Escrow Agent shall execute and deliver
that certain Amended and Restated Charge Over Shares dated as of March 1, 1996
(herein as executed and delivered called the "AMENDED CHARGE") substantially in
the form of EXHIBIT H annexed hereto and made a part hereof pursuant to which
the Charge is amended in certain respects and restated and NWP Ltd. shall cause
the Amended Charge to be duly and effectively registered with Companies House,
Cardiff, Wales not later than the twenty-first day following the date of
execution and delivery thereof;
(g) NWP Corp., Sundial and the Escrow Agent shall execute and deliver
that certain Charge Over Shares dated as of March 1, 1996 (herein as executed
and delivered called the "NWP LTD. CHARGE") substantially in the form of EXHIBIT
K annexed hereto and made a part hereof providing, among other things, for the
pledge by NWP Corp. to Sundial by delivery to the Escrow Agent of 500 ordinary
shares of 1(pound) each of NWP Ltd., constituting 50% of all of the issued and
outstanding shares of NWP Ltd.
(h) Subject to the satisfaction of each of the conditions precedent set
forth in this Agreement, Sundial hereby waive any and all defaults of which it
has actual knowledge and that may exist on the date hereof under and pursuant to
the NWP Ltd. Note, the Wolverine Note, and the Support and Pledge Agreement; and
(i) Sundial hereby consents to the execution, delivery and performance
of the Fleming Documents.
SECTION 3. WARRANT EXCHANGE. Concurrently with the execution and
delivery hereof, Sundial has surrendered or caused to be surrendered to Boston
EquiServe Shareholder Services, 45-02-016, P.O. Box 1865, Boston, Massachusetts
02105-1865, Attention: Mr. Stephen Plefka (617) 575-2388 as warrant transfer
agent ("WARRANT TRANSFER AGENT"), duly endorsed in blank, certificates
representing 259,000 $7.50 Warrants, 451,921 $8.00 Warrants and 369,000 $15.00
Warrants. NWP Corp. hereby unconditionally and irrevocably instructs the Warrant
Transfer Agent to issue the following number of New Warrants as follows:
(i) 85,911 New Warrants to Sundial in exchange for 250,000 $7.50
Warrants;
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(ii) 315,114 New Warrants to Sundial in exchange for 451,921
$8.00 Warrants;
(iii) 34,194 New Warrants to Sundial in exchange for 318,000
$15.00 Warrants.
(iv) 5,376 New Warrants to Sundt in exchange for 50,000 $15.00
Warrants;
(v) 3,093 New Warrants to Wilhelmsen in exchange for 9,000 $7.50
Warrants; and
(vi) 108 New Warrants to Wilhelmsen in exchange for 1,000 $15.00
Warrants;
aggregating 443,796 New Warrants. Such New Warrants shall be issued and
delivered within 10 calendar days following the later of (i) the date of
execution and delivery of this Agreement or (ii) the date on which there has
been delivered to NWP Corp. the old Warrants referred to in the first paragraph
of this Section 3, duly assigned in blank.
Each holder of a New Warrant by acceptance thereof agrees that it
will not sell or otherwise dispose of any New Warrants or shares of Common Stock
acquired upon exercise of any such New Warrants unless such New Warrants or
shares have been registered under the Securities Act and, to the extent
required, under any applicable state securities laws or pursuant to an
applicable exemption from such registration requirements. NWP Corp. may endorse
on all New Warrant certificates and share certificates evidencing shares of
Common Stock acquired upon exercise of any such New Warrants a legend stating or
referring to such transfer restrictions; PROVIDED, that no such legend shall be
endorsed on any such New Warrant certificates, or share certificates issued
after the termination of the Restricted Period, other than a legend on the New
Warrant certificates required by Rule 902(m)(1) under the Securities Act, unless
otherwise required by any applicable state securities law. For a period of forty
(40) days from the date of issuance of the New Warrants (the "RESTRICTED
PERIOD", the holder shall not engage in any "directed selling efforts" (as
defined in Regulation S) in respect of the New Warrants, if any, in or directed
toward the United States, or offer, sell or transfer the New Warrants, if any,
or any interest therein in the United States or to, or for the account or
benefit of, a U.S. person.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES. Each of the
Companies jointly and severally represents and warrants to Sundial as of the
date hereof, as of the date of execution and delivery of this Agreement, and as
of the date of execution and delivery of each of the Exhibits hereto to which
any of the Companies is a party, as follows:
(a) Each of the Companies and each Material Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of its
state or other jurisdiction of incorporation. Each of the Companies and each
Material Subsidiary is duly
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qualified, licensed (except as otherwise set forth in Schedule 4) and authorized
to do business and is in good standing in each jurisdiction in which it owns or
leases any property or in which the conduct of its business requires it so to
qualify or so to be licensed, except for such jurisdictions where the failure to
so qualify or so to be licensed would not have a Material Adverse Effect on the
assets, properties, liabilities, business, affairs, results of operations,
condition (financial or otherwise) or prospects of any Company or any Material
Subsidiary.
(b) Each of the Companies has all requisite power, authority (corporate
or other) and legal right to execute, deliver, enter into and consummate the
transactions contemplated by the Transaction Documents. The execution, delivery
and performance of the Transaction Documents have been duly authorized by all
required corporate and other actions. Each of the Companies has duly executed
and delivered the Transaction Documents to which it is a party. The Transaction
Documents constitute the legal, valid and binding obligations of the Companies
enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to the
rights of creditors generally. The shares of Common Stock when issued upon
exercise of the New Warrants or any of them or upon conversion of the Exchange
Notes or any of them will be duly authorized, validly issued, fully paid and
nonassessable. Each of the Companies, their principal officers, and their
directors have carefully reviewed, discussed and duly deliberated among each
other and with their respective counsel, and investment banker, with respect to,
the Transaction Documents and have duly determined that the entering into by the
Companies of the Transaction Documents, and the Companies joint and several
undertakings to perform the Obligations under the Transaction Documents are in
the mutual best interests of each of the Companies and their respective
shareholders, and that the agreements of Sundial contained therein are equitable
and constitute fair consideration for the undertakings and agreements of the
Companies under the Transaction Documents. Such determination has been made by
such officers and directors without economic duress or undue influence on the
part of Sundial, the Advisor, any Fleming Noteholders or representative or agent
thereof or any other party and in full realization of the fact that in all
respects such officers and directors have reached such determination of their
own free will with due regard for, and in fulfillment of, their fiduciary duties
as directors and officers of the Companies, and without compulsion of any sort.
In making such determination such officers and directors have, in particular,
concluded that the transactions contemplated by the Transaction Documents do not
unduly or inappropriately favor one class or group of shareholders or
Warrantholders of NWP Corp. or one class or group of creditors of the Companies
over another such class or group.
(c) The authorized capital stock of NWP Corp. consists of (A) 40,000,000
shares of Common Stock, par value $0.01 per share, and (B) 5,000,000 shares of
Preferred Stock, par value $0.01 per share. None of the shares of NWP Corp.'s
capital stock (i) was subject to preemptive rights when issued or (ii) provide
the holders thereof with any preemptive rights with respect to any issuances of
capital stock.
(d) Except as disclosed on SCHEDULE 1 hereof, there are no outstanding
options, warrants, subscriptions, rights, convertible securities or other
agreements or plans under which
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NWP Corp. may become obligated to issue, sell or transfer shares of its capital
stock or other securities.
(e) The execution, delivery and performance by the Companies of the
Transaction Documents does not and will not (i) violate or conflict with, with
or without the giving of notice or the passage of time or both, any provision of
(A) the certificate of incorporation or by-laws or memorandum or articles of
association of any of the Companies or (B) any law, rule, regulation or order of
any federal, state, county, municipal or other governmental authority, or any
judgment, writ, injunction, decree, award or other action of any court or
governmental authority or arbitrator(s), or any agreement, indenture or other
instrument applicable to the Companies or any of their assets, including,
without limitation, the Fleming Documents and the Hambros Documents, (ii) result
in the creation of any Lien upon any of the Companies' properties, assets or
revenues, except pursuant to the Transaction Documents, (iii) require the
consent, waiver, approval, order or authorization of, or declaration,
registration, qualification or filing with, any Person (whether or not a
governmental authority and including, without limitation, any shareholder
approval) other than the filing of the Amended Wolverine Mortgages with the
offices of the Registrar of Deeds for Gladwin, and Midland Counties, Michigan,
respectively, and other than the filing of the Amended Charge with Companies
House, Cardiff, Wales, and the consent of the Fleming Noteholders (which consent
has been duly given) or (iv) cause anti-dilution clauses of any outstanding
securities to become operative or give rise to any preemptive rights, including,
without limitation, pursuant to the Fleming Documents.
(f) There is no action, suit, proceeding, investigation or claim pending
or, to the knowledge of the Companies or the Subsidiaries, threatened in law,
equity or otherwise before any court, administrative agency or arbitrator which
either (i) questions the validity of the Transaction Documents or (ii) might
adversely affect the right, title or interest of Sundial in any of the
Transaction Documents or (iii) might result in a material adverse change in the
assets, properties, liabilities, business, affairs, results of operations, or
condition (financial or otherwise) of any of the Companies, except as otherwise
set forth in Schedule 4 annexed hereto and made a part hereof.
(g) A true and complete copy, certified to be such by the Companies, of
each of the Fleming Documents, the Hambros Documents, the Glass Associates
Agreement, the Kuhns Employment Agreement, the Condor Agreement and the REIL
Shareholders Agreement as in effect on the date of execution and delivery hereof
has heretofore been furnished by the Companies to Sundial or the Advisor.
SECTION 5. AFFIRMATIVE COVENANTS. So long as any of the Obligations
remain unpaid or undischarged (and thereafter, for a period of 3 calendar years
from the date the Obligations have been fully discharged, in the case of
subsections (f), (j) and (k), so long as Sundial and/or Sundt directly or
indirectly together beneficially own not less than 5% of the Common Stock of NWP
Corp. as determined for purposes of Section 13(d) of the Securities
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Exchange Act of 1934), the Companies, jointly and severally, will, or, will
cause each other to, unless Sundial shall otherwise consent in writing:
(a) COMPLIANCE WITH LAWS, ETC. Subject to the provisions of Section 5(e)
below, comply, and cause each of its Material Subsidiaries to comply, in all
material respects, with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, compliance with ERISA, the Securities
Act of 1933 and all Environmental Laws, except, in each case, any non-compliance
which would not have a Material Adverse Effect.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each of its
Material Subsidiaries to pay and discharge, before the same shall become
delinquent, all taxes, assessments, claims and governmental charges or levies
imposed upon it or upon its property, except to the extent that any failure to
do so would not have a Material Adverse Effect; PROVIDED, HOWEVER, that neither
the Companies nor any of their Material Subsidiaries shall be required to pay or
discharge any such tax, assessment, claim or charge that is being contested in
good faith and by proper proceedings and as to which appropriate reserves are
being maintained.
(c) MAINTENANCE OF INSURANCE. Maintain, and cause each of its Material
Subsidiaries to maintain, appropriate and adequate insurance with responsible
and reputable insurance companies or associations to the extent consistent with
prudent practices customary in their respective industries in such amounts,
covering such risks and with such deductibles, warranties and franchises as is
customary in the industries in which the Companies or such Material Subsidiaries
operate, a complete list and detailed description of all such insurance,
deductibles, warranties, franchises, insurance companies and associations and
their ratings (all of which shall be acceptable to Sundial) to be furnished to
the Advisor not later than June 15, 1996 together with an opinion of one or more
reputable independent insurance brokers (who may be brokers to the Companies) to
the effect that such coverages are adequate to cover the risks customarily
covered by reputable first class companies in similar industries, such list and
opinions to be furnished to the Advisor annually thereafter during the month of
May in each year beginning with the year 1997.
(d) PAYMENT OF WELFARE PLANS. Pay, and cause each of its Subsidiaries to
pay, the aggregate annualized cost (including, without limitation, the cost of
insurance premiums) with respect to post-retirement benefits under Welfare Plans
for which the Borrower and its Subsidiaries are liable.
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain, and
cause each of its Material Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises; PROVIDED, HOWEVER,
that neither the Companies nor such Material Subsidiary shall be required to
preserve any right or franchise (other than the corporate existence of the
Companies) when, in the good faith business judgment of the Companies, such
preservation or maintenance is neither necessary nor appropriate for the prudent
management of the business of the Companies or any Material Subsidiaries, it
being
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further understood that the Companies intend to restructure their overall
corporate organization by liquidating and dissolving certain Subsidiaries which
are not Material Subsidiaries or allowing the corporate charters of certain
Subsidiaries which are not Material Subsidiaries to lapse, and that in
connection therewith the Companies shall furnish the Advisor promptly with
information concerning such intended action and the reasons therefor.
(f) VISITATION RIGHTS AND OTHER INFORMATION. At any reasonable time or
times during normal business hours and upon reasonable prior notice (not in
excess of 3 calendar days) and from time to time, permit Sundial, the Advisor or
any of their agents or representatives to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of,
the Companies and any of their Subsidiaries, and to discuss the affairs,
finances and accounts of the Companies and any of their Subsidiaries with any of
their officers, directors or employees and with their independent certified
public accountants and forward to Sundial or the Advisor any and all documents,
financial and other information required to be furnished to any lender or
creditor by or with respect thereto by any of the Companies or their
Subsidiaries, including without limitation, such information as is required to
be furnished by them to any Fleming Noteholders or their representative or agent
thereof under the Fleming Documents or under the Hambros Documents and any and
all financial and other information received in respect of REIL, Caton Moor,
Dyffryn Brodyn and Four Burrows, and of all notices sent to or received from any
of the foregoing, all simultaneously with the furnishing as required of such
information or notices by the Companies or their Subsidiaries from others,
forthwith upon receipt thereof. No provision of this Subsection 5(m) shall
confer upon Sundial the right to require NWP Corp. or any of its Subsidiaries to
be audited, whether or not at the expense of NWP Corp. or any such Subsidiary,
other than by NWP Corp.'s regular auditors provided such regular auditors are a
firm of nationally recognized auditors or are otherwise acceptable to Sundial.
(g) KEEPING OF BOOKS. Keep, and cause each of its Material Subsidiaries
to keep, proper books and records of account as are necessary to prepare
consolidated financial statements in accordance with GAAP, in which full and
correct entries shall be made of all financial transactions and the assets and
business of the Companies and each of its Material Subsidiaries in accordance
with GAAP consistently applied (except as shall otherwise be required by the
Companies' auditors).
(h) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and cause
each of its Material Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(i) REPORTING REQUIREMENTS. Furnish to Sundial or the Advisor as set
forth below:
(i) To the Advisor, as soon as possible and in any event within
twenty four hours after any of the Companies or their Material Subsidiaries
obtains notice of the occurrence of each Event of Default and each default, a
statement of the chief accounting or
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chief financial officer of the Company or Companies or the Material Subsidiary
affected thereby setting forth details of such Event of Default or default and
the action which the Companies and/or such Material Subsidiaries have taken or
propose to take with respect thereto;
(ii) forthwith furnish to the Advisor (A) copies of all regular
and periodic financial and/or other reports which the Companies or their
Material Subsidiaries may from time to time make available to any of its public
or private security holders or note or bond holders and (B) copies of all
filings made with the SEC and a list of all filings with the SEC heretofore
required to be made and not yet made (whether or not an extension has been
granted in respect thereof);
(iii) to the Advisor promptly and in any event within 15 days
after the Companies or any ERISA Affiliate knows or should reasonably know that
any ERISA Event has occurred with respect to which the liability or potential
liability of the Companies or any of its ERISA Affiliates exceeds or could
reasonably be expected to exceed $50,000, a statement of a principal financial
officer of the Companies describing such ERISA Event and the action, if any,
which the Companies or such ERISA Affiliate proposes to take with respect
thereto;
(iv) to the Advisor promptly and in any event within 10 calendar
days after receipt thereof by the Companies or any ERISA Affiliate, copies of
each notice from the PBGC stating its intention to terminate any Plan or to have
a trustee appointed to administer any Plan where such action would have a
Material Adverse Affect;
(v) to the Advisor with respect to liabilities or potential
liabilities of the Companies or any of their ERISA Affiliates of $50,000 or
more, promptly and in any event within 10 business days after receipt thereof by
the Companies or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by the Companies or any ERISA Affiliate concerning
(1) the imposition of Withdrawal Liability by a Multiemployer Plan, (2) the
reorganization or termination, within the meaning of Title IV of ERISA, of any
Multiemployer Plan or (3) the amount of liability incurred, or which may be
incurred, by the Companies or any ERISA Affiliate in connection with any event
described in clause (1) or (2) above; and
(vi) forthwith after the Companies or any Material Subsidiary
obtain knowledge thereof, furnish to the Advisor such other material business
and financial information respecting the condition or operations, financial or
otherwise, of the Companies or any of their Material Subsidiaries, and forthwith
after request therefor any such other information, whether or not material, that
Sundial or the Advisor may from time to time request.
(j) APPOINTMENT OF DIRECTOR. Upon the request of Sundial, forthwith (and
in any event before any board or executive committee meeting, proceeding or
action (including, without limitation, action on written consent without a
meeting) is taken after receipt of such
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request (and whether or not theretofore scheduled) following the execution and
delivery of this Agreement, appoint or cause to be appointed a person (who shall
be reasonably acceptable to a majority of the members of the Board of Directors
then holding office excluding for such purpose any member who fails either to
accept or reject such appointee) designated by Sundial as a member of the Board
of Directors and any executive committee(s) (or equivalent thereof in the case
of Persons which do not act through directors as such) of any one or more of the
Companies and/or their Material Subsidiaries, each of (i) NWP Corp. and each
Material Subsidiary thereof, (ii) NWP Ltd. and each Subsidiary thereof and (iii)
Wolverine and each Subsidiary thereof to furnish Sundial notice in advance of
each meeting, proceeding or action of the board of directors or any executive
committee of each thereof at least equivalent to that furnished to each other
director or member, and to furnish, not later than the time at which the same
shall be furnished to each other director or member, a complete and detailed
agenda of any and all matters to be taken up or considered at any such meeting,
proceeding or related action and to furnish Sundial with copies of the minutes
or other records of each such meeting, proceeding or action forthwith upon the
making or taking thereof, it being understood that the foregoing requirement to
furnish notices, agendae, copies of minutes or records shall be independent of
the exercise by Sundial of its right to appoint any such director and shall be
furnished by the Companies and their Material Subsidiaries forthwith upon their
availability via fax, with copies by mail, to Sundial whether or not Sundial
exercises its right to appoint such a director, it being further understood that
the Companies shall cause all such minutes and details of other board or
executive committee actions to be prepared and distributed within twenty-four
hours after the making or taking thereof.
(k) ATTENDANCE OF OBSERVER. Forthwith following the execution and
delivery of this Agreement, and in any event before any board executive
committee meeting, proceeding or action is taken, and whether or not theretofore
scheduled, give not less prior written notice to the Advisor than that given to
the members of the board or executive committee of every meeting, proceeding or
other action (including, without limitation, action on written consent without a
meeting) of the directors or of any executive committee of any of the Companies,
it being further understood that the Companies shall have the same obligations
concerning notices of meetings or actions, agendae and copies of minutes or
records under this Section 5(k) as are set forth above in Section 5(j), and it
being further understood that Sundial shall have the unqualified right to
appoint an observer (the "OBSERVER") to attend each and every such meeting,
proceeding or action, in person, by conference telephone or otherwise, as
Sundial may designate, such Observer to be kept fully informed of any and all
discussions of actions proposed to be taken thereat and to be provided with
copies of any and all documents distributed at, or in preparation for, any such
meeting, proceeding or action. The Observer shall not have the right to vote on
any matter presented to any Board or any committee thereof. The Companies shall
reimburse the Observer for travel and other expenses in connection with such
meetings to the same extent that those Companies reimburse directors and
committee members.
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(l) PAYMENT OF DEFAULTED INTEREST. On or before the date of execution
and delivery hereof, the Company shall have paid or cause to have been paid to
Sundial the defaulted interest on the Wolverine Note in the amount of $603.16
and defaulted interest on the NWP Ltd. Note in the amount of $250.00 multiplied
times the number of days from and including April 1, 1996 through and including
the date of execution and delivery of this Agreement.
(m) WOLVERINE ASSETS. Wolverine shall not declare or make any dividend,
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account of any shares of any class of its capital stock, or
purchase, redeem or otherwise acquire for value (or permit any of its
Subsidiaries so to do) any shares of any class of capital stock of the Companies
or any warrants, rights, or options to acquire any such shares, now or hereafter
outstanding, or otherwise in any manner or by any means, directly or indirectly,
transfer or permit the transfer of any of its assets to NWP Corp. or any
Affiliated Person, whether or not in payment for services rendered or goods
acquired or allocated overhead, it being understood and agreed that all assets
and earnings of Wolverine shall, except to the extent otherwise provided in
Section 7(e), be retained by Wolverine and used exclusively for (i) Wolverine's
operating expenses, (ii) the service of Indebtedness in favor of Sundial, and
(iii) the creation of appropriate reserves to fund capital improvements required
or anticipated to be required by regulatory authorities or otherwise deemed
advisable by the management of Wolverine.
(n) FORBEARANCE AGREEMENT PROVISIONS PARAMOUNT. It is understood and
agreed that the rights of Sundial in respect of NWP Ltd. and its Subsidiaries
and Wolverine and its Subsidiaries and the assets and earnings of any thereof
under the Transaction Documents are paramount to any provisions of the Condor
Agreement, the Kuhns Employment Agreement or the Glass Associates Agreement
which may be in conflict with such rights of Sundial and that Sundial by the
entering into and performance of this Agreement and the other Transaction
Documents in no way consents to any provisions of the Condor Agreement, the
Kuhns Employment Agreement or the Glass Associates Agreement which may be in
conflict with such rights of Sundial provided however that any commissions
payable under the Kuhns Employment Agreement, the Condor Agreement or the Glass
Associates Agreement in respect of the sale of certain assets of NWP Corp. and
its Subsidiaries may be deducted as an expense of sale from the gross proceeds
of any such sale. It is further understood that Sundial has reviewed the Condor
Agreement, the Kuhns Employment Agreement, and the Glass Associates Agreement
and confirms that no provisions of such Agreements as understood and interpreted
by Sundial are in conflict with Sundial's rights.
(o) OPINIONS OF COUNSEL. Concurrently with the execution and delivery
hereof, the Companies shall cause to be furnished to Sundial opinions of English
and New York counsel to the Companies addressed to Sundial in form and substance
satisfactory to Sundial.
(p) SUBORDINATION OF CERTAIN INDEBTEDNESS; NO CHARGE FOR SERVICES AND
OVERHEAD EXPENSES. So long as any of the Obligations shall be outstanding (i)
the repayment of any and all Indebtedness, if any, of NWP Ltd., Wolverine, and
their respective Subsidiaries, to NWP Corp. and any of its other Subsidiaries
shall be subject and subordinate in all respects to
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the prior payment and performance in full of all of the Obligations, and (ii)
neither NWP Corp. nor any of its other Subsidiaries shall, directly or
indirectly, by any means whatsoever make or collect any charge for services
rendered or goods delivered or for allocation of overhead or any similar charge
to NWP Ltd., Wolverine or their respective Subsidiaries.
SECTION 6. NEGATIVE COVENANTS. So long as any Obligations of the
Companies shall remain unpaid or undischarged -- the Companies, jointly and
severally, will not, and will not allow each other to, unless Sundial shall
otherwise consent in writing:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or
with respect to any of its properties, whether now owned or hereafter acquired,
or assign, or permit any of its Subsidiaries to assign, any right to receive
income, other than:
(i) Permitted Liens;
(ii) Liens ("EXISTING LIENS") outstanding on the date of
execution and delivery hereof listed and described on SCHEDULE 2, and any
renewal, extension or replacement (or successive renewals, extensions or
replacements) thereof which do not encumber any property of the Companies or
their Material Subsidiaries other than (1) the property encumbered by the Lien
being renewed, extended or replaced, (2) property acquired by the Companies or
their Material Subsidiaries in the ordinary course of business to replace
property covered by Existing Liens, and (3) de minimis other property incidental
to the property referred to in clauses (1) or (2) above, but excluding in any
and all events and at all times any Lien of any nature in any property in which
Sundial presently has or is granted or contemplated to be granted a security
interest pursuant to this Agreement and to other Transaction Documents whether
or not subject or subordinate to the interest of Sundial; and
(iii) Purchase Money Liens; and
(b) RESTRICTIONS ON FUNDAMENTAL CHANGES. Except as otherwise provided in
the Transaction Documents and the Fleming Documents, without the consent of
Sundial, not, and not permit any of its Material Subsidiaries, to:
(i) merge or consolidate with or into, or
(ii) convey, transfer, lease or otherwise dispose of (whether in
one transaction or a series of transactions) all or substantially all of
the property (whether now owned or hereafter acquired) of any of the
Companies and their Material Subsidiaries, except as otherwise provided
in or permitted by this Agreement (including, without limitation Section
7 hereof) and the other Transaction Documents,to, or
(iii) convey, transfer, lease or otherwise dispose of (whether in
one transaction or a series of transactions, and whether by or pursuant
to merger, consolidation or any
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other arrangement), any property (whether now owned or hereafter
acquired) except as otherwise provided in or permitted by this Agreement
(including, without limitation Section 7 hereof) and the Transaction
Documents,to, or
(iv) enter into any partnership, joint venture,, syndicate, pool
or other combination with,
any Person.
(c) TRANSACTIONS WITH AFFILIATES. Enter into, or permit any of its
Subsidiaries to enter into, any transaction with an Affiliate of the Companies,
even if otherwise permitted under this Agreement, except on terms that are fair
and reasonable to the Companies and their Subsidiaries and on terms no less
favorable to the Companies or such Subsidiary than the Companies or any such
Subsidiary would obtain in a comparable arm's length transaction with a Person
not an Affiliate.
(d) DIVIDENDS, ETC. Declare or make any dividend, payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any share of any class of capital stock of the Companies, or
purchase, redeem or otherwise acquire for value (or permit any of its
Subsidiaries so to do) any shares of any class of capital stock of the Companies
or any Subsidiary or any warrants, rights or options to acquire any such shares,
now or hereafter outstanding; provided, however, that except as otherwise
required by the provisions of Section 7 hereof concerning the assets and
earnings of Wolverine and NWP Ltd., which provisions shall be in all respects
controlling with respect to the subject matter thereof, the foregoing provisions
of this subdivision (d) shall not preclude any upstream payments or transfers of
assets by any Subsidiary of NWP Corp. to NWP Corp. (i) which have been pledged
to the Fleming Noteholders and are required or permitted by the Fleming
Documents to be used for the payment of the operating expenses of NWP Corp. and
its Subsidiaries or in reduction of Indebtedness to the Fleming Noteholders or
(ii) which are Unencumbered Assets.
(e) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its Material
Subsidiaries to make, any material change in the nature of its business as
carried on as of the date of execution and delivery hereof, except as otherwise
contemplated by this Agreement, the other Transaction Documents or the Fleming
Documents.
(f) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or reporting
practices, except as required or permitted by GAAP and the auditors of the
Companies and their Subsidiaries.
(g) GUARANTEES; ASSUMPTIONS OF INDEBTEDNESS; TRANSFERS OF ASSETS.
Guarantee, assume the Indebtedness of, or otherwise become liable in respect of,
directly or indirectly, by any means whatsoever, any obligation, absolute,
liquidated, or contingent of any other Person, whether or not an Affiliated
Person, or assign, hypothecate, pledge or transfer in any manner
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whatsoever, any of its assets except in the ordinary course of business for fair
value or for sales, transfers or other dispositions provided in or permitted by
this Agreement, including without limitation Section 7 hereof or permitted by
the Kuhns Employment Agreement termination provisions.
(h) CERTAIN ACTIVITIES BY NWP LTD. In the case of NWP Ltd., conduct any
business whatsoever, directly or indirectly, in the United States, its
territories or possessions, or join in, or acquiesce in, or consent to any
action or inaction whatsoever which would or might lead to a substantive
consolidation of its assets and liabilities or the assets and liabilities of any
of its Subsidiaries with those of any parent, affiliated or related company in
any bankruptcy proceeding in the United States, its territories or possessions.
(i) NO AMENDMENT OF CERTAIN DOCUMENTS. Except to the extent otherwise
provided in the Intercreditor Agreement with respect to approval of "Changes"(as
defined in the Intercreditor Agreement), enter into any amendment, supplement or
change in or to the Fleming Documents, the Hambros Documents, the REIL
Shareholders Agreement, the Kuhns Employment Agreement, the Glass Associates
Agreement, the Condor Agreement or any other agreement of any type whatsoever
with any existing officer, director, employee or with any Affiliate; provided
however, that nothing contained in this subsection 6(i) shall prevent NWP Corp.
from exercizing its rights of termination under the Kuhns Employment Agreement,
the Glass Associates Agreement or the Condor Agreement, or preclude the
Companies from terminating any officer or employee of the Companies or of
removing any director of the Company from office subject to the rights of
Sundial set forth in subdivision (f) of the definition of Change of Control
Event and to the rights of Sundial under subsection 5(j).
SECTION 7. U.K. WINDFARM COLLATERAL; NWP LTD. SHARES; REIL SHARES; OTHER
PERMITTED SALES OF ASSETS; EARNINGS AND CASH FLOW OF WOLVERINE AND NWP LTD.
(a) It is understood and agreed that the U.K. Windfarm
Collateral is subject to a first prior perfected security interest in favor of
Hambros Bank pursuant to the Hambros Documents and to no other present security
interest. It is further understood that no such security interest can be granted
to any Person without the prior written consent of Hambros Bank and that no
party to this Agreement shall at any time cause or attempt to cause any such
security interest whether subject or subordinate to the interest of Hambros Bank
or otherwise to be created except in favor of the Fleming Noteholders, on the
one hand, and Sundial, on the other hand, severally, each to the extent of 50%.
NWP Corp. and NWP Ltd. shall, if so requested by either of the Fleming Majority
Noteholders or Sundial, obtain the consent of Hambros Bank to the grant by NWP
Ltd. of such security interests in the U.K. Windfarm Collateral to the Fleming
Noteholders and Sundial as aforesaid subject to such terms and conditions as
shall be imposed by Hambros Bank with respect thereto and as shall be acceptable
to the Fleming Noteholders and Sundial. NWP Corp. and NWP Ltd. shall effect and
perfect such grant, subject to such consent of Hambros, forthwith upon the
demand of either the Fleming Majority Noteholders or Sundial.
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NWP Corp. and NWP Ltd. will use their best efforts to sell the
U.K. Windfarm Collateral not later than November 30, 1996, subject to the joint
approval of Sundial and the Fleming Majority Noteholders if the gross proceeds
of such sale are individually less than the amounts set forth on Schedule 3
annexed hereto and made a part hereof. The entire Net Proceeds thereof shall be
paid in equal parts 50% to the Fleming Noteholders for disposition in accordance
with the terms of the Fleming Documents (and the balance thereof, if any, to
Sundial, once the obligations to the Fleming Noteholders have been satisfied)
and 50% to Sundial to be applied by Sundial FIRST, to any expenses at the time
due and owing and unpaid to Sundial or the Advisor pursuant to this Agreement
and the Transaction Documents, SECOND, to the payment or prepayment of any
amounts due or to become due and unpaid on account of the New NWP Ltd. Note,
THIRD, to the payment or prepayment of any accrued and unpaid interest on the
Amended Wolverine Note, FOURTH, to the payment or prepayment of any indebtedness
on account of any remaining installments of principal of the Amended Wolverine
Note in order of maturity, FIFTH, the balance, if any, to the Fleming
Noteholders in satisfaction of any obligations then remaining to be paid to the
Fleming Noteholders under or pursuant to the Fleming Documents, and SIXTH, the
balance, if any, to NWP Corp.
(b) It is further understood and agreed that NWP Corp. shall not
pledge, charge, hypothecate, sell or otherwise transfer in any manner any of the
NWP Ltd. Shares except that such NWP Ltd. Shares shall be pledged or charged to
the Fleming Noteholders, on the one hand, and Sundial on the other hand, as
equal several pledgees or chargees. It is further understood and agreed that NWP
Corp. and NWP Ltd. shall sell the NWP Ltd. Shares not later than November 30,
1996 (unless otherwise approved by Sundial), the gross sales proceeds thereof to
be subject to the joint approval of Sundial and the Fleming Majority Noteholders
if the gross cash proceeds of such sale are less than the amount set forth on
Schedule 3. The entire Net Proceeds thereof shall be distributed in the same
manner as hereinabove provided with respect to the sale of the U.K. Windfarm
Collateral, it being understood that no such sale shall in any way affect the
Amended Charge of the REIL Charged Shares to Sundial (except to the extent that
Sundial may receive funds in reduction or fulfillment of the obligations of NWP
Ltd. to Sundial thereunder). On or prior to May 25, 1996 NWP Corp. shall at its
own expense grant a perfected charge over the NWP Ltd. Shares in favor of
Sundial and the Fleming Noteholders severally, each to the extent of 50%,
subject only to (i) the inclusion of such provisions as shall be required by
Hambros Bank and be acceptable to Sundial and the Fleming Majority Noteholders
and (ii) to the consent of Hambros Bank. Sundial shall hold such charge as
additional security for the Obligations and Fleming shall hold such charge in
accordance with the terms of the Fleming Documents. All events requiring the
prepayment in whole or in part of the New NWP Ltd. Note or the Amended Wolverine
Note are herein sometimes referred to as "Note Prepayment Events".
(c) It is further understood and agreed that the Companies will
use their best efforts to effect a sale of the REIL Shares as soon as
practicable but in any event not later than December 1, 1996, subject to the
approval of Sundial if the gross cash proceeds of such sale are less than the
amount set forth on Schedule 3, with respect to the REIL Shares, or in
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the event of a transacton involving the sale of less than all of the REIL
Shares, if the gross cash proceeds of such sale are less on a per share basis
than the amount set forth on Schedule 3. The Net Proceeds of sale of the first
250,000 REIL Shares to be sold shall be applied as follows: FIRST, to any
expenses at the time due and owing and unpaid to Sundial or the Advisor pursuant
to this Agreement and the other Transaction Documents, SECOND, to the payment or
prepayment of the New NWP Ltd. Note, THIRD, to the payment or prepayment of the
installment of principal or interest due December 1, 1996 under the Amended
Wolverine Note and FOURTH either retained by NWP Ltd. as working capital or paid
as a dividend or loaned to NWP Corp. The Net Proceeds of the sale of the
remaining REIL shares shall be applied in payment or prepayment of all remaining
Obligations under the Transaction Documents in the following order: FIRST, to
any expenses at the time due and unpaid to Sundial or the Advisor under this
Agreement and the other Transaction Documents, SECOND, to the payment or
prepayment of any amounts necessary to be paid on account of the New NWPL Note,
THIRD, to the payment of any accrued and unpaid interest on the Amended
Wolverine Note and, FOURTH, to the payment or prepayment of any remaining
Indebtedness on account of installments of principal of the Amended Wolverine
Note in order of maturity.
(d) The provisions of Section 6(d) to the contrary
notwithstanding, and without prejudice to any of the rights and remedies of
Sundial following the occurrence of an Event of Default, any and all earnings
and cash flow of NWP Ltd. and its Subsidiaries, excluding Net Proceeds from the
sale of the U.K. Windfarm Collateral, which Net Proceeds shall be disposed of as
hereinabove in Section 7 (a) provided, and except to the extent otherwise
provided in the first clause "fourth" of Section 7(c), shall remain in NWP Ltd.
and shall not under any circumstances or by any means whatsoever, directly or
indirectly be upstreamed to NWP Corp. or transferred by way of loan, dividend or
in any other manner to NWP Corp. or any Affiliated Person without the prior
written mutual consent of Sundial and the Fleming Majority Noteholders, which
consent may be granted or withheld by either of Sundial or the Fleming Majority
Noteholders in their sole discretion. NWP Ltd. shall use such earnings and cash
flow (i) to pay the operating expenses and liabilities of NWP Ltd. and its
Subsidiaries and (ii) the balance the balance to establish a reserve, one half
of which shall be used to pay or prepay the Sundial Obligations and the other
one half of which should be used to pay or prepay the obligations to the Fleming
Noteholders under the Fleming Documents. Notwithstanding the provisions of
Section 8 of the Amended Charge, NWP Ltd. shall be allowed to withdraw from the
trust account referred to therein amounts required to meet the operating
expenses of NWP Ltd. and its Subsidiaries (i) in the event, cash or cash
equivalents are not available to NWP Ltd. or such Subsidiaries from other
sources to meet such expenses and (ii) to the extent such amounts on deposit in
said trust account represent ordinary dividends paid in respect of REIL shares
owned by NWP Ltd. and do not exceed the amounts permitted to be paid in
accordance with the policy presently enunciated in Section 3(a) of the REIL
Shareholders Agreement; provided, however, that any such amounts withdrawn from
such trust account are redeposited in the trust account whenever and to the
extent that cash and cash equivalents available to NWP Ltd. directly or through
its Subsidiaries exceed an amount necessary to pay the succeeding 30 days
operating expenses of NWP Ltd. and its Subsidiaries. As used in this subsection
(d), the term "Subsidiaries" shall exclude REIL.
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(e) The provisions of Section 6(d) and 5(m) to the contrary
notwithstanding, and without prejudice to the rights and remedies of Sundial
following the occurrence of an Event of Default, until all of the Obligations
shall have been discharged in full, any and all earnings and cash flow of
Wolverine shall be dealt with and applied in the following manner:
(i) earnings and cash flow of Wolverine shall be
retained in Wolverine to ensure that Wolverine maintains a
current ratio of 1.5 to 1. For the purposes of this Agreement
current ratio shall mean that current cash and receivables
(excluding the reserves hereinafter mentioned), shall be not less
than 1.5 times current liabilities (excluding: accrued interest
on Wolverine's Fourteen Year Variable Rates Subordinated
Debentures dated as of October 30, 1987, due October 31, 2000;
budgeted payables from the reserves hereinafter mentioned; and
any amounts due within one year from the date of execution and
delivery hereof for principal and interest on the Amended
Wolverine Note);
(ii) earnings and cash flow of Wolverine shall be
retained for the purpose of establishing a reserve fund in the
amount of $50,000 to pay the expenses of conducting an
arbitration with Consumers Power Company in respect of the
resetting of rates under the agreement between Wolverine and
Consumers Power Company; and
(iii) earnings and cash flow shall be used to
establish a reserve fund in the amount of $216,000 to pay for
maintenance, repairs and capital improvements to Wolverine's
hydroelectric plant and facilities to be made during calendar
year 1996.
After Wolverine has made provision for the payment of the amounts set forth in
subdivisions (i), (ii) and (iii) above, Wolverine shall, to the extent permitted
by law, be allowed to upstream to NWP Corp. earnings and cash flow in excess of
such amounts through and including but not following November 30, 1996. On or
after December 1, 1996 all earnings and cash flow of Wolverine shall be retained
in Wolverine to be applied towards the payment of the Wolverine's operating
expenses, the payment of Indebtedness due Sundial and the establishment of
reserves for deferred maintenance, repairs and capital improvements necessary or
advisable in the good faith business judgment of Wolverine and as may be
required by regulatory authorities having jurisdiction thereover to Wolverine's
hydroelectric plant and facilities on a worst case basis. For purposes of this
Agreement, "worst case basis" shall assume, in the event the matter has not been
finally settled with such regulatory authorities, the maximum amount which the
Company determines in good faith to be required to meet such maintenance,
repairs and capital improvement obligations, assuming the final decision of the
regulatory authorities were least favorable to Wolverine.
(f) The agreements and undertakings of each of the Companies
under this Agreement, including, without limitation, this Section 7, and under
each of the other Transaction Documents, shall be the joint and several
obligations of all of the Companies.
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SECTION 8. NOTE EXCHANGE OPTION. (a) Each holder of the New NWP Ltd.
Note and the Amended Wolverine Note (together the "NOTES") shall have the right
at any time to exchange (the "EXCHANGE OPTION") the whole or any part of its
Notes for new unsecured 8% Convertible Subordinated Notes Due July 31, 2000 of
NWP Corp. (the "EXCHANGE NOTES") in the form of EXHIBIT I attached hereto and
made a part hereof; PROVIDED, HOWEVER, in the case of a holder that is not a
U.S. person no such holder may exchange any portion of the Notes as would cause
such holder to be treated as a "10% shareholder" for purposes of ss.871(h)(3) of
the Code. This limitation shall not apply to any holder that is exempt from U.S.
withholding tax on payments of interest under the terms of an income tax treaty.
(b) Each holder of the Notes may exercise the Exchange Option by
tendering those Notes which such holder desires to exchange, during normal
business hours on any Business Day, to NWP Corp. at its offices designated
pursuant to Section 26 hereof, together with a notice to NWP Corp. stating that
such holder is exercising its Exchange Option. Thereupon NWP Corp. shall
immediately issue Exchange Notes to the exchanging holder in the principal
amount equal to the outstanding principal amount of the Notes so exchanged plus
any accrued and unpaid interest thereon and a new Note in the same form as the
Note being exchanged but in the principal amount equal to the outstanding
principal amount of the Notes not being exchanged. Upon the issuance and
delivery of the Exchange Notes to Sundial or its nominees, such Exchange Notes
shall not be entitled to the benefit of any of the Collateral. To the extent
that the exchange of Exchange Note for Notes results in any intercompany payable
to NWP Corp.or any Subsidiary, such payable shall be subject and subordinate in
all respects to any and all remaining Indebtedness of the Companies to Sundial,
such subordination to be in form and substance satisfactory to Sundial in its
sole and absolute discretion.
(c) The Exchange Notes and the holders thereof shall be subject
to and be entitled to the benefits of the following:
(i) The Exchange Notes shall be subordinate and subject in right
of payment to the prior payment in full of all Senior Indebtedness. The
Notes (other than such of the Notes as shall have been exchanged for
Exchange Notes) shall continue to be considered Senior Indebtedness as
defined in Section 17 hereof; otherwise the Exchange Notes and that
portion of the Notes not exchanged for Exchange Notes shall rank PARRI
PASSU with one another.
(ii) Subject to the provisions of Section 8(c)(v) hereof, the
holders of the Exchange Notes shall have the right, at any time, to
convert the unpaid principal amount of each Exchange Note or any portion
thereof and any accrued and unpaid interest on such Exchange Note into
shares of Common Stock pursuant to this Section 8(c)(ii) at the
"Exchange Note Conversion Price" (defined below).
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The Exchange Note Conversion Price shall be calculated as
follows:
(A) on or before July 31, 1996, 75% of the Exchange
Note Market Price; and thereafter
(B) until December 31, 1996, 70% of the Exchange
Note Market Price; and thereafter
(C) until the payment in full of the Exchange
Notes, 65% of the Exchange Note Market Price.
Notwithstanding anything contained herein to the contrary, the Exchange
Note Conversion Price shall not, at any time, be less than $0.75 (the "MINIMUM
CONVERSION PRICE") nor greater than $3.25 (the "MAXIMUM CONVERSION PRICE"). The
Minimum Conversion Price and the Maximum Conversion Price are subject to
adjustment in the same manner as the "Conversion Price" referred to in the
Fleming Purchase Agreement is subject to adjustment (except to the extent the
context shall otherwise require) as provided in Section 6 thereof, the
provisions of which are incorporated herein by reference and made a part hereof.
For the purpose of any computation under this
Section 8(c)(ii), the "Exchange Note Market Price" on any date
shall be deemed to be the average of the daily closing prices of
the common stock of NWP Corp. for the five (5) consecutive
trading days prior to the day as of which the "Exchange Note
Market Price" is being determined. The closing price for each day
shall be the last reported sale price regular way or, in case no
such sale takes place on such day, the average of the closing bid
and asked prices regular way, in either case on the principal
national securities exchange on which the NWP Corp.'s common
stock is listed or admitted to trading, or if the NWP Corp.'s
common stock is listed or admitted to trading, or if the NWP
Corp.'s common stock is not listed or admitted to trading on any
national securities exchange, on the NASDAQ Stock Market or a
comparable quotation system. If the closing price cannot be so
determined, then the Exchange Note Market Price shall be
determined:
(x) by the written agreement of NWP
Corp. and the holders of Exchange Notes
representing a majority of the shares of Common
Stock then obtainable from the conversion of
outstanding Exchange Notes issued pursuant to this
Agreement (and no other such Exchange Notes) , or
(y) in the event that no such
agreement is reached within twenty (20) calendar
days after the event
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giving rise to the need to determine the Exchange
Note Market Price, by the agreement of two
arbitrators, one of whom shall be selected by the
NWP Corp. and the other of whom shall be selected
by such majority holders, or
(z) if the two arbitrators so
selected fail to agree within a further twenty (20)
day period, by a third arbitrator selected by the
mutual agreement of the other two (with all costs
and expenses of any arbitrators to be paid by the
NWP Corp.).
NWPC Corp. shall cooperate, and
shall provide all necessary information and
assistance, to permit any determination under the
preceding clauses (x), (y) or (z).
The Exchange Notes may, at the option of the holder, be converted into shares of
Common Stock in accordance with the following formula:
No. of Shares of Common Stock to be issued per $1,000.00
principal amount of Exchange Note - [(0.08)(N/365) ($1,000)] + $1,000
---------------------------------
Exchange Note Conversion Price
wherein "N" equals the number of days elapsed following the later of (x) the
last interest payment on the Exchange Note being converted or (y) the issuance
of the Exchange Note being converted.
(iii) No holder of the Exchange Notes shall convert such Exchange
Notes into shares of Common Stock ,or sell, transfer or otherwise
dispose of any shares of Common Stock that it receives from the
conversion of the Exchange Notes, until such time as NWP Corp. shall
have registered (in accordance with Section 8(d) of this Agreement)
pursuant to and in accordance with the Securities Act and set aside for
the conversion of the and Exchange Notes, such number of shares of its
Common Stock as shall equal the registered number of shares of Common
Stock ("REGISTERED NUMBER") into which the holders of all of the
Exchange Notes (whether acquired pursuant to this Agreement or
otherwise) may convert such Exchange Notes into shares of Common Stock.
(d) NWP Corp. hereby agrees that it shall, as soon as practicable
after the date hereof but in no event later than September 30, 1996 register
such number of shares of its Common Stock on (i) Form S-1 or any similar
long-form registration or (ii) Form S-2 or S-3 or any similar short-form
registration if NWP Corp. qualifies to use such short-form, as will equal the
Registered Number of shares of Common Stock into which Sundial may convert any
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Exchange Notes which it may have acquired into Common Stock. In respect of such
registration obligation of NWP Corp., the provisions of Articles 3, 4, 6 and 9
of the Registration Rights Agreement (which NWP Corp. and Sundial hereby agree
to execute and deliver concurrently with the execution and delivery of this
Agreement) are hereby incorporated by reference, MUTATIS MUTANDIS, as if set
forth herein.
SECTION 9. PREPAYMENT OF EXCHANGE NOTES; RESTRICTIONS ON
TRANSFER. (a) At any time after July 31, 1998, NWP Corp. may, at its option,
prepay all (but not less than all) of the principal amount of the Exchange Notes
then outstanding at a price equal to 100% of the principal amount of the
Exchange Notes to be paid plus all accrued and unpaid interest thereon to the
date of such prepayment if (and only if) there has been a Prepayment Level of
Public Trading. A "Prepayment Level of Public Trading" shall exist if (i) on the
date of a notice of prepayment given under Section 9(b) hereof the Common Stock
(A) is listed or admitted to trading on a national securities exchange or is
traded on the NASDAQ Stock Market and (B) is subject to an effective
registration statement filed with the commission under Section 12 of the
Securities Exchange Act and (ii) for the thirty (30) trading days immediately
preceding the date of such notice of prepayment (A) the average closing price of
shares of Common Stock on such national securities exchange or the NASDAQ Stock
Market equals or exceeds $7.00 per share, (B) the actual number of shares of
Common Stock traded on each such date equals or exceeds 1,000 and (C) the
average number of shares of Common Stock traded on each such date equals or
exceeds 20,000.
(b) The right of NWP Corp. to prepay Exchange Notes pursuant to
Section 9(a) shall be conditioned upon its giving notice of prepayment, signed
by its President and Chief Financial Officer, to the holders of Exchange Notes
not less than forty-five (45) days and not more than sixty (60) days prior to
the date upon which the prepayment is to be made specifying (i) the facts
supporting the existence of a Prepayment Level of Public Trading, as required
under Section 9(a) hereof, (ii) the registered holder of each Exchange Note to
be prepaid, (iii) the aggregate principal amount being prepaid, (iv) the date of
such prepayment and (v) the accrued and unpaid interest (to but not including
the date upon which the prepayment is to be made). Notice of prepayment under
this Section 9(b) having been so given, the aggregate principal amount of the
Exchange Notes so specified in such notice and all accrued and unpaid interest
thereon, shall become due and payable on the specified prepayment date provided
however, that no such notice shall affect the right of the holder of any
Exchange Note to convert such Exchange Note into shares of Common Stock prior to
the prepayment date specified in such notice.
(c) Each holder of an Exchange Note by acceptance thereof agrees
that it will not sell or otherwise dispose of any Exchange Note or shares of
Common Stock acquired upon conversion of the Exchange Note unless such Exchange
Notes or shares of Common Stock have been registered under the Securities Act
and, to the extent required, under any applicable state securities laws, or
pursuant to an applicable exemption from such registration requirements. NWP
Corp. may endorse on all Exchange Notes, and certificates representing such
shares of Common Stock a legend stating or referring to such transfer
restrictions.
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SECTION 10. SUBORDINATION OF EXCHANGE NOTES.
Pursuant to the Transaction Documents, NWP Corp. has granted to
Sundial a security interest in the Collateral. All provisions of this Section 10
are subject to the rights of Sundial under the Transaction Documents, it being
understood that in the event exchange of the Notes for Exchange Notes, the
Collateral and rights of Sundial under the Transaction Documents shall inure to
the benefit of Sundial in respect only of the Notes not exchanged for Exchange
Notes. Upon the occurrence and during the continuance of an Event of Default
under the Transaction Documents, Sundial may take certain actions with respect
to the Collateral, including selling the Collateral and applying the proceeds
thereof to the obligations of Sundial. To the extent the Obligations are secured
by the Collateral, such of the Notes not exchanged for Exchange Notes shall be
treated the same as Senior Indebtedness for all purposes and shall not be
subordinated to any other Indebtedness of the Companies or their Subsidiaries.
The Exchange Notes shall to the extent and in the manner hereinafter set forth,
be subordinated and subject in right of payment to the prior payment in full of
all Senior Indebtedness. Each holder of an Exchange Note, whether upon original
issue or upon transfer or assignment thereof, by its acceptance thereof agrees
that the Exchange Notes shall be subject to the provisions contained in Section
10 through and including 17 of this Agreement. The subordination provisions of
Section 10 through and including 17 of this Agreement shall be for the benefit
of any present or future holders of the Senior Indebtedness and may be enforced
directly by such holders.
SECTION 11. LIQUIDATION; DISSOLUTION; BANKRUPTCY. (a) Upon any
payment or distribution of assets of NWP Corp. (whether in cash, property or
securities) to creditors upon any dissolution or winding-up or total or partial
liquidation or reorganization of NWP Corp. whether voluntary or involuntary or
in bankruptcy, insolvency, receivership, assignment for the benefit of
creditors, marshalling of assets or similar proceeding relating to NWP Corp. or
its property, all amounts due or to become due upon all Senior Indebtedness then
outstanding shall first be paid in full before the holders of the Exchange Notes
shall be entitled to receive any assets so paid or distributed in respect
thereof (but without restricting the conversion rights of the holders of
Exchange Notes under Section 8 hereof); provided, that with respect to any of
the foregoing, the holders of Exchange Notes may receive (and shall be entitled
to retain) securities which are subordinate to (at least to the extent that the
Exchange Notes are subordinate to Senior Indebtedness pursuant to the terms
hereof) the payment of all Senior Indebtedness then outstanding. Upon any such
dissolution or winding-up or liquidation, reorganization or other proceeding,
any payment or distribution of assets of NWP Corp. of any kind or character,
whether in cash, property or securities, to which the holders of the Exchange
Notes would be entitled, except for these provisions, shall be paid by NWP Corp.
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making such payment or distribution directly to the holders of Senior
Indebtedness which was then outstanding to the extent necessary to pay all such
Senior Indebtedness which was then outstanding in full, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the holders of the
Exchange Notes (but subject to the proviso to the preceding sentence).
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(b) Each holder of Exchange Notes by its acceptance hereof (x)
irrevocably authorizes and empowers (but without imposing any obligation on)
each holder of any Senior Indebtedness at the time outstanding, under (and only
under) the circumstances set forth in Section 11(a) hereof, if the holder of
Exchange Notes shall fail to do so prior to twenty (20) calendar days before the
expiration of the time to do so, to file and prove all claims of such holder for
its ratable share of payments or distributions in respect of the Exchange Notes
which are required to be paid or delivered to the holders of Senior Indebtedness
as provided in Section 11(a) hereof, in the name of each such holder of the
Exchange Notes or otherwise, as such holder of Senior Indebtedness may determine
to be necessary or appropriate for enforcement of the provisions of Section
11(a) hereof, and the holder of Exchange Notes may amend any such claims
regarding the Exchange Notes before or after such twentieth (20th) day (but not
in a manner inconsistent with the rights of holders of Senior Indebtedness under
this Section 11) other than this Section 11(b) whether such claims are filed by
such holder of Exchange Notes or are filed, pursuant to this Section 11, by any
holder of Exchange Notes or are filed, pursuant to this Section 11, by any
holder of Senior Indebtedness, and (y) under (and only under) the circumstances
set forth in this Section 11, agrees to execute and deliver to each holder of
Senior Indebtedness all such further instruments confirming the authorization
hereinabove set forth, and all such powers of attorney, proofs of claim,
assignments of claim and other instruments, and to take all such other action,
as may be reasonably requested by such holder in order to enable such holder to
enforce all claims upon or in respect of such Exchange Noteholder's ratable
share of payments or distributions in respect of the Exchange Notes. Nothing in
this Section 11, or any other provisions hereof, shall give or be construed to
give the holder of any Senior Indebtedness any right to vote any Exchange Note,
or any related claim, or any portion of such Exchange Note or such claim, or to
exercise any approval rights, either in connection with any resolution,
arrangement, plan of reorganization, compromise, settlement, election of
trustees or otherwise. Holders of Senior Indebtedness shall not create any
liability to any person on the part of any holders of Exchange Notes in
connection with the exercise of any rights granted under this Section 11(b).
SECTION 12. DEFAULT ON SENIOR INDEBTEDNESS. (a) Upon the maturity
of any Senior Indebtedness (or portion thereof) by lapse of time, acceleration
or otherwise, all amounts due or to become due in connection therewith shall
first be paid in full before any payment (other than pursuant to Section 8
hereof) is made by NWP Corp. or any person acting on behalf of NWP Corp. on
account of any Exchange Note.
(b) No direct or indirect payment (other than pursuant to Section
8 hereof) by or on behalf of NWP Corp. of principal of, premium, if any, or
interest on the Exchange Notes shall be made if (i) at the time of such payment,
there exists a default in the payment (a "PAYMENT DEFAULT") of all or a portion
of principal of, premium, if any, or interest on any Senior Indebtedness whether
at maturity, at a date fixed for prepayment or on acceleration, (ii) in the case
of a Payment Default involving a failure to pay interest, the holders of the
Senior Indebtedness, or any agent or trustee acting on behalf of such holders,
shall have given written notice thereof to NWP Corp. and the holders of the
Exchange Notes, and (iii) such
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default shall not have been cured or waived in writing by or on behalf of the
holders of the Senior Indebtedness; PROVIDED, HOWEVER, that if such Payment
Default involves a failure to pay interest on Senior Indebtedness and if the
holders of the Senior Indebtedness, or any agent or trustee acting on behalf of
such holders, have not declared such Senior Indebtedness to be immediately due
and payable on or before the date which is ninety (90) days after the date of
such Payment Default, then NWP Corp. shall resume making required payments in
respect of the Exchange Notes (including any missed payments); PROVIDED,
FURTHER, that payments with respect to the Exchange Notes shall not be
restricted under this Section 12(b) for more than two hundred seventy (270)
consecutive days in any three hundred sixty-five (365) day period other than as
a result of a Payment Default involving a failure to pay principal on Senior
Indebtedness.
SECTION 13. PAYMENTS IN VIOLATION. In the event that any money,
property or securities is received by a holder of Exchange Notes in violation of
Sections 10 through and including 17 hereof, the holder thereof shall hold the
same in trust for the benefit of, and shall deliver the same in kind to, the
holders of Senior Indebtedness to be applied to the payment of Senior
Indebtedness to the extent necessary to pay any Senior Indebtedness in
accordance with its terms, after giving effect to any concurrent payment or
distribution or provisions therefor to or for the holders of the Senior
Indebtedness.
SECTION 14. NO PREJUDICE OR IMPAIRMENT. (a) No right of any
present or future holders of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired (i) by
any act or failure to act on the part of NWP Corp., including without limitation
any merger or consolidation of NWP Corp. into or with any other person, or any
sale, lease or transfer of any or all of the assets of NWP Corp. to any other
person, (ii) by any act (in good faith) or failure (in good faith) to act by any
such holder of Senior Indebtedness, including without limitation the failure by
such holder to perfect a security interest in any security or guaranty for the
payment of Senior Indebtedness or (iii) by any noncompliance by NWP Corp. with
the terms and provisions of any Exchange Note regardless of any knowledge
thereof which any such holder may have or be otherwise charged with. The holders
of the Senior Indebtedness may, without in any way affecting the subordination
hereunder, at any time or from time to time and in their absolute discretion,
change the manner, place or terms of payment of, change or extend the time of
payment of, or renew or alter, any Senior Indebtedness, or amend, modify or
supplement any agreement or instrument governing or evidencing such Senior
Indebtedness or any other document referred to therein, or exercise or refrain
from exercising any other of their rights under the Senior Indebtedness
including, without limitation, the waiver of default thereunder and the release
of any collateral securing such Senior Indebtedness, all without notice to or
assent from the holders of the Notes. The absence of any notice to or knowledge
by, any holder of Senior Indebtedness of the existence or occurrence of any of
the matters or events set forth in this paragraph (a) shall not impair or
otherwise affect the rights of the holders of Senior Indebtedness against
holders of Exchange Notes under the subordination provisions of Section 10
hereof.
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(b) The provisions of this Section 14 shall continue to be
effective, or be reinstated, as the case may be, if at any time any payment in
respect of any Senior Indebtedness is rescinded or must otherwise be restored or
returned by the holders of such Senior Indebtedness upon the occurrence of any
event described in Section 11 hereof, or upon or as a result of the appointment
of a receiver, intervenor or conservator of, or trustee or similar officer for,
NWP Corp. or any substantial part of its property, or otherwise, all as though
such payment had not been made.
(c) Without limiting Sections 15 and 16 hereof, the holders of
the Senior Indebtedness shall have no obligation to preserve the rights of
holders of the Exchange Notes against any prior parties or to marshall any of
the assets or properties of NWP Corp. for the benefit of any person.
SECTION 15. SUBROGATION. After all Senior Indebtedness is paid
indefeasibly in full and until the Exchange Notes are indefeasibly paid in full,
the holders of the Exchange Notes shall be subrogated to the rights of holders
of the Senior Indebtedness to receive payments or distributions applicable to
the Senior Indebtedness. For the purpose of such subrogation, (a) no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the holders of the Exchange Notes would be entitled except
for the provisions of this Section 15, and no payment over pursuant to the
provisions of this Section 15 to the holders of the Senior Indebtedness by the
holders of Exchange Notes, as between NWP Corp., its creditors other than the
holders of the Senior Indebtedness, and the holders of Exchange Notes, shall be
deemed to be a payment by NWP Corp. to or on account of the Senior Indebtedness,
and (b) no payment or distributions of cash, property or securities to or for
the benefit of the holders of the Exchange Notes pursuant to the subrogation
provisions of this Section 15, which would otherwise have been paid to the
holders of the Senior Indebtedness, shall be deemed to be a payment by NWP Corp.
on or for the account of the Exchange Notes. It is understood that, in each
case, the provisions of this Section 15 are and are intended solely for the
purpose of defining the relative rights of the holders of the Exchange Notes, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
SECTION 16. RELATIVE RIGHTS; OBLIGATIONS UNAFFECTED. This Section
16 defines certain of the relative rights of the holders of the Exchange Notes
and the holders of Senior Indebtedness. Nothing contained in this Section 16 is
intended to or shall impair as among NWP Corp., its creditors other than the
holders of Senior Indebtedness, and the holders of the Exchange Notes, the
obligation of NWP Corp., which shall be absolute and unconditional, to pay to
the holders of the Exchange Notes the principal of, premium, if any, and
interest on the Exchange Notes, as and when the same shall become due and
payable in accordance with their terms, or to affect the relative rights of the
holders of the Exchange Notes and creditors of NWP Corp. other than the holders
of Senior Indebtedness. Nothing herein shall prevent any holder of the Exchange
Notes from exercising any remedies otherwise permitted by applicable law upon
the occurrence of an Event of Default, subject to the rights, if any, of the
holders of Senior Indebtedness under the provisions thereof, and nothing herein
shall prevent
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the conversion of the Exchange Notes (or any part thereof) in accordance with
the terms of this Agreement.
SECTION 17. DEFINITION OF SENIOR INDEBTEDNESS. The term "SENIOR
INDEBTEDNESS" shall mean the principal of, premium, if any, and interest
(including any interest accruing subsequent to an event specified in Section
19(e) at the rate specified by the terms of the applicable Senior Indebtedness)
on Indebtedness of NWP Corp. and the other Companies for borrowed money, and
other Indebtedness of NWP Corp. and the other Companies, in each case declared
to be "Senior Indebtedness" by the Board of Directors of NWP Corp. and the other
Companies, and any renewals, modifications, refundings or extensions of any such
Indebtedness, unless under the provisions of the instrument creating or
evidencing any such Indebtedness, or pursuant to which the same is outstanding,
it is provided that such Indebtedness is subordinate in right of payment to any
other Indebtedness of NWP Corp. and the other Companies (including, without
limitation, the Notes); provided that Senior Indebtedness shall not include (i)
any obligations under any provision of any agreement or instrument regarding
such Senior Indebtedness in respect of any fees, premiums, penalties or charges
which are the equivalent of, or in lieu of, an equity interest in or
equity-related kicker with respect to NWP Corp. and the other Companies, (ii)
any Indebtedness owing to any Subsidiary or to any other Affiliate (of NWP Corp.
and the other Companies or of any Subsidiary), (iii) any obligation, to any
Person, of any Affiliate of NWP Corp. or of any Subsidiary (other than an
obligation of NWP Corp. or of a Subsidiary), which obligation is assumed or
guaranteed by NWP Corp. or any Subsidiary or (iv) Indebtedness incurred in
violation of any limitation on Indebtedness provided in the Transaction
Documents or the Fleming Documents.
Senior Indebtedness shall include, without limitation, all
Obligations of the Companies under the Transaction Documents and the boards of
directors of the Companies shall have taken appropriate action pursuant to this
Section 17 on or before the date of execution and delivery of this Agreement to
ensure that such Obligations are duly and properly declared to be and constitute
in all respects Senior Indebtedness.
SECTION 18. REIMBURSEMENT OF EXPENSES. The Companies jointly and
severally shall pay to the Advisor and to Sundial an amount equal to the amount
of all costs and expenses, (including without limitation, the outstanding
invoices listed in the statement of the Advisor to NWP Corp. dated 26 March,
1996 in the amount of $29,886.05, which shall be paid to the Advisor on or
before September 1, 1996) legal, advisory and travel fees and disbursements, in
connection with the preparation, execution, delivery, recording, filing,
performance, the obtaining by Sundial of advice prior to or following the
foregoing or in connection with any defaults or prospective defaults under
documentation superseded by this Agreement and the Transaction Documents, or
otherwise in any way relating to such superseded documents, this Agreement or
the other Transaction Documents, whether or not the transactions contemplated
hereby or thereby are consummated, or the administration and enforcement or
exercise of any right or remedy granted to the Advisor or Sundial hereunder or
thereunder. The foregoing indemnity agreement includes any costs incurred by the
Advisor
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in connection with any action or proceeding which may be instituted in respect
of the foregoing by the Advisor or Sundial, or by any other person either
against the Advisor or in connection with which any officer, agent or employee
of the Advisor or Sundial is called as a witness or deponent, including, but not
limited to, the fees and disbursements of Gilmartin, Poster & Shafto, and any
out-of-pocket costs incurred by the Advisor or Sundial in appearing as a witness
or in otherwise complying with legal process served upon it. All the payments
required to be made to Advisor or Sundial hereunder shall bear interest at the
rate of 10% per annum, compounded quarterly, from the date of billing to the
date of payment thereof.
If the Companies shall fail to do any act or thing which they
have covenanted to do hereby or any representation or warranty of the Companies
shall be breached, the Advisor or Sundial may (but shall not be obligated to) do
the same or cause it to be done or remedy any such breach and there shall be
added to the obligations of the Companies, the cost or expense incurred by the
Advisor or Sundial in so doing, and any and all amounts expended by the Advisor
or Sundial in taking such actions shall be repayable to it upon its demand
therefor and shall bear interest at 10% per annum compounded quarterly from the
date advanced to the date of repayment.
The Companies' obligations contained in this Section 18 shall
survive the expiration or earlier termination of this Agreement.
SECTION 19. EVENT OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) The Companies shall fail to pay the principal of or interest
on either of the Notes, when the same become due and payable in accordance with
their terms or the requirements of this Agreement and the other Transaction
Documents; the Notes or any other payment under this Agreement or the other
Transaction Documents when the same becomes due and payable; or
(b) Any representation or warranty made by the Companies herein
or in any of the other Transaction Documents or by any of their officers under
or in connection with this Agreement or the Transaction Documents shall prove to
have been incorrect in any material respect when made; or
(c) Any of the Companies or any Subsidiary shall fail to perform
or observe any term, covenant or agreement contained in this Agreement or the
Transaction Documents on its part to be performed or observed in any material
respect; or
(d) The Companies or any of their Material Subsidiaries shall
fail to pay any principal of or premium or interest on any Indebtedness which is
outstanding, when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness; or any other event
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shall occur or condition shall exist under any agreement or instrument relating
to any such Indebtedness and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment, including, without limitation, a prepayment required in connection
with the sale of the sole asset or all assets securing such Indebtedness),
redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Indebtedness shall be required to be made, in each case prior to
the stated maturity thereof; PROVIDED, HOWEVER, that if there is acceleration or
an event permitting acceleration of any Indebtedness which is included under
this clause (d) solely because of a guarantee by the Companies or one of their
Material Subsidiaries, an Event of Default will not exist under this clause (d)
so long as the Companies or such Material Subsidiary, as the case may be, fully
performs its obligations in a timely manner under such guarantee; or
(e) The Companies or any of their Material Subsidiaries shall
generally not pay their debts as such debts become due, or shall admit in
writing their inability to pay their debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against the Companies or any of their Subsidiaries seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such proceeding shall
remain undismissed or unstayed for a period of 30 days, or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its property)
shall occur; or the Companies or any of their Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
subsection (e); or
(f) Any judgment or order for the payment of money shall be
rendered against the Companies or any of their Material Subsidiaries and other
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(g) A Change of Control Event shall occur; or
(h) Any ERISA Event shall have occurred with respect to a Plan;
or
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(i) The Companies or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plans; or
(j) The Companies or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Companies and their ERISA Affiliates to all Multiemployer
Plans which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of such Multiemployer Plans immediately preceding the plan
year in which the reorganization or termination occurs;
then, and in any such event, Sundial (i) may, by notice to the Companies,
declare the Notes, all interest thereon and all other amounts payable under this
Agreement and the other Transaction Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand protest or further notice
of any kind, all of which are hereby expressly waived by the Companies;
PROVIDED, HOWEVER, that in the event of an actual or deemed entry of an order
for relief with respect to the Companies or any Subsidiary under the Federal
Bankruptcy Code, or the equivalent law of any jurisdiction, including the law of
England and Wales, the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Companies.
SECTION 20. NO IMPAIRMENT. No delay or omission on Sundial's part
in exercising any right, power, privilege or remedy in respect of the Agreement
or the Transaction Documents shall impair such right, power, privilege or remedy
or be construed as a waiver thereof nor shall any single or partial exercise of
any such right, power, privilege or remedy preclude any further exercise thereof
or the exercise of any other right, power, privilege or remedy. The rights,
powers, privileges and remedies herein provided are cumulative and not exclusive
of any rights, powers, privileges or remedies provided by law.
SECTION 21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
covenants, agreements, representations and warranties made herein or in the
Transaction documents or in any certificates, affidavits, agreements, documents
or other writings, delivered pursuant hereto or thereto shall survive the
execution and delivery hereof and thereof, and shall continue in full force and
effect until the payment in full of the Obligations or conversion of all of the
Notes regardless of the release of part or all of the Collateral.
SECTION 22. INDEMNIFICATION BY THE COMPANIES. Each of the
Companies hereby jointly and severally indemnifies and holds harmless the
Advisor and Sundial (to the fullest extent permitted by applicable law) from and
against, and agrees that the Advisor and Sundial shall have no liability or
obligation arising out of, any and all claims, demands, losses,
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judgments, liabilities, penalties and expenses (including reasonable attorneys'
fees) of any nature whatsoever, arising out of or related to this Agreement or
the Transaction Documents, including with respect to the Collateral any such
claims (i) asserted before the taking of actual possession of relevant
Collateral by Sundial pursuant to this Agreement and the Transaction Documents,
(ii) arising out of any act of, or omission to act on the part of, any party
prior to such taking of actual possession or control by Sundial (whether
asserted before or after such taking of possession or control), or (iii) arising
out of any act on the part of the Companies, its agents or Affiliates before or
after the commencement of such actual possession or control by Sundial.
All indemnities contained in this Section 22 shall survive the
expiration or earlier termination of the Transaction Documents.
SECTION 23. FAILURE TO ACT NOT A WAIVER. Neither any failure to
exercise nor any delay on the part of Sundial in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege.
SECTION 24. INDEBTEDNESS; COLLATERAL. Each of the Companies
covenants that from the date of the execution and delivery of this Agreement and
thereafter so long as any of the Transaction Documents are outstanding, it will
not, directly or indirectly, without the express prior written consent of
Sundial, (a) create, incur, assume, guarantee or otherwise become or remain
liable with respect to any Indebtedness, (b) enter into any agreement, amendment
or modification with respect to any existing Indebtedness including, without
limitation, Indebtedness to the Fleming Noteholders (except as contemplated by
Section 6(i)) or (c) take any action which may adversely affect in any material
respect the Collateral.
SECTION 25. MISCELLANEOUS. The Transaction Documents may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be original but all such counterparts shall
together constitute one and the same instrument, and all signatures need not
appear on any counterpart. From time to time, at its expense, duly execute and
deliver to Sundial such further documents and assurances as Sundial may request
in order to effectuate the purposes of this Agreement and the other Transaction
Documents or obtain the full benefit of any thereof.
SECTION 26. NOTICES. Any and all notices or demands hereunder may
be given by any party to any other party in any of the following manners: (i) by
facsimile transmission, (ii) by personal delivery, (iii) by first class mail,
postage prepaid, or (iv) by certified mail, postage prepaid. Any notice given by
facsimile transmission shall be effective two hours after dispatch thereof is
completed by the sending party; all other notices shall be effective upon
receipt. All notices shall be given to the parties at the addresses or to the
facsimile numbers set forth below (or to such other numbers or addresses as
shall be furnished by notice from any party hereto to the other parties hereto):
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The New World Power Company Ltd.
c/o The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Fax: (203) 435-0505
with a copy to:
The New World Power Company Ltd.
Tavistock House
34/36 Bromham Road
Bedford MK 40 ZQD
England
Attention: Mr. Chuan Zhang
and:
Olshan Grundman Frome & Rosenzweig, LLP
505 Park Avenue
New York, New York 10022
Telephone (212) 755-1467
Attention: Thomas J. Fleming, Esq.
and:
Finers
Solicitors
179 Great Portland Street
London W1N 6L3
England
Attn: John D'Ardenne, Esq.
Fax: 011 44 171 323 4000
or: 011 44 171 580 7069
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attention: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
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with a copy to:
Sundt & Co. Ltd.
11 St. James's Square
London SW1Y 4LB
England
Attention: Jens Wilhelmsen
Fax: 011 44 171 930 1784
and
Gilmartin, Poster & Shafto
One William Street
New York, New York 10004 USA
Attention: Donald B. Shafto, Esq.
Fax: (212) 482-0848
(212) 425-3130
SECTION 27. GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York.
SECTION 28. MODIFICATION. No modification, amendment or waiver of
any provision of the Transaction Documents, and no consent to any departure by
the Companies therefrom, shall in any event be effective unless the same shall
be in writing and signed by Sundial, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on the Companies in any case shall entitle the Companies to
any other further notice or demand in the same, similar or other circumstances.
SECTION 29. SEVERABILITY. In the case of any one or more of the
provisions contained in the Transaction Documents should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. To the extent permitted by applicable law, the parties hereby
waive any provision of law which may render any provision hereof invalid,
illegal or unenforceable in any respect.
SECTION 30. COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument, and all signatures need not appear on
any one counterpart.
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SECTION 31. HEADINGS. The headings and captions of this Agreement
and the Transaction Documents are for convenience of reference only and shall
not define, limit or otherwise affect any of the terms or provisions hereof.
SECTION 32. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH
OF THE COMPANIES HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY
AGREES THAT, SUBJECT TO THE ELECTION OF SUNDIAL, ALL ACTIONS OR PROCEEDINGS
RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY BE LITIGATED IN SUCH
COURTS. EACH OF THE COMPANIES ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT AND THE SUBJECT MATTER HEREOF. EACH OF THE COMPANIES HEREBY AGREES
THAT SERVICE UPON IT BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, SHALL
CONSTITUTE SUFFICIENT NOTICE AND SERVICE OF PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE AGENT TO BRING
PROCEEDINGS OR OBTAIN OR ENFORCE JUDGMENTS AGAINST THE PLEDGOR IN THE COURTS OF
ANY OTHER JURISDICTION.
SECTION 33. WAIVER OF JURY TRIAL. THE COMPANIES HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE
COMPANIES ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT,
BUT FOR THIS WAIVER, BE REQUIRED OF SUNDIAL. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATES TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANIES FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS
OF) THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS
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<PAGE>
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY THE
COURT.
SECTION 34. SUCCESSORS. Whenever in this Agreement any of the
parties hereto is referred to such reference shall be deemed to include the
successors and assigns of such party, and all covenants, promises and agreements
by or on behalf of the parties which are contained in this Agreement shall bind
and inure to the benefit of the successors and assigns of all other parties.
SECTION 35. TERMINATION. Upon payment in full of the New World
Power Ltd. Note and the Amended Wolverine Note and of all expenses billed
pursuant to Section 18 of this Agreement and in the event Sundial has not
exercised its right to accept any Exchange Notes, the following sections of this
Agreement shall terminate (all other provisions to remain in full force and
effect.): 5 (other than subsections (f), (j) and (k) thereof which shall remain
in effect for a period of three years following the date of the discharge of all
of the Obligations so long as Sundial and/or Sundt directly or indirectly
beneficially own not less than 5% of the Common Stock of NWP Corp. as determined
for purposes of Section 13(d) of the Securities Exchange Act of 1934), 6, 8-17
and 24. Should Sundial exercise its right to accept any Exchange Notes, then
upon payment in full of the New World Power Ltd. Note and the Amended Wolverine
Note and of all expenses billed pursuant to Section 18 of this Agreement,
Sections 5 (other than subsections (f), (j) and (k) thereof which shall remain
in effect for a period of three years following the date of the discharge of all
of the Obligations so long as Sundial and/or Sundt directly or indirectly own
not less than 5% of the Common Stock of NWP Corp. as determined for purposes of
Section 13(d) of the Securities Exchange Act of 1934), 6 and 24 shall terminate
(all other provisions to remain in full force and effect.).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respectively duly authorized officers as of the day and
year first above written.
THE SUNDIAL INTERNATIONAL FUND
LIMITED
By: /s/ Donald B. Shafto
---------------------
Name: Donald B. Shafto
Title: Assistant Secretary
THE NEW WORLD POWER CORPORATION
By: /s/ George P. Petrenko
-----------------------
Name: George P. Petrenko
Title: Chief Executive Officer
THE NEW WORLD POWER COMPANY LIMITED
By: /s/ John D. Kuhns
------------------
Name: John D. Kuhns
Title: Director
WOLVERINE POWER CORPORATION
By:/s/ John D. Kuhns
Name: John D. Kuhns
Title: Chairman
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EXHIBIT A
RESOLUTIONS
OF
THE BOARD OF DIRECTORS
OF
THE NEW WORLD POWER CORPORATION
WHEREAS, the Board hereby acknowledges that the principal
officers and the directors of each of the Company, NWP Ltd. and
Wolverine (as defined below) have carefully reviewed, discussed
and duly deliberated among each other and with their respective
counsel, with respect to the Forbearance Agreement and the
Related Documents (as defined below) and have duly determined
that the entering into by each of the Company, NWP Ltd. and
Wolverine of the Forbearance Agreement and the Related Documents
constitutes the joint and several undertakings to perform the
obligations by each of the Company, NWP Ltd. and Wolverine under
the Forbearance Agreement and the Related Documents and that they
are in the mutual best interests of each of the Company, NWP Ltd.
and Wolverine and their respective shareholders, and that the
agreements of Sundial contained therein are equitable and
constitute fair consideration for the undertakings and agreements
of each of the Company, NWP Ltd. and Wolverine under the
Forbearance Agreement and the Related Documents;
AND WHEREAS, such determination has been made by such officers
and directors without economic duress or undue influence on the
part of Sundial, the Advisor, any Fleming Noteholders (all as
defined in the Forbearance Agreement) or any representative or
agent thereof or any other party and in full realization of the
fact that in all respects such officers and directors have
reached such determination of their own free will and with due
regard for, and in fulfillment of, their fiduciary duties as
directors and officers of each of the Company, NWP Ltd. and
Wolverine, and without compulsion of any sort and that in making
such determination such officers and directors have, in
particular, concluded that the transactions contemplated by the
Forbearance Agreement and the Related Documents do not unduly or
inappropriately favor one class or group of shareholders or
warrantholders of the Company or one class or group of creditors
of any of the Company, NWP Ltd. or Wolverine over another such
class or group;
<PAGE>
1. FORBEARANCE, WARRANT EXCHANGE, NOTE CONVERSION AND AMENDATORY
AGREEMENT
NOW THEREFORE LET IT BE HEREBY RESOLVED, that that certain
Forbearance, Warrant Exchange, Note Conversion and Amendatory
Agreement, among the Sundial International Fund Limited
("Sundial"), The New World Power Corporation (the "Company"), The
New World Power Company Limited ("NWP Ltd.") and Wolverine Power
Corporation ("Wolverine"), to be dated as of March 1, 1996, (the
"Forbearance Agreement"), the transactions contemplated thereby,
and (i) any other documents, agreements or instruments executed
in connection therewith to which the Company, NWP Ltd. or
Wolverine is a party including without limitation the New NWP
Ltd. Note, the Amended Wolverine Note, the Amended Support and
Pledge Agreement, the Amended Guarantee, the Amended Charge or
the New NWPL Ltd. Charge (as each of those terms is defined in
the Forbearance Agreement); and (ii) Amendment No. 3 to the Note
and Warrant Purchase Agreement among the Fleming Noteholders and
the Company, and all amendments to the related exhibits, to that
agreement; and (iii) the Intercreditor Agreement between the
Company, Sundial and the Fleming Noteholders (all collectively
referred to herein as the "Related Documents"), be, and they
hereby are, in all respects, authorized and approved; and it is
further
RESOLVED, that each of the Chief Executive Officer, the
President, each Vice President and any other officer of the
Company be, and each hereby is, authorized and directed to
execute, deliver and perform, in the name and on behalf of the
Company, the Forbearance Agreement and the Related Documents and
any amendments thereto, and any other documents, agreements or
instruments executed in connection therewith to which the Company
is a party, and that the foregoing officers of the Company be,
and each hereby is, authorized and directed to execute, deliver
and perform in the name and on behalf of the Company such other
documents, agreements and instruments relating thereto, his
signature thereto to be binding upon the Company, all with such
additions, changes or deletions therein as the officer executing
the same shall in his discretion approve (the execution thereof
by such officer to be conclusive evidence of such approval); and
it is further
2. SUBSIDIARIES OF THE COMPANY
RESOLVED, that the Boards of Directors of each of NWP Ltd. and
Wolverine (each a wholly-owned subsidiary of the Company) be, and
they hereby are, authorized, in all respects, to approve and
authorize the Forbearance Agreement and the Related Documents and
the transactions
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contemplated thereby, and any other documents, agreements or
instruments executed in connection therewith to which NWP Ltd. or
Wolverine is a party; and it is further
3. ACKNOWLEDGEMENT OF SENIOR DEBT
RESOLVED, that the Board of Directors of the Company hereby
acknowledges that each of the New NWP Ltd. Note (as defined in
the Forbearance Agreement) and the Amended Wolverine Note (as
defined in the Forbearance Agreement) shall constitute Senior
Indebtedness (as that term is defined in the Forbearance
Agreement); and it is further
4. REGISTRATION STATEMENT
RESOLVED, that the filing of a registration statement on Form S-1
or any other appropriate form (the "Registration Statement"), for
the registration of (i) the shares (the "Shares") of the common
stock, $.01 par value (the "Common Stock") of the Company
underlying the warrants (the "Warrants") to purchase Common Stock
issued pursuant to the Forbearance Agreement and (ii) any shares
of Common Stock into which the Notes (as defined in the
Forbearance Agreement) or notes into which the Notes are
exchanged, be, and the same hereby is, approved in all respects;
and that the officers of the Company be, and each of them with
full power to act without the others hereby is, authorized in the
name and on behalf of the Company to execute, personally or by
power of attorney, the Registration Statement, with such
additions, deletions or changes therein as the officer or
officers executing the same shall approve (the execution thereof
by each such officer, personally or by power of attorney, to be
conclusive evidence of the approval of any such additions,
deletions or changes), and to file or cause to be filed the
Registration Statement with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of
1933, as amended (the "Act"), together with all exhibits and
schedules thereto and any and all other documents in connection
therewith and all actions to be taken by such officers in this
regard are hereby authorized and approved; and it is further
RESOLVED, that the officers of the Company be, and each of them
with full power to act without the others hereby is, authorized
in the name and on behalf of the Company, to execute, personally
or by power of attorney, and to file or cause to be filed with
the Commission pursuant to the Act any and all amendments and
post-effective amendments to the Registration Statement, each
such amendment and post-effective amendment to be in
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such form as the officer or officers executing the same shall
approve (the execution thereof by each such officer, personally
or by power of attorney, to be conclusive evidence of the
approval thereof), together with all exhibits and schedules
thereto and any and all other documents in connection therewith
and all actions to be taken by such officers in this regard are
hereby authorized and approved; and it is further
RESOLVED, that the officers of the Company be, and each of them
with full power to act without the others hereby is, authorized
in the name and on behalf of the Company, to file or cause to be
filed with the Commission, the form of prospectus included in the
Registration Statement (the "Prospectus") when it shall become
effective and any and all supplements to such Prospectus and all
actions to be taken by such officers in this regard are hereby
authorized and approved; and it is
RESOLVED, that the officers of the Company be, and each of them
with power to act without the others hereby is, authorized to
make all such payments and to do all such other acts and things
as they or any of them may deem necessary or desirable in order
to facilitate the effectiveness of the Registration Statement and
any and all amendments and post-effective amendments thereto and
all actions to be taken by such officers in this regard are
hereby authorized and approved; and it is further
RESOLVED, that the appointment of the Chief Executive Officer of
the Company, as agent for the Company to receive any and all
notices and communications from the Commission and from each
other governmental agency relating to the Registration Statement
and any and all amendments and post-effective amendments thereto
is hereby authorized and approved; and it is further
5. STATE REGISTRATION AND QUALIFICATION
RESOLVED, that it is desirable and in the best interest of the
Company that the Shares be qualified or registered for sale in
various states; that the actions of the officers of the Company
to determine the states in which action shall be taken to qualify
or register for sale all or such part of the Shares as said
officers may deem advisable is hereby authorized and approved;
that said officers be, and each of them with full power to act
without the other hereby is, authorized to perform on behalf of
the Company any and all such acts as he may deem necessary or
advisable in order to comply with the applicable laws of any such
states, and in connection therewith to execute and file all
requisite papers and documents, including, but not limited to,
applications, reports, surety bonds,
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<PAGE>
irrevocable consents and appointments of attorneys for service of
process; and that any and all IN HAEC VERBA resolutions which may
be required by the "Blue Sky" or securities laws of any state in
which the Company intends to offer or sell part or all of the
Shares, as determined by the officers of the Company, and each of
them with full power to act without the others, be, and they
hereby are, adopted; and that the officers of the Company be, and
each of them with full power to act without the others hereby is,
authorized to certify that such resolutions were duly adopted by
this resolution; and the execution by such officers of any such
paper or document in connection with the foregoing matters shall
conclusively establish their authority therefor from the Company
and the approval by the Company of the papers and documents to be
executed and the action to be taken; and it is
6. NASDAQ AND SECURITIES EXCHANGE ACT OF 1934
RESOLVED, that the officers of the Company be, and each of them
with full power to act without the others hereby is, authorized
to make an application to the Nasdaq Natural Market System
("Nasdaq") or any other exchange which the officers of the
Company deem appropriate for the listing of the Shares; and that
such officers be, and each of them with full power to act without
the others hereby is, authorized by the Company to sign said
application and any listing agreements or documents required by
Nasdaq in connection therewith and to make such changes in any of
the foregoing documents to conform with the requirements for
listing and to appear (if requested) before officials of Nasdaq
and to register the Shares under the Securities Exchange Act of
1934, as amended; and it is
RESOLVED, that the officers of the Company be, and each of them
with full power to act without the others hereby is, authorized,
in the name and on behalf of the Company, to do or cause to be
done any and all things necessary or advisable in order to comply
with the listing requirements of Nasdaq; and it is
RESOLVED, that the officers of the Company be, and each of them
with full power to act without the others hereby is, authorized,
in the name and on behalf of the Company, to do or cause to be
done all things necessary or advisable in order to comply with
the provisions of the Securities Exchange Act of 1934, as
amended, including the registration of the Shares under such Act
on Form 8-A or such other appropriate form that the Commission
may provide; and it is
7. RESERVATION OF SHARES OF COMMON STOCK
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<PAGE>
RESOLVED, that the Shares and any shares into which the Notes or
notes into which the Notes are exchanged are converted be, and
hereby is, duly reserved for issuance, and, when the Shares are
issued and delivered upon conversion of the Warrants in
accordance with the terms and conditions of the Forbearance
Agreement shall be fully paid and non-assessable shares of Common
Stock of the Company and the holders thereof shall not be liable
for any calls or assessments thereon or for any payment in
respect thereof; and it is
8. FURTHER RESOLUTION
RESOLVED, that each of the Chief Executive Officer, the
President, each Vice President or any officer of the Company be,
and each hereby is, authorized and empowered in the name and on
behalf of the Company to do and perform all such actions and
things as may be necessary, advisable or proper to carry out the
foregoing resolutions and the transactions contemplated thereby,
including the terms and provisions of the Forbearance Agreement
and the Related Documents, and instruments, agreements and
documents related thereto.
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<PAGE>
RESOLUTIONS
OF
THE BOARD OF DIRECTORS
OF
WOLVERINE POWER CORPORATION
WHEREAS, the Board hereby acknowledges that the principal
officers and the directors of the Company (as defined below) have
carefully reviewed, discussed and duly deliberated among each
other and with their respective counsel and their investment
banker, with respect to the Forbearance Agreement and the Related
Documents (as defined below) and have duly determined that the
entering into by the Company of the Forbearance Agreement and the
Related Documents constitutes the undertaking to perform the
obligations by the Company under the Forbearance Agreement and
the Related Documents and that they are in the mutual best
interests of the Company and respective shareholders, and that
the agreements of Sundial contained therein are equitable and
constitute fair consideration for the undertakings and agreements
of the Company under the Forbearance Agreement and the Related
Documents;
AND WHEREAS, such determination has been made by such officers
and directors without economic duress or undue influence on the
part of Sundial, the Advisor, any Fleming Noteholders (all as
defined in the Forbearance Agreement) or any representative or
agent thereof or any other party and in full realization of the
fact that in all respects such officers and directors have
reached such determination of their own free will and with due
regard for, and in fulfillment of, their fiduciary duties as
directors and officers of the Company, and without compulsion of
any sort and that in making such determination such officers and
directors have, in particular, concluded that the transactions
contemplated by the Forbearance Agreement and the Related
Documents do not unduly or inappropriately favor one class or
group of shareholders or warrantholders of the Company or one
class or group of creditors of the Company over another such
class or group;
1. FORBEARANCE, WARRANT EXCHANGE, NOTE CONVERSION AND AMENDATORY
AGREEMENT
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<PAGE>
NOW THEREFORE LET IT BE HEREBY RESOLVED, that that certain
Forbearance, Warrant Exchange, Note Conversion and Amendatory
Agreement, among the Sundial International Fund Limited
("Sundial"), The New World Power Corporation ("NWP Corp."), The
New World Power Company Limited ("NWP Ltd.") and Wolverine Power
Corporation (the "Company"), dated as of March 1, 1996, (the
"Forbearance Agreement"), the transactions contemplated thereby,
and (i) any other documents, agreements or instruments executed
in connection therewith to which the Company is a party including
without limitation the New NWP Ltd. Note, the Amended Wolverine
Note, the Amended Support and Pledge Agreement, the Amended
Guarantee, the Amended Charge or the NWPL Ltd. Charge (as each of
those terms is defined in the Forbearance Agreement); and (ii)
Amendment No. 3 to the Note and Warrant Purchase Agreement
between the Fleming Noteholders and the Company, and all
amendments to the related exhibits, to that agreement; and (iii)
the Intercreditor Agreement between the Company, Sundial and the
Fleming Noteholders (all collectively referred to herein as the
"Related Documents"), be, and they hereby are, in all respects,
authorized and approved; and it is further
RESOLVED, that each of the Chief Executive Officer, the
President, each Vice President and any other officer of the
Company be, and each hereby is, authorized and directed to
execute, deliver and perform, in the name and on behalf of the
Company, the Forbearance Agreement and the Related Documents, to
which the Company is a party, and any amendments thereto, and any
other documents, agreements or instruments executed in connection
therewith to which the Company is a party, and that the foregoing
officers of the Company be, and each hereby is, authorized and
directed to execute, deliver and perform in the name and on
behalf of the Company such other documents, agreements and
instruments relating thereto, his signature thereto to be binding
upon the Company, all with such additions, changes or deletions
therein as the officer executing the same shall in his discretion
approve (the execution thereof by such officer to be conclusive
evidence of such approval); and it is further
2. ACKNOWLEDGEMENT OF SENIOR DEBT
RESOLVED, that the Board of Directors of the Company hereby
acknowledges that the Amended Wolverine Note (as defined in the
Forbearance Agreement) shall constitute Senior Indebtedness (as
that term is defined in the Forbearance Agreement); and it is
further
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<PAGE>
3. FURTHER RESOLUTION
RESOLVED, that each of the Chief Executive Officer, the
President, each Vice President or any officer of the Company be,
and each hereby is, authorized and empowered in the name and on
behalf of the Company to do and perform all such actions and
things as may be necessary, advisable or proper to carry out the
foregoing resolutions and the transactions contemplated thereby,
including the terms and provisions of the Forbearance Agreement
and the Related Documents, and instruments, agreements and
documents related thereto.
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<PAGE>
RESOLUTIONS
OF
THE BOARD OF DIRECTORS
OF
THE NEW WORLD POWER COMPANY, LTD.
WHEREAS, the Board hereby acknowledges that the principal
officers and the directors of the Company (as defined below) have
carefully reviewed, discussed and duly deliberated among each
other and with their respective counsel and their investment
banker, with respect to the Forbearance Agreement and the Related
Documents (as defined below) and have duly determined that the
entering into by the Company of the Forbearance Agreement and the
Related Documents constitutes undertaking to perform the
obligations by the Company under the Forbearance Agreement and
the Related Documents and that they are in the mutual best
interests of the Company and their respective shareholders, and
that the agreements of Sundial contained therein are equitable
and constitute fair consideration for the undertakings and
agreements of the Company under the Forbearance Agreement and the
Related Documents;
AND WHEREAS, such determination has been made by such officers
and directors without economic duress or undue influence on the
part of Sundial, the Advisor, any Fleming Noteholders (all as
defined in the Forbearance Agreement) or any representative or
agent thereof or any other party and in full realization of the
fact that in all respects such officers and directors have
reached such determination of their own free will and with due
regard for, and in fulfillment of, their fiduciary duties as
directors and officers of the Company and without compulsion of
any sort and that in making such determination such officers and
directors have, in particular, concluded that the transactions
contemplated by the Forbearance Agreement and the Related
Documents do not unduly or inappropriately favor one class or
group of shareholders or warrantholders of the Company or one
class or group of creditors of the Company over another such
class or group;
1. FORBEARANCE, WARRANT EXCHANGE, NOTE CONVERSION AND AMENDATORY
AGREEMENT
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<PAGE>
NOW THEREFORE LET IT BE HEREBY RESOLVED, that that certain
Forbearance, Warrant Exchange, Note Conversion and Amendatory
Agreement, among the Sundial International Fund Limited
("Sundial"), The New World Power Corporation ("NWP Corp."), The
New World Power Company Limited (the "Company") and Wolverine
Power Corporation ("Wolverine"), dated as of March 1, 1996, (the
"Forbearance Agreement"), the transactions contemplated thereby,
and (i) any other documents, agreements or instruments executed
in connection therewith to which the Company is a party including
without limitation the New NWP Ltd. Note, the Amended Wolverine
Note, the Amended Support and Pledge Agreement, the Amended
Guarantee, the Amended Charge or the NWPL Charge (as each of
those terms is defined in the Forbearance Agreement); and (ii)
Amendment No. 3 to the Note and Warrant Purchase Agreement
between the Fleming Noteholders and the Company, and all
amendments to the related exhibits, to that agreement; and (iii)
the Intercreditor Agreement between the Company, Sundial and the
Fleming Noteholders (all collectively referred to herein as the
"Related Documents"), be, and they hereby are, in all respects,
authorized and approved; and it is further
RESOLVED, that each of the Chief Executive Officer, the
President, each Vice President and any other officer of the
Company be, and each hereby is, authorized and directed to
execute, deliver and perform, in the name and on behalf of the
Company, the Forbearance Agreement and the Related Documents, to
which the Company is a party, and any amendments thereto, and any
other documents, agreements or instruments executed in connection
therewith to which the Company is a party, and that the foregoing
officers of the Company be, and each hereby is, authorized and
directed to execute, deliver and perform in the name and on
behalf of the Company such other documents, agreements and
instruments relating thereto, his signature thereto to be binding
upon the Company, all with such additions, changes or deletions
therein as the officer executing the same shall in his discretion
approve (the execution thereof by such officer to be conclusive
evidence of such approval); and it is further
2. ACKNOWLEDGEMENT OF SENIOR DEBT
RESOLVED, that the Board of Directors of the Company hereby
acknowledges that the New NWP Ltd. Note (as defined in the
Forbearance Agreement) shall constitute Senior Indebtedness (as
that term is defined in the Forbearance Agreement); and it is
further
3. FURTHER RESOLUTION
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<PAGE>
RESOLVED, that each of the Chief Executive Officer, the
President, each Vice President or any officer of the Company be,
and each hereby is, authorized and empowered in the name and on
behalf of the Company to do and perform all such actions and
things as may be necessary, advisable or proper to carry out the
foregoing resolutions and the transactions contemplated thereby,
including the terms and provisions of the Forbearance Agreement
and the Related Documents, and instruments, agreements and
documents related thereto.
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<PAGE>
WARRANT CERTIFICATE
NEITHER THE WARRANT REPRESENTED BY THIS CERTIFICATE NOR THE
COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, AND NEITHER MAY BE SOLD OR
OTHERWISE TRANSFERRED WITHOUT REGISTRATION UNDER SUCH ACT
AND ANY APPLICABLE STATE SECURITIES LAW UNLESS AN EXEMPTION
FROM REGISTRATION IS THEN AVAILABLE.
THIS WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S.
PERSON (AS DEFINED IN REGULATION IS UNDER SUCH ACT) WITHOUT
REGISTRATION UNDER SUCH ACT UNLESS AN EXEMPTION FROM
REGISTRATION IS THEN AVAILABLE.
WARRANT TO PURCHASE COMMON STOCK
OF
THE NEW WORLD POWER CORPORATION
INITIAL ISSUANCE DATE: MAY __, 1996
No. ___
This is to certify that, FOR VALUE RECEIVED, the registered
holder hereof, ________________________ (together with any successors and
assigns hereunder, the "Holder" or the "Holders"), is entitled to purchase,
subject to the provisions of this Warrant Certificate, from the NEW WORLD POWER
CORPORATION, a Delaware corporation (the "Company"), up to ______ shares (as
such number may be adjusted in accordance with Section 5 hereof) of the
Company's Common Stock, par value $0.01 per share (such class of stock, together
with any capital stock of the Company into which such class of stock shall be
converted, being referred to herein as "Stock"), at $1.75 per share (as such
number may be adjusted in accordance with Section 5 hereof) (the "Exercise
Price"). The number of shares of Stock to be received upon the exercise of this
Warrant and the Exercise Price shall be adjusted from time to time as
hereinafter set forth. The shares of Stock or other securities or property
deliverable upon the exercise, as adjusted from time to time, are hereinafter
sometimes referred to as "Warrant Shares."
This Warrant Certificate is one of the Warrant Certificates (the
"New Warrants") issued in connection with that certain Forbearance, Warrant
Exchange, Note Conversion and Amendatory Agreement, among the Sundial
International Fund Limited, the Company, The New World Power Company Limited and
Wolverine Power Corporation, dated
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as of March 1, 1996, (the "Forbearance Agreement.") The New Warrants so issued
evidence rights to purchase an aggregate of up to 443,796 Warrant Shares at the
Exercise Price. The Forbearance Agreement under which this Warrant is being
issued is herein referred to as the "Forbearance Agreement." This Warrant is
subject to the provisions, and is entitled to the benefits, of the Forbearance
Agreement.
THIS WARRANT CERTIFICATE SHALL NOT BE VALID AND MAY NOT BE
TRANSFERRED OR EXERCISED UNLESS COUNTERSIGNED BY THE WARRANT AGENT.
Section 1. EXERCISE OF WARRANT.
1.1. MANNER OF EXERCISE. (a) This Warrant may be exercised by the
Holder, in whole or in part, at any time or from time to time through and
including May __, 2001 (the "EXPIRATION DATE") during normal business hours on
any Business Day (as defined in the Forbearance Agreement) by surrender of this
Warrant, duly countersigned by the Warrant Agent referred to below, together
with the form of subscription duly executed by such Holder in substantially the
form attached as Annex A hereto, to the Company at its office designated
pursuant to Section 26 of the Forbearance Agreement (or, if such exercise is in
connection with an underwritten public offering of Warrant Shares subject to
this Warrant, at the location at which the underwriting agreement requires that
such Warrant Shares be delivered).
(b) Payment of the Exercise Price for the Warrant Shares shall be
made at the principal shareholder services offices at Boston EquiServe
Shareholder Services, or its successor (the "Warrant Agent"), presently located
at 150 Royal Street, M/S 45-01-19, Canton, Massachusetts 02021, (i) by certified
or bank check or wire transfer payable to the order of the Company, in any case,
in an amount equal to (x) the number of Warrant Shares specified in such form of
subscription, multiplied by (y) the then current Exercise Price, (ii) in the
manner provided in Section 1.6 hereof or (iii) in the manner provided in Section
1.7 hereof. The Holder shall thereupon be entitled to receive the number of
Warrant Shares specified in such form of subscription (plus cash in lieu of any
fractional share as provided in Section 1.3 hereof).
1.2. EFFECTIVE DATE. Each exercise of this Warrant pursuant to
Section 1.1 hereof shall be deemed to have been effected immediately prior to
the close of business on the Business Day on which this Warrant is surrendered
to the Company as provided in Section 1.1 hereof unless a later time is
specified in writing by the Holder surrendering such Warrant (except that if
such exercise is in connection with an underwritten public offering to Warrant
Shares subject to this Warrant, then such exercise shall be deemed to have been
effected upon such surrender of this Warrant unless a later time is specified in
writing by the Holder surrendering such Warrant). On each such day that an
exercise of this Warrant is deemed effected, the person or persons in whose name
or names any certificate or certificates for Warrant Shares are issuable upon
such exercise (as provided in Section 1.3 hereof) shall be deemed to have become
the Holder of Holders of record thereof.
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1.3. WARRANT SHARE CERTIFICATES, CASH FOR FRACTIONAL WARRANT
SHARES AND REISSUANCE OF WARRANTS. As promptly as practicable after the exercise
of this Warrant, in whole or in part, and in any event within five (5) Business
Days thereafter (unless such exercise shall be in connection with a public
offering of Warrant Shares subject to this Warrant, in which event concurrently
with such exercise), the Company at its expense (including the payment by it of
any applicable issue, stamp or other taxes) will cause to be issued in the name
of and delivered to the Holder or, subject to Section 3 of the Forbearance
Agreement, as the Holder may direct.
(i) a certificate or certificates for the number of Warrant
Shares to which the Holder shall be entitled upon such exercise plus, in
lieu of any fractional share to which the Holder would otherwise be
entitled, cash in an amount equal to the same fraction of the Market
Price (as defined in Section 5.1 hereof) per Warrant Share on the
Business Day next preceding the date of such exercise; and
(ii) in case such exercise is in part only, a new Warrant or
Warrants, substantially identical hereto, representing the rights
formerly represented by this Warrant which have not expired or been
exercised.
1.4. ACKNOWLEDGMENT OF OBLIGATION. The Company will, at the time
of or at any time after each exercise of this Warrant, upon the request of the
Holder hereof or of any Warrant Shares issued upon such exercise, acknowledge in
writing its continuing obligation to afford to such Holder all rights
(including, without limitation, any rights to registration of any such Warrant
Shares pursuant to the Registration Rights Agreement (as defined in the
Forbearance Agreement)) to which such Holder shall continue to be entitled under
this Warrant, the Forbearance Agreement and the Registration Rights Agreement;
PROVIDED, that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Company to afford such
rights to such Holder.
1.5. CONDITIONAL EXERCISE. Notwithstanding any other provision
hereof, if any exercise of any portion of this Warrant is to be made in
connection with a public offering of Warrant Shares or any transaction described
in Section 5.9 hereof, the exercise of any portion of this Warrant may, at the
election of the Holder, be conditioned upon the consummation of the public
offering or such transaction, in which case such exercise shall not be deemed to
be effective until the consummation of such public offering or transaction.
1.6. PAYMENT BY APPLICATION OF THE NOTES. (a) The Holder shall
have the option, but not the obligation, upon any exercise of this Warrant, to
apply to the payment required by Section 1.1 hereof all or any part of the
principal amount and accrued interest then unpaid of any one or more Notes (as
defined in the Forbearance Agreement) at the time held by such Holder. The
Company will accept the amount of principal and accrued interest, if such
election is selected, specified in such form of subscription in satisfaction of
the Exercise Price for such Warrant Shares to be purchased. Within five (5)
Business Days after receipt of any such notice, the Company will pay to the
holder of Notes submitting such
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subscription, in the manner provided in such Notes and the Forbearance
Agreement, any unpaid interest accrued to the date of exercise of this Warrant
on the principal amount so specified in such form of subscription unless such
interest has been applied by the Holder to the exercise price of Warrant Shares.
In the event that less than the entire unpaid principal amount of any Note is
applied to the payment required by Section 1.1 hereof, such Note shall be
surrendered together with the form of subscription and cancelled, and the
Company will promptly issue a new Note representing the remaining unpaid
principal balance. In the event that the entire unpaid principal amount and
accrued interest thereon of any Note is applied to the payment required by
Section 1.1 hereof, such Note shall be surrendered together with the form of
subscription and cancelled.
(b) The Holder shall have the right to apply all or any portion
of the principal amount of a Note (and accrued interest thereon) to exercise all
or any portion of this Warrant even though the Company or such Holder may have
given notice of prepayment with respect to all or any portion of the principal
amount and accrued interest of such Note, so long as the subscription form with
respect to such principal amount of such Note shall, together with this Warrant,
have been delivered to the Company in accordance with Section 1.1 hereof prior
to the date fixed for such prepayment.
1.7. CONVERSION OF WARRANT. In addition to and without limiting
the rights of the Holder under the terms of this Warrant, the Holder shall have
the option, but not the obligation, to convert this Warrant, or any portion
hereof (the "Conversion Right"), into Warrant Shares as provided in this Section
1.7 at any time on or prior to the Expiration Date. Upon exercise of the
Conversion Right with respect to a particular number of shares subject to this
Warrant (the "Conversion Warrant Shares"), the Company shall deliver to the
Holder (without consideration) that number of Warrant Shares equal to the
quotient obtained by dividing (i) the value of this Warrant (or the specified
portion hereof) on the effective date of the exercise of the Conversion Right,
as provided in Section 1.2 hereof ("the Conversion Date"), which value shall be
determined by subtracting (x) the aggregate exercise price of the Converted
Warrant Shares immediately prior to the exercise of the Conversion Right from
(y) the aggregate Market Price (determined as provided in Section 5.6) of such
Converted Warrant Shares on the Conversion Date by (ii) the Market Price of one
Warrant Share on the Conversion Date.
1.8. COMPLIANCE WITH U.S. SECURITIES LAWS. The Warrant Shares
deliverable upon the exercise of this Warrant may not be delivered within the
United States unless they are delivered to a professional fiduciary in the
United States having investment discretion for the Holder of this Warrant or
unless such Warrant Shares have been registered under the Act or an exemption
from such registration is available. Upon exercise of the Company (i) a written
certification that such Holder is not a "U.S. person" (as defined in Regulation
S under the Act) and that the Warrants are not being exercised on behalf of, or
for the account or benefit of, a U.S. person or (ii) a written opinion of U.S.
counsel, in form and substance reasonably satisfactory to the Company, to the
effect that the Warrants and the Warrant Shares have been registered under the
Act or are exempt from registration thereunder.
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Section 2. RESERVATION OF SHARES.
The Company shall at all times after the date hereof and until
the Expiration Date reserve for issuance and delivery upon exercise of this
Warrant the number of Warrant Shares as shall be required for issuance and
delivery upon exercise in full of this Warrant.
Section 3. TRANSFER, EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT.
3.1. TRANSFER. This Warrant may be assigned in whole or in part
or transferred in whole or in part; subject, however, to compliance with the
provisions of the Act and the rules and regulations promulgated thereunder.
3.2. PROCEDURE FOR ASSIGNMENT OR TRANSFER. This Warrant shall be
transferable only on the books of the Warrant Agent maintained at the Warrant
Agent's principal shareholder services office upon delivery of this Warrant
together with the form of assignment, in substantially the form attached as
Annex B hereto, duly completed and signed by the Holder or by its duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer in form acceptable to the
Warrant Agent and the Company. The Warrant Agent or Company may, in its
discretion, require, as a condition to any transfer of Warrants, a signature
guarantee by a participant in a recognized signature guarantee medallion program
in the United States, The Securities and Futures Authority Limited in the United
Kingdom, or The International Stock Exchange of London, England. Upon any
registration of transfer, the Warrant Agent shall deliver a new Warrant
Certificate or Certificates of like tenor and evidencing in the aggregate a like
number of Warrants to the person entitled thereto in exchange for this
Certificate, subject to the limitations provided herein, without any charge
except for any tax or other governmental charged imposed in connection
therewith. This Warrant may be divided or combined with other Warrants which
carry the same rights upon presentation thereof at the principal office of the
Warrant Agent together with a written notice signed by the holder thereof,
specifying the names and denominations in which new Warrants are to be issued.
3.3. LOSS, THEFT, DESTRUCTION OR MUTILATION. Upon receipt by the
Warrant Agent of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification to the Warrant Agent or (in the case of
mutilation) presentation of this Warrant for surrender and cancellation, the
Warrant Agent will execute and deliver a new Certificate of like tenor in lieu
thereof and any such lost, stolen, destroyed or mutilated Warrant shall
thereupon become void.
Section 4. WARRANT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER
The Holders shall not, solely because of holding this Warrant, be
entitled to vote, receive dividends or be deemed the holder of Stock or any
other securities of the Company which may at any time be issuable on the
exercise of the Warrant for any purpose
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whatsoever, nor shall anything contained herein be construed to confer upon the
Holders, as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matters submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, change of par value or change of stock to no par
value, consolidation, merger, conveyance or otherwise), or to receive notice of
meetings or other actions affecting stockholders, or to receive dividend or
subscription rights, or otherwise, until this Warrant shall have been exercised
in accordance with the provisions hereof.
Section 5. ANTIDILUTION.
The number of Warrant Shares for which this Warrant is
exercisable and/or the Exercise Price at which such Warrant Shares may be
purchased upon exercise of this Warrant shall be subject to adjustment from time
to time as set forth in this Section 5. The Company shall give the Holders
notice of any event described below which requires an adjustment pursuant to
this Section 5 at the time of such event.
5.1. STOCK DIVIDENDS, SUBDIVISIONS; COMBINATIONS AND
RECLASSIFICATIONS.
In case the Company shall, after the date hereof,
(i) pay a stock dividend or make a distribution (on or in
respect of its Stock) in shares of its Stock,
(ii) subdivide the outstanding shares of its Stock,
(iii) combine the outstanding shares of its Stock into a
smaller number of shares, or
(iv) issue by reclassification of shares of its Stock, any
shares of capital stock of the Company,
then, in any such case, (A) the Warrant Shares for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Stock which a record holder of the same number
of shares of Stock for which this Warrant is exercisable immediately prior to
the occurrence of such event would own or be entitled to receive after the
happening of such event, and (B) the Exercise Price shall be adjusted to equal
(x) the Exercise Price multiplied by the Warrant Shares for which this Warrant
is exercisable immediately prior to the adjustment divided by (y) the Warrant
Shares for which this Warrant is exercisable immediately after such adjustment.
An adjustment made pursuant to this Section 5.1 shall become effective
retroactively immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification.
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5.2. CERTAIN OTHER DISTRIBUTIONS. In the case the Company shall,
after the date hereof, fix a record date for the making of a distribution to
holders of its Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation) of
(i) assets,
(ii) evidences of indebtedness or other securities (except
for its Stock) of the Company or of any entity other than the Company,
or
(iii) subscription rights, options or warrants to purchase
any of the foregoing assets or securities, whether or not such rights,
options or warrants are immediately exercisable.
then, (A) the Warrant Shares for which this Warrant is exercisable shall be
adjusted to equal the product of the Warrant Shares for which this Warrant is
exercisable immediately prior to such adjustment by a fraction (x) the numerator
of which shall be the Market Price per share of Stock (determined as provided in
Section 5.6 hereof) at the date of taking such record and (y) the denominator of
which shall be such Market Price per share of Stock minus the amount allocable
to one share of Stock of any cash so distributable and of the fair value (as
determined in good faith by the Board of Directors of the Company) of any and
all other assets, evidences of indebtedness, other securities, subscription
rights, options or warrants so distributable, and (B) the Exercise Price shall
be adjusted to equal (x) the Exercise Price multiplied by the Warrant Shares for
which this Warrant is exercisable immediately prior to the adjustment divided by
(y) the Warrant Shares for which this Warrant is exercisable immediately after
such adjustment.
5.3. ISSUANCE OF ADDITIONAL SHARES OF STOCK. Subject to the
exceptions referred to in Section 5.5 hereof, in case the Company shall at any
time or from time to time after the date hereof issue any additional shares of
Stock ("Additional Stock"), for a consideration per share either
(i) less than the then current Market Price per share of
Stock (determined as provided in Section 5.6 hereof) immediately prior
to the issuance of such Additional Stock,
(ii) less than the then current Exercise Price immediately
prior to the issuance of such Additional Stock or
(iii) without consideration,
then (in the case of either clause (i), (ii) or (iii)), and thereafter
successively upon each such issuance, the current Exercise Price shall forthwith
be reduced to the price determined by multiplying such current Exercise Price by
a fraction, of which
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(a) the numerator shall be (x) the number of shares
of Stock outstanding immediately prior to such issuance of
Additional Stock plus (y) the number of shares of Stock which the
aggregate amount of consideration, if any, received by the
Company for the total number of such Additional Stock so issued
would purchase at the greater (A) the then current Market Price
per share of Stock or (B) the then current Exercise Price per
share of Stock, and
(b) the denominator shall be the number of shares
of Stock outstanding immediately after such issuance of
Additional Stock;
PROVIDED, HOWEVER, that such adjustment shall be made only if such adjustment
results in a current Exercise Price less than the current Exercise Price in
effect immediately prior to the issuance of such Additional Stock. The
provisions of this Section 5.3 shall not apply to any issuance of Additional
Stock for which an adjustment is provided under Section 5.1 or 5.2.
5.4. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS
SECTION. The following provisions shall be applicable to the making of
adjustments of the Warrant Shares for which this Warrant is exercisable and the
Exercise Price at which such Warrant Shares may be purchased upon exercise of
this Warrant provided for in this Section 5:
(a) CASH CONSIDERATION. In case of the issuance of
Additional Stock for cash, the consideration received by the Company
therefor shall be deemed to be the cash proceeds received by the Company
for such Additional Stock before deducting any commissions or other
expenses paid or incurred by the Company for any underwriting of, or
otherwise in connection with the issuance of, such Additional Stock.
(b) NON-CASH CONSIDERATION. In case of the issuance of
Additional Stock for a consideration other than cash, or a consideration
a part of which shall be other than cash, the amount of the
consideration other than cash so received or to be received by the
Company shall be deemed to be the value of such consideration at the
time of its receipt by the Company as determined in good faith by the
Board of Directors of the Company, except that where the non-cash
consideration consists of the cancellation, surrender or exchange of
outstanding obligations of the Company or where such obligations are
otherwise converted into shares of the Company's Stock), the value of
the non-cash consideration shall be deemed to be the principal amount of
the obligations cancelled, surrendered, satisfied, exchanged or
converted. If the Company receives consideration, part or all of which
consists of publicly traded securities (i.e., in lieu of cash), the
value of such non-cash consideration shall be the aggregate market value
of such securities (based on the latest reported sale price regular way)
as of the close of the day immediately preceding the date of their
receipt by the Company.
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(c) OPTIONS, WARRANTS, CONVERTIBLES, ETC. In case of the
issuance, whether by distribution or sale to holders of its Stock or to
others, by the Company of (i) any security (other than the Notes) that
is convertible into Stock or (ii) any rights, options or warrants (other
than the Warrants) to purchase Stock, the Company shall be deemed to
have issued, for the consideration described below, the number of shares
of Stock into which such convertible security may be converted when
first convertible, or the number of shares of Stock deliverable upon the
exercise of such rights, options or warrants when first exercisable, as
the case may be (and such shares shall be deemed to be Additional Stock
for purposes of Section 5.3 hereof). The consideration deemed to be
received by the Company at the time of the issuance of such convertible
securities or such rights, options or warrants shall be the
consideration so received determined as provided in Sections 5.4(a) and
(b) hereof after deducting any commissions or other expenses paid or
incurred by the Company for any underwriting of, or otherwise in
connection with, the issuance of such convertible securities or rights,
options or warrants, plus (x) any consideration or adjustment payment to
be received by the Company in connection with such conversion or, as
applicable, (y) the aggregate price at which shares of Stock are to be
delivered upon the exercise of such rights, options or warrants when
first exercisable (or, if no price is specified and such shares are to
be delivered at an option price related to the market value of the
subject Stock an aggregate option price bearing the same relation to the
market value of the subject Stock at the time such rights, options or
warrants are granted). If, subsequently, (1) such number of shares into
which such convertible security is convertible, or which are deliverable
upon the exercise of such rights, options or warrants, is increased or
(2) the conversion or exercise price of such convertible security,
rights, options or warrants is decreased, then the calculations under
the preceding two sentences (and any resulting adjustment to the current
Exercise Price under Section 5.3 hereof) with respect to such
convertible security, rights, options or warrants, as the case may be,
shall be recalculated as of the time of such issuance but giving effect
to such changes (but any such recalculation shall not result in the
current Exercise Price being higher than that which would be calculated
without regard to such issuance). On the expiration or termination of
such rights, options or warrants, or rights to convert, the Exercise
Price hereunder shall be readjusted (up or down as the case may be) to
such current Exercise Price as would have been obtained had the
adjustments made with respect to the issuance of such rights, options or
warrants or upon the conversion of any such securities and at the actual
exercise or conversion prices (but any such recalculation shall not
result in the current Exercise Price being higher than that which would
be calculated without regard to such issuance).
(d) NUMBER OF SHARES OUTSTANDING. The number of shares of
Stock as at the time outstanding shall exclude all shares of Stock then
owned or held by or for the account of the Company but shall include the
aggregate number of shares of Stock at the time deliverable in respect
of the convertible securities, rights, options and warrants referred to
in Section 5.4(c) and 5.5 hereof; PROVIDED, that to the extent that such
rights, options, warrants or conversion privileges are not exercised,
such shares of
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Stock shall be deemed to be outstanding only until the expiration dates
of the rights, warrants, options or conversion privileges or the prior
cancellation thereof.
(e) WHEN ADJUSTMENTS TO BE MADE. The adjustments required
by this Section 5 shall be made whenever and as often as any event
requiring an adjustment shall occur, except that any adjustment of the
Warrant Shares for which this Warrant is exercisable that would
otherwise be required may be postponed (except in the case of a stock
dividend, subdivision, combination or reclassification of shares of the
Stock, as provided for in Section 5.1) up to, but not beyond the date of
exercise in such adjustment either by itself or with other adjustments
not previously made adds or subtracts less than 1% of the shares of the
Stock for which this Warrant is exercisable immediately prior to the
making of such adjustment. Any adjustment representing a change of less
than such minimum amount (except as aforesaid) which is postponed shall
be carried forward and made as soon as such adjustment, together with
other adjustments required by this Section 5 and not previously made,
would result in a minimum adjustment or on the date of exercise. For the
purpose of any adjustment, any event shall be deemed to have occurred at
the close of business on the date of its occurrence.
(f) FRACTIONAL INTERESTS. In computing adjustments under
this Section 5, fractional interests in the Stock shall be taken into
account to the nearest 1/10th of a share.
(g) WHEN ADJUSTMENT NOT REQUIRED. If the Company shall
take a record of the holders of the Stock for the purpose of entitling
them to receive a dividend or distribution or subscription or purchase
rights and shall, thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then thereafter no
adjustment shall be required for reason of the taking of such record and
any such adjustment previously made in respect thereof shall be
rescinded and annulled.
(h) CHALLENGE TO GOOD FAITH DETERMINATION. Whenever the
Board of Directors of the Company shall be required to make a
determination in good faith of the fair value of any item under this
Section 5, such determination may be challenged in good faith by a
Holder and any dispute shall be resolved by an investment banking firm
of recognized national standing selected by the Company and acceptable
to such Holder.
(i) ESCROW OF PROPERTY. If the Company shall take a record
of the holders of its Stock for the purpose of entitling them to receive
any distribution of any kind of property whatsoever, but prior to the
payment of such distribution the Holder exercises this Warrant, upon
payment of the Exercise Price, such property shall be held in escrow for
the Holder by the Company to be issued to the Holder upon the occurrence
of such distribution and to the extent such distribution actually takes
place.
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Notwithstanding any other provision to the contrary herein, if the
distribution for which such record was taken fails to occur or is
rescinded, then such escrowed property shall be returned to the Company.
5.5. EXCLUSIONS FROM ADDITIONAL STOCK ISSUANCES. The following
shall not be deemed to be issuances of Additional Stock under Section 5.3
hereof: (i) issuance of Stock upon conversion of the Notes or the exercise of
the Warrants (as defined in the Forbearance Agreements) or the exercise of
Convertible Warrants (as defined in the Fleming Documents (as defined in the
Forbearance Agreement)) or the issuance of any Notes or Warrants under the
Fleming Documents (as defined in the Forbearance Agreement) and (ii) the
issuance of Stock upon the exercise of the existing options, rights and warrants
listed on Schedule 1 hereto pursuant to the current terms thereof, provided that
any change in the number of shares of stock issuable upon exercise thereof due
to any amendment or modification of the terms thereof (but not as a result of
the application of the current antidilution provisions thereof), or the exchange
of any such option, right or warrant for any other option, right, warrant or
security exercisable for or convertible into Stock, shall be considered an
issuance of Additional Stock under Section 5.3 hereof.
5.6. DETERMINATION OF MARKET PRICE. For the purpose of any
computation under this Section 5, the current "Market Price" per share of Stock
on any date shall be deemed to be the average of the daily closing prices for
the thirty (30) consecutive trading days prior to the day as of which "Market
Price" is being determined. The closing price for each day shall be the last
reported sale price regular way or, in case no such sale takes place on such
day, the average of the closing bid and asked prices regular way, in either case
on the principal national securities exchange on which the Stock is listed or
admitted to trading, or if the Stock is not listed or admitted to trading on any
national securities exchange, on the NASDAQ Stock Market or a comparable
quotation system. If the closing price cannot be so determined, then the Market
Price shall be determined:
(i) by the written agreement of the Company
and the holders of Warrants representing a majority of the
Warrant Shares then obtainable from the exercise of the
Warrants then outstanding, or
(ii) in the event that no such agreement is
reached within twenty (20) days after the event giving
rise to the need to determine the Market Price, by the
agreement of two arbitrators, one of whom shall be
selected by the Company and the other of whom shall be
selected by such majority holders, or
(iii) if the two arbitrators so selected fail
to agree within a further twenty (20) day period, by a
third arbitrator selected by the mutual agreement of the
other two (with all costs and expenses of any arbitrators
to be paid by the Company).
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The Company shall cooperate, and shall provide all necessary information and
assistance, to permit any determination under the preceding clauses (i), (ii) or
(iii).
5.7. ANTIDILUTION ADJUSTMENTS UNDER OTHER SECURITIES. Without
limiting any other rights available hereunder to the Holder, if there is an
antidilution adjustment (i) under any security which is convertible into Stock
whether issued prior to or after the date hereof (except for the Notes) or (ii)
under any right, option or warrant to purchase Stock whether issued prior to or
after the date hereof (except for the Warrants) which, in either case, results
in a reduction in the conversion, exercise or purchase price with respect to
such security, right, option or warrant or results in an increase in the number
of shares obtainable under such security, right option or warrant, then an
adjustment shall be made under this Section 5.7 to the current Exercise Price
hereunder. Any such adjustment under this Section 5.7 shall be whichever of the
following results in a lower current Exercise Price: (A) a reduction in the
current Exercise Price equal to the percentage reduction in such conversion,
exercise or purchase price with respect to such security, right, option or
warrant or (B) a reduction in the current Exercise Price which will result in
the same percentage increase in the number of Warrant Shares available hereunder
as the percentage increase in the number of shares available under such
security, right, option or warrant. Any such adjustment under this Section 5.7
shall only be made if it would result in a lower current Exercise Price than
that which would be determined pursuant to any other antidilution adjustment
otherwise required under this Section 5 as a result of the event or circumstance
which triggered the adjustment to the security, right, option or warrant
described in clause (i) or (ii) above (and if any such adjustment is so made
under this Section 5.7, then such other antidilution adjustment otherwise
required under this Section 5 shall not be made as a result of such event or
circumstance).
5.8. MEANING OF "ISSUANCE". References in this Agreement to
"issuance" of stock by the Company include issuances by the Company of
previously unissued shares and issuances or other transfers by the Company of
treasury stock.
5.9. MERGER OR CONSOLIDATION. If the Company shall at any time
consolidate with or merge into another corporation (where the Company is not the
continuing corporation after such merger or consolidation), or the Company shall
sell, transfer or lease all or substantially all of its assets, or the Company
shall change its Stock into property other than capital stock, then, in such
case, the Holders shall thereupon (and thereafter) be entitled to receive upon
exercise of this Warrant in whole or in part, the same kind and number of shares
of stock and other securities, cash or other property (and upon the same terms
and with the same rights) as would have been distributed to the Holder upon such
consolidation or merger, sale of assets or change had the Holder exercised this
Warrant immediately prior to such consolidation or merger, sale of assets or
change (with any record date requirement being deemed to have been satisfied),
and this Warrant shall thereafter continue to be subject to further adjustments
under this Section 5. The Holder shall pay upon such exercise the Exercise Price
that otherwise would have been payable pursuant to the term of this Warrant. If
such consolidation or merger, sale of assets or change results in a cash
distribution in
-12-
<PAGE>
excess of the Exercise Price provided by this Warrant, a Holder may, at the
Holder's option, exercise this Warrant without making payment of the Exercise
Price, and in such case the Company shall, upon distribution to the Holder,
consider the Exercise Price to have been paid in full, and in making settlement
to the Holder, shall deduct an amount equal to the Exercise Price from the
amount payable to the Holder. The Company shall take such steps in connection
with such consolidation or merger, sale of assets or change as may be necessary
to assure the Holder that the provisions of this Warrant, the Forbearance
Agreement and the Registration Rights Agreement shall thereafter be applicable
in relation to any securities or property thereafter deliverable upon exercise
of this Warrant, including, but not limited to, obtaining a written obligation
to supply such securities or property upon such exercise and to be so bound by
this Warrant.
5.10. CHIEF FINANCIAL OFFICER'S OPINION. Upon each adjustment of
the Exercise Price and upon each change in the Warrant Shares issuable upon the
exercise of this Warrant, and in the event of any change in the rights of a
Holder by reason of other events herein set forth, then and in each such case,
the Company shall promptly obtain an opinion of the chief financial officer of
the Company, stating the adjusted Exercise Price and the new Warrant Shares so
issuable, or specifying the other shares of the Stock, securities or assets and
the amount thereof receivable as a result of such change in rights, and setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based. The Company will promptly mail a copy of such opinion
to the Holders. If a Holder disagrees with such calculation, the Company agrees
to obtain within thirty (30) business days an opinion of a firm of independent
certified public accountants selected by the Company's Board of Directors and
acceptable to such Holder to review such calculation and the opinion of such
firm of independent certified public accountants shall be final and binding on
the parties and shall be conclusive evidence of the correctness of the
computation with respect to any such adjustment of the Exercise Price and any
such change in the number of Warrant Shares so issuable.
5.11. COMPANY TO PREVENT DILUTION. In case at any time or from
time to time conditions arise by reason of action taken by the Company, which in
good faith opinion of its Board of Directors or a majority of the Holders are
not adequately covered by the provisions of this Section 5, and which might
materially and adversely affect the exercise rights of the Holders, the Board of
Directors of the Company shall appoint such firm or independent certified public
accountants acceptable to a majority of the Holders, which shall give their
opinion upon the adjustment, if any, on a basis consistent with the standards
established in the other provisions of this Section 5, necessary with respect to
the Exercise Price, so as to preserve, without dilution (other than as
specifically contemplated by this Warrant), the exercise rights of the Holders.
Upon receipt of such opinion, the Board of Directors of the Company shall
forthwith make the adjustments described therein.
-13-
<PAGE>
SECTION 6. CHARACTER OF SHARES OF STOCK.
All shares of Stock issuable upon the exercise of this Warrant
shall, when issued to Holder, be duly authorized, validly issued, fully paid and
nonassessable, free and clear of any lien or encumbrance and without any
preemptive rights.
Section 7. NOTICE TO HOLDER.
So long as this Warrant shall be outstanding, (i) if the Company
shall pay any dividend or make any distribution upon the Stock, (ii) if the
Company shall offer to the holders of Stock, for subscription or purchase by
them, any shares of any class of stock of the Company or any other rights or
(iii) if there shall be any capital reorganization of the Company,
reclassification of the capital stock of the Company, consolidation or merger of
the Company with or into another corporation, sale, lease or transfer of all or
substantially all of the property and assets of the Company, voluntary or
involuntary dissolution, liquidation or winding up of the Company, then in such
event, the Company shall cause to be mailed by certified mail to each Holder, at
least 30 days prior to the relevant date of the event described above, a notice
containing a brief description of the proposed action and stating the date or
expected date on which a record is to be taken for the purpose of such dividend,
distribution or rights, or the date or expected date such reclassification,
reorganization, consolidation, liquidation or winding up shall take place or be
voted upon by holders of the Stock of record, and the date or expected date as
of which the holders of Stock or record shall be entitled to change their shares
of Stock for securities or other property deliverable upon any such event.
Section 8. GOVERNING LAW.
This Warrant shall be construed in accordance with the laws of
the State of New York applicable to contracts executed and to be performed
wholly within such state without regard to any conflicts of laws principles.
Section 9. NOTICES.
Any notice, demand, document or other communication given or
delivered hereunder shall be in writing, and may be (i) personally delivered,
(ii) given or made by United States registered or certified mail, return receipt
requested, postage prepaid, or (iii) given or made by overnight courier or
express mail for delivery the next Business Day, delivery charges prepaid,
addressed as follows:
IF TO THE COMPANY: The New Work Power Corporation
558 Lime Rock Road
Lime Rock, CT 06039
Attention: George Petrenko
-14-
<PAGE>
WITH A COPY TO: The New World Power Company Ltd.
Tavistock House
34/36 Bromham Road
Bedford MK 40 ZQD
England
Attention: Chuan Zhang
and
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022-1170
Attention: Thomas J. Fleming, Esq.
and
Finers Solicitors
179 Great Portland Street
London WIN 6L3
England
Attention: John D'Ardenne, Esq.
IF TO THE HOLDER: The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attention: James Graham
WITH A COPY TO: Sundt & Co. Ltd.
11 St. James Square
London SW1Y 4LB
England
Attention: Jens Wilhelmsen
and
Gilmartin, Poster & Shafto
One Williamson Street
New York, new York 10004
USA
Attention: Donald B. Shafto, Esq.
-15-
<PAGE>
The Company and the Holder shall each have the right to designate a different
address for itself by notice similarly given. All such notices, demands,
documents or other communication will be deemed to be delivered (i) upon
receipt, if personally delivered, (ii) on the third full Business Day following
the day of mailing, if sent by United States registered or certified mail and
(iii) on the Business Day following the date it was sent, if sent by overnight
courier or express mail for delivery the next Business Day.
Section 10. REMEDIES.
The Company stipulates that the remedies at law of the Holder in
the event of any default or threatened default by the Company in the performance
of or compliance with any of the terms of this Warrant are not and will not be
adequate, and that such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any of the terms hereof or otherwise, in addition to any
other remedies which may be available at law or in equity.
Section 11. COMPANY WILL AVOID CERTAIN ACTIONS.
The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, issue or sale of securities or otherwise, avoid or take any action which
would have the effect of avoiding the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in carrying out all of the provisions of this Warrant
Certificate and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant
Certificate against dilution or other impairment, and in particular, will not
cause the par value of any share of Stock to be or become greater than the then
effective Exercise Price.
Section 12. COMPANY WILL NOT CLOSE BOOKS.
The Company will at no time close its transfer books against the
transfer of this Warrant or of any shares of Stock issued or issuable upon the
exercise of this Warrant in any manner which interferes with the timely exercise
of this Warrant.
Section 13. SUCCESSORS AND ASSIGNS.
This Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and assigns of the Holders hereof. The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant and shall
be enforceable by any such Holder.
-16-
<PAGE>
Section 14. AMENDMENT.
This Warrant Certificate may be modified or amended and any
provision hereof may be waived by a writing executed by the Company and holders
of Warrants representing a majority of the Warrant Shares obtainable upon
exercise of the Warrants.
Section 15. HEADINGS.
Section headings in this Warrant are for references only and
shall affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Company has executed this Warrant as of
the date first written above.
THE NEW WORLD POWER CORPORATION
By
------------------------------
Name:
Title:
COUNTERSIGNED:
BOSTON EQUISERVE SHAREHOLDER SERVICES, as Warrant Agent
By:
---------------------
Name:
Title:
Issue Date:
---------------
-17-
<PAGE>
ANNEX A
FORM OF SUBSCRIPTION
(To be executed only upon exercise of the Warrant
in whole or in part)
To THE NEW WORLD POWER CORPORATION
The undersigned registered holder of the accompanying Warrant
hereby irrevocably exercises such Warrant or portion thereof for, and purchases
thereunder, ________* Warrant Shares (as defined in such Warrant) and herewith
[makes payments therefor of $_____] [OR] [makes payment therefor by application
pursuant to Section 1.6 of such Warrant of $____________ aggregate principal
amount of Notes (as defined in such Warrant] [OR] (makes payment therefor by
conversion _____ Warrant Shares represented by such Warrant pursuant to Section
1.7 of such Warrant]. The undersigned requests that the certificates for such
Warrant Shares to be issued in the name of, and delivered to,
__________________, whose address is ______________________. [NOTE: The address
for delivery may not be in the United States unless it is to a professional
fiduciary in the United States having investment discretion for the undersigned
holder.]
The undersigned certifies that (i) it is not a U.S. Person and
such Warrant is not being exercised on behalf of a U.S. Person (as such term is
defined in Regulation S under the Securities Act of 1933, as amended) and (ii)
such Warrant is not being exercised in the United States.
Dated:
Name of Warrant Holder:
-----------------------------------------------
(Name must conform in all respects to name of
holder as specified on the face of the Warrant)
-----------------------------------------------
(Street Address)
-----------------------------------------------
(City) (State) (Zip Code)
Signed in the presence of:
- -------------------------
- -------------------------------
* Insert the number of Warrant Shares as to which this Warrant is being
exercised. In the case of a partial exercise, a new Warrant or Warrants
will be issued and delivered, representing the unexercised portion of
this Warrant, to the holder surrendering the same.
-18-
<PAGE>
ANNEX B
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For Value received, the undersigned hereby sells, assigns and
transfers to __________________________ [Name] of __________________________
[Address] the right represented by the within Warrant to purchase _____________
shares of Common Stock of THE NEW WORLD POWER CORPORATION to which the within
Warrant relates, and appoints __________________ Attorney to transfer such right
on the books of THE NEW WORLD POWER CORPORATION with full power of substitution
in the premises.
Dated:
-----------------------------------------------
(Name must conform in all respects to name of
holder as specified on the face of the Warrant)
-----------------------------------------------
(Street Address)
-----------------------------------------------
(City) (State) (Zip Code)
Signed in the presence of:
- -------------------------
-19-
<PAGE>
THE NEW WORLD POWER COMPANY LIMITED
(INCORPORATED IN ENGLAND NO. 2837916 UNDER
THE COMPANIES ACT 1985)
0% SENIOR SECURED
NOTE DUE 1 DECEMBER 1996
Issued pursuant to the Memorandum and Articles of Association and authorized by
resolution of the Board of Directors passed as of April 1, 1996.
1. For value received, THE NEW WORLD POWER COMPANY LIMITED whose registered
office is at Tavistock House, 34/36 Bromham Road, Bedford MK 40 ZQD
England (the "COMPANY") promises to pay to THE SUNDIAL INTERNATIONAL
------- FUND LIMITED, c/o Coutts & Co. (Bahamas) Ltd., Coutts Building -
West Bay Street, P.O. Box N7788, Nassau, Bahamas (the "REGISTERED
HOLDER") on 1 December ----------------- 1996 (the "REPAYMENT DATE") the
principal sum of US $579,851.13 except to the -------------- extent that
such principal sum shall have been redeemed in whole or this Note shall
have been exchanged in accordance with the Conditions attached hereto.
2. The income element for the income period commencing on the issue date
and ending on the Repayment Date is US $29,851.13 as those terms are
defined in Schedule 4 to the Income and Corporation Taxes Act 1988.
3. This Note is issued subject to and with the benefit of the Conditions
attached hereto which are deemed to be part of it.
Executed and unconditionally delivered as a Deed by the Company as of
this 1st day of April 1996 in the presence of:
- ------------------------- -----------------------------
- -------------- -----------------
Director Director
EXHIBIT C
<PAGE>
THE CONDITIONS WITHIN REFERRED TO
1. The Company represents that its obligations under this Note are legal,
valid and binding obligations on it.
2. Until the whole of this Note has been exchanged or redeemed:
2.1 the Registered Holder shall be entitled to appoint a director
(reasonably acceptable to the Company) to the Board of Directors
of the Company; and
2.2 the Company shall not incur any indebtedness for borrowed money,
including any guarantees or assumptions of indebtedness for
borrowed money (other than in favour of the Registered Holder),
without the prior written consent of the Registered Holder.
3. All payments under this Note shall be made by remitting the amount due,
net of all wire transfer and other handling charges, to Marine Midland
Bank, 140 Broadway, New York, New York, for credit to the account of The
Hong Kong and Shanghai Bank (CI) Ltd. for further credit to the account
of The Sundial International Fund Limited, A/C No. 000-03890-0, CHIPS
UID 139586, or to such other place and in such other manner as the
Registered Holder may by notice to the Company provide.
4. This Note shall be entitled to the benefits of that certain Amended and
Restated Charge Over Shares of even date herewith by and among the
Company, the Registered Holder and the Escrow Agent referred to therein
(the "AMENDED CHARGE") and that certain Forbearance, Warrant Exchange,
Note Conversion and Amendatory Agreement ("FORBEARANCE AGREEMENT") dated
as of March 1, 1996 among the Company, Wolverine Power Corporation
("WOLVERINE"), The New World Power Corporation ("NWP CORP.")(parent
company of the Company), and the Registered Holder.
5. The Registered Holder shall receive, in consideration of its purchase of
this Note by surrender to the Company for cancellation of the Company's
0% Secured Note due 31 March 1996 in the principal amount of US
$550,000, (i) the Note, (ii) the "Amended Guarantee" (hereinafter
defined), (iii) the Amended Charge and (iv) the Forbearance Agreement.
Concurrently with the purchase of this Note by the Registered Holder,
the Company has entered into that certain Amended and Restated
Continuing Guarantee (the "AMENDED GUARANTEE") of even date herewith
pursuant to which, among other things, the Company has irrevocably and
unconditionally guaranteed the payment and performance by: (A) its
affiliated company, Wolverine, of all of Wolverine's obligations under
the "Amended Wolverine Note" and the Amended Mortgages and Security
Agreements ("AMENDED MORTGAGES") referred to in the Amended Guarantee,
(B) NWP Corp. of all of the obligations of NWP Corp., under and pursuant
to the Amended Support and Pledge Agreement referred to in the Amended
Guarantee and (C) Wolverine and NWP Corp. of all of their obligations
under and pursuant to the Forbearance Agreement. In further
consideration of the Registered Holder's purchase of this Note from the
Company, the Company has entered into the Amended Charge of even date
herewith whereby the Company has pledged 700,000 Ordinary Shares
-2-
<PAGE>
("REIL CHARGED SHARES") of Renewable Energy Ireland Limited ("REIL"), a
corporation organized and existing under the laws of the Republic of
Ireland as security for, among other things, the obligations of the
Company under this Note and the Amended Guarantee.
6. The principal sum of this Note or the then outstanding balance thereof
shall become immediately due and payable following the happening of any
of the following events:
6.1 if the Company defaults in the payment of the principal of (or
premium, if any, on) this Note when it becomes due and payable,
whether at maturity, by mandatory prepayment, by acceleration or
otherwise ; or
6.2 if the Company is in breach of or does not comply with any of the
conditions of this Note and (if the same shall be capable of
remedy) fails to remedy the same within three (3) calendar days
after service of notice in writing on the Company requiring the
same to be remedied; or
6.3 if the Company is in breach of or does not comply with any of the
conditions of the Amended Guarantee, the Amended Charge or the
Forbearance Agreement and (if the same shall be capable of
remedy) fails to remedy the same within three (3) calendar days
after service of notice in writing to the Company; or
6.4 if any representation or warranty made by the Company in any of
the documents or instruments referred to herein proves to have
been false or misleading in any material respect when made; or
6.5 if an administrative order is made in relation to the Company or
a receiver or manager or administrative receiver is appointed for
the Company or any of the Company's assets or the Company enters
into reorganization or liquidation; or
6.6 if the Company, NWP Corp. or Wolverine shall (i) commence a
voluntary case under Title 11 of the United States Code as from
time to time in effect; (ii) file an answer or other pleading
admitting or failing to deny the material allegations of a
petition filed against it commencing an involuntary case under
said Title 11, or seek, consent to or acquiesce in the relief
therein provided, or fail to controvert timely the material
allegations of any such petition; (iii) seek relief as a debtor
under any applicable law, other than said Title 11, of any
jurisdiction, including, without limitation, the law of England
and Wales, relating to the liquidation or reorganization of
debtors or to the modification or alteration of the rights of
creditors, or consent to or acquiesce in such relief; (iv) by the
entry of an order by a court of competent jurisdiction, be found
to be bankrupt or insolvent; (v) make an assignment for the
benefit of, or enter into a composition with, creditors, or
appoint or consent to the appointment of a receiver or other
custodian for all or a substantial part of its property; or (vi)
take any formal corporate action in furtherance of the foregoing.
-3-
<PAGE>
6.7 If an "Event of Default" (as defined in the Forbearance
Agreement) shall have occurred and be continuing.
7. If the Company defaults in the payment of the principal of this Note
when it becomes due and payable, such principal sum shall be increased
by the sum of US $275.00 per day until this Note is redeemed in full.
8. If at any time the Company is required to make any deduction or
withholding in respect of taxes imposed by or within the United Kingdom
from any payment due under this Note (including any payment required to
be made pursuant to this Clause 8), the sum due from the Company in
respect of such payment shall be increased to the extent necessary to
ensure that, after the making of such deduction or withholding, the
Registered Holder receives on the due date for such payment (and
retains, free from any liability, other than tax on the overall net
income or profits of the Registered holder, in respect of such deduction
or withholding), a net sum equal to the sum which it would have received
had no such deduction or withholding been required to be made.
9. If following any such deduction or withholding as is referred to in the
foregoing paragraph from any payment by the Company, the Registered
Holder shall receive any repayment of tax in respect of which such
deduction or withholding was made, the Registered Holder shall, subject
to the Company's having made any increased payment as provided in the
foregoing paragraph, reimburse the Company with such amount as shall be
the proportion of such repayment as will leave the Registered holder
(after such reimbursement) in no worse position than it would have been
in had there been no such deduction or withholding from the payment by
the Company.
10. The Company may redeem in whole or in part of the principal sum of the
Note at any time. On such redemption (or upon payment at maturity), this
Note shall be cancelled but no such cancellation shall in any way alter
or diminish any continuing rights of the Registered Holder under the
Forbearance Agreement, the Amended Guarantee or the Amended Charge. The
Registered Holder is also entitled to the benefit of certain provisions
of the Forbearance Agreement and the "Transaction Documents" referred to
in the Forbearance Agreement providing for mandatory prepayment of this
Note under certain circumstances.
11. This Note may be transferred or assigned either in whole or in part by
the Registered Holder.
12. The principal sum of this Note will be paid without regard to any
equities between the Company and the Registered Holder or to any right
of set-off or cross-claim, and the receipt of the Registered Holder for
such principal sum shall be a good discharge to the Company for the
same.
13. No application will be made for a listing for or permission to deal in
this Note upon any stock exchange (in the United Kingdom or elsewhere),
and this Note shall not be offered to the public for subscription or
purchase.
-4-
<PAGE>
14. Any and all notices or demands hereunder may be given by any party to
any other party in any of the following manners: (i) by facsimile
transmission, (ii) by personal delivery, (iii) by first class mail,
postage prepaid, or (iv) by certified mail, postage prepaid. Any notice
given by facsimile transmission shall be effective two hours after
dispatch thereof is completed by the sending party; all other notices
shall be effective upon receipt. All notices shall be given to the
parties at the addresses or to the facsimile numbers set forth below (or
to such other numbers or addresses as shall be furnished by notice from
any party hereto to the other parties hereto):
The New World Power Company Ltd.
c/o The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Attn: Mr. George Petrenko
Fax: (203) 435-0505
with a copy to:
The New World Power Company Ltd.
Tavistock House
34/36 Bromham Road
Bedford MK 40 ZQD
England
Attention: Mr. Chuan Zhang
and:
Finers
Solicitors
179 Great Portland Street
London W1N 6L3
England
Attn: John D'Ardenne, Esq.
Fax: 011 44 171 323 4000
or: 011 44 171 580 7069
Olshan Grundman Frome & Rosenzweig, LLP
505 Park Avenue
New York, New York 10022
Telephone (212) 755-1467
Attention: Thomas J. Fleming, Esq.
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
-5-
<PAGE>
Attention: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
with a copy to:
Sundt & Co. Ltd.
11 St. James's Square
London SW1Y 4LB
England
Attention: Mr. Jens Wilhelmsen
Fax: 011 44 171 930 1784
and
Gilmartin, Poster & Shafto
One William Street
New York, New York 10004 USA
Attention: Donald B. Shafto, Esq.
Fax: (212) 482 0848
(212) 425-3130
15. This Note will be construed in accordance with English Law, and each of
the Company and the Registered Holder irrevocably submits to the
non-exclusive jurisdiction of the English Courts in respect of any
dispute relating to this Note.
-6-
<PAGE>
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR ANY OTHER SECURITIES LAWS, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND OTHER APPLICABLE SECURITIES LAWS
COVERING THIS NOTE, (2) THE SALE IS MADE IN ACCORDANCE WITH REGULATION S (OR
RULE 144A, IF AVAILABLE) OR A SUCCESSOR RULE UNDER THE ACT, OR (3) THE COMPANY
RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO IT THAT ANOTHER EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.
AMENDED AND RESTATED
WOLVERINE POWER CORPORATION
FIRST MORTGAGE NOTE
$3,434,602.00 U.S. Dated as of March 1, 1996
WHEREAS, concurrently with the execution and delivery hereof, WOLVERINE
POWER CORPORATION (the "COMPANY"), a Delaware corporation, THE NEW WORLD POWER
CORPORATION ("NWP CORP."), a Delaware corporation, THE SUNDIAL INTERNATIONAL
FUND LIMITED ("SUNDIAL"), a Cayman Islands corporation and THE NEW WORLD POWER
COMPANY LIMITED ("NWP LTD."), have entered into that certain Forbearance,
Warrant Exchange, Note Conversion and Amendatory Agreement ("FORBEARANCE
AGREEMENT") dated as of March 1, 1996, providing, among other things, for the
issuance by the Company (i) of this Amended and Restated Wolverine Power
Corporation First Mortgage Note ("AMENDED WOLVERINE NOTE"), and (ii) those two
certain Amended and Restated Mortgage and Security Agreements ("AMENDED
WOLVERINE MORTGAGES") to Sundial;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants in the Forbearance Agreement contained and for other good and valuable
consideration, receipt whereof the Company does hereby acknowledge, and is
therewith fully satisfied, contented and paid, the Company hereby issues and
delivers this Amended Note to Sundial.
The Company hereby promises to pay to Sundial, the principal office of
which is located at c/o Coutts & Co. (Bahamas) Ltd., P.O. Box N7788, Nassau,
Bahamas, or registered assigns (the "HOLDER"), the principal sum of THREE
MILLION FOUR HUNDRED THIRTY FOUR THOUSAND SIX HUNDRED TWO AND NO/100 U.S.
DOLLARS ($3,434,602.00), in four installments of principal, the first of which
shall be in the amount of
EXHIBIT D
<PAGE>
FIVE HUNDRED FORTY TWO THOUSAND THREE HUNDRED FIVE AND 50/100 U.S. DOLLARS
($542,305.50) and shall be payable on December 1, 1996, each of the second and
third of which shall be in the amount of ONE HUNDRED EIGHTY THOUSAND SEVEN
HUNDRED SIXTY-EIGHT AND 50/100 U.S. DOLLARS ($180,768.50) and shall be payable
on March 1, 1997 and June 1, 1997, respectively, the fourth and final of which
shall be in the amount of TWO MILLION FIVE HUNDRED THIRTY THOUSAND SEVEN HUNDRED
FIFTY-NINE AND 50/100 U.S. DOLLARS ($2,530,759.50) and shall be payable on July
31, 1997, together with interest thereon at the LIBOR Rate, as defined below,
plus two (2) percentage points on the unpaid principal balance hereof, accrued
interest to be payable concurrently with the payment of installments of
principal. As used herein, "LIBOR Rate" shall mean the rate published in THE
WALL STREET JOURNAL as the three-month London Interbank Offered Rate (LIBOR) two
(2) business days prior to March 1, 1996 and two (2) business days prior to each
three-month anniversary of March 1, 1996. Interest hereunder shall be calculated
for the actual number of days elapsed on the basis of a 360-day year. Both the
principal of and interest on this Amended Wolverine Note shall be payable in
lawful money of the United States of America by wire transfer, net of all wire
transfer and other bank charges, to Marine Midland Bank, 140 Broadway, New York,
New York, for credit to the account of The Hong Kong and Shanghai Bank (CI) Ltd.
for further credit to the account of The Sundial International Fund Limited, a/c
no. 000-03890-0, CHIPS UID 139586, or to such other place and in such other
manner as the Holder may from time to time request. Notwithstanding the
foregoing, following the occurrence of an Event of Default hereunder and so long
as the same shall be continuing, the Company shall pay interest on the entire
unpaid principal balance of this Amended Wolverine Note, at a rate per annum
equal at all times to two percentage points (2%) per annum above the rate per
annum otherwise required to be paid on such balance as provided above.
This Amended Wolverine Note is a registered Note and is transferable
only by surrender hereof at the principal office of the Company in Lime Rock,
Connecticut, duly endorsed or accompanied by a written instrument of transfer,
duly executed by the registered holder of this Amended Wolverine Note or his or
her attorney, duly authorized in writing.
This Amended Wolverine Note is secured by the Amended Wolverine
Mortgages from the Company to Sundial, which Amended Wolverine Mortgages
constitute a first lien on the hydroelectric facilities of the Company located
in the Counties of Gladwin and Midland, State of Michigan and upon other
property of the Company.
The Company may at its option prepay the whole or any portion of the
principal amount of this Amended Wolverine Note at any time without payment of
any premium or penalty.
This Amended Wolverine Note is subject to mandatory prepayment in whole
or in part upon the occurrence of certain events specified in the Forbearance
Agreement and therein referred to as "Note Prepayment Events".
Whenever any payment to be made shall be due on a Saturday, Sunday or a
public holiday under the laws of the State of Connecticut, such payment may be
made on the next succeeding business day.
-2-
<PAGE>
If any of the following events ("EVENTS OF DEFAULT") shall occur and be
continuing:
(a) The Company shall fail to pay any installment of principal or
interest on this Amended Wolverine Note on the date such payment
is due;
(b) The Company shall fail to perform or observe any other term,
covenant or agreement contained in this Amended Wolverine Note on
its part to be performed or observed;
(c) The Company or any subsidiary of the Company shall (i) admit in
writing its inability to pay its debts generally as they become
due; (ii) commence a voluntary case under Title 11 of the United
States Code as from time to time in effect, or authorize, by
appropriate proceedings of its Board of Directors or other
governing body, the commencement of such a voluntary case; (iii)
file an answer or other pleading admitting or failing to deny the
material allegations of a petition filed against it commencing an
involuntary case under said Title 11, or seek, consent to or
acquiesce in the relief therein provided, or fail to controvert
timely the material allegations of any such petition; or if an
order for relief in any involuntary case commenced under said
Title 11 is entered against the Company or any subsidiary; (iv)
seeks relief as a debtor under any applicable law, other than
said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of
the rights of directors, or consent to or acquiesce in such
relief; (v) by the entry of an order by a court of competent
jurisdiction, be found to be bankrupt or insolvent; (vi) make an
assignment for the benefit of, or enter into a composition with,
creditors, or appoint or consent to the appointment of a receiver
or other custodian for all or a substantial part of its property;
or (vii) take any formal corporate action in furtherance of the
foregoing; or
(d) If any "Event of Default" (as defined in the Forbearance
Agreement) shall occur and be continuing;
then, and in any such event, while such event shall be continuing, the Holder
may, with the written consent of the holders of sixty-six and two-thirds percent
(66-2/3%) or more in aggregate principal amount of this Amended Wolverine Note
at the time outstanding, by written notice to the Company, declare the entire
unpaid principal amount of this Amended Wolverine Note and all interest accrued
and unpaid thereon to be forthwith due and payable, whereupon all such amounts
shall become and be forthwith due and payable (unless there shall have occurred
an Event of Default under subsection (c) above, in which case all such amounts
shall automatically become due and payable), without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Company, and the Company shall forthwith pay to such Holder the entire
principal of and interest accrued on this Amended Wolverine Note.
The Company shall pay not later than September 1, 1996 all costs and
expenses which the Company has undertaken to pay jointly and severally with NWP
Corp. and NWP Ltd. pursuant to Sections 18 and 22 of the Forbearance Agreement
which have been billed to the
-3-
<PAGE>
Company on or before such date and to pay within 10 calendar days following
demand therefor all such other costs and expenses which are billed to the
Company following September 1, 1996. The Company shall also pay any and all
costs incurred by the Holder in connection with the enforcement and collection
of this Amended Wolverine Note.
This Amended Wolverine Note may not be amended, and no default hereunder
may be waived, without the prior written consent of the Company and the holders
of sixty-six and two-thirds percent (66-2/3%) or more in aggregate principal
amount of this Amended Wolverine Note at the time outstanding.
Any and all notices or demands hereunder may be given by any party to any other
party in any of the following manners: (i) by facsimile transmission, (ii) by
personal delivery, (iii) by first class mail, postage prepaid, or (iv) by
certified mail, postage prepaid. Any notice given by facsimile transmission
shall be effective two hours after dispatch thereof is completed by the sending
party; all other notices shall be effective upon receipt. All notices shall be
given to the parties at the addresses or to the facsimile numbers set forth
below (or to such other numbers or addresses as shall be furnished by notice
from any party hereto to the other parties hereto):
Wolverine Power Corporation
c/o The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Fax: (203) 435-0505
with a copy to:
The New World Power Company Ltd.
Tavistock House
34/36 Bromham Road
Bedford M
K 40 ZQD
England
Attention: Mr. Chuan Zhang
and:
Finers
Solicitors
179 Great Portland Street
London W1N 6L3
England
Attn: John D'Ardenne, Esq.
Fax: 011 44 171 323 4000
or: 011 44 171 580 7069
-4-
<PAGE>
Olshan Grundman Frome & Rosenzweig, LLP
505 Park Avenue
New York, New York 10022
Telephone (212) 755-1467
Attention: Thomas J. Fleming, Esq.
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attn: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
with a copy to:
Sundt & Co. Ltd.
11 St. James's Square
London SW1Y 4LB
England
Attn: Jens Wilhelmsen
Fax: 011 44 171 930 1784
and
Gilmartin, Poster & Shafto
One William Street
New York, New York 10004 USA
Attention: Donald B. Shafto, Esq.
Fax: (212) 482-0848
(212) 425-3130
This Amended Wolverine Note is being executed and delivered in the State
of New York and shall be construed in accordance with the laws thereof.
IN WITNESS WHEREOF, the undersigned has set its hand as of the
date and
-5-
<PAGE>
year first above written.
WOLVERINE POWER CORPORATION
By:___________________________
[Title]
-6-
<PAGE>
AMENDED MORTGAGE AND SECURITY AGREEMENT
THIS AMENDED MORTGAGE AND SECURITY AGREEMENT is made as of the
1st day of March, 1996 by and between WOLVERINE POWER CORPORATION, a Delaware
corporation, the principal office of which is located at 558 Lime Road Road,
Lime Rock, Connecticut 06039 ("MORTGAGOR") and THE SUNDIAL INTERNATIONAL FUND
LIMITED, a Cayman Islands company limited by shares, the principal office of
which is located at c/o Coutts & Co. (Bahamas) Ltd., P.O. Box N7788, Nassau,
Bahamas, Attention: Mr. James Graham, Secretary and Registrar ("MORTGAGEE").
W I T N E S S E T H:
WHEREAS, the Mortgagor heretofore entered into that certain
Mortgage and Security Agreement dated the 31st day of December, 1992 in favor of
The New World Power Corporation, a Delaware corporation ("NWP CORP.") as
security for, among other things, a certain First Mortgage Note of even date
therewith in the original principal amount of U.S.$3,000,000 which said Mortgage
was recorded in the office of the Registrar of Deeds for the County of Gladwin,
State of Michigan on January 5, 1993 at 1:43 P.M. in Liber 393 at page 755;
WHEREAS, the said First Mortgage Note was subsequently assigned
by NWP Corp. to Mortgagee and pursuant to that certain letter agreement dated as
of December 1, 1995 among Mortgagor, NWP Corp. and Mortgagee, among others, the
"New Principal Balance" of said First Mortgage Note was agreed to be
$3,615,370.00 as of December 1, 1995;
WHEREAS, as security for the said First Morrgage Note as so and
otherwise amended, the said Mortgage and Security Agreement was assigned by NWP
Corp. to Mortgagee by Assignment of Mortgage dated the 31st day of December 1992
and recorded in the office of the Registrar of Deeds for the County of Gladwin,
State of Michigan on December 13, 1995 at 3:18 P.M. in Liber 438, at page 351;
WHEREAS, pursuant to a certain Forbearance, Warrant Exchange,
Note Conversion and Amendatory Agreement ("FORBEARANCE AGREEMENT") among
Mortgagee, NWP
EXHIBIT E-1
<PAGE>
Corp., The New World Power Company Limited ("NWP LTD.") and Mortgagor dated as
of March 1, 1996, a copy of the Forbearance Agreement without exhibits thereto
being annexed hereto as EXHIBIT A and made a part hereof, Mortgagor agreed to
execute and deliver to Mortgagee a certain Amended and Restated Wolverine Power
Corporation First Mortgage Note dated as of March 1, 1996 ("AMENDED WOLVERINE
NOTE") pursuant to which the First Mortgage Note above referred to was amended
and restated and the outstanding principal amount as at March 1, 1996 thereof
agreed to be U.S. $3,434,602.00, a copy of the Amended Wolverine Note being
annexed hereto as EXHIBIT B and made a part hereof; and Mortgagor has agreed
that it is justly indebted to Mortgagee, as evidenced by the Amended Wolverine
Note, in the principal amount of U.S. $3,434,602.00 as of March 1, 1996 and is
further justly indebted to Mortgagee for performance of each and every one of
the other Obligations to be performed or observed by Mortgagor and the other
Companies under and pursuant to the terms of the Forbearance Agreement and the
other Transaction Documents referred to therein (the terms "Obligations",
"Companies" and "Transaction Documents" as used herein being as defined in the
Forbearance Agreement); and
WHEREAS, pursuant to the Forbearance Agreement Mortgagor and
Mortgagee have agreed, amongst other things, to execute, deliver and cause to be
recorded this Amended Mortgage and Security Agreement ("AMENDED WOLVERINE
MORTGAGE") whereby the said First Mortgage as heretofore assigned pursuant to
the said Assignment is amended.
NOW, THEREFORE, the Mortgagor, for the purpose of securing the
payment of the Amended Wolverine Note and the performance by the Mortgagor and
the other Companies of each and every one of the Obligations referred to in the
Forbearance Agreement and the other Transaction Documents referred to therein
hereby in all respects confirms the Mortgage and Security Agreement and grants
unto Mortgagee, its successors and assigns, all the other terms, rights, and
conditions whatsoever created in favor of Mortgagee as set forth and contained
in the aforesaid Mortgage and Security Agreement as assigned to Mortgagee with
the intent and effect that each and every one of the rights, powers, privileges
and covenants therein contained for the benefit of Mortgagee shall hereafter
secure in all respects the performance by the Mortgagor of the Amended Wolverine
Note and each and every one of the Obligations in the Forbearance Agreement and
the other Transaction Documents on the part of the Mortgagor and the other
Companies to be performed and observed:
AND IT IS FURTHER AGREED AND UNDERSTOOD by and between the
Mortgagor and Mortgagee as follows:
1. The notice provision set forth in Section 31 of the Mortgage
and Security Agreement as assigned is hereby amended to read in its
entirety as follows.
"Any and all notices or demands hereunder may be given by either party
to the other party in any of the following manners: (i) by facsimile
transmission, (ii) by personal delivery, (iii) by first class mail,
postage prepaid, or (iv) by certified mail, postage prepaid. Any notice
given by facsimile transmission shall be effective two hours after
dispatch thereof is completed by the sending party; all other notices
shall be effective upon receipt. All notices shall be given to the
parties at the addresses or to the
-2-
<PAGE>
facsimile numbers set forth below (or to such other numbers or addresses
as shall be furnished by notice from either party to the other):
Wolverine Power Corporation
c/o The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Fax: (203) 435-0505
and:
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attn: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
with a copy to
Gilmartin, Poster & Shafto
One William Street - 5th Floor
New York, New York 10004
Attn: Donald B. Shafto,Esq.
Tel: 212 425 3220
FAX: 212 482-0848"
2. Any and all references in the Mortgage and Security Agreement
(as heretofore assigned by NWP Corp. to the Mortgagee) to the "Note"
shall hereinafter mean and refer to the Amended Wolverine Note; all
references therein to Schedule A shall hereafter mean and refer to the
Amended Wolverine Note; and all references therein to "Event of Default"
shall hereafter mean and refer to an "Event of Default" as referred to
and defined in the Amended Wolverine Note.
3. Except as hereinabove otherwise expressly set forth, the
Mortgage and Security Agreement as heretofore assigned by NWP Corp. to
the Mortgagee shall remain in full force and effect without further
change.
-3-
<PAGE>
IN WITNESS WHEREOF, the Mortgagor and Mortgagee have
caused their names to be set forth on this Amended Wolverine Mortgage as of this
1st day of March, 1996 through their corporate officers thereunto duly
authorized.
Signed, sealed and delivered WOLVERINE POWER CORPORATION
in the presence of:
_________________________ By:_________________________________
Signed, sealed and delivered THE SUNDIAL INTERNATIONAL
in the presence of: FUND LIMITED
_________________________ By:________________________________
Donald B. Shafto,
Assistant Secretary
-4-
<PAGE>
STATE OF NEW YORK )
SS.:
COUNTY OF NEW YORK )
Be it known, That on this _____ day of May 1996, personally appeared
before me ____________________________, who being duly sworn, deposed and said
that he resides at _____________________________________________________, that
he is the ___________________________ of Wolverine Power Corporation, the
corporation which is described in and which executed the within instrument, and
that he affixed his signature by order of the board of directors of the said
corporation and acknowledged the within instrument to be the free act and deed
of the said corporation.
In Testimony whereof, I have hereunto set my hand and seal this _____ day of May
1996.
---------------------------
Notary Public
STATE OF NEW YORK )
SS.:
COUNTY OF NEW YORK )
Be it known, That on this _____ day of May 1996, personally appeared
before me Donald B. Shafto, who being duly sworn, deposed and said that he
resides at 5th Floor, One William Street, New York, New York 10004 that he is an
Assistant Secretary of Sundial International Fund Limited, the corporation which
is described in and which executed the within instrument, and that he affixed
his signature by order of the board of directors of the said corporation and
acknowledged the within instrument to be the free act and deed of the said
corporation.
In Testimony whereof, I have hereunto set my hand and seal this _____ day of
May, 1996.
---------------------------
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Donald B. Shafto, Esq.
c/o Messrs. Gilmartin, Poster & Shafto
One William Street - 5th Floor
New York, New York 10004
(212) 425-3220
-5-
<PAGE>
AMENDED MORTGAGE AND SECURITY AGREEMENT
THIS AMENDED MORTGAGE AND SECURITY AGREEMENT is made as of the
1st day of March, 1996 by and between WOLVERINE POWER CORPORATION, a Delaware
corporation, the principal office of which is located at 558 Lime Road Road,
Lime Rock, Connecticut 06039 ("MORTGAGOR") and THE SUNDIAL INTERNATIONAL FUND
LIMITED, a Cayman Islands company limited by shares, the principal office of
which is located at c/o Coutts & Co. (Bahamas) Ltd., P.O. Box N7788, Nassau,
Bahamas, Attention: Mr. James Graham, Secretary and Registrar ("MORTGAGEE").
W I T N E S S E T H:
WHEREAS, the Mortgagor heretofore entered into that certain
Mortgage and Security Agreement dated the 31st day of December, 1992 in favor of
The New World Power Corporation, a Delaware corporation ("NWP CORP.") as
security for, among other things, a certain First Mortgage Note of even date
therewith in the original principal amount of U.S.$3,000,000 which said Mortgage
was recorded in the office of the Registrar of Deeds for the County of Midland,
State of Michigan on January 5, 1993 at 10:56 A.M. in Liber 713 at page 659;
WHEREAS, the said First Mortgage Note was subsequently assigned
by NWP Corp. to Mortgagee and pursuant to that certain letter agreement dated as
of December 1, 1995 among Mortgagor, NWP Corp. and Mortgagee, among others, the
"New Principal Balance" of said First Mortgage Note was agreed to be
$3,615,370.00 as of December 1, 1995;
WHEREAS, as security for the said First Morrgage Note as so and
otherwise amended, the said Mortgage and Security Agreement was assigned by NWP
Corp. to Mortgagee by Assignment of Mortgage dated the 31st day of December 1992
and recorded in the office of the Registrar of Deeds for the County of Midland,
State of Michigan on December 13, 1995 at 3:08 P.M. in Liber 797, at page 495;
WHEREAS, pursuant to a certain Forbearance, Warrant Exchange,
Note Conversion and Amendatory Agreement ("FORBEARANCE AGREEMENT") among
Mortgagee, NWP
EXHIBIT E-2
<PAGE>
Corp., The New World Power Company Limited ("NWP LTD.") and Mortgagor dated as
of March 1, 1996, a copy of the Forbearance Agreement without exhibits thereto
being annexed hereto as EXHIBIT A and made a part hereof, Mortgagor agreed to
execute and deliver to Mortgagee a certain Amended and Restated Wolverine Power
Corporation First Mortgage Note dated as of March 1, 1996 ("AMENDED WOLVERINE
NOTE") pursuant to which the First Mortgage Note above referred to was amended
and restated and the outstanding principal amount as at March 1, 1996 thereof
agreed to be U.S. $3,434,602.00, a copy of the Amended Wolverine Note being
annexed hereto as EXHIBIT B and made a part hereof; and Mortgagor has agreed
that it is justly indebted to Mortgagee, as evidenced by the Amended Wolverine
Note, in the principal amount of U.S. $3,434,602.00 as of March 1, 1996 and is
further justly indebted to Mortgagee for performance of each and every one of
the other Obligations to be performed or observed by Mortgagor and the other
Companies under and pursuant to the terms of the Forbearance Agreement and the
other Transaction Documents referred to therein (the terms "Obligations",
"Companies" and "Transaction Documents" as used herein being as defined in the
Forbearance Agreement); and
WHEREAS, pursuant to the Forbearance Agreement Mortgagor and
Mortgagee have agreed, amongst other things, to execute, deliver and cause to be
recorded this Amended Mortgage and Security Agreement ("AMENDED WOLVERINE
MORTGAGE") whereby the said First Mortgage as heretofore assigned pursuant to
the said Assignment is amended.
NOW, THEREFORE, the Mortgagor, for the purpose of securing the
payment of the Amended Wolverine Note and the performance by the Mortgagor and
the other Companies of each and every one of the Obligations referred to in the
Forbearance Agreement and the other Transaction Documents referred to therein
hereby in all respects confirms the Mortgage and Security Agreement and grants
unto Mortgagee, its successors and assigns, all the other terms, rights, and
conditions whatsoever created in favor of Mortgagee as set forth and contained
in the aforesaid Mortgage and Security Agreement as assigned to Mortgagee with
the intent and effect that each and every one of the rights, powers, privileges
and covenants therein contained for the benefit of Mortgagee shall hereafter
secure in all respects the performance by the Mortgagor of the Amended Wolverine
Note and each and every one of the Obligations in the Forbearance Agreement and
the other Transaction Documents on the part of the Mortgagor and the other
Companies to be performed and observed:
AND IT IS FURTHER AGREED AND UNDERSTOOD by and between the
Mortgagor and Mortgagee as follows:
1. The notice provision set forth in Section 31 of the Mortgage
and Security Agreement as assigned is hereby amended to read in its
entirety as follows.
"Any and all notices or demands hereunder may be given by either party
to the other party in any of the following manners: (i) by facsimile
transmission, (ii) by personal delivery, (iii) by first class mail,
postage prepaid, or (iv) by certified mail, postage prepaid. Any notice
given by facsimile transmission shall be effective two hours after
dispatch thereof is completed by the sending party; all other notices
shall be effective upon receipt. All notices shall be given to the
parties at the addresses or to the
-2-
<PAGE>
facsimile numbers set forth below (or to such other numbers or addresses
as shall be furnished by notice from either party to the other):
Wolverine Power Corporation
c/o The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Fax: (203) 435-0505
and:
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attn: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
with a copy to
Gilmartin, Poster & Shafto
One William Street - 5th Floor
New York, New York 10004
Attn: Donald B. Shafto,Esq.
Tel: 212 425 3220
FAX: 212 482-0848"
2. Any and all references in the Mortgage and Security Agreement
(as heretofore assigned by NWP Corp. to the Mortgagee) to the "Note"
shall hereinafter mean and refer to the Amended Wolverine Note; all
references therein to Schedule A shall hereafter mean and refer to the
Amended Wolverine Note; and all references therein to "Event of Default"
shall hereafter mean and refer to an "Event of Default" as referred to
and defined in the Amended Wolverine Note.
3. Except as hereinabove otherwise expressly set forth, the
Mortgage and Security Agreement as heretofore assigned by NWP Corp. to
the Mortgagee shall remain in full force and effect without further
change.
-3-
<PAGE>
IN WITNESS WHEREOF, the Mortgagor and Mortgagee have
caused their names to be set forth on this Amended Wolverine Mortgage as of this
1st day of March, 1996 through their corporate officers thereunto duly
authorized.
Signed, sealed and delivered WOLVERINE POWER CORPORATION
in the presence of:
_________________________ By:_________________________________
Signed, sealed and delivered THE SUNDIAL INTERNATIONAL
in the presence of: FUND LIMITED
_________________________ By:________________________________
Donald B. Shafto,
Assistant Secretary
-4-
<PAGE>
STATE OF NEW YORK )
SS.:
COUNTY OF NEW YORK )
Be it known, That on this _____ day of May 1996, personally appeared
before me ____________________________, who being duly sworn, deposed and said
that he resides at _______________________________________________, that he is
the _____________ of Wolverine Power Corporation, the corporation which is
described in and which executed the within instrument, and that he affixed his
signature by order of the board of directors of the said corporation and
acknowledged the within instrument to be the free act and deed of the said
corporation.
In Testimony whereof, I have hereunto set my hand and seal this _____ day of May
1996.
---------------------------
Notary Public
STATE OF NEW YORK )
SS.:
COUNTY OF NEW YORK )
Be it known, That on this _____ day of May 1996, personally appeared
before me Donald B. Shafto, who being duly sworn, deposed and said that he
resides at 5th Floor, One William Street, New York, New York 10004 that he is an
Assistant Secretary of Sundial International Fund Limited, the corporation which
is described in and which executed the within instrument, and that he affixed
his signature by order of the board of directors of the said corporation and
acknowledged the within instrument to be the free act and deed of the said
corporation.
In Testimony whereof, I have hereunto set my hand and seal this _____ day of
May, 1996.
---------------------------
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
Donald B. Shafto, Esq.
c/o Messrs. Gilmartin, Poster & Shafto
One William Street - 5th Floor
New York, New York 10004
(212) 425-3220
-5-
<PAGE>
AMENDED SUPPORT AND PLEDGE AGREEMENT
Dated as of March 1, 1996
The Sundial International Fund Limited
c/o Coutts & Co. (Bahamas) Ltd.
Coutts Building
West Bay Street
P.O. Box N 7788
Nassau, Bahamas
Gentlemen:
We refer to that certain (i) Support and Pledge Agreement dated
December 31, 1992 by and between The New World Power Corporation (fka Wolverine
Holdings Inc.) ("NWP CORP.") and The Sundial International Fund Limited
("SUNDIAL"), a copy of which is annexed hereto as EXHIBIT A and made a part
hereof, and (ii) Forbearance, Warrant Exchange, Note Conversion and Amendatory
Agreement ("FORBEARANCE AGREEMENT") dated as of March 1, 1996 by and among NWP
Corp., Sundial, The New World Power Corporation Limited ("NWP LTD.") and
Wolverine Power Corporation ("WOLVERINE").
Capitalized terms used herein and not defined herein are used
with the meanings assigned thereto in the Forbearance Agreement.
This Agreement is the Amended Support and Pledge Agreement
referred to in the Forbearance Agreement and is entered into as required by and
pursuant to the Forbearance Agreement. This Amended Support and Pledge Agreement
amends and restates the terms of the Support and Pledge Agreement.
As an inducement to Sundial to enter into and perform the terms
of the Forbearance Agreement, NWP Corp. hereby agrees that in the event of the
failure of Wolverine to pay the principal of or interest on the Amended
Wolverine Note when due, the
EXHIBIT F
<PAGE>
undersigned shall make loans to Wolverine sufficient to enable Wolverine to make
payments of principal and interest under the Amended Wolverine Note when due,
the repayment of which loans shall be subordinated to any and all Obligations to
Sundial on terms satisfactory to Sundial in its sole discretion.
NWP Corp. is the legal and beneficial owner of 200 shares of
Wolverine, constituting all of the issued and outstanding capital stock of
Wolverine ("WOLVERINE STOCK"). The Wolverine Stock is evidenced by Share
Certificate No. 7 dated June 23, 1989 heretofore delivered to Sundial together
with a stock power signed in blank dated January 5, 1993 ("STOCK POWER") (the
Wolverine Stock, the Stock Power and the proceeds thereof being herein
collectively called the "COLLATERAL") pursuant to the Support and Pledge
Agreement on or about January 5, 1993 in perfection of the pledges and grant of
a security interest in the Collateral granted by NWP Corp. under and pursuant to
the Support and Pledge Agreement.
NWP Corp. hereby confirms the pledge and grant of a security
interest in the Collateral and hereby further confirms that said pledge and
grant of a security interest shall secure each and every one of the Obligations
under the Transaction Documents including, without limitation, the Obligations
of Wolverine under the Amended Wolverine Note.
So long as there shall not occur any default of NWP Corp.
hereunder or any Event of Default under the Amended Wolverine Note or any Event
of Default under the Forbearance Agreement (said default and said Events of
Default being hereinafter referred to in this Amended Support and Pledge
Agreement as an "EVENT OF DEFAULT"), the undersigned shall have the right to
vote the Collateral on all corporate questions for all purposes not inconsistent
with the terms of this Amended Support and Pledge Agreement and the other
Transaction Documents. It is understood and agreed that any dividends or other
distributions at any time declared upon or received with respect to the
Collateral shall be received by NWP Corp. in trust for Sundial and shall
forthwith upon receipt be transferred by NWP Corp. to Sundial to be applied by
Sundial in prepayment of the principal of or interest on or expenses due in
respect of or in accordance with the terms of the Amended Wolverine Note and the
provisions of Section 7 of the Forbearance Agreement.
NWP Corp. warrants and represents to you as follows:
(i) there are no restrictions on the voting rights or on the
transfer of any of the Collateral other than may appear on
the certificate evidencing the Collateral or as provided
in this Amended Support and Pledge Agreement;
(ii) the undersigned has good and valid title to such
Collateral, free and clear of any pledges, liens, charges,
encumbrances or security interests and has the unfettered
and unqualified right to vote, pledge and grant a security
interest in or otherwise transfer such Collateral free of
any of the above to Sundial without the consent, approval
or authorization of any other Person, and NWP Corp.
confirms that it shall not at any time, whether or not
secondary or subordinate to the interests of Sundial
hereunder or in the Collateral, at any time transfer,
pledge, lien, charge,
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<PAGE>
encumber or grant a security interest in the Collateral to
any other person;
(iii) pursuant to the Support and Pledge Agreement and this
Amended Support and Pledge Agreement there has been
created in favor of Sundial a valid first lien upon, and
perfected security interest in the Collateral in favor of
Sundial, such lien having been created and perfected with
effect from and after the delivery to Sundial of the
Collateral which NWP Corp. and Sundial acknowledge and
agree occurred on January 5, 1993; and
(iv) the execution, delivery and performance by NWP Corp. of
this Amended Support and Pledge Agreement has been duly
and validly authorized and constitutes the legal, valid
and binding obligation of NWP Corp. enforceable against
NWP Corp. in accordance with its terms and does not and
will not violate any provision of law or the terms of any
agreement to which NWP Corp. is now and may hereafter
become a party.
Upon the occurrence or continuance of an Event of Default,
Sundial shall have, in addition to any other rights given by law, all of the
rights and remedies with respect to the Collateral of a secured party under the
applicable provisions of Article 9 of the Uniform Commercial Code.
Upon payment in full of the Amended Wolverine Note and the
performance by NWP Corp. of all of NWP Corp.'s obligations hereunder and the
performance of all of the Obligations under the Transaction Documents, this
Amended Support and Pledge Agreement shall terminate, otherwise to remain in
full force and effect, and Sundial shall promptly deliver possession of the
Collateral to NWP Corp. or as NWP Corp. may otherwise direct.
This Amended Support and Pledge Agreement shall be mutually
binding upon and for the mutual benefit of NWP Corp. and Sundial and their
respective successors and assigns and shall be governed by and construed in
accordance with the laws of the State of New York.
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<PAGE>
If the foregoing sets forth your understanding, please sign this
letter in the space provided below.
Very truly yours,
THE NEW WORLD POWER CORPORATION
By:____________________________
ACCEPTED AND AGREED TO:
THE SUNDIAL INTERNATIONAL FUND LIMITED
By:_____________________________________
Donald B. Shafto, Assistant Secretary
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<PAGE>
DATED AS OF MARCH 1, 1996
THE NEW WORLD POWER COMPANY LIMITED
- to -
THE SUNDIAL INTERNATIONAL FUND LIMITED
------------------------------------------
AMENDED AND RESTATED CONTINUING GUARANTEE
------------------------------------------
EXHIBIT G
<PAGE>
AMENDED AND RESTATED CONTINUING GUARANTEE
WHEREAS, THE NEW WORLD POWER COMPANY LIMITED, a
corporation incorporated under the laws of England and Wales the registered
office of which is at 179 Great Portland Street, London W1N 5FD (hereinafter
called the "GUARANTOR") heretofore executed and delivered to The Sundial
International Fund Limited, a Cayman Islands corporation, the address of which
is c/o Coutts & Co. (Bahamas) Ltd., P.O. Box N7788, Nassau, Bahamas ( herein,
together with its successors and assigns, referred to as "SUNDIAL") that certain
Continuing Guarantee dated December 20, 1995;
WHEREAS, in consideration of the extension of the maturity of
that certain 0% Senior Secured $550,000.00 Note dated December 20, 1995 and due
March 31,1996 heretofore issued by Guarantor to Sundial by exchange thereof for
that certain 0% Senior Secured $579,851.13 Note date as of April 1, 1996 and for
other good and valuable consideration, receipt whereof is hereby acknowledged,
Guarantor and Sundial have agreed to amend and restate in full the form of the
Continuing Guarantee.
NOW, THEREFORE, Guarantor hereby unconditionally guarantees to
Sundial and agrees with Sundial as follows:
1. The Guarantor will pay to Sundial on demand all money which is
now or shall at any time or times hereafter be due or owning or payable to
Sundial from or by Wolverine Power Corporation, a Delaware corporation which is
affiliated with the Guarantor ("WOLVERINE") and/or The New World Power
Corporation, a Delaware corporation which is the parent of the Guarantor ("NWP
CORP."), under or in respect of:
(i) all obligations of Wolverine under and pursuant to
(a) that certain Amended and Restated Wolverine Power Corporation
First Mortgage Note (the "AMENDED WOLVERINE NOTE") dated as of March 1, 1996 in
the principal amount of U.S. $3,434,602.00 made by Wolverine to Sundial, a copy
of which is annexed hereto as EXHIBIT A and made a part hereof; and
(b) (i) those two certain Amended Mortgage and Security
Agreements (the "AMENDED WOLVERINE MORTGAGES") dated as of March 1, 1996 made by
and between Wolverine and Sundial as security for, among other things, the
Amended Wolverine Note, a copy of each of the Amended Wolverine Mortgages being
annexed hereto as EXHIBIT B-1 and B-2 and made a part hereof, respectively; and
(ii) all obligations of NWP Corp. under and pursuant to that
certain Amended and Restated Support and Pledge Agreement (the "AMENDED SUPPORT
AND PLEDGE AGREEMENT") dated as of March 1, 1996 between NWP Corp. and Sundial,
a copy of which is annexed hereto as EXHIBIT C and made a part hereof; and
(iii) all obligations of NWP Corp. and Wolverine under and
pursuant to that certain Forbearance, Warrant Exchange, Note Conversion and
Amendatory Agreement ("FORBEARANCE AGREEMENT") dated as of March 1, 1996 among
Wolverine, NWP Corp. ,
<PAGE>
Guarantor and Sundial, a copy of which (without exhibits thereto) is annexed
hereto as EXHIBIT D and made a part hereof and any and all other "Transaction
Documents" (as defined in the Forbearance Agreement) and used herein with the
same meaning to which Guarantor and/or Wolverine is or hereafter becomes a
party; and
(iv) not later than September 1, 1996 all costs and expenses
which the Guarantor has also undertaken to pay jointly and severally with NWP
Corp. an Wolverine pursuant to Sections 18 and 22 of the Forbearance Agreement
which have been billed to the Guarantor on or before such date and to pay on
demand any and all such other costs and expenses which are billed to the
Guarantor following September 1, 1996.
2. This Guarantee shall be a continuing security and will remain
in full force and effect (i) as against Wolverine until Wolverine has no
outstanding liabilities to Sundial under the Amended Wolverine Note, the Amended
Wolverine Mortgages the Forbearance Agreement and any and all other "Transaction
Documents" to which Wolverine is a party, and (ii) as against NWP Corp. until
NWP Corp. has no outstanding liabilities to Sundial under the Amended Support
and Pledge Agreement, the Forbearance Agreement and any and all other
Transaction Documents to which NWP Corp. is or becomes a party, and there are no
such liabilities capable of arising and shall not be satisfied, discharged or
affected by any intermediate payment or settlement of account.
3. The obligations of the Guarantor under this Guarantee shall be
to make payment to Sundial, in the currency in which the applicable obligations
ought to have been or ought to be paid or discharged by Wolverine and/or NWP
Corp., as the case may be, strictly in accordance with the terms and provisions
of the Amended Wolverine Note, the Amended Wolverine Mortgages, the Amended
Support and Pledge Agreement and all other Transaction Documents applicable to
each respective obligation of Wolverine and NWP Corp., regardless of any law,
regulation or decree, now or after this date in effect, which affects or might
in any manner affect any of such terms or provisions of Sundial's rights as
against the Principal.
4. The bankruptcy, liquidation, dissolution or insolvency of
Wolverine or NWP Corp. or the appointment of a receiver to any of Wolverine's or
NWP Corp.'s respective assets shall not affect or determine the liability of the
Guarantor under this Guarantee. All dividends, compositions and monies received
by Sundial from Wolverine and/or NWP Corp. or from any other company, person or
estate capable of being applied by Sundial in reduction of the indebtedness of
Wolverine and/or NWP Corp. shall be regarded for all purposes as payments in
gross and Sundial shall be entitled to prove in the bankruptcy, reorganization,
liquidation or insolvency of Wolverine and/or NWP Corp., as the case may be, in
respect of the whole of Wolverine's or NWP Corp.'s respective indebtedness to
Sundial and without any right on the part of the Guarantor to be subrogated to
Sundial in respect of any such proof to the intent that this guarantee shall
apply to and secure the whole of any ultimate balance which shall remain due to
Sundial. Notwithstanding the foregoing, upon the full and final discharge of any
and all obligations of Wolverine and NWP Corp. to Sundial under the Secured
Documents, Sundial agrees to assign to Guarantor, without recourse or warranty
of any kind, any and all rights, titles and interests which Sundial may then
continue to have against Wolverine and/or NWP Corp. to the extent of any amounts
which may have been paid by Guarantor under or pursuant to this Guarantee.
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<PAGE>
5. Any settlement or discharge between Sundial and the Guarantor
shall be subject to the condition that no security or payment to Sundial by
Wolverine and/or NWP Corp. or any other person shall be avoided or reduced by
virtue of any provisions or enactments relating to bankruptcy, reorganization,
liquidation or insolvency for the time being in force and if any such security
or payment shall be so avoided or reduced Sundial shall be entitled to recover
the value or amount thereof from the Guarantor subsequently just as if such
settlement or discharge had not occurred.
6. This Guarantee and Sundial's rights hereunder shall be in
addition to and shall not be in any way prejudiced or affected by any one or
more other securities or guarantees for Wolverine and/or NWP Corp. which Sundial
may now or hereafter hold whether from the Guarantor or from any other person.
7. The liability of the Guarantor hereunder shall be unaffected
by any arrangements which Sundial may make with Wolverine and/or NWP Corp. or
with any other person which (but for this provision) might operate to diminish
or discharge the liability of or otherwise provide a defense to a surety.
Without prejudice to the generality of the foregoing Sundial shall be at liberty
at any time and without reference to the Guarantor to give time for payment or
grant any other indulgence and give up, deal with, vary, exchange or abstain
from perfecting or enforcing any other securities or guarantees held by Sundial
at any time and to discharge any party thereto, and to realize such securities
or guarantees or any of time as Sundial think fit and to compound with, accept
compositions from and make any other arrangements with Wolverine and/or NWP
Corp. or any person or persons liable to bills, notes or other securities or
guarantees held or to be held by Sundial without affecting the Guarantor's
liability under this Guarantee.
8. Sundial shall be at liberty but not bound to resort for
Sundial's own benefit to any other means of payment at any time and in any order
Sundial shall think fit without thereby diminishing the liability of the
Guarantor and Sundial may enforce this Guarantee either for the payment of the
ultimate balance after resorting to other means of payment or for the balance
due at any time notwithstanding that other means of payment have not been
resorted to and in the latter case without entitling the Guarantor to any
benefit from such other means of payment so long as any monies remain due or
owing or payable (whether actually or contingently) from or by Wolverine and/or
NWP Corp. to Sundial under the Transaction Documents.
9. This Guarantee shall take effect as a guarantee of the whole
and every part of the moneys due or owing or payable and to become due or owing
or payable as aforesaid and accordingly the Guarantor shall not be entitled as
against Sundial to any right of proof in the bankruptcy, liquidation or
insolvency of Wolverine and/or NWP Corp. or any other surety or other right of a
surety (including any right of contribution from any other surety) discharging,
in whole or in part, his liability in respect of the principal debt or to share
in any security held or money received by Sundial on account of the obligations
of Wolverine and/or NWP Corp. under the Transaction Documents or any other
surety or to have or exercise any rights as surety (including any such right of
contribution as aforesaid) in competition with you unless and until the whole of
such moneys shall have first been completely discharged and satisfied.
Furthermore, until such moneys shall have been discharged and satisfied in full
the
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<PAGE>
Guarantor shall not, if any moneys shall have become payable or shall have been
paid by the Guarantor under this Guarantee, take any step to enforce repayment
or to exercise any other rights, claims or remedies of any kind which accrue
howsoever to the Guarantor in respect either of the amount so payable or so paid
(including any such right of contribution as aforesaid) or of any other moneys
for the time being due to the Guarantor from Wolverine and/or NWP Corp. under
the Transaction Documents or any other surety provided that in the event of the
bankruptcy, liquidation or insolvency of Wolverine and/or NWP Corp. or any other
surety the Guarantor shall if so directed by Sundial but not otherwise prove for
the whole or any part of the moneys due to the Guarantor from Wolverine and/or
NWP Corp. or any other surety as aforesaid on terms that the benefit of such
proof and of all moneys to be received by the Guarantor in respect thereof shall
be held in trust for Sundial and applied in discharging the obligations of the
Guarantor to Sundial hereunder. For the purpose of enabling Sundial to sue
Wolverine and/or NWP Corp. or any other surety or prove in the bankruptcy,
liquidation or insolvency of Wolverine and/or NWP Corp. or any other surety for
the whole of such moneys as aforesaid, or to preserve intact the liability of
any other party, Sundial may at any time place and keep, for such time as
Sundial may think prudent, any moneys received, recovered or realized hereunder
or under any other guarantee or security to the credit, either of the Guarantor,
or such other person or transaction (if any) as Sundial shall think fit without
any intermediate obligation on Sundial's part to apply the same or any part
thereof in or towards the discharge of the moneys as aforesaid or any
intermediate right on the part of the Guarantor to sue Wolverine and/or NWP
Corp. or any other surety or prove in the bankruptcy, liquidation or insolvency
of Wolverine and/or NWP Corp. or any other surety in competition with or so as
to diminish any dividend or other advantage that would or might come to Sundial
or to treat the liability of Wolverine and/or NWP Corp. or any other surety as
diminished. As used in this Clause and Clause 11 hereof the expression "any
other surety" includes any other person constituting the Guarantor and any party
or persons referred to in Clause 7 hereof.
10. If Wolverine, NWP Corp. or the Guarantor is a partnership or
a company, this Guarantee shall remain in full force and effect notwithstanding
any change in the constitution of Wolverine, NWP Corp. or the Guarantor.
11. It is hereby declared by the Guarantor that no security has
been received by the Guarantor from Wolverine or NWP Corp. or any other surety
for the giving of this Guarantee and it is agreed by the Guarantor that the
Guarantor will not so long as this Guarantee remains in force take any security
in respect of the Guarantor's liability hereunder without first obtaining
Sundial's written consent.
12. As a separate and independent stipulation it is agreed by the
Guarantor that any moneys mentioned in Clause 1 hereof which may not be
recoverable on the footing of a guarantee whether by reason of any legal
limitation, disability or incapacity on or of the Wolverine or NWP Corp., as the
case may be, or any other fact or circumstance and whether known to Sundial or
the Guarantor or not shall nevertheless be recoverable from the Guarantor as
sole or principal debtor(s) in respect thereof and shall be paid by the
Guarantor on demand.
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<PAGE>
13. This Guarantee shall continue to bind the Guarantor
notwithstanding any amalgamation or merger that may be effected by Sundial with
any other company or companies and notwithstanding any reconstruction by Sundial
involving the formation of and transfer of the whole or any part of Sundial's
undertaking and assets to a new company and notwithstanding the sale or transfer
of the whole or any part of Sundial's undertaking and assets to another company
whether the company or companies with which Sundial amalgamate or merge or the
company to which Sundial transfers the whole or merge or the company to which
transfer the whole or any part of Sundial undertaking and assets either on a
reconstruction or sale or transfer as aforesaid shall or shall not differ from
Sundial in their or its objects, character or constitution, it being the intent
of the Guarantor that this Guarantee shall remain valid and effectual in all
respects in favour of, against and with reference to, and that the benefit of
this Guarantee and all rights conferred upon Sundial hereby may be assigned to
and enforced by any such company or companies and proceeded on in the same
manner to all intents and purposes as if such company or companies had been
named herein instead of and/or in addition to Sundial.
14. Each payment to be made by the Guarantor hereunder shall be
made to Sundial in the appropriate currency in accordance with the terms hereof
to the credit of Sundial's account with whichever bank or banks located in the
country of such currency as shall be designated by Sundial. All such payments
shall be made in full without set-off or counterclaim and free and clear of and
without deduction of or withholding for or on account of any tax of any nature
now or hereafter imposed by any country or any subdivision or taxing authority
thereof or therein or any federation or organisation of which such country is a
member. If any such payment shall be subject to any such tax or if the Guarantor
shall be required to make any such deduction or withholding the Guarantor shall
pay such tax shall ensure that such payment or deduction or withholding will not
exceed the minimum legal liability therefor and shall simultaneously pay to
Sundial such additional amount as may be necessary to enable Sundial to receive
after all such payments deductions and withholdings a net amount equal to the
full amount payable hereunder.
15. It is further agreed by the Guarantor that the Guarantor will
indemnify Sundial against any loss incurred by Sundial as a result of any
judgment or order being given or made for the payment of any amount due
hereunder and such judgement or order being expressed in a currency other than
that in which such amount is payable by the Guarantor hereunder and as a result
of any variation having occurred in rates of exchange between the date as at
which such amount is converted into such other currency for the purposes of such
judgment or order and the date of actual payment pursuant thereto. The foregoing
indemnity shall constitute a separate and independent obligation of the
Guarantor and shall apply irrespective of any indulgence granted to the
Guarantor from time to time and shall continue in full force and effect
notwithstanding any such judgment or order as aforesaid.
16. No delay or omission on Sundial's part in exercising any
right, power, privilege or remedy in respect of this Guarantee shall impair such
right, power, privilege or remedy or be construed as a waiver thereof nor shall
any single or partial exercise of any such right, power, privilege or remedy
preclude any further exercise thereof or the exercise of any other right, power,
privilege or remedy. The rights, powers, privileges and remedies herein
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<PAGE>
provided are cumulative and not exclusive of any rights, powers, privileges or
remedies provided by law.
17. Any and all notices or demands hereunder may be given by any
party to any other party in any of the following manners: (i) by facsimile
transmission, (ii) by personal delivery, (iii) by first class mail, postage
prepaid, or (iv) by certified mail, postage prepaid. Any notice given by
facsimile transmission shall be effective two hours after dispatch thereof is
completed by the sending party; all other notices shall be effective upon
receipt. All notices shall be given to the parties at the addresses or to the
facsimile numbers set forth below (or to such other numbers or addresses as
shall be furnished by notice from any party hereto to the other parties hereto):
The New World Power Company Ltd.
c/o The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Fax: (203) 435-0505
with a copy to:
The New World Power Company Ltd.
Tavistock House
34/36 Bromham Road
Bedford MK 40 ZQD
England
Attention: Mr. Chuan Zhang
and:
Finers
Solicitors
179 Great Portland Street
London W1N 6L3
England
Attn: John D'Ardenne, Esq.
Fax: 011 44 171 323 4000
or: 011 44 171 580 7069
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attn: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
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<PAGE>
with a copy to:
Sundt & Co. Ltd.
11 St. James's Square
London SW1Y 4LB
England
Attn: Jens Wilhelmsen
Fax: 011 44 171 930 1784
and
Gilmartin, Poster & Shafto
One William Street
New York, New York 10004 USA
Attention: Donald B. Shafto, Esq.
Fax: (212) 482-0848
(212) 425-3220
18. This Guarantee and all of your rights hereunder shall be
entitled to the benefit of that certain Amended and Restated Charge Over Shares
of even date herewith among Guarantor, Sundial and the Escrow Agent named
therein, Oakes, Fitzwilliams & Co.
Ltd., the Forbearance Agreement and the Transaction Documents.
19. In this Guarantee where the context permits the singular
includes the plural and vice versa and references to persons include references
to companies.
20. This Guarantee will be governed by and construed in
accordance with English law and the Guarantor hereby irrevocably submits to the
non-exclusive jurisdiction of the English courts and to the courts of any other
jurisdiction where the Guarantor or its assets may be found as Sundial may
select.
21. The paper on which this Guarantee is drawn is and shall at
all times remain your property.
-7-
<PAGE>
22. This Guarantee may be transferred or assigned in whole or in
part by Sundial.
DATED as of this 1st day of March 1996.
Executed and unconditionally delivered
as a Deed by THE NEW WORLD POWER
COMPANY LIMITED by the signatures of:
--------------------------------------
Director
--------------------------------------
Director
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<PAGE>
THE NEW WORLD POWER COMPANY LIMITED (1)
SUNDIAL INTERNATIONAL FUND LIMITED (2)
and
OAKES, FITZWILLIAMS & CO. LIMITED (3)
--------------------------------------------
AMENDED AND RESTATED CHARGE OVER SHARES
--------------------------------------------
EXHIBIT H
<PAGE>
THIS AMENDED AND RESTATED CHARGE is made on the 29th day of May, 1996
with effect as of the 1st day of March, 1996
BETWEEN
(1) THE NEW WORLD POWER COMPANY LIMITED whose registered office is at 179
Great Portland Street, London W1N 5FD ("the Borrower")
(2) THE SUNDIAL INTERNATIONAL FUND LIMITED, c/o Coutts & Co. (Bahamas)Ltd.,
Coutts Building - West Bay Street, P.O. Box N7788, Nassau, Bahamas ("the
Lender")
(3) OAKES, FITZWILLIAMS & CO. LIMITED whose registered office is at Byron
House, 7-9 St. James's Street, London SWIA 1EE, as escrow agent ("the
Escrow Agent").
NOW THIS DEED WITNESSES as follows:
DEFINITIONS AND INTERPRETATION
1. In this Charge:
(a) "Charged Property" means the Shares and Security Assets and
includes any proceeds of sale or other realisation thereof or any
part thereof;
(b) "the Company" means Renewable Energy Ireland Limited;
(c) "the Default Rate" means ten per cent (10%) per annum;
(d) "Enforcement Event" means any default under the Note, the
Forbearance Agreement or the Guarantee;
(e) "the Forbearance Agreement" means that certain Forbearance,
Warrant Exchange, Note Conversion and Amendatory Agreement dated
as of March 1, 1996, among the Borrower, the Lender, The New
World Power Corporation ("NWPC"), a Delaware corporation, and
Wolverine Power Corporation ("WPC"), a Delaware corporation;
(f) "the Guarantee" means that certain Amended and Restated
Continuing Guarantee dated as of March 1, 1996 by and between
Borrower, as guarantor, and Lender made on the same day as this
Charge;
(g) "the Note" means that certain 0% Senior Secured Note in the
principal amount of U.S.$579,851.13 dated as of April 1, 1996 due
December 1, 1996 issued by the Borrower in favour of the Lender;
(h) "Obligations" means all warranties, guarantees, covenants,
undertakings, liabilities, debts and obligations of the Borrower
whatsoever and wheresoever
<PAGE>
and howsoever arising which now are or at any time hereafter may
be due or given or owed to the Lender or the benefit of which
shall be vested in the Lender, in any currency, solely or jointly
with any other person or persons, as principal, agent or surety
on any account, under the Forbearance Agreement, the Note, the
Guarantee and the other "Transaction Documents" (referred to in
the Forbearance Agreement and used herein with the same meaning);
(i) "Receiver" means any receiver appointed by the Lender under this
Charge;
(j) "Security Assets" means all stocks, shares, warrants, rights,
money or other property accruing, offered, issued or deriving at
any time by way of redemption, bonus, preference, option,
consolidation, sub-division, dividend, interest or otherwise in
respect of the Shares;
(k) "Shares" means the shares specified in the Schedule;
Words importing the singular number only shall include the plural and
vice versa and any reference to the masculine gender shall include the
feminine and neuter and vice versa.
In this Charge headings to clauses are for convenience only and have no
legal effect and references to Clauses and Schedules are to clauses and
schedules of this Charge unless otherwise stated.
In this Charge the expression "the Borrower" and "the Lender" include
their respective successors and assigns whether immediate or derivative.
Any change in the constitution of the Lender or its absorption in or
amalgamation with any other person or the acquisition of all or part of
its undertaking by any other person shall not in any way prejudice or
affect its rights hereunder.
Any reference to any agreement or document shall be deemed to refer to
the same as amended, modified or supplemented from time to time by the
parties hereto.
Where there are two or more persons included in the expression "the
Borrower" references to the Borrower are references to all or any of
them as the context may require and all assignments, charges,
agreements, undertakings, covenants, obligations, warranties and
representations given, undertaken, made or assumed by the Borrower shall
be deemed to have been given, undertaken, made or assumed by them
jointly and severally and construed accordingly.
References to statutory provisions shall be construed as references to
those provisions as respectively amended or re-enacted (whether before
or after the date hereof) from time to time and shall include provisions
of which they are re-enactments (whether with or without modification)
and any subordinate legislation, orders, instruments and regulations
issued or made thereunder and being in force from time to time.
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<PAGE>
COVENANT TO PAY
2. The Borrower covenants with the Lender that it will upon the due date
agreed in relation thereto or (if none) upon demand pay and discharge
the Obligations. The Borrower shall pay interest to the date of payment
or discharge (notwithstanding any demand or any judgment obtained by the
Lender or the liquidation or administration of or any arrangement or
composition with creditors by the Borrower) at the rate or rates
applicable under the agreements or arrangements giving rise to the
relevant Obligations and on any other terms relating to interest
payments contained in such agreements or arrangements or, if no such
rate or rates are specified, at the Default Rate upon such days and upon
such terms as the Lender may from time to time determine. Such interest
shall be compounded quarterly in the event of it not being punctually
paid.
CHARGING CLAUSE
3. (a) As security for the discharge of the Obligations the Borrower
hereby and with full title guarantee charges all its present and future
right, title and interest in the Charged Property to the Lender.
(b) Notwithstanding sub-clause 3(a) the Borrower shall be entitled at
any time to sell all or any portion of the Shares of the Company
provided (i) no Enforcement Event shall then have occurred and be
continuing, (ii) the sales price of said Shares shall not be less than
the minimum price therefor provided for in Section 7 of the Forbearance
Agreement, and (iii) the net proceeds of such sale shall be distributed
in accordance with the provisions of Section 7 of the Forbearance
Agreement.
DEPOSIT OF SHARE CERTIFICATES AND BLANK TRANSFERS
4. The Borrower has deposited with the Escrow Agent all share certificates
or other documents of title to the Shares concurrently with the
execution of this Charge, together with such duly executed transfers or
assignments (with the name of the transferee, date and consideration
left blank) as the Lender may require, to the intent that the Lender may
at any time after an Enforcement Event without notice present them for
registration and perfect the title of the Lender or its nominee to the
Shares.
5. (a) Subject to Clause 8, the Borrower shall upon the accrual,
offer, issue or receipt of any Security Assets deliver or pay to
the Lender or procure the delivery or payment to the Lender of
all such Security Assets or the share certificates or other
documents of title to or representing them together with such
duly executed transfers or assignments (with the name of the
transferee, date and consideration left blank) as the Lender may
require, to the intent that the Lender may at any time after an
Enforcement Event without notice present them for registration
and perfect the title of the Lender or its nominee to such
Security Assets.
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<PAGE>
(b) The Borrower will, if so requested by the Lender, promptly and at
the Borrower's expense execute and deliver and do all deeds,
instruments, transfers, powers of attorney, renunciations,
proxies, notices, documents acts and things in such form as the
Lender may from time to time require for perfecting or protecting
the Lender's security over the Charged Property or facilitating
its realisation after an Enforcement Event (including, insofar as
it is able, procuring that any transfer of the Charged Property
in favour of the Lender or its nominee and any subsequent
transfer by the Lender is duly registered in the books of the
Company).
REPRESENTATIONS AND WARRANTIES
6. The Borrower represents and warrants to the Lender on the date of this
Charge and on each subsequent day (until the occurrence of an
Enforcement Event) that:
(a) the Borrower is the sole, absolute and beneficial owner and
registered holder of the Charged Property, that no person save
the Borrower has any right or interest of any sort whatsoever in
or to the Charged Property and that there are no agreements or
arrangements (other than restrictions on transfer or rights of
pre-emption) affecting the Charged Property in any way or which
would or might in any way fetter or otherwise prejudice the
rights of the Borrower or any mortgagee of the Charged Property;
(b) the Borrower has not sold or otherwise disposed of or agreed to
sell or otherwise dispose of or granted or agreed to grant any
option in respect of all or any of its right, title and interest
in and to the Charged Property;
(c) the Borrower has and will at all material times have the
necessary power to enable it to enter into, exercise its rights
and perform its obligations under this Charge and such actions
have been and will, during the subsistence of this Charge, be
duly authorised;
(d) the Shares are duly authorised, validly issued and fully paid and
there are no monies or liabilities outstanding in respect of any
of the Shares;
(e) this Charge creates legal, valid, binding and enforceable
obligations of the Borrower and its effective security over the
Charged Property;
(f) this Charge and the performance of the Borrower's obligations
under it, do not conflict or result in any breach of or
constitute a default under any agreement, instrument or
obligation to which the Borrower is a party or by which it is
bound (including the Borrower's Memorandum and Articles of
Association)
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<PAGE>
(g) the Shares represent 80.46% of the Company's issued ordinary
share capital which carries votes.
COVENANTS
7. The Borrower covenants with the Lender that during the continuance of
this security:
(a) it will not (without the prior written consent of the Lender)
(i) permit any person other than the Lender or its nominees to
be registered as holder of the Charged Property or any
part thereof; or
(ii) create or purport to create or permit to subsist any
mortgage, debenture, charge, pledge, lien or encumbrance
(other than in favour of the Lender) on or over the
Charged Property or any part thereof or interest therein,
whether or not subordinate to the rights of Lender under
this Charge or the Transaction Documents; or
(iii) sell, transfer or otherwise dispose of the Charged
Property or any part thereof or interest therein or
attempt to agree so to do except as permitted by clause
3(b) of the Charge;
(b) it will pay all calls and other payments when due and discharge
promptly all other obligations in respect of the Charged Property
(and if the Borrower does not do so, the Lender may make such
payments on behalf of the Borrower, in which event any sums shall
be reimbursed on demand by the Borrower to the Lender);
(c) it will comply with any notice served on it under the Companies
Act 1985;
(d) it will not do or cause or permit to be done anything which is a
variation or abrogation of the rights attaching to or conferred
by all or part of the Charged Property or which may in any way
depreciate, jeopardise or otherwise prejudice the value to the
Lender of the Charged Property and it will vote against any
resolution which would have such an effect (if passed).
DIVIDEND AND VOTES
8. (a) Before the occurrence of an Enforcement Event, the Borrower
may (subject to Clause 7(d)) direct how the votes attaching to
the Charged Property are to be exercised
-5-
<PAGE>
(b) Before the occurrence of an Enforcement Event, all dividends,
interest and other income forming part of the Charged Property
will be paid to the Borrower and held by the Borrower in trust
for the Lender as part of the Charged Property and held by
Borrower in a separate bank account substantially identifying the
trust character of such income; after the occurrence of an
Enforcement Event all such dividends, interest and other income
shall be paid directly to Lender as part of the Charged Property.
At the option of the Borrower such dividends, interest and other
income may be used to pay or prepay, in whole or part, the New
NWP Ltd. Note.
(c) After the occurrence of an Enforcement Event, if the Charged
Property is registered in the name of the Lender or a nominee for
the Lender all dividends, interest and other money received which
forms part of the Charged Property may be held by the Lender and
applied by it as though they were proceeds of sale and the Lender
may (at its absolute discretion) direct how the votes and other
rights attaching to the Charged Property are to be exercised and,
without limitation, the Lender shall be entitled to exercise all
the powers given to trustees by section 10(3) and (4) of the
Trustee Act 1925 as amended by section 9 of the Trustee
Investments Act 1961 in respect of any of the Charged Property
which is subject to a trust. For so long as the Charged Property
continues to be registered in the name of the Borrower all
dividends interest and other monies received as aforesaid shall
be held on trust by the Borrower for the Lender and all votes and
other rights as aforesaid shall be exercised by the Borrower as
directed by the Lender.
POWER OF THE LENDER
9. (a) At any time after the occurrence of an Enforcement Event
(i) the Lender and any nominee of the Lender may without further
notice in respect of all or any part of the Charged Property
exercise all the powers or rights which may be exercisable by the
registered holder of the Charged Property, appoint a receiver and
exercise the power of sale and all other powers conferred on
mortgagees by the Law of Property Act 1925 as hereby varied or
extended. Any Receiver shall be the agent of the Borrower who
shall be responsible for his fees and expenses. The Lender shall
cease to be under any further commitment to the Borrower
following the occurrence of an Enforcement Event; and
(ii) each of the Lender, any nominee of the Lender and any
Receiver shall be entitled (in addition to any other powers
conferred by law) to sell, exchange, redeem or otherwise dispose
of all or any part of the Charged Property for such consideration
and on such terms as he may in his absolute discretion think fit.
-6-
<PAGE>
(b) Sections 93 and 103 of the Law of Property Act 1925 shall not apply
to the security constituted by this Charge.
(c) The Lender and any Receiver are authorised to give a good discharge
for any money received in exercise of the power of sale as well as for
any money or property received by either of them in respect of the
Charged Property during the subsistence of this Charge. No purchaser or
other person shall be bound or concerned to see or enquire whether the
right of the Lender or the Receiver to exercise any of the powers hereby
conferred has arisen or not or be concerned with notice to the contrary
or with the propriety of the exercise or purported exercise of such
powers and may rely on any statement given by the Lender or any Receiver
in this connection.
(d) The Lender and any Receiver shall, (without prejudice to their right
to recover any shortfall from the Borrower and, after the payment of any
claims having priority to the security created by this Charge), apply
the proceeds arising from the exercise of any powers conferred by this
Charge in paying the costs of sale or other disposal and in or towards
the discharge of the Obligations in such order as they in their absolute
discretion think fit and the Lender or Receiver may credit such proceeds
to a suspense account for so long and in such manner as he may from time
to time determine. The surplus (if any) of such proceeds shall be paid
to the person or persons entitled to it.
(e) Each of the Lender and any Receiver may compound or settle any
question in relation to the Charged Property in such manner as he thinks
fit. Neither the Lender nor its nominee (if any) nor any Receiver shall
be liable for any loss arising after an Enforcement Event occasioned by
any exercise, purported exercise or non-exercise of rights attached to
the Charged Property or given to them by this Charge and, in particular,
they shall not be liable to account as mortgagee in possession in
respect of all or any part of the Charged Property and shall not be
liable for any loss whatsoever arising directly or indirectly from any
negligence on their part in respect of any sale or disposal or for any
neglect or default to present any interest coupon or any bond or stock
drawn for repayment or for any failure to pay any call or instalment or
to accept any offer or to notify the Borrower of any such matter or for
any negligence or default by their nominees, correspondents, employees
or agent or for any other loss of any nature whatsoever in connection
with the Charged Property.
(f) The Borrower unconditionally covenants with the Lender fully to
indemnify and hold harmless the Lender and any Receiver from and against
all losses, actions, claims, expenses, demands and liabilities whether
in contract, tort or otherwise and in respect of calls or other payments
relating to the Charged Property now or hereafter incurred by either of
them (including value added tax where applicable) for anything done or
omitted in the exercise or purported exercise of their powers or
occasioned by any breach by the Borrower of any of its covenants or
other obligations to the Lender. The Borrower shall indemnify the Lender
or Receiver (as appropriate) on demand and shall pay interest on the
sums demanded at the Default Rate.
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<PAGE>
POWER OF ATTORNEY
10. To secure the performance of its obligations under this Charge the
Borrower hereby irrevocably appoints the Lender to be its attorney (with
full powers of substitution and delegation) to sign any documents,
execute and deliver any deed (including, but without limitation, any
stock transfer form) and do any act or thing on behalf of the Borrower
which the Borrower may or ought to do under this Charge. The Borrower
hereby covenants with the Lender to ratify and confirm any document,
deed, act and thing and all transactions which such attorney may sign,
execute or do.
RELEASE OF SECURITY
11. On discharge of the Obligations in full the Lender, at the request and
cost of the Borrower, shall release or procure the release of the
Charged Property so as to vest it in the Borrower free from this
security.
NATURE OF SECURITY
12. This security is in addition to any other security now held by the
Lender for the Obligations of the Borrower (whether under this Charge or
otherwise).
CONTINUING SECURITY
13. This Charge is a continuing security and will not be satisfied by any
intermediate discharge of the whole or any part of the Obligations or
any other matter or thing whatsoever, Including the insolvency,
liquidation or administration of the Borrower and shall be binding until
all of the Obligations have been unconditionally and irrevocably
discharged in full. It covers all the money and liabilities which for
the time being constitute the Obligations.
SET-OFF AND GROSSING UP
14. All sums payable by the Borrower under this Charge shall be paid without
any set-off, counterclaim, withholding or deduction whatsoever, unless
required by law in which event the Borrower will simultaneously with
making the relevant payment under this Charge pay to the Lender such
additional amount as will result in the receipt by the Lender of the
full amount which would otherwise have been receivable.
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<PAGE>
COSTS
15. The Borrower shall on demand and on a full indemnity basis pay to the
Lender or any Receiver (as appropriate) the amount of all fees, costs
and expenses (with VAT thereon) and other liabilities which the Lender
or such receiver incurs in connection with:
(a) the preparation, negotiation, execution and delivery of this
Charge;
(b) any stamping or payment of stamp duty reserve tax or registration
of this Charge or any transfer of the Charged Property pursuant
hereto;
(c) any discharge or release of this Charge;
(d) the preservation or exercise (or attempted preservation or
exercise) of any rights under or in connection with this Charge
and the enforcement (or attempted enforcement) of this Charge or
the Obligations against the Borrower or others; or
(e) dealing with or obtaining advice about any other matter or
question arising out of or in connection with this Charge.
NOTICES
16. Any and all notices or demands hereunder may be given by any party to
any other party in any of the following manners: (i) by facsimile
transmission, (ii) by personal delivery, (iii) by first class mail,
postage prepaid, or (iv) by certified mail, postage prepaid. Any notice
given by facsimile transmission shall be effective two hours after
dispatch thereof is completed by the sending party; all other notices
shall be effective upon receipt. All notices shall be given to the
parties at the addresses or to the facsimile numbers set forth below (or
to such other numbers or addresses as shall be furnished by notice from
any party hereto to the other parties hereto):
The New World Power Company Ltd.
c/o The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Attn: Mr. George Petrenko
Fax: (203) 435-0505
-9-
<PAGE>
with a copy to:
The New World Power Company Ltd.
Tavistock House
34/36 Bromham Road
Bedford MK 40 ZQD
England
Attention: Mr. Chuan Zhang
and:
Finers
Solicitors
179 Great Portland Street
London W1N 6L3
England
Attn: John D'Ardenne, Esq.
Fax: 011 44 171 323 4000
or: 011 44 171 580 7069
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attn: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
with a copy to:
Sundt & Co. Ltd.
11 St. James's Square
London SW1Y 4LB
England
Attn: Mr. Jens Wilhelmsen
Fax: 011 44 171 930 1784
and
Gilmartin, Poster & Shafto
One William Street
New York, New York 10004 USA
Attention: Donald B. Shafto, Esq.
Fax: (212) 482-0848
(212) 425-3130
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<PAGE>
Oakes, Fitzwilliams & Co. Limited
Byron House
7-9 St. James' Street
London SW1A 1EE
England
Attn: Mr. Herbert Lee Oakes
Fax: 011 44 171 925 1026
ESCROW HOLDER
17. (a) The Escrow Holder is acting hereunder as an escrow holder for the
purpose of holding the certificates evidencing the Security Assets. The
Escrow Holder may act upon any instrument or other writing believed by
it in good faith to be genuine and to have been signed or presented by
the proper person and shall not be liable to any party hereto in
connection with the performance of its duties hereunder, except for its
own negligence or willful misconduct. The Escrow Holder's duties shall
be determined only with reference to this Agreement and applicable laws,
and the Escrow Holder is not charged with knowledge of or any duties or
responsibilities in connection with any other document or agreement.
(b) In consideration of its acceptance of the appointment as the Escrow
Holder, the other parties hereto agree to indemnify and hold the Escrow
Holder harmless as to any liability incurred by it to any person, firm
or corporation by reason of its having accepted the same or in carrying
out any of the terms hereof, except for the Escrow Holder's negligence
or willful misconduct.
(c) The Borrower shall pay the Escrow Holder's reasonable costs and
expenses incurred in connection with its duties hereunder.
(d) The Escrow Holder shall have the right at any time to resign
hereunder by giving written notice of its resignation to the parties
hereto at least ten (10) business days prior to the date specified for
such resignation to take effect; and upon the effective date of such
resignation, the certificates evidencing the Pledged Stock then held by
the Escrow Holder hereunder shall be delivered by it to such successor
Escrow Holder or as otherwise shall be designated in writing by the
parties hereto; provided, however, if the parties hereto are unable to
agree upon such successor Escrow Holder within such ten-day period,
Messrs. Gilmartin, Poster & Shafto shall automatically become such
Escrow Holder without necessity of further act.
(e) In the event that the Escrow Holder should at any time be confronted
with inconsistent claims or demands by the parties hereto, the Escrow
Holder shall have the right to interplead said parties in any court of
competent jurisdiction and request that
-11-
<PAGE>
such court determine such respective rights of the parties with respect
to this Agreement, and upon doing so, the Escrow Holder automatically
shall be released from any obligations or liability as a consequence of
any such claims or demands.
MISCELLANEOUS
18. (a) No failure or delay by the Lender in exercising any right or remedy
shall operate as a waiver thereof nor shall any single or partial
exercise or waiver of any right or remedy preclude its further exercise
or the exercise of any other right or remedy.
(b) Each of the provisions of this Charge is severable and distinct from
the others and if at any time one or more of such provisions is or
becomes invalid illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way
be affected or impaired thereby.
(c) Any statement, certificate or determination of the Lender as to the
Obligations or any other matter provided for in this Charge shall, in
the absence of manifest error be conclusive and binding on the Borrower.
JURISDICTION
19. (a) This Charge shall be governed by and interpreted in accordance with
English Law.
(b) The Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of the courts of England, but this Charge may be enforced
in any court of competent jurisdiction.
(c) The Borrower hereby irrevocably authorises and appointsFiners,
Solicitors, 179 Great Portland Street, London W1N 6L3, England, Attn:
John D'Ardenne, Esq. (or such other person being a firm of solicitors
resident in England as it may by notice to the Lender substitute) to
accept service of all legal process out of or connected with this Charge
and service on Finers (or such substitute) shall be deemed to be service
on the Borrower.
20. This Charge may be transferred or assigned in whole or in part by the
Lender.
EXECUTED as a deed the day and year first above written.
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<PAGE>
SCHEDULE
NUMBER OF SHARES OR DESCRIPTION OF STOCKS,
AMOUNT OF STOCK SHARES, OR OTHER SECURITIES
Seven Hundred Thousand (700,000) Ordinary Shares of IR (pound)1 each in
the share capital of Renewable Energy
Ireland Limited, a company incorporated
in the Republic of Ireland
-13-
<PAGE>
IN WITNESS WHEREOF this Agreement has been executed on the date
first above written.
Executed and unconditionally delivered as a)
Deed by THE NEW WORLD POWER ) ------------------------
COMPANY LIMITED by the ) Director
signatures of: )
----------------------
Director
Executed and unconditionally delivered as a )
Deed by THE SUNDIAL )
INTERNATIONAL FUND LIMITED by ) ---------------------
the signature of: ) Donald B. Shafto,
Assistant Secretary
Executed and unconditionally )
delivered as a Deed by OAKES, )
FITZWILLIAMS & CO. LIMITED )
by the signatures of: ) ----------------------
Director
----------------------
Director
-14-
<PAGE>
FORM OF EXCHANGE NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR UNDER ANY APPLICABLE LAW OR REGULATION OF ANY STATE AND IS NOT TRANSFERABLE
EXCEPT UPON THE CONDITIONS SPECIFIED IN SECTION 9(C) OF THE FORBEARANCE
AGREEMENT REFERRED TO HEREIN.
THE NEW WORLD POWER CORPORATION
8% CONVERTIBLE SUBORDINATED NOTE
DUE JULY 31, 2000
$_______________ _______________ 199__
New York, New York
FOR VALUE RECEIVED, the undersigned, THE NEW WORLD POWER
CORPORATION, a Delaware corporation (herein, together with any successor,
referred to as the "COMPANY"), hereby promises to pay to
______________________________________ or its registered assigns, the principal
sum of ___________________________________ Dollars ($_______________) on July
31, 2000, with interest (computed on the basis of the actual number of days
elapsed over a 360-day year (a) on the unpaid balance of such principal sum from
the date hereof at the interest rate of 8% per annum from the date hereof,
payable semiannually in arrears on January 31 and July 31 of each year, until
the entire principal amount hereof shall have become due and payable, whether at
maturity or at a date fixed for prepayment or by acceleration or declaration or
otherwise, and (b) at the Default Rate on any overdue installment of principal
(including any overdue prepayment of principal) and on any overdue premium and
(to the extent permitted by law) on any overdue installment of interest until
paid (whether or not any circumstance prevents such payment). The "Default Rate"
shall be a per annum interest plus the rate announced from time to time by
Citibank, N.A. as its prime or stated rate for unsecured short-term U.S. dollar
commercial loans within the United States (the "PRIME RATE") for the first six
(6) months any installment of principal, premium of interest is overdue and (ii)
the greater of (y) 15% or (z) the sum of 8% plus the Prime Rate thereafter until
any such overdue installment is paid, provided, however, that in no event shall
the Default Rate exceed the maximum nonusurious per annum interest rate
permitted by applicable law.
EXHIBIT I
<PAGE>
If any payment of interest due hereunder becomes due and payable
on a day which is not a Business Day (as defined in the Forbearance Agreement
referred to below), the due date thereof shall be the next preceding day which
is a Business Day, and the interest payable on such next preceding Business Day
shall be the interest which would otherwise have been payable on the due date
which was not a Business Day.
Payments of principal and interest shall be made in lawful money
of the United States of America at the principal office of the Company at Lime
Rock, Connecticut, or at such other place as the Company shall have designated
for such purpose to the holder hereof in writing, as provided in the Forbearance
Agreement referred to below, or to the address or account designated by the
holder hereof for such purpose.
This Note is one of a duly authorized issue of Exchange Notes
issued pursuant to that certain Forbearance, Warrant Exchange, Note Conversion
and Amendatory Agreement among The Sundial International Fund Limited
("SUNDIAL"), a Cayman Islands corporation, on the one hand, The Company, The New
World Power Company Limited ("NWP LTD."), a company incorporated under the laws
of England and Wales, and Wolverine Power Corporation ("WOLVERINE"), a Delaware
corporation, jointly and severally, on the other hand (herein as executed and
delivered and as at any time amended referred to as the "FORBEARANCE
AGRREEMENT").
This Note is subject to the provisions of and is entitled to the
benefits of the Forbearance Agreement. The Forbearance Agreement provides, INTER
ALIA, for prepayments of principal upon the terms set forth therein. Each holder
of this Note, by accepting the same, agrees to and shall be bound by the
provisions of the Forbearance Agreement.
This Note is transferable only upon the terms and conditions
specified in the Forbearance Agreement.
In case an Event of Default (as defined in the Forbearance
Agreement shall occur and be continuing, the principal of this Note may be
declared due and payable in the manner and with the effect provided in the
Forbearance Agreement.
The principal amount of this Note (and, if elected by the holder,
accrued and unpaid interest hereon) can be converted, in whole or in part, at
the option of the holder, to purchase Common Stock of the Company in the manner,
and upon the terms and conditions, including, without limitation, antidilution
provisions, provided in the Forbearance Agreement.
No reference herein to the Forbearance Agreement and no
provisions hereof or thereof shall alter or impair the obligations of the
Company, which are absolute and unconditional, to pay the principal hereof and
interest hereon at the respective times and places specified herein and in the
Forbearance Agreement.
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<PAGE>
This Note is delivered in and shall be construed and enforced in
accordance with and governed by the laws of the State of New York.
Subject to the provisions of Section 9(c) of the Forbearance
Agreement, the Company may treat the person in whose name this Note is
registered as the owner and holder of this Note for the purpose of receiving
payment of principal of, premium, if any, and interest on this Note and for all
other purposes whatsoever, and the Company shall not be affected by any notice
to the contrary.
IN WITNESS WHEREOF, The New World Power Corporation has caused
this Note to be duly executed as of the date first written above.
THE NEW WORLD POWER CORPORATION
By: ___________________________________
Name:
Title:
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<PAGE>
--------------------------------------
REGISTRATION RIGHTS AGREEMENT
by and between
THE NEW WORLD POWER CORPORATION
and
THE SUNDIAL INTERNATIONAL FUND LIMITED
Dated as of March 1, 1996
--------------------------------------
EXHIBIT J
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEMAND REGISTRATIONS.................. 2
1.1 REQUESTS FOR REGISTRATION..................................... 2
1.2 LIMITATIONS ON DEMAND REGISTRATIONS........................... 2
1.3 EFFECTIVE REGISTRATION STATEMENT.............................. 3
1.4 PRIORITY ON DEMAND REGISTRATIONS.............................. 3
1.5 SELECTION OF UNDERWRITERS..................................... 4
1.6 OTHER REGISTRATION RIGHTS..................................... 4
ARTICLE II
OTHER REGISTRATIONS.................. 4
2.1 RIGHT TO PIGGYBACK............................................ 4
2.2 PRIORITY ON PRIMARY REGISTRATIONS............................. 4
2.3 PRIORITY ON SECONDARY REGISTRATIONS........................... 5
2.4 OTHER REGISTRATIONS........................................... 5
ARTICLE III
REGISTRATION PROCEDURES................ 6
ARTICLE IV
REGISTRATION EXPENSES................. 9
4.1 COMPANY'S FEES AND EXPENSES................................... 9
4.2 FEES OF COUNSEL TO HOLDERS.................................... 9
ARTICLE V
UNDERWRITTEN OFFERINGS................. 9
5.1 DEMAND UNDERWRITTEN OFFERINGS................................. 9
5.2 INCIDENTAL UNDERWRITTEN OFFERINGS. ........................... 10
ARTICLE VI
INDEMNIFICATION.................... 10
6.1 INDEMNIFICATION BY THE COMPANY................................ 10
6.2 INDEMNIFICATION BY HOLDERS.................................. 11
6.3. INDEMNIFICATION PROCEDURES.................................. 12
6.4 INDEMNIFICATION OF UNDERWRITERS............................. 13
6.5 CONTRIBUTION................................................ 13
ARTICLE VII
RULE 144........................ 14
ARTICLE VIII
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS...... 14
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<PAGE>
ARTICLE IX
DEFINITIONS
........................................................................... 15
ARTICLE X
MISCELLANEOUS..................... 16
10.1 NO INCONSISTENT AGREEMENTS................................... 16
10.2 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES................. 16
10.3 REMEDIES..................................................... 17
10.4 AMENDMENTS AND WAIVERS....................................... 17
10.5 SUCCESSORS AND ASSIGNS....................................... 17
10.6 NOTICES...................................................... 17
10.7 HEADINGS..................................................... 18
10.8 GENDER....................................................... 18
10.9 INVALID PROVISIONS........................................... 19
10.10 GOVERNING LAW............................................... 19
10.11 COUNTERPARTS................................................ 19
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<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is dated as of March 1, 1996,
between the New World Power Corporation, a Delaware corporation (the "COMPANY")
and The Sundial International Fund Limited, a Cayman Islands company limited by
shares ("INVESTOR").
W I T N E S S E T H:
WHEREAS, capitalized terms used and not otherwise defined herein
have the respective meanings ascribed thereto in Article IX, and if not defined
therein, as defined in the Forbearance Agreement hereinafter mentioned;
WHEREAS, simultaneously herewith, the Company and the Investor,
among others, have entered into that certain Forbearance, Warrant Exchange, Note
Conversion and Amendatory Agreement ("FORBEARANCE AGREEMENT") dated as of March
1, 1996, copy of the Forbearance Agreement(without exhibits thereto) being
annexed hereto as Exhibit A and made a part hereof, pursuant to which 435,219
New Warrants have been issued to Investor, 5,376 New Warrants to Sundt and 3,201
New Warrants to Wilhelmsen, aggregating 443,796 New Warrants (said aggregate
being hereinafter sometimes referred to as the "INVESTOR WARRANTS"), each New
Warrant granting to the holder thereof the right to purchase one share of Common
Stock for a purchase price per share set forth in the New Warrants subject to
adjustment as set forth therein;
WHEREAS, pursuant to the Forbearance Agreement, the Investor has
the right to exchange the whole or any portion of the Notes referred to therein
for Exchange Notes and pursuant to the terms of the Exchange Notes to convert
each such Exchange Note into a number of shares of Common Stock based on a
Conversion Price subject to adjustment as set forth in the Forbearance
Agreement;
WHEREAS, it is not known if and to what extent the New Warrants
may be exercised, if at all, but it is known that if all the New Warrants were
exercised, a total of 443,796 shares of Common Stock would be issued to the
Investor (including Sundt and Wilhelmsen) as a result of such exercise;
WHEREAS, the Investor may exchange the Notes for Exchange Notes
which in turn may be converted into shares of Common Stock at a minimum price of
.75(cent) per share (subject to certain antidilution provisions) in accordance
with the terms of the Forbearance Agreement and because it is not presently
possible to determine the exact maximum number of shares of Common Stock into
which such Exchange Notes may be converted as a result of
1
<PAGE>
the existence of certain variables, for purposes of this Agreement such number
of shares has been assumed to be 5,900,000, which together with the 443,796
shares of Common Stock into which the New Warrants may be converted, aggregate
6,343,796 shares (herein together referred to as the "MAXIMUM COMMON STOCK
ISSUANCE").
WHEREAS, it is a condition to the consummation of the
transactions contemplated by the Forbearance Agreement that the Company and the
Investor enter into this Agreement whereby the Company shall grant, and the
Investor shall obtain, the rights relating to the registration of the
Registrable Securities under the Securities Act, as set forth in this Agreement,
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEMAND REGISTRATIONS
1.1 REQUESTS FOR REGISTRATION. Subject to Section 1.2, at any
time and from time to time on or after the sixtieth day following receipt by the
Company of an opinion letter from the Company's regular auditors concerning the
yearend 1995 financial statements, the holder or holders of at least
thirty-three percent (33%) of the Registrable Securities may request
registration under the Securities Act of all or part of their Registrable
Securities (i) on Form S-1 or any similar long-form registration ("LONG-FORM
DEMAND REGISTRATIONS"), or (ii) on Form S-2 or S-3 or any similar short-form
registration ("SHORT-FORM DEMAND REGISTRATIONS") if the Company qualifies to use
such short form (and the Company will use its best efforts to make short-form
registration statements available for the sale of Registrable Securities).
Thereafter, the Company will use its best efforts to promptly effect the
registration of such Registrable Securities under the Securities Act on the form
requested by the holder or holders of the Registrable Securities making such
registration request. All registrations requested pursuant to this Section 1.1
are referred to herein as "DEMAND REGISTRATIONS". The holders of the Registrable
Securities making any registration request may, at any time prior to the
effective date of the registration statement relating to any Demand
Registration, revoke such Demand Registration request by providing written
notice to the Company; PROVIDED, HOWEVER, that the holders of the Registrable
Securities shall forfeit their right to such Demand Registration unless they
reimburse the Company for the reasonable out-of-pocket expenses it incurred in
connection with such revoked Demand Registration.
1.2 LIMITATIONS ON DEMAND REGISTRATIONS. (a) The holders of the
Registrable Securities shall be entitled to two (2) Long-Form Demand
Registrations and two (2) Short- Form Demand Registrations.
(b) The Company shall be entitled to postpone for a reasonable
period of time not to exceed sixty (60) days the filing of any registration
statement otherwise required to be prepared and filed by it if, at the time it
receives a request for a Demand Registration, the Board of Directors of the
Company determines, in its reasonable good faith judgment, that
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such registration (i) would materially interfere with a business or financial
transaction of substantial importance to the Company (other than an underwritten
public offering of its securities), including without limitation, any such
transaction involving a material acquisition, consolidation, merger or corporate
reorganization then pending or proposed by its Board of Directors involving the
Company, or (ii) would violate any provision of any underwriting agreement to
which the Company is a party or of any Previous Registration Rights Agreement,
and the Company promptly gives the holders of the Registrable Securities written
notice of any such determination; PROVIDED, HOWEVER, that the Company shall not
be entitled to postpone filing a registration statement in response to a Demand
Registration for the twelve (12) months following the expiration of such
sixty-day period. In the event the filing of any registration statement is
postponed pursuant to this paragraph, the holders of the Registrable Securities
making a registration request shall have the right to withdraw the request for
such Demand Registration by giving written notice to the Company within thirty
(30) days after receipt of the notice of postponement (and, in the event of such
withdrawal, the right of the holders of the Registrable Securities to such
Demand Registration shall be reinstated).
1.3 EFFECTIVE REGISTRATION STATEMENT. A Demand Registration
requested pursuant to Section 1.1 of this Agreement shall not be deemed to have
been affected (i) unless a registration statement with respect thereto has
become effective (ii) if after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Securities and Exchange Commission (the "SEC") or other governmental agency
or court for any reason, and the Registrable Securities covered thereby have not
been sold, (iii) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied by reason of a failure by or inability of the
Company to satisfy any thereof, or the occurrence of an event outside the
control of the holders of Registrable Securities, or (iv) if holders of
Registrable Securities are not able to register and sell at least 25% of the
amount of Registrable Securities requested to be included in such registration.
1.4 PRIORITY ON DEMAND REGISTRATIONS. The Company will not
include in any Demand Registration any securities which are not Registrable
Securities without the written consent of the holders of a majority (by number
of shares) of the Registrable Securities requesting such registration other than
securities requested to be included in such Demand Registration which the
Company is contractually obligated, pursuant to the Previous Registration Rights
Agreements or the Other Purchasers' Registration Rights Agreement, to include in
any Demand Registration. If other securities are included in a Demand
Registration which is an underwritten offering and the managing underwriters
advise the Company in writing that in their opinion the number of Registrable
Securities and other securities requested to be included exceeds the number of
Registrable Securities and other securities which can be sold in such offering
within a price range acceptable to the holders of at least a majority (by number
of shares) of the Registrable Securities to be offered thereby, the Company will
include in such registration prior to the inclusion of any securities which are
not Registrable Securities or other securities requested to be included in such
registration which the Company is contractually obligated, pursuant to the
Previous Registration Rights
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Agreements or the Other Purchasers' Registration Rights Agreements, to include
in such registration the number of Registrable Securities and such other
securities requested to be included which in the opinion of such underwriters
can be sold, pro rata among the respective holders on the basis of the amount of
Registrable Securities and such other securities requested to be offered
thereby.
1.5 SELECTION OF UNDERWRITERS. The holder or holders of at least
a majority of Registrable Securities included in any Demand Registration will
have the right to select the underwriters and the managing underwriter to
administer such Demand Registration.
1.6 OTHER REGISTRATION RIGHTS. Except as provided in this
Agreement and in the Other Purchasers' Registration Rights Agreement, the
Company will not grant to any Person the right to request the Company to
register any equity securities of the Company, or any securities convertible,
exchangeable or exercisable for or into such securities, other than piggyback
registration rights entitling the holder thereof to participate in registrations
consistent with the provisions of Section 2 hereof, without the written consent
of the holder or holders of at least a majority of the Registrable Securities.
ARTICLE II
OTHER REGISTRATIONS
2.1 RIGHT TO PIGGYBACK. Whenever the Company proposes to register
any of its securities under the Securities Act (other than pursuant to a Demand
Registration or on Form S-4 or S-8 or any successor similar form), and the
registration form to be used may be used for the registration of Registrable
Securities (a "PIGGYBACK REGISTRATION"), the Company will give prompt written
notice (in any event within three (3) Business Days after its receipt of notice
of any exercise of other demand registration rights) to all holders of
Registrable Securities of its intention to effect such a registration and will
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within thirty
(30) days after the receipt of the Company's notice.
2.2 PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering, the Company will include
in such registration (i) first, the securities the Company proposes to sell,
(ii) second, any securities requested to be included in such registration which
the Company is contractually obligated, pursuant to any Previous Registration
Rights Agreement, to give priority over the Registrable Securities in such
registration, (iii) third, the Registrable Securities requested to be included
in such registration, any securities registrable pursuant to the Other
Purchasers' Registration Rights Agreement requested to be included in such
registration and any securities registrable pursuant to any Previous
Registration Rights Agreement which the Company is contractually obligated to
include in such registration on a
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pari passu basis with the Registrable Securities, PROVIDED, that if the managing
underwriters in good faith determine that a lower number of Registrable
Securities and such other securities should be included, then the Company shall
be required to include in the underwriting only that lower number of Registrable
Securities and such other securities, and the holders of Registrable Securities
and such other securities who have requested registration shall participate in
the underwriting pro rata based upon their total ownership, on a fully diluted
basis, of Registrable Securities and such other securities requested to be
included in such registration and (iv) fourth, other securities requested to be
included in such registration.
2.3 PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering, the
Company will include in such registration (i) first, the securities requested to
be included therein by the holders requesting such registration, (ii) second,
any securities requested to be included in such registration which the Company
is contractually obligated, pursuant to any Previous Registration Rights
Agreement, to give priority over the Registrable Securities in such
registration, (iii) third, the Registrable Securities requested to be included
in such registration, any securities registrable pursuant to the Other
Purchasers' Registration Rights Agreement requested to be included in such
registration and any securities registrable pursuant to any Previous
Registration Rights Agreement which the Company is contractually obligated to
include in such registration on a pari passu basis with the Registrable
Securities, PROVIDED, that if the managing underwriters in good faith determine
that a lower number of Registrable Securities and such other securities should
be included, then the Company shall be required to include in the underwriting
only that lower number of Registrable Securities and such other securities, and
the holders of Registrable Securities and such other securities who have
requested registration shall participate in the underwriting pro rata based upon
their total ownership, on a fully diluted basis, of Registrable Securities and
such other securities requested to be included in such registration and (iv)
fourth, other securities requested to be included in such registration.
2.4 OTHER REGISTRATIONS. If the Company has previously filed a
registration statement for a Long-Form Demand Registration with respect to
Registrable Securities pursuant to Article I of this Agreement, and if such
previous registration has not been withdrawn or abandoned, the Company will not
file or cause to be effected any other registration of any of its equity
securities or securities convertible, exchangeable or exercisable for or into
its equity securities under the Securities Act (except on Form S-4 or S-8 or any
successor forms), whether on its own behalf or at the request of any holder or
holders of such securities other than the holders of the Registrable Securities
or holders of securities registrable pursuant to the Other Purchasers'
Registration Rights Agreement, until a period of at least six (6) months elapsed
from the effective date of such previous registration; PROVIDED, HOWEVER, that
this provision shall not apply to the extent that it conflicts with the
provisions of any Previous Registration Rights Agreement.
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ARTICLE III
REGISTRATION PROCEDURES
Whenever the holders of Registrable Securities have requested
that any Registrable Securities be registered pursuant to this Agreement, the
Company will use its best efforts to effect the registration and the sale of
such Registrable Securities in accordance with the intended method of
disposition thereof, and pursuant thereto the Company will as expeditiously as
possible or, in the case of clause (o) below, will not:
(a) promptly prepare and file with the SEC a registration
statement with respect to such Registrable Securities (such registration
statement to include all information which the holders of the Registrable
Securities to be registered thereby shall reasonably request) and use its best
efforts to promptly cause such registration statement to become effective,
PROVIDED, that at least five days before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will (i)
furnish to counsel selected by the holder or holders of at least a majority of
the Registrable Securities covered by such registration statement copies of all
such documents proposed to be filed, and the Company shall not file any such
documents to which such counsel shall have reasonably objected on the grounds
that such document does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations thereunder,
and (ii) notify each holder of Registrable Securities covered by such
registration statement of (x) any request by the SEC to amend such registration
statement or amend or supplement any prospectus or (y) any stop order issued or
threatened by the SEC, and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered;
(b) (i) will promptly prepare and file with the SEC such
amendment and supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such registration statement
effective for a period of not less than 180 days except that such 180 day period
shall be extended (x) by the length of any period that a stop order or similar
proceeding is in effect which prohibits the distribution of the Registrable
Securities and (y) by the number of days during the period from and including
the date on which each seller of Registrable Securities shall have received a
notice delivered pursuant to clause (f) below until the date when such seller
shall have received a copy of the supplemented or amended prospectus
contemplated by clause (f) below, and (ii) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement;
(c) as soon as reasonably possible furnish to each seller of
Registrable Securities, without charge, such number of conformed copies of such
registration statements, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus
and prospectus supplement and, in each case, including all exhibits) and such
other documents as such seller may reasonably request, all in
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conformity with the requirements of the Securities Act, in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(d) use its best efforts promptly to register or qualify the
Shares under such other securities or blue sky laws of such jurisdictions as any
seller thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement remains in
effect and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such seller, PROVIDED,
however, that the Company will not be required to (i) qualify generally to do
business as a foreign corporation in any jurisdiction where it would not
otherwise be required to qualify but for this clause (d), (ii), subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction;
(e) furnish to each seller of Registrable Securities a signed
copy, addressed to such seller (and the underwriters, if any) of an opinion of
counsel for the Company or special counsel to the selling stockholders, dated
the effective date of such registration statement (and, if such registration
statement includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), reasonably satisfactory in form and
substance to such seller, covering substantially the same matters with respect
to such registration statement (and the prospectus included therein; as are
customarily covered in opinions of issuer's counsel delivered to the
underwriters in underwritten public offerings, and such other legal matters as
the seller (or the underwriters, if any) may reasonably request;
(f) promptly notify each seller of Registrable Securities, at a
time when a prospectus relating to the Shares is required to be delivered under
the Securities Act, of the Company's becoming aware that the prospectus included
in such registration statement, as then in effect, contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they were made, and, at the request of any such
seller, the Company will promptly prepare and furnish such seller a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
under which they were made;
(g) cause all of the Shares to be listed on each securities
exchange on which similar securities issued by the Company are then listed or,
if there shall then be no such listing, to be accepted for quotation as a
National Market Security on The NASDAQ Stock Market;
(h) provide a transfer agent and registrar for all of the Shares
not later than the effective date of such registration statement;
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(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) subject to other provisions hereof, use its best efforts to
cause the Shares to be registered with or approved by such other governmental
agencies or authorities or self-regulatory organizations as may be necessary to
enable the sellers thereof to consummate the disposition of the Shares;
(k) use its best efforts to obtain a "comfort" letter, dated the
effective date of such registration statement (and, if such registration
includes an underwritten offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants, who have
certified the Company's financial statements, addressed to each seller, and to
the underwriters, if any, covering substantially the same matters with respect
to such registration statement (and the prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to the underwriters in
underwritten public offerings of securities and such other financial matters as
such seller (or the underwriters, if any) may reasonably request;
(l) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and make available to its security holders, in
each case as soon as practicable, an earning statement covering a period of at
least twelve months, beginning with the first month after the effective date of
the registration statement, which earning statement shall satisfy the provisions
of Section 11(a) of the Securities Act;
(m) permit any holder of Registrable Securities, which holder, in
the sole judgment, exercised in good faith, of such holder might be deemed to be
a controlling person of the Company (within the meaning of the Securities Act or
the Exchange Act) to participate in the preparation of any registration
statement covering such holder's Registrable Securities and to include therein
material, furnished to the Company in writing, which in the reasonable judgment
of such holder should be included and which is reasonably acceptable to the
Company;
(n) use every reasonable effort to obtain the lifting at the
earliest possible time of any stop order suspending the effectiveness of any
registration statement or of any order preventing or suspending the use of any
preliminary prospectus;
(o) at any time file or make any amendment to a registration
statement, or any amendment of or supplement to a prospectus (including
amendments of the documents incorporated by reference into the prospectus), of
which each seller of Registrable Securities
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or the managing underwriters shall not have previously been advised and
furnished a copy or to which the sellers of Registrable Securities, the managing
underwriters, or counsel for such sellers or for the underwriters shall
reasonably object; and
(p) make such representations and warranties (subject to
appropriate disclosure schedule exceptions to sellers of Registrable Securities
and the underwriters, if any, in form, substance and scope as are customarily
made by issuers to underwriters and selling holders, as the case may be, in
underwritten public offerings of substantially the same type.
ARTICLE IV
REGISTRATION EXPENSES
4.1 COMPANY'S FEES AND EXPENSES. All expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, fees and expenses for listing or quoting the shares on each securities
exchange or The NASDAQ Stock Market on which similar securities issued by the
Company are then listed or quoted, and fees and disbursements of counsel for the
Company, any transfer agent and all independent certified public accountants,
underwriters (excluding discounts and selling commissions) and other Persons
retained by the Company in connection with any Demand Registration or any
Piggyback Registration (all such expenses being herein called "REGISTRATION
EXPENSES"), will be paid by the Company.
4.2 FEES OF COUNSEL TO HOLDERS. In connection with each
registration hereunder, the Company will reimburse the holders of Registrable
Securities covered by such registration for the reasonable fees and
disbursements of one counsel chosen by the holder or holders of at least a
majority of the Registrable Securities covered by such registration.
ARTICLE V
UNDERWRITTEN OFFERINGS
5.1 DEMAND UNDERWRITTEN OFFERINGS. If requested by the
underwriters for any underwritten offerings of Registrable Securities pursuant
to a Demand Registration, the Company will enter into an underwriting agreement
with such underwriters for such offering, such agreement to be satisfactory in
substance and form to a majority (by number of shares) of holders of Registrable
Securities being offered and the underwriters, and to contain such
representations and warranties by the Company, and such other terms as are
generally included in agreements of this type, including, without limitation,
indemnities customarily included in such agreements. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to such
underwriting agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the
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benefit of such holders of Registrable Securities and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. The Company shall cooperate with any such
holder of Registrable Securities in order to limit any representations or
warranties to, or agreements with, the Company or the underwriters to be made by
such holder only to those representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by law.
5.2 INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time
proposes to register any of its securities under the Securities Act as
contemplated by Article II of this Agreement and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by any holder of Registrable Securities as provided in Article II of
this Agreement, arrange for such underwriters to include all the Registrable
Securities to be offered and sold by such holder, subject to the limitations set
forth in Article II hereof, among the securities to be distributed by such
underwriters. The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters, and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. The Company shall cooperate with any such
holder of Registrable Securities in order to limit any representations or
warranties to, or agreement with, the Company or the underwriters to be made by
such holder only to those representations, warranties or agreements regarding
such holder, such holder's Registrable Securities and such holder's intended
method of distribution and any other representation required by law.
ARTICLE VI
INDEMNIFICATION
6.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless, to the extent permitted by law, each of the holders
of any Registrable Securities covered by any registration statement prepared
pursuant to this Agreement, each other Person, if any, who controls such holder
within the meaning of the Securities Act or the Exchange Act, and each of their
respective directors, general partners and officers, as follows:
(i) against any and all loss, liability, claim, damage and
expense arising out of or based upon an untrue statement or
alleged untrue statement of a material fact contained in any
registration statement (or any amendment or supplement thereto,
including all documents incorporated therein by reference,
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or in any preliminary prospectus or prospectus (or any amendment
or supplement thereto) or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense to the extent of the aggregate amount paid in
settlement of any litigation, investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission
or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company;
and
(iii) against any and all expense incurred by them in
connection with investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission or any such
alleged untrue statement or omission, to the extent that any such
expense is not paid under clause (i) or (ii) above;
PROVIDED, that this indemnity does not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any holder expressly for use in the preparation of any registration statement
(or any amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary prospectus or prospectus (or any
amendment or supplement thereto); and PROVIDED FURTHER, that the Company will
not be liable to any holder under the indemnity agreement in this Section 6.1,
with respect to any preliminary prospectus or the final prospectus or the final
prospectus as amended or supplemented, as the case may be, to the extent that
any such loss, liability, claim, damage or expense of such controlling Person or
holder results from the fact that such holder sold Registrable Securities to a
Person to whom there was not sent or given, on or prior to the written
confirmation of such sale, a copy of the final prospectus or of the final
prospectus as then amended or supplemented, whichever is most recent, if the
Company has previously and timely furnished copies thereof to such holder. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or any such director, officer, general
partner, or other controlling person and shall survive the transfer of such
securities by such seller.
6.2 INDEMNIFICATION BY HOLDERS. In connection with any
registration statement in which a holder of Registrable Securities is
participating, each such holder agrees to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 6.1 of this
Agreement), to the extent permitted by law, the Company and its directors,
officers and controlling Persons, and their respective directors, officers and
general partners, with respect to any statement or alleged statement in or
omission or alleged omission from
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such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by or on behalf
of such holder, specifically stating that it is for use in the preparation of
such registration statement, preliminary, final or summary prospectus or
amendment or supplement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company, or such
holder as the case may be, or any of their respective directors, officers,
controlling Persons or general partners and shall survive the transfer of such
securities by such holder. The obligations of each holder of Registrable
Securities pursuant to this Section 6.2 are to be several and not joint;
PROVIDED, that with respect to each claim pursuant to this Section 6.2, each
such holder's maximum liability under this Section shall be limited to an amount
equal to the net proceeds actually received by such holder (after deducting any
underwriting discount and expenses) from the sale of Registrable Securities
being sold pursuant to such registration statement or prospectus by such holder.
6.3. INDEMNIFICATION PROCEDURES. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding involving a claim referred to in Section 6.1 or Section 6.2 of
this Agreement, such indemnified party will, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the latter of the
commencement of such action; PROVIDED, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under Section 6.1 or Section 6.2 of this Agreement except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified,
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, unless in such indemnified party's judgment a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, in which case the indemnifying party shall not be liable for the
fees and expenses of (i) more than one counsel for all holders of Registrable
Securities, selected by a majority (by number of shares) of the holders of
Registrable Securities (which choice shall be reasonably satisfactory to the
Company), or (ii) more than one counsel for the Company in connection with any
one action or separate but similar or related actions. An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels. The indemnifying party will
not, without the prior written consent of each indemnified party, settle or
compromise or
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consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought hereunder
(whether or not such indemnified party or any Person who controls such
indemnified party is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability arising out of such claim, action, suit or
proceeding. Notwithstanding anything to the contrary set forth herein, and
without limiting any of the rights set forth above, in any event any party will
have the right to retain, at its own expense, counsel with respect to the
defense of a claim.
6.4 INDEMNIFICATION OF UNDERWRITERS. The Company and each holder
of Registrable Securities requesting registration shall provide for the
foregoing indemnity in any underwriting agreement with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority other than the Securities Act.
6.5 CONTRIBUTION. If the indemnification provided for in Sections
6.1 and 6.2 of this Agreement is unavailable or insufficient to hold harmless an
indemnified party under such Sections, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in Section 6.1 or
Section 6.2 of this Agreement in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand, and the
indemnified party on the other, in connection with statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as
any other relevant equitable considerations, including, without limitation, the
relative benefits received by each party from the offering of the securities
covered by such registration statement, the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted and the opportunity to correct and prevent any statement or omission.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statements or omission. The parties hereto agree that it
would not be just and equitable if contributions pursuant to this Section 6.5
were to be determined by pro rata or per capita allocation (even if the
underwriters were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this Section 6.5. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this Section 6.5 shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any action or claim (which shall be
limited as provided in Section 6.3 of this Agreement if the indemnifying party
has assumed the defense of any such action in accordance with the provisions
thereof) which is the subject of this Section 6.5. Promptly after receipt by an
indemnified party under this Section 6.5 of notice of the commencement of any
action against such party in respect of which a claim for contribution may be
made against an indemnifying
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party under this Section 6.5, such indemnified party shall notify the
indemnifying party in writing of the commencement thereof if the notice
specified in Section 6.3 of this Agreement has not been given with respect to
such action; PROVIDED, that the omission to so notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may
otherwise have to any indemnified party under this Section 6.5, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. The Company and each holder of Registrable Securities agrees with
each other and the underwriters of the Registrable Securities, if requested by
such underwriters, that (i) the underwriters' portion of such contribution shall
not exceed the underwriting discount and (ii) that the amount of such
contribution shall not exceed an amount equal to the net proceeds actually
received by such indemnifying party from the sale of Registrable Securities in
the offering to which the losses, liabilities, claims, damages or expenses of
the indemnified parties relate. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
ARTICLE VII
RULE 144
The Company covenants that it will file the reports required to
be filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder (or, if the Company is not required to
file such reports, it will, upon the request of any holder of Registrable
Securities, make publicly available other information), and it will take such
further action as any holder of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holder to sell
shares of Registrable Securities without registration under the Securities Act
within the limitation of the exemption provided by (i) Rule 144 or Rule 144A
under the Securities Act, as such Rules may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
requirements.
ARTICLE VIII
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Person may participate in any underwritten registration
hereunder unless such Person (i) agrees to sell such Person's securities on the
basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements, and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements and consistent with the provisions of this Agreement.
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ARTICLE IX
DEFINITIONS
9.1 As used in this Agreement, the following defined terms shall
have the meanings set forth below:
"BUSINESS DAY" means a day other than Saturday, Sunday or any day
on which banks located in the State of New York are authorized or obligated to
close.
"COMMON STOCK" means the Company's Common Stock, par value $0.01
per share.
"COMPANY" shall have the meaning as set forth in the Forbearance
Agreement.
"DEMAND REGISTRATIONS" shall have the meaning as set forth in
Article I, ss.1.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FORBEARANCE AGREEMENT" shall have the meaning as set forth in
the second Recital of this Agreement.
"INVESTOR" shall have the meaning as set forth in the Preamble of
this Agreement.
"INVESTOR WARRANTS" shall have the meaning as set forth in the
second Recital of this Agreement.
"LONG-FORM DEMAND REGISTRATIONS" shall have the meaning set forth
in Article I, ss.1.1 of this Agreement.
"MAXIMUM COMMON STOCK ISSUANCE" shall have the meaning set forth
in the fifth Recital of this Agreement.
"OTHER PURCHASERS' REGISTRATION RIGHTS AGREEMENT" means any
registration rights agreement entered into by the Company on or prior to the
date of execution and delivery hereof .
"PERSON" means any individual, corporation, partnership,
association, trust or other entity or organization, including a governmental or
political subdivision or an agency or instrumentality thereof.
"PIGGYBACK REGISTRATION" shall have the meaning set forth in
Article II, ss.2.1.
15
<PAGE>
"PREVIOUS REGISTRATION RIGHTS AGREEMENT" means the agreements
listed on Schedule 1 hereto pursuant to which the Company has, prior to the date
hereof, granted registration rights with respect to its securities to any other
Person.
"REGISTRABLE SECURITIES" mean (i) any shares of Common Stock
issued or issuable upon conversion of the Exchange Notes acquired by the
Investor pursuant to the Forbearance Agreement, (ii) any shares of Common Stock
issued or issuable upon exercise of the New Warrants acquired by the Investor
pursuant to the Forbearance Agreement, and (iii) any securities issued or
issuable with respect to the Common Stock referred to in clause (i) or (ii)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, such
securities will cease to be Registrable Securities when they have (x) been
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering them, or (y) been transferred pursuant
to Rule 144 (or any similar rule then in force) under the Securities Act.
"REGISTRATION EXPENSES" shall have the meaning set forth in
Article IV, ss.4.1.
"SECURITY AND EXCHANGE COMMISSION" shall have the meaning set
forth in Article I, ss.1.3.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" mean the shares of Registrable Securities registered on
the registration statement filed with the SEC in connection with any Demand
Registration or any Piggyback Registration.
9.2 As used in this Agreement, the following terms shall have the
meanings assigned thereto in the Forbearance Agreement: "AMENDED WOLVERINE
NOTE"; "CONVERSION NOTE"; "EXCHANGE NOTE"; "LIBOR RATE"; "NEW NWP LTD. NOTE";
"NEW WARRANTS"; "NOTES"; "SUNDT"; "TRANSACTION DOCUMENTS"; and "WILHELMSEN".
ARTICLE X
MISCELLANEOUS
10.1 NO INCONSISTENT AGREEMENTS. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the holders of Registrable Securities of this
Agreement.
10.2 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
will not take any action, or fail to take any action which it may properly take,
with respect to its securities which would adversely affect the ability of the
holders of Registrable Securities to include Registrable Securities in a
registration undertaken pursuant to this Agreement or
16
<PAGE>
which, to the extent within its control, would adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares).
10.3 REMEDIES. In the event of a breach by any party to this
Agreement of its obligations under this Agreement, any party injured by such
breach, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, for breach of any such provision
will be inadequate compensation for any loss and that any defense in any action
for specific performance that a remedy at law would be adequate is waived.
10.4 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
no modification, amendment or waiver of any provision of this Agreement will be
effective against the Company or any holder of Registrable Securities, unless
such modification, amendment or waiver is approved in writing by the Company and
the holder or holders of at least a majority of the Registrable Securities. The
failure of any party to enforce any of the provisions of this Agreement will in
no way be construed as a waiver of such provisions and will not affect the right
of such party thereafter to enforce each and every provision of this Agreement
in accordance with its terms.
10.5 SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of the
holders of Registrable Securities are also for the benefit of, and enforceable
by, any subsequent holder of Registrable Securities, except to the extent
reserved to or by the transferor in connection with any such transfer.
10.6 NOTICES. Any and all notices or demands hereunder may be
given by any party to any other party in any of the following manners: (i) by
facsimile transmission, (ii) by personal delivery, (iii) by first class mail,
postage prepaid, or (iv) by certified mail, postage prepaid. Any notice given by
facsimile transmission shall be effective two hours after dispatch thereof is
completed by the sending party; all other notices shall be effective upon
receipt. All notices shall be given to the parties at the addresses or to the
facsimile numbers set forth below (or to such other numbers or addresses as
shall be furnished by notice from any party hereto to the other parties hereto.
(i) if to Sundial:
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
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Nassau, Bahamas
Facsimile: (809) 326-6709
ATTENTION: Mr. James Graham
Secretary and Registrar
with a copy to:
Gilmartin, Poster & Shafto
One William Street
New York, New York 10004
Facsimile: (212) 482 0848
(212) 425-3130
ATTENTION: Donald B. Shafto, Esq.
and
Sundt & Co.
11 St. James's Square
London SW1Y 4LB, England
Facsimile: 011 44 171 930 1784
Attention: Mr. Jens A. Wilhelmsen
(ii) if to the Company, to:
The New World Power Corporation
558 Lime Rock Road
Lime Rock, Connecticut 06039
Facsimile: (203) 435-0505
ATTENTION: Chief Executive Officer
with a copy to:
Olshan Grundman Frome & Rosenzweig, LLP
505 Park Avenue
New York, New York 10022
Telephone: (212) 755-1467
Attention: Thomas J. Fleming, Esq.
10.7 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
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<PAGE>
10.8 GENDER. Whenever the pronouns "he" or "his" are used herein,
they shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.
10.9 INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid or unenforceable, and if the rights or obligations
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (i) such provision will be fully severable, (ii) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as part of this Agreement a legal,
valid and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
10.10 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to a
contract executed and performed in such State without giving effect to the
conflict of law principles thereof.
10.11 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first written above.
THE NEW WORLD POWER CORPORATION
By:_________________________________
Name: George P. Petrenko
Title: Chief Executive Officer
THE SUNDIAL INTERNTIONAL FUND
LIMITED
By:_________________________________
Name: Donald B. Shafto
Title: Assistant Secretary
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THE NEW WORLD POWER CORPORATION (1)
SUNDIAL INTERNATIONAL FUND LIMITED (2)
and
OAKES, FITZWILLIAMS & CO. LIMITED (3)
--------------------------------------------
CHARGE OVER SHARES
--------------------------------------------
EXHIBIT K
<PAGE>
THIS CHARGE OVER SHARES is made on the 29th day of May, 1996 with
effect as of the 1st day of March, 1996
BETWEEN
(1) THE NEW WORLD POWER CORPORATION whose registered office is at The
Farmhouse, 558 Lime Rock Road, Lime Rock, Connecticut
06039 ("the Borrower")
(2) THE SUNDIAL INTERNATIONAL FUND LIMITED, c/o Coutts & Co.
(Bahamas)Ltd., Coutts Building - West Bay Street, P.O. Box
N7788, Nassau, Bahamas ("the Lender")
(3) OAKES, FITZWILLIAMS & CO. LIMITED whose registered office is
at Byron House, 7-9 St. James's Street, London SWIA 1EE, as
escrow agent ("the Escrow Agent").
NOW THIS DEED WITNESSES as follows:
DEFINITIONS AND INTERPRETATION
1. In this Charge:
(a) "Amended Support and Pledge Agreement" shall have the meaning set
forth in the Forebearance Agreement.
(b) "Charged Property" means the Shares and Security Assets and
includes any proceeds of sale or other realization thereof or any
part thereof;
(c) "the Company" means The New World Power Company
Limited;
(d) "the Default Rate" means ten per cent (10%) per annum;
(e) "Enforcement Event" means any Event of Default under
the Forbearance Agreement;
(f) "the Forbearance Agreement" means that certain
Forbearance, Warrant Exchange, Note Conversion and
Amendatory Agreement dated as of March 1, 1996, among
the Borrower, the Lender, the Company and Wolverine
Power Corporation ("WPC"), a Delaware corporation, a
copy of which (without Exhibits or Schedules thereto
other than Schedule 3 thereto) is annexed hereto as
EXHIBIT A and made a part hereof;
(g) "Intercreditor Agreement" shall mean that certain
agreement dated as of execution and delivery hereof
among the Borrower, the Lender, and Robert Fleming &
Co. Ltd. as agent for the Fleming Noteholders (as
defined in the Forebearance Agreement) concerning,
<PAGE>
among other things, the joint administration of the
Charged Property.
(h) "Obligations" means all warranties, guarantees,
covenants, undertakings, liabilities, debts and
obligations of the Borrower whatsoever and wheresoever
and howsoever arising which now are or at any time
hereafter may be due or given or owed to the Lender or
the benefit of which shall be vested in the Lender, in
any currency, solely or jointly with any other person
or persons, as principal, agent or surety on any
account, under the Forbearance Agreement and the other
"Transaction Documents" (referred to in the Forbearance
Agreement and used herein with the same meaning);
(i) "Receiver" means any receiver appointed by the Lender
under this Charge;
(j) "Security Assets" means all stocks, shares, warrants, rights,
money or other property accruing, offered, issued or deriving at
any time by way of redemption, bonus, preference, option,
consolidation, sub-division, dividend, interest or otherwise in
respect of the Shares;
(k) "Shares" means the shares specified in the Schedule;
Words importing the singular number only shall include the plural and
vice versa and any reference to the masculine gender shall include the
feminine and neuter and vice versa.
In this Charge headings to clauses are for convenience only and have no
legal effect and references to Clauses and Schedules are to clauses and
schedules of this Charge unless otherwise stated.
In this Charge the expression "the Borrower" and "the Lender" include
their respective successors and assigns whether immediate or derivative.
Any change in the constitution of the Lender or its absorption in or
amalgamation with any other person or the acquisition of all or part of
its undertaking by any other person shall not in any way prejudice or
affect its rights hereunder.
Any reference to any agreement or document shall be deemed to refer to
the same as amended, modified or supplemented from time to time by the
parties hereto.
Where there are two or more persons included in the expression "the
Borrower" references to the Borrower are references to all or any of
them as the context may require
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and all assignments, charges, agreements, undertakings, covenants,
obligations, warranties and representations given, undertaken, made or
assumed by the Borrower shall be deemed to have been given, undertaken,
made or assumed by them jointly and severally and construed accordingly.
References to statutory provisions shall be construed as references to
those provisions as respectively amended or re-enacted (whether before
or after the date hereof) from time to time and shall include provisions
of which they are re-enactments (whether with or without modification)
and any subordinate legislation, orders, instruments and regulations
issued or made thereunder and being in force from time to time.
COVENANT TO PAY
2. The Borrower covenants with the Lender that it will upon the
due date agreed in relation thereto or (if none) upon demand
pay and discharge the Obligations. The Borrower shall pay
interest to the date of payment or discharge
(notwithstanding any demand or any judgment obtained by the
Lender or the liquidation or administration of or any
arrangement or composition with creditors by the Borrower)
at the rate or rates applicable under the agreements or
arrangements giving rise to the relevant Obligations and on
any other terms relating to interest payments contained in
such agreements or arrangements or, if no such rate or rates
are specified, at the Default Rate upon such days and upon
such terms as the Lender may from time to time determine.
Such interest shall be compounded quarterly in the event of
it not being punctually paid.
CHARGING CLAUSE
3. (a) As security for the discharge of the Obligations the
Borrower hereby and with full title guarantee charges all its
present and future right, title and interest in the Charged
Property to the Lender.
(b) Notwithstanding sub-clause 3(a) the Borrower shall be entitled at
any time to sell all of the Shares of the Company provided (i) no
Enforcement Event shall then have occurred and be continuing, (ii) the
sales price of said Shares shall not be less than the minimum price
provided therefor in Section 7 of, and Schedule 3 to, the Forbearance
Agreement, and (iii) the "net proceeds" (as defined in the Forebearance
Agreement) of such sale shall be distributed in accordance with the
provisions of Section 7 of the Forbearance Agreement.
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<PAGE>
DEPOSIT OF SHARE CERTIFICATES AND BLANK TRANSFERS
4. The Borrower has deposited with the Escrow Agent all share
certificates or other documents of title to the Shares
concurrently with the execution of this Charge, together
with such duly executed transfers or assignments (with the
name of the transferee, date and consideration left blank)
as the Lender may require, to the intent that the Lender may
at any time after an Enforcement Event without notice
present them for registration and perfect the title of the
Lender or its nominee to the Shares.
5. (a) Subject to Clause 8, the Borrower shall upon the
accrual, offer, issue or receipt of any Security Assets
deliver or pay to the Lender or procure the delivery or
payment to the Lender of all such Security Assets or
the share certificates or other documents of title to
or representing them together with such duly executed
transfers or assignments (with the name of the
transferee, date and consideration left blank) as the
Lender may require, to the intent that the Lender may
at any time after an Enforcement Event without notice
present them for registration and perfect the title of
the Lender or its nominee to such Security Assets.
(b) The Borrower will, if so requested by the Lender,
promptly and at the Borrower's expense execute and
deliver and do all deeds, instruments, transfers,
powers of attorney, renunciations, proxies, notices,
documents acts and things in such form as the Lender
may from time to time require for perfecting or
protecting the Lender's security over the Charged
Property or facilitating its realization after an
Enforcement Event (including, insofar as it is able,
procuring that any transfer of the Charged Property in
favour of the Lender or its nominee and any subsequent
transfer by the Lender is duly registered in the books
of the Company).
REPRESENTATIONS AND WARRANTIES
6. The Borrower represents and warrants to the Lender on the date of this
Charge and on each subsequent day (until the occurrence of an
Enforcement Event), except to the extent otherwise provided in the
Intercreditor Agreement, the "Fleming Documents" and the "Hambros
Documents" (each as defined in the Forebearance Agreement) that:
(a) the Borrower is the sole, absolute and beneficial owner and
registered holder of the Charged Property, that no person save
the Borrower has any right or interest of any sort whatsoever in
or to the Charged Property and
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<PAGE>
that there are no agreements or arrangements (other than
restrictions on transfer or rights of pre-emption) affecting the
Charged Property in any way or which would or might in any way
fetter or otherwise prejudice the rights of the Borrower or any
mortgagee of the Charged Property;
(b) the Borrower has not sold or otherwise disposed of or agreed to
sell or otherwise dispose of or granted or agreed to grant any
option in respect of all or any of its right, title and interest
in and to the Charged Property;
(c) the Borrower has and will at all material times have the
necessary power to enable it to enter into, exercise its rights
and perform its obligations under this Charge and such actions
have been and will, during the subsistence of this Charge, be
duly authorized;
(d) the Shares are duly authorized, validly issued and
fully paid and there are no monies or liabilities
outstanding in respect of any of the Shares;
(e) this Charge creates legal, valid, binding and enforceable
obligations of the Borrower and its effective security over the
Charged Property;
(f) this Charge and the performance of the Borrower's obligations
under it, do not conflict or result in any breach of or
constitute a default under any agreement, instrument or
obligation to which the Borrower is a party or by which it is
bound (including the Borrower's Memorandum and Articles of
Association)
(g) the Shares represent 50% of the Company's issued ordinary share
capital which carries votes.
COVENANTS
7. The Borrower covenants with the Lender that during the
continuance of this security:
(a) it will not (without the prior written consent of the
Lender)
(i) permit any person other than the Lender or its
nominees to be registered as holder of the Charged
Property or any part thereof; or
(ii) except as otherwise provided in the Intercreditor
Agreement, create or purport to create or permit to
subsist any mortgage, debenture, charge,
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<PAGE>
pledge, lien or encumbrance (other than in favour of the
Lender) on or over the Charged Property or any part
thereof or interest therein, whether or not subordinate to
the rights of Lender under this Charge or the Transaction
Documents; or
(iii) sell, transfer or otherwise dispose of the Charged
Property or any part thereof or interest therein or
attempt to agree so to do except as permitted by clause
3(b) of the Charge;
(b) it will pay all calls and other payments when due and discharge
promptly all other obligations in respect of the Charged Property
(and if the Borrower does not do so, the Lender may make such
payments on behalf of the Borrower, in which event any sums shall
be reimbursed on demand by the Borrower to the Lender);
(c) it will comply with any notice served on it under the
Companies Act 1985;
(d) it will not do or cause or permit to be done anything which is a
variation or abrogation of the rights attaching to or conferred
by all or part of the Charged Property or which may in any way
depreciate, jeopardize or otherwise prejudice the value to the
Lender of the Charged Property and it will vote against any
resolution which would have such an effect (if passed).
DIVIDEND AND VOTES
8. (a) Before the occurrence of an Enforcement Event, the
Borrower may (subject to Clause 7(d)) direct how the
votes attaching to the Charged Property are to be
exercised
(b) Before the occurrence of an Enforcement Event, except
to the extent otherwise provided in Section 7 of the
Forebearance Agreement, all dividends, interest and
other income forming part of the Charged Property will
be paid to the Borrower and held by the Borrower in
trust for the Lender as part of the Charged Property
and held by Borrower in a separate bank account
identifying the trust character of such income; after
the occurrence of an Enforcement Event all such
dividends, interest and other income shall be paid
directly to Lender as part of the Charged Property.
(c) After the occurrence of an Enforcement Event, if the Charged
Property is registered in the name of the Lender or a nominee for
the Lender all dividends, interest and other money received which
forms part of
-6-
<PAGE>
the Charged Property may be held by the Lender and applied by it
as though they were proceeds of sale and the Lender may (at its
absolute discretion) direct how the votes and other rights
attaching to the Charged Property are to be exercised and,
without limitation, the Lender shall be entitled to exercise all
the powers given to trustees by section 10(3) and (4) of the
Trustee Act 1925 as amended by section 9 of the Trustee
Investments Act 1961 in respect of any of the Charged Property
which is subject to a trust. For so long as the Charged Property
continues to be registered in the name of the Borrower all
dividends interest and other monies received as aforesaid shall
be held on trust by the Borrower for the Lender and all votes and
other rights as aforesaid shall be exercised by the Borrower as
directed by the Lender.
POWER OF THE LENDER
9. (a) At any time after the occurrence of an Enforcement
Event except as otherwise provided in the Intercreditor
Agreement and the Hambros Documents
(i) the Lender and any nominee of the Lender (or any other party
pursuant to the Intercreditor Agreement) may without further
notice in respect of all or any part of the Charged Property
exercise all the powers or rights which may be exercisable by the
registered holder of the Charged Property, appoint a receiver and
exercise the power of sale and all other powers conferred on
mortgagees by the Law of Property Act 1925 as hereby varied or
extended. Any Receiver shall be the agent of the Borrower who
shall be responsible for his fees and expenses. The Lender shall
cease to be under any further commitment to the Borrower
following the occurrence of an Enforcement Event; and
(ii) each of the Lender, any nominee of the Lender and any
Receiver shall be entitled (in addition to any other powers
conferred by law) to sell, exchange, redeem or otherwise dispose
of all or any part of the Charged Property for such consideration
and on such terms as he may in his absolute discretion think fit.
(b) Sections 93 and 103 of the Law of Property Act 1925 shall not apply
to the security constituted by this Charge.
(c) The Lender and any Receiver are authorized to give a good discharge
for any money received in exercise of the power of sale as well as for
any money or property received by either of them in respect of the
Charged Property during the subsistence of this Charge. No purchaser or
other
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<PAGE>
person shall be bound or concerned to see or enquire whether the right
of the Lender or the Receiver to exercise any of the powers hereby
conferred has arisen or not or be concerned with notice to the contrary
or with the propriety of the exercise or purported exercise of such
powers and may rely on any statement given by the Lender or any Receiver
in this connection.
(d) The Lender and any Receiver shall, (without prejudice to their right
to recover any shortfall from the Borrower and, after the payment of any
claims having priority to the security created by this Charge), apply
the proceeds arising from the exercise of any powers conferred by this
Charge in paying the costs of sale or other disposal and in or towards
the discharge of the Obligations in such order as they in their absolute
discretion think fit and the Lender or Receiver may credit such proceeds
to a suspense account for so long and in such manner as he may from time
to time determine. The surplus (if any) of such proceeds shall be paid
to the person or persons entitled to it.
(e) Each of the Lender and any Receiver may compound or settle any
question in relation to the Charged Property in such manner as he thinks
fit. Neither the Lender nor its nominee (if any) nor any Receiver shall
be liable for any loss arising after an Enforcement Event occasioned by
any exercise, purported exercise or non-exercise of rights attached to
the Charged Property or given to them by this Charge and, in particular,
they shall not be liable to account as mortgagee in possession in
respect of all or any part of the Charged Property and shall not be
liable for any loss whatsoever arising directly or indirectly from any
negligence on their part in respect of any sale or disposal or for any
neglect or default to present any interest coupon or any bond or stock
drawn for repayment or for any failure to pay any call or instalment or
to accept any offer or to notify the Borrower of any such matter or for
any negligence or default by their nominees, correspondents, employees
or agent or for any other loss of any nature whatsoever in connection
with the Charged Property.
(f) The Borrower unconditionally covenants with the Lender fully to
indemnify and hold harmless the Lender and any Receiver from and against
all losses, actions, claims, expenses, demands and liabilities whether
in contract, tort or otherwise and in respect of calls or other payments
relating to the Charged Property now or hereafter incurred by either of
them (including value added tax where applicable) for anything done or
omitted in the exercise or purported exercise of their powers or
occasioned by any breach by the Borrower of any of its covenants or
other obligations to the Lender. The Borrower shall indemnify the
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<PAGE>
Lender or Receiver (as appropriate) on demand and shall pay interest on
the sums demanded at the Default Rate.
POWER OF ATTORNEY
10. To secure the performance of its obligations under this
Charge the Borrower hereby irrevocably appoints the Lender
to be its attorney (with full powers of substitution and
delegation) to sign any documents, execute and deliver any
deed (including, but without limitation, any stock transfer
form) and do any act or thing on behalf of the Borrower
which the Borrower may or ought to do under this Charge.
The Borrower hereby covenants with the Lender to ratify and
confirm any document, deed, act and thing and all
transactions which such attorney may sign, execute or do.
RELEASE OF SECURITY
11. On discharge of the Obligations in full the Lender, at the request and
cost of the Borrower, shall release or procure the release of the
Charged Property, except as otherwise provided in the Intercreditor
Agreement, so as to vest it in the Borrower free from this security.
NATURE OF SECURITY
12. This security is in addition to any other security now held
by the Lender for the Obligations of the Borrower (whether
under this Charge or otherwise).
CONTINUING SECURITY
13. This Charge is a continuing security and will not be
satisfied by any intermediate discharge of the whole or any
part of the Obligations or any other matter or thing
whatsoever, Including the insolvency, liquidation or
administration of the Borrower and shall be binding until
all of the Obligations have been unconditionally and
irrevocably discharged in full. It covers all the money and
liabilities which for the time being constitute the
Obligations.
SET-OFF AND GROSSING UP
14. All sums payable by the Borrower under this Charge shall be paid without
any set-off, counterclaim, withholding or deduction whatsoever, unless
required by law in which event the Borrower will simultaneously with
making the relevant payment under this Charge pay to the Lender such
additional amount as will result in the receipt by the Lender of the
full amount which would otherwise have been receivable.
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<PAGE>
COSTS
15. The Borrower shall not later than September 1, 1996 and thereafter on
demand and on a full indemnity basis pay to the Lender or any Receiver
(as appropriate) the amount of all fees, costs and expenses (with VAT
thereon) and other liabilities which the Lender or such receiver incurs
in connection with:
(a) the preparation, negotiation, execution and delivery of
this Charge;
(b) any stamping or payment of stamp duty reserve tax or
registration of this Charge or any transfer of the
Charged Property pursuant hereto;
(c) any discharge or release of this Charge;
(d) the preservation or exercise (or attempted preservation or
exercise) of any rights under or in connection with this Charge
and the enforcement (or attempted enforcement) of this Charge or
the Obligations against the Borrower or others; or
(e) dealing with or obtaining advice about any other matter or
question arising out of or in connection with this Charge.
NOTICES
16. Any and all notices or demands hereunder may be given by any
party to any other party in any of the following manners:
(i) by facsimile transmission, (ii) by personal delivery,
(iii) by first class mail, postage prepaid, or (iv) by
certified mail, postage prepaid. Any notice given by
facsimile transmission shall be effective two hours after
dispatch thereof is completed by the sending party; all
other notices shall be effective upon receipt. All notices
shall be given to the parties at the addresses or to the
facsimile numbers set forth below (or to such other numbers
or addresses as shall be furnished by notice from any party
hereto to the other parties hereto):
The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Attn: Mr. George Petrenko
Fax: (203) 435-0505
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<PAGE>
with a copy to:
The New World Power Company Ltd.
Tavistock House
34/36 Bromham Road
Bedford MK 40 ZQD
England
Attention: Mr. Chuan Zhang
and:
Finers
Solicitors
179 Great Portland Street
London W1N 6L3
England
Attn: John D'Ardenne, Esq.
Fax: 011 44 171 323 4000
or: 011 44 171 580 7069
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attn: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
with a copy to:
Sundt & Co. Ltd.
11 St. James's Square
London SW1Y 4LB
England
Attn: Mr. Jens Wilhelmsen
Fax: 011 44 171 930 1784
and
Gilmartin, Poster & Shafto
One William Street
New York, New York 10004 USA
Attention: Donald B. Shafto, Esq.
Fax: (212) 482-0848
(212) 425-3130
Oakes, Fitzwilliams & Co. Limited
Byron House
7-9 St. James' Street
London SW1A 1EE
England
Attn: Mr. Herbert Lee Oakes
Fax: 011 44 171 925 1026
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<PAGE>
ESCROW AGENT
17. (a) The Escrow Agent is acting hereunder as an escrow
holder for the purpose of holding the certificates
evidencing the Security Assets. The Escrow Agent may act
upon any instrument or other writing believed by it in good
faith to be genuine and to have been signed or presented by
the proper person and shall not be liable to any party
hereto in connection with the performance of its duties
hereunder, except for its own negligence or willful
misconduct. The Escrow Agent's duties shall be determined
only with reference to this Agreement and applicable laws,
and the Escrow Agent is not charged with knowledge of or any
duties or responsibilities in connection with any other
document or agreement.
(b) In consideration of its acceptance of the appointment as the Escrow
Agent, the other parties hereto agree to indemnify and hold the Escrow
Agent harmless as to any liability incurred by it to any person, firm or
corporation by reason of its having accepted the same or in carrying out
any of the terms hereof, except for the Escrow Agent's negligence or
willful misconduct.
(c) The Borrower shall pay the Escrow Agent's reasonable costs and
expenses incurred in connection with its duties hereunder.
(d) The Escrow Agent shall have the right at any time to resign
hereunder by giving written notice of its resignation to the parties
hereto at least ten (10) business days prior to the date specified for
such resignation to take effect; and upon the effective date of such
resignation, the certificates evidencing the Pledged Stock then held by
the Escrow Agent hereunder shall be delivered by it to such successor
Escrow Agent or as otherwise shall be designated in writing by the
parties hereto; provided, however, if the parties hereto are unable to
agree upon such successor Escrow Agent within such ten-day period,
Messrs. Gilmartin, Poster & Shafto shall automatically become such
Escrow Agent without necessity of further act.
(e) In the event that the Escrow Agent should at any time be confronted
with inconsistent claims or demands by the parties hereto, the Escrow
Agent shall have the right to interplead said parties in any court of
competent jurisdiction and request that such court determine such
respective rights of the parties with respect to this Agreement, and
upon doing so, the Escrow Agent automatically shall be released from any
obligations or liability as a consequence of any such claims or demands.
MISCELLANEOUS
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<PAGE>
18. (a) No failure or delay by the Lender in exercising any right or remedy
shall operate as a waiver thereof nor shall any single or partial
exercise or waiver of any right or remedy preclude its further exercise
or the exercise of any other right or remedy.
(b) Each of the provisions of this Charge is severable and distinct from
the others and if at any time one or more of such provisions is or
becomes invalid illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way
be affected or impaired thereby.
(c) Any statement, certificate or determination of the Lender as to the
Obligations or any other matter provided for in this Charge shall, in
the absence of manifest error be conclusive and binding on the Borrower.
JURISDICTION
19. (a) This Charge shall be governed by and interpreted in
accordance with English Law.
(b) The Borrower hereby irrevocably submits to the non-exclusive
jurisdiction of the courts of England, but this Charge may be enforced
in any court of competent jurisdiction.
(c) The Borrower hereby irrevocably authorizes and appoints Finers,
Solicitors, 179 Great Portland Street, London W1N 6L3, England, Attn:
John D'Ardenne, Esq. (or such other person being a firm of solicitors
resident in England as it may by notice to the Lender substitute) to
accept service of all legal process out of or connected with this Charge
and service on Finers (or such substitute) shall be deemed to be service
on the Borrower.
20. This Charge may be transferred or assigned in whole or in
part by the Lender.
EXECUTED as a deed the day and year first above written.
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IN WITNESS WHEREOF this Agreement has been executed on the date
first above written.
Executed and unconditionally )
delivered as a Deed by ) ------------------------
THE NEW WORLD POWER ) Director
CORPORATION by the )
signatures of: ) ------------------------
Director
Executed and unconditionally )
delivered as a Deed by ) ---------------------------
THE SUNDIAL ) Donald B. Shafto, Assistant
INTERNATIONAL FUND ) Secretary
LIMITED by the signature of: )
Executed and unconditionally ) ----------------------
delivered as a Deed by OAKES,) Director
FITZWILLIAMS & CO. LIMITED )
by the signatures of: ) ----------------------
Director
EXHIBIT 10.2
AMENDMENT NO. 3 TO NOTE AND WARRANT PURCHASE AGREEMENT
This AMENDMENT is dated as of March 1, 1996 by and between THE
NEW WORLD POWER CORPORATION, a Delaware corporation (the "Company"), and the
Purchaser listed on the signature page of this Amendment (the "Purchaser"), and
it amends the Note and Warrant Purchase Agreement, dated as of August 15, 1995,
amended by Amendment No. 1 to Note and Warrant Purchase Agreement, dated as of
October 13, 1995, by and between the Company and the Purchaser, and by Amendment
No. 2 to Note and Warrant Purchase Agreement ("Amendment No. 2"), dated as of
February 29, 1996, by and between the Company and the Purchaser (collectively,
the "Purchase Agreement"). All capitalized terms used but not defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
W I T N E S S E T H:
WHEREAS, the Company and the Purchaser are parties to
the Purchase Agreement;
WHEREAS, the Purchaser and the Company wish to amend
the Purchase Agreement as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. The second sentence of Section 5(b) of Amendment
No. 2 is hereby amended to read as follows:
"The Company shall deposit into the Sinking Fund (i) 100% of
the net proceeds from the sale by the Company of those assets
set forth as items 1 to 3 and item 7 on Schedule 1 and (ii)
50% of the net proceeds from the sale by the Company of those
assets set forth as items 4 to 6 and item 8 on Schedule 1."
2. The definition of "Minimum Conversion Price" in
Section 6(c)(ii)(C) of Amendment No. 2 is hereby amended to be
"$.75", rather than "$1.00."
3. Section 6(d) of Amendment No. 2 is hereby amended
by replacing "July 1, 1996" in the first sentence thereof with
"September 30, 1996."
<PAGE>
4. Section 8(b) of Amendment No. 2 is hereby amended
to read in its entirety as follows:
"(b) Simultaneously with such termination, the Escrowed Funds
shall be deposited with the New Escrow Agent and shall be
held, paid and/or distributed in accordance with the terms of
the New Escrow Agreement, and the Escrowed Shares shall be
deposited with the Pledge Agreement Agent and shall be held,
paid and/or distributed in accordance with the terms of the
Pledge Agreement Amendment."
5. Section 8.2(b)(iii) of the Purchase Agreement is
hereby amended by adding a provision at the end thereof as
follows:
"provided that, notwithstanding the foregoing, the financial
statements for the year ended December 31, 1995 shall be
delivered on or before June 30, 1996;"
6. Section 8.17 of the Purchase Agreement is hereby
amended by deleting the first sentence thereof in its entirety.
7. Section 9.15 of the Purchase Agreement is hereby
amended by adding the following to the end of such Section:
", other than the Amended and Restated By-Laws of the Company
adopted by the Board of Directors of the Company, effective
March 28, 1996."
8. The text of Section 14(a)(viii) of the Purchase
Agreement is hereby deleted in its entirety and replaced with the
following:
"The Sundial International Fund Limited ("Sundial") makes any
demand for payment under the Amended and Restated Continuing
Guarantee, dated as of March 1, 1996, from The New World Power
Company Limited, a subsidiary of the Company organized under
the laws of England and Wales, to Sundial;"
9. The Purchaser hereby agrees to the modification of the
terms of the indebtedness due and owing to Sundial pursuant to the terms of the
Forbearance, Warrant Exchange, Note Conversion and Amendatory Agreement dated as
of March 1, 1996 among The Sundial International Fund Limited, the Company, The
New World Power Company Limited and Wolverine Power Corporation, and consents to
the execution, delivery and performance by the parties thereto to the
Forbearance Agreement and the other "Transaction Documents" referred to therein.
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<PAGE>
10. Attached as Schedule A hereto is a schedule of all
payments to be made by the Company for the period from May 15, 1996 to July 31,
1996. The Purchaser hereby directs the Pledge Agreement Agent to sign and
deliver to Chemical Bank, as the New Escrow Agent under the New Escrow
Agreement, the Distribution Letter attached hereto as Schedule B (the "Escrow
Distribution Letter"). The Company shall use the amounts distributed to it
pursuant to the Escrow Distribution Letter to make the payments listed on
Schedule A. Upon making each payment listed on Schedule A, the Company shall
provide the Purchaser with a copy of the check accompanied by a certificate,
signed by the chief financial officer or the President of the Company,
certifying that the Company has made the payment and that it has not made any
payments since May 15, 1996 that are not listed on Schedule A or are in excess
of the individual amounts listed on Schedule A. Any payment by the Company of
any amount not shown on Schedule A or in excess of the amount shown for that
payment on Schedule A shall be an Event of Default under Section 14(a)(ii) of
the Purchase Agreement.
11. In the event the Company or any of its subsidiaries sells
assets other than in the ordinary course of business and (i) such assets are not
subject to any lien or other encumbrance and (ii) the Company or such subsidiary
is not required to deposit the proceeds from such asset sales in a sinking fund
or to otherwise segregate such proceeds or apply them to the repayment of debt,
the Company shall notify the Purchasers and the Pledge Agreement Agent of the
sale and of the receipt of cash proceeds therefrom in writing at least three (3)
Business Days prior to the closing of such sale transaction and to the receipt
of any cash sale proceeds therefrom. Such notice shall include a description of
the terms of the sale, the amount and type of sale proceeds to be received and
the timing of receipt of such proceeds and an itemization of the fees and
expenses incurred by the Company and such subsidiary in connection with such
sale. Any such cash sale proceeds, less the Company's and such subsidiary's
reasonable fees and expenses of such sale, shall reduce the amounts payable to
the Company from the Working Capital Fund (as defined in the New Escrow
Agreement) pursuant to the Escrow Distribution Letter on a dollar for dollar
basis. Any such reduction shall be applied to the next payment or payments, as
necessary, to be made pursuant to the Escrow Distribution Letter. These funds
will then be made available after July 31, 1996 for working capital purposes at
the discretion of the Pledge Agreement Agent until December 31, 1996. The
release of these funds to the Company by the Pledge Agreement Agent will not be
unreasonably withheld. Upon receipt of notice from the Company of any such sale
or of the receipt of any cash sale proceeds, the Pledge Agreement Agent shall
instruct the New Escrow Agent to withhold amounts otherwise payable pursuant to
the Escrow Distribution Letter equal to the amount of proceeds from such sale.
Any failure of the Company to give notice as
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<PAGE>
required by this paragraph shall be an Event of Default under Section 14(a)(ii)
of the Purchase Agreement.
12. Pursuant to the Amended and Restated Charge over Shares,
dated as of March 1, 1996, among New World Power Limited, Sundial and Oakes,
Fitzwilliams & Co. Limited, Sundial holds a charge over 700,000 ordinary shares
of the share capital of Renewable Energy Ireland Limited. In the event Sundial
takes any action to enforce its rights with respect to such charge, any proceeds
from such action shall, after payment in full of the obligations owed to
Sundial, be paid into the Sinking Fund held by the New Escrow Agent in
accordance with the terms of the New Escrow Agreement for the benefit of the
Purchasers to the extent the obligations under the Purchase Agreement are still
outstanding. The Company shall promptly pay, or cause to be paid, to the Pledge
Agreement Agent any such proceeds which are in excess of the obligations owed to
Sundial.
13. Notwithstanding the provisions of Section 12 of the
Purchase Agreement, the Purchasers hereby agree that the Majority Noteholders
may, without the consent of the other Purchasers, agree to any amendment or
change to (i) the provisions of Section 5 of Amendment No. 2 relating to Partial
Redemption Offers and (ii) the provisions of Section 6(d) of Amendment No. 2.
14. Except as specifically amended by this Amendment, the
Purchase Agreement shall remain in full force and effect as originally executed
and amended. This Amendment may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original
but all such counterparts shall together constitute one and the same instrument,
and all signatures need not appear on any counterpart. This Amendment shall be
governed by, and construed in accordance with, the laws of the State of New York
(other than any conflict of laws rule which might result in the application of
the laws of any other jurisdiction).
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 3 to Note and Warrant Purchase Agreement to be duly executed as of
the date first written above.
THE NEW WORLD POWER CORPORATION
By: /s/
------------------------
Name:
Title:
UVCC FUND II
By: Arete Ventures, Inc.
By: /s/ Robert W. Shaw
------------------
Name: Robert W. Shaw
Title: President
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 3 to Note and Warrant Purchase Agreement to be duly executed as of
the date first written above.
THE NEW WORLD POWER CORPORATION
By: /s/
------------------------
Name:
Title:
UTECH CLIMATE CHALLENGE FUND, L.P.
By: Arete Ventures, Inc.
By: /s/ Robert W. Shaw
----------------------
Name: Robert W. Shaw
Title: President
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<PAGE>
FFF AMERICAN FLEDGELING FUND
By: /s/
------------------------
Name:
Title:
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<PAGE>
FFF DISCOVERY US DISCOVERY FUND
By: /s/
------------------------
Name:
Title:
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<PAGE>
FLEMING AMERICAN INVESTMENT TRUST PLC
By: /s/
------------------------
Name:
Title:
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<PAGE>
S&P AMERICAN SMALLER COMPANIES FUND
By: /s/
------------------------
Name:
Title:
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<PAGE>
FLEMING US DISCOVERY FUND (II)
By: /s/
------------------------
Name:
Title:
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<PAGE>
FLEMING OVERSEAS INVESTMENT TRUST PLC
By: /s/
------------------------
Name:
Title:
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<PAGE>
NCL INVESTMENT LTD.
By: /s/
------------------------
Name:
Title:
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<PAGE>
NIPPON CREDIT GARTMORE A/C YASUDA BO72
By: /s/
------------------------
Name:
Title:
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<PAGE>
OAKES, FITZWILLIAMS & CO., LIMITED
A/C CLIENT
By: /s/
------------------------
Name:
Title:
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<PAGE>
OAKES, FITZWILLIAMS & CO., S.A.
By: /s/
------------------------
Name:
Title:
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<PAGE>
/s/ C.M.V. Jones
----------------
C.M.V. Jones
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<PAGE>
/s/ David Edwards
-----------------
David Edwards
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INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT is entered into as of March 1,
1996, by and among THE NEW WORLD POWER CORPORATION, a Delaware corporation (the
"Company"), ROBERT FLEMING & CO. LTD., an English company, as agent for the
Purchasers under the Purchase Agreements referred to below (the "Pledge Agent"),
and THE SUNDIAL INTERNATIONAL FUND LIMITED, a Cayman Islands corporation
("Sundial").
W I T N E S S E T H:
WHEREAS, the Company has entered into separate Note and
Warrant Purchase Agreements, dated as of August 15, 1995, as amended (the "Note
Purchase Agreements"), with the purchasers named therein (the "Purchasers")
pursuant to which the Company has issued $15.75 million aggregate principal
amount of its 8% Convertible Subordinated Notes (the "Notes") and warrants to
purchase shares of its common stock;
WHEREAS, the Company is the owner beneficially and of record
of all of the issued and outstanding shares of The New World Power Company
Limited ("New World Power Limited") consisting of 1,000 ordinary shares of
1(pound) each (the "New World Power Company Limited Shares");
WHEREAS, as used herein the term "New World Power Limited
Collateral" shall mean (i) the New World Power Company Limited Shares, (ii) all
proceeds of the New World Power Company Limited Shares and (iii) all other
monies, securities or other property at any time and from time to time
receivable or otherwise distributed in respect of, or in exchange for, or in
liquidation of any of The New World Power Company Limited Shares; and, unless
the context otherwise requires, with respect to the interests of the Pledge
Agent, on the one hand, and Sundial, on the other hand, "New World Power Limited
Collateral" shall mean 50% of each of the items of property enumerated in
subdivisions (i), (ii) and (iii) of this recital;
WHEREAS, the Company granted to the Pledge Agent, as agent for
the Purchasers, a security interest in certain assets of the Company as
collateral for the obligations of the Company to the Purchasers under the Note
Purchase Agreements and the Notes pursuant to the terms of the Amended and
Restated Pledge without limitation, a security interest in 50% of the New World
Power Limited Collateral;
<PAGE>
WHEREAS, Sundial has previously loaned amounts to subsidiaries
of the Company represented by a 0% Senior Secured Note of New World Power
Limited in the amount of U.S. $550,000 dated December 20, 1995 (the "Old New
World Power Limited Note") and a Wolverine Power Corporation First Mortgage
Note, dated December 31, 1992, in the outstanding principal amount as of March
1, 1996 of $3,434,602 (the "Wolverine Note");
WHEREAS, pursuant to the Forbearance, Warrant Exchange, Note
Conversion and Amendatory Agreement, dated as of March 1, 1996 (the "Forbearance
Agreement"), by and among Sundial, the Company, New World Power Limited and
Wolverine Power Corporation ("Wolverine"), (i) Sundial is exchanging the Old New
World Power Limited Note for a new 0% Senior Secured Note of New World Power
Limited in the principal amount of $579,851.13 dated April 1, 1996 and maturing
December 1, 1996 (the "New World Power Limited Note"), (ii) the parties thereto
are amending the Wolverine Note and various other agreements which provide for
security of the obligations owed to Sundial by New World Power Limited and
Wolverine under the New World Power Limited Note and the Wolverine Note (the
"Sundial Obligations") and (iii) New World Power Limited is granting to Sundial
a security interest in 50% of the New World Power Limited Collateral pursuant to
the Charge over Shares, dated as of March 1, 1996 (the "Charge Agreement"); and
WHEREAS, the parties hereto wish to enter into this Agreement
with respect to the exercise of certain rights, remedies and options by the
Pledge Agent (for the benefit of the Purchasers) and Sundial as secured parties
hereunder and under the documents mentioned above;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. ENFORCEMENT OF RIGHTS AS A SECURED PARTY; CONSENT
OF HAMBROS BANK.
In the event either the Pledge Agent or Sundial wishes to take
any action to enforce its rights as a secured party with respect to the New
World Power Limited Collateral, the party wishing to take such action shall
notify the other of the actions such party wishes to take. All decisions
regarding the enforcement of their respective rights with respect to the New
World Power Limited Collateral shall be made jointly by the Pledge Agent and
Sundial, including decisions (i) regarding the exercise of any and all rights or
remedies with respect to all or any part of the New World Power Limited
Collateral, (ii) regarding the conduct of any and all proceedings with respect
to the New World Power Limited Collateral and (iii) otherwise dealing in or with
all or any part of the New
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<PAGE>
World Power Limited Collateral. Notwithstanding the foregoing, upon the
satisfaction in full of the Sundial Obligations, Sundial shall have no further
rights with respect to the enforcement of any rights with respect to the New
World Power Limited Collateral, and upon the satisfaction in full of the
obligations of the Company under the Note Purchase Agreements and the Notes (the
"Noteholder Obligations"), the Pledge Agent shall have no further rights with
respect to the New World Power Limited Collateral. In the event of the
satisfaction of the Sundial Obligations or the Noteholder Obligations, Sundial
or the Pledge Agent, as the case may be, shall promptly convey, without warranty
or recourse of any kind, to the Pledge Agent or Sundial all New World Power
Limited Collateral held by it and such New World Power Limited Collateral shall
then be held as part of the Charge Agreement or the Pledge Agreement, as the
case may be. The Company hereby agrees to take all such action as may be
necessary or appropriate to effect such transfer of such New World Power Limited
Collateral. Sundial and the Pledge Agent hereby waive any rights they may have
with respect to marshalling.
It is understood that the provisions of the "Hambros
Documents" (as defined in the Forbearance Agreement) do not preclude the Company
from granting to the Pledge Agent and Sundial a first prior perfected security
interest in the New World Power Limited Collateral but that such provisions do
require the consent of Hambros Bank (as defined in the Forbearance Agreement) to
the transfer of New World Power Company Limited Shares to any proposed
transferee in the event of the exercise by Sundial or the Pledge Agent of their
remedies under the Charge Agreement or Pledge Agreement. The Company hereby
agrees to use its best efforts to secure from Hambros Bank as soon as possible
and in no event later than May 31, 1996 the waiver of such provisions of the
Hambros Documents that affect the rights and remedies of Sundial and the Pledge
Agent under the Charge Agreement and the Pledge Agreement. Failure of the
Company to obtain such consent shall constitute an Event of Default under the
Forbearance Agreement and the Note Purchase Agreements.
2. SHARING OF PROCEEDS FROM ENFORCEMENT OF SECURITY INTEREST.
The parties hereby agree that any proceeds received with
respect to the enforcement by the Pledge Agent and Sundial of their respective
security interests in the New World Power Limited Collateral, less the costs and
expenses incurred by the Pledge Agent and Sundial in connection with such
enforcement, including attorneys' fees and expenses and costs of sale, shall be
shared equally between the Pledge Agent and Sundial; provided, however, that (i)
any portion of such proceeds allocated to Sundial which are in excess of the
Sundial Obligations shall be
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<PAGE>
paid to the Pledge Agent to the extent the Noteholder Obligations are still
outstanding, (ii) any portion of such proceeds allocated to the Pledge Agent
which are in excess of the Noteholder Obligations shall be paid to Sundial to
the extent the Sundial Obligations are still outstanding, and (iii) any portion
of such proceeds allocated to Sundial or the Pledge Agent which are in excess of
the amount necessary to satisfy the Sundial Obligations and the Noteholder
Obligations shall be paid to the Company. Upon receipt by the Pledge Agent or
Sundial of the proceeds of any such enforcement action, such party shall
promptly pay the costs and expenses of such enforcement action and shall
promptly pay 50% of such net proceeds (or such lesser amount to which it may be
entitled pursuant to this Section) to the other party by wire transfer to an
account designated by such other party.
3. SHARING OF PROCEEDS FROM ENFORCEMENT OF GUARANTEE.
Pursuant to the terms of the Amended and Restated Continuing
Guarantee, dated as of March 1, 1996, from New World Power Limited to Sundial
(the "Guarantee"), New World Power Limited has guaranteed certain of the Sundial
Obligations. Sundial hereby agrees that it will provide the Pledge Agent with a
copy of any notice or demand that it gives under the Guarantee at the same time
and in the same manner that such notice or demand is given pursuant to the
Guarantee.
Sundial acknowledges that any demand for payment it may make
under the Guarantee shall constitute an event of default under the Note Purchase
Agreements. Sundial hereby agrees that so long as any obligations under the Note
Purchase Agreements remain outstanding, in the event that it makes a demand for
payment on the Guarantee, but there exists a deficiency in the proceeds that it
receives following full and final realization upon the collateral securing the
Guarantee when compared to the amount of the Sundial Obligations, it will share
equally with the Pledge Agent any amounts realized by it from or in respect of
such deficiency arising from any realization upon the U.K. Windfarm Shares (as
hereinafter defined) which is in excess of any amounts which the Pledge Agent
have received in respect of such realization. Immediately upon receipt by
Sundial of any such amounts, Sundial shall pay 50% of such amounts by wire
transfer to an account designated by the Pledge Agent in the same manner as set
forth in Section 2 of this Agreement.
Further, the Pledge Agent acknowledges that Sundial shall not
share with the Pledge Agent or the Purchasers any proceeds that it receives (i)
under the Guarantee that relate to funds that New World Power Limited has
received directly from Renewable Energy Ireland Limited ("REIL") by way of
dividend, loan or otherwise, provided, however that if such funds are not so
directly received from REIL then Sundial will share such funds
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<PAGE>
equally with the Pledge Agent, or (ii) from New World Power Limited in respect
of any deficiency due to Sundial after Sundial has fully realized on the
collateral securing such Guarantee to the extent of any dividends paid by REIL
to New World Power Limited on or after March 1, 1996. Immediately upon receipt
by Sundial of any amounts that were not received from REIL, Sundial will pay 50%
of such amounts by wire transfer to an account designated by the Pledge Agent in
the same manner as set forth in Section 2 of this Agreement. By way of example,
if, after fully realizing upon the collateral securing the Guarantee, there
remained a deficiency of $500,000 due and owing by New World Power Limited to
Sundial, and New World Power Limited had cash, cash equivalents and receivables
in hand of $600,000 of which $200,000 were attributable to dividends received by
New World Power Limited from REIL, Sundial would receive in respect of its
$500,000 deficiency a total of $400,000 (being the sum of $200,000 attributable
to the REIL dividends and one-half of the $400,000 balance of such cash, cash
equivalents and receivables) and the Pledge Agent would receive $200,000, being
one-half of the balance of such cash, cash equivalents and receivables after
deducting therefrom the amount attributable to the REIL dividends.
4. U.K. WINDFARMS; REIL.
The parties hereto acknowledge that the outstanding share
capital of each of New World Power (Caton Moor) Limited, New World Power Company
(Dyffryn Brodyn) Limited and New World Power Company (Four Burrows) Limited
(together, the "U.K. Windfarm Shares") is subject to a first priority security
interest in favor of Hambros Bank Limited ("Hambros"). The Pledge Agent and
Sundial each agrees that it will not take any action to obtain a second priority
security interest in the U.K. Windfarm Shares or in any of the assets of those
entities while they are subject to the security interest in favor of Hambros
unless the Pledge Agent and Sundial jointly agree to obtain such a second
priority security interest. In the event the Pledge Agent and Sundial jointly
request such a second priority security interest, the Company shall promptly
grant such an interest and shall use its best efforts to obtain Hambros' consent
thereto. Except as provided in the previous sentence or below, the Company shall
not permit the U.K. Windfarm Shares or any of the assets of those entities to be
pledged to any person other than Hambros so long as any Noteholder Obligations
or Sundial Obligations remain outstanding.
Upon the sale of any of the U.K. Windfarm Shares or of any of
the assets of any of those entities, after payment to Hambros of the amounts
owed to it which are secured by the lien on the U.K. Windfarm Shares, the
Company shall immediately cause the net cash sale proceeds, less the Company's
reasonable fees and expenses of such sale, to be paid 50% to the Pledge Agent
and
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<PAGE>
50% to Sundial by wire transfer to an account designated by the Pledge Agent and
Sundial, respectively; provided, however, that (i) any portion of such proceeds
allocated to Sundial which are in excess of the Sundial Obligations shall be
paid to the Pledge Agent to the extent the Noteholder Obligations are still
outstanding, (ii) any portion of such proceeds allocated to the Pledge Agent
which are in excess of the Noteholder Obligations shall be paid to Sundial to
the extent the Sundial Obligations are still outstanding, and (iii) any portion
of such proceeds allocated to Sundial or the Pledge Agent which are in excess of
the amount necessary to satisfy the Sundial Obligations and the Noteholder
Obligations shall be paid to the Company.
Upon the release by Hambros of its first priority security
interest in the U.K. Windfarm Shares, the Company shall immediately cause a
first priority lien and security interest in the U.K. Windfarm Shares to be
granted to the Pledge Agent and to Sundial, each to the extent the Company then
continues to own, directly or indirectly, the U.K. Windfarm Shares. In such
event the provisions of Sections 1 and 2 of this Agreement shall be applicable
with respect to such security interests, mutatis mutandis.
Any provision of this Agreement to the contrary
notwithstanding, it is understood and agreed that no agreement with respect to
the sharing of proceeds of the New World Power Limited Collateral shall in any
way affect or diminish the rights of Sundial under the "Amended Charge" of the
"REIL Shares" (as such terms are defined in the Forbearance Agreement).
5. AMENDMENTS TO THE TRANSACTION DOCUMENTS OR THE
FLEMING DOCUMENTS.
(a) No change in, amendment to, or supplement of, the Fleming
Documents (as defined in the Forbearance Agreement) will be made, and no new
agreement or understanding of any type (including, without limitation, any
agreement or understanding providing additional collateral to the Purchasers or
providing additional financing or capital to the Company and/or any of its
subsidiaries) will be entered into between the Purchasers, on the one hand, and
the Company and/or any of its subsidiaries, on the other hand (any such change,
amendment, supplement or new agreement being hereinafter referred to as a
"Change") without the prior written consent of Sundial, except for any Change
that may be entered into pursuant to the covenant of further assurances
contained in Section 8.19 of the Note Purchase Agreements. In the event the
Purchasers propose to enter into any Change, the Pledge Agent shall provide
written notice of the proposed Change to Sundial, which notice shall be
accompanied by a copy of the proposed Change. Within ten (10) calendar days
after receipt by Sundial of such notice, Sundial shall either consent to such
proposed Change or notify the Purchasers and the
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<PAGE>
Pledge Agent that it objects to such Change on the basis that it believes such
proposed Change would or might materially and adversely affect the interests of
Sundial. Any such objection shall specify the grounds therefor and shall be made
in good faith. No such consent shall be unreasonably withheld by Sundial. In the
event Sundial fails to respond to such notice within such ten (10) day period,
Sundial shall be deemed to have irrevocably waived its rights under this Section
5 with respect to such proposed Change.
(b) No change in, amendment to, or supplement of, the
Transaction Documents (as defined in the Forbearance Agreement) will be made,
and no new agreement or understanding of any type (including, without
limitation, any agreement or understanding providing additional collateral to
Sundial or providing additional financing or capital to the Company and/or any
of its subsidiaries) will be entered into between Sundial, on the one hand, and
the Company and/or any of its subsidiaries, on the other hand without the prior
written consent of the Fleming Majority Noteholders, except for any Change that
may be entered into pursuant to the covenant of further assurances contained in
Section 25 of the Forbearance Agreement. In the event Sundial proposes to enter
into any Change, Sundial shall provide written notice of the proposed Change to
the Purchasers and the Pledge Agent, which notice shall be accompanied by a copy
of the proposed Change. Within ten (10) calendar days after receipt by the
Purchasers of such notice, the Fleming Majority Noteholders shall either consent
to such proposed Change or notify Sundial that it objects to such Change on the
basis that it believes such proposed Change would or might materially and
adversely affect the interests of the Purchasers. Any such objection shall
specify the grounds therefor and shall be made in good faith. No such consent
shall be unreasonably withheld by the Fleming Majority Noteholders. In the event
the Purchasers fail to respond to such notice within such ten (10) day period,
the Purchasers shall be deemed to have irrevocably waived its rights under this
Section 5 with respect to such proposed Change.
(c) The foregoing provisions of this Section 5 shall in no way
affect the rights of Sundial, on the one hand, or the Purchasers or the Pledge
Agent, on the other hand, to waive, temporarily or permanently, any of their
respective rights under the Fleming Documents or the Transaction Documents, or
any defaults by the Company or any of its Subsidiaries under the Fleming
Documents or the Transaction Documents, respectively. However, each party agrees
forthwith upon the granting of any such waiver to inform the other party of any
such action.
6. FURTHER ASSURANCES.
Each of the parties hereto agrees to execute and deliver such
further instruments and agreements and to take such
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<PAGE>
further actions as any other party hereto may at any time or times reasonably
request in order to carry out the provisions and intent of this Agreement.
7. NOTICES.
All notices and other communications provided for herein shall
be in writing and shall be delivered by hand or shall be sent by telecopy (and
if sent by telecopy, shall be confirmed by registered mail, return receipt
requested, or by overnight mail or courier, postage and delivery charges
prepaid) or shall be sent by a recognized overnight courier service, to the
following addresses:
If to the Company:
The New World Power Corporation
558 Lime Rock Road
Lime Rock, CT 06039
Phone No.: (203) 435-4000
Fax No.: (203) 435-0505
Attention: Chief Executive Officer
with a copy to:
Olshan Grundman Frome & Rosenzweig, LLP
505 Park Avenue
New York, New York 10022
Telephone (212) 755-1467
Attention: Thomas J. Fleming, Esq.
If to the Pledge Agent:
Robert Fleming & Co. Ltd.
c/o Fleming Capital Management
320 Part Avenue, 11th Floor
New York, NY 10022
Phone No.: (212) 508-3900
Fax No.: (212) 508-3928
Attention: Christopher Jones
David Edwards
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178-0060
Phone No.: (212) 309-6000
Fax No.: (212) 309-6273
Attention: David W. Pollak, Esq.
If to Sundial:
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<PAGE>
The Sundial International Fund Ltd.
c/o Coutts & Co. (Bahamas) Ltd.
P.O. Box N7788
Nassau, Bahamas
Attention: Mr. James Graham
Secretary and Registrar
Fax: (809) 326-6709
with a copy to:
Sundt & Co. Ltd.
11 St. James's Square
London SW1Y 4LB
England
Attention: Jens Wilhelmsen
Fax: 011 44 171 930 1784
and
Gilmartin, Poster & Shafto
One William Street
New York, New York 10004 USA
Attention: Donald B. Shafto, Esq.
Fax: (212) 482-0848
(212) 425-3130
Whenever any notice is required to be given hereunder, such notice shall be
deemed given and such requirement satisfied only when such notice is delivered
or, if sent by telecopy, when received. Addresses may be changed upon notice of
such change given as provided in this Section 9.
8. SUCCESSORS AND ASSIGNS.
Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party, and all covenants, promises and agreements by or on
behalf of the parties which are contained in this Agreement shall bind and inure
to the benefit of the successors and assigns of all other parties.
9. GOVERNING LAW.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (other than any conflict of
laws rule which might result in the application of the laws of any other
jurisdiction).
10. PARAMOUNT AGREEMENT.
To the extent that any provision of the Charge
Agreement shall be in conflict with the provisions of this
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<PAGE>
Agreement respecting the sharing between Sundial and the Pledge Agent of the net
proceeds of the sale of the New World Power Limited Collateral, the provisions
of this Agreement shall be paramount to the provisions of the Charge Agreement.
11. MODIFICATIONS AND AMENDMENTS; WAIVERS.
No modification or amendment of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
all of the parties hereto. Any waiver of any provision of this Agreement must be
in writing and signed by the party against whom it is being enforced, and any
such waiver shall be effective only in the specific instance and for the purpose
for which it is given.
12. SEVERABILITY.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
13. COUNTERPARTS.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
14. HEADINGS.
The headings and captions of this Agreement are for
convenience of reference only and shall not define, limit or otherwise affect
any of the terms or provisions hereof.
15. CONFLICTS.
To the extent there is a conflict or inconsistency between the
terms of this Agreement, the Pledge Agreement and any security documents related
to the Sundial Obligations, the parties hereto agree that this Agreement shall
control as between the Pledge Agent and Sundial but shall not affect the rights
of the Pledge Agent and Sundial against the Company pursuant to any of such
agreements, all of which are expressly reserved.
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<PAGE>
16. TERMINATION.
This Agreement shall terminate at such time as all of the
Noteholder Obligations and the Sundial Obligations have been indefeasibly
satisfied, provided, however, that the provisions of Section 1 shall continue in
effect notwithstanding that such obligations have been satisfied.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Intercreditor Agreement as of the date first written above.
THE NEW WORLD POWER CORPORATION
By:/s/ George P. Petrenko
----------------------
Name: George P. Petrenko
Title: Chief Executive Officer
ROBERT FLEMING & CO. LTD., as
Pledge Agent
By: /s/
-----------------------------
Name:
Title:
THE SUNDIAL INTERNATIONAL FUND
LIMITED
By: /s/ Donald B. Shafto
------------------------
Name: Donald B. Shafto
Title: Assistant Secretary
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Exhibit 20
NEW WORLD POWER ANNOUNCES COMPLETION OF DEBT
RESTRUCTURING, PROGRESS IN DEVELOPING AND SELLING ASSETS,
POTENTIAL WRITE DOWN OF ASSET VALUES AND POSSIBLE DELISTING
BY NASDAQ
For Immediate Release
1996
CONTACT: George P. Petrenko Henry Hermann
Interim CEO (214)871-9445
The New World Power Corporation
558 Lime Rock Road
Lime Rock, CT 06039
(860) 435-4000
Lime Rock, CT --- The New World Power Corporation (NASDA-NMS: NWPC) announced
today the successful completion of the restructuring of its debt arrangements
with its two major secured lenders. This restructuring will provide current
funds and assist New World in carrying out its 1996 business plan for both the
development and the sales of power production assets.
New World's $15.7 million 8% subordinated convertible loans from a group lead by
the Robert Fleming & Co. Ltd. will not mature on July 31, 1997, with interest on
the restructured notes during 1996 to be paid with the issuance of additional
notes and warrants. Also, interest and principle payments on the approximately
$4 million of Sundial International Fund Limited loans have been deferred to
December 1, 1996 and thereafter. In each case additional collateral was provided
as part of the restructuring. The restructuring agreements contain numerous
post-closing covenants, including consent from third parties, which New World is
endeavoring to satisfy.
New World also announced continuing progress on the 40 megawatt Wind Farm to be
constructed at Big Spring, Texas. The Texas Public Utility Commission has
approved the power sales agreement and the Company is proceeding with requests
for proposals for turnkey construction and management of the project. Current
plans call for the plant to begin operation in early 1998.
Progress is also being made on the sale of power generation development assets
to provide funds to retire debt and to fund continuing project development. New
World has reached an agreement in principle to sell its interest in the 16
megawatt Dona Julia hydroelectric project in Costa Rica and is evaluating offers
on other assets anticipated to be sold under its restructuring plan.
<PAGE>
The Company further announced that the Price Waterhouse audit of 1995 operations
is well underway. Completion has been delayed by the previously announced
restructuring and reorganization activities. In part because of the decision to
sell various assets and close down other developments, the Company anticipates a
one-time write down of asset values in the range of $23-28 million that will
comprise a majority of anticipated loss for the year. Anticipated loss for the
year is estimated to be in the range of $35-40 million.
The Company also announced that as a result of its delayed Form 10-K for fiscal
year ended December 31, 1995 and Form 10-Q for the first quarter ended March 31,
1996, NASDAQ has denied the Company's request for continued listing on the
NASDAQ National Market, effective May 28, 1996. The Company further announced
that it has appealed this decision and that the Company has been granted a
hearing on June 6, 1996. Under NASDAQ rules, the stock will continue to be
listed during the pendency of the appeal process.
NEW WORLD POWER CORPORATION IS AN INTERNATIONAL PRODUCER OF ELECTRICITY
GENERATED FORM WIND ENERGY, SOLAR ENERGY AND HYDROPOWER. THE COMPANY DEVELOPS,
MANUFACTURERS AND MARKETS ELECTRICAL GATHERING SYSTEMS POWERED BY RENEWABLE
RESOURCES AND ALSO PROVIDES RELATED SERVICE.
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EXHIBIT 99
THE NASDAQ STOCK MARKET, INC. NASDAQ
Jon B. Koon
Senior Analyst, NASDAQ LISTING QUALIFICATIONS
May 16, 1996
Mr. George P. Petrenko
Interim Chief Executive Officer
The New World Power Corporation
The Farmhouse
558 Lime Rock Road
Lime Rock, CT 06039
Dear Mr. Petrenko:
This will serve to notify you that we have completed our evaluation of the
information provided in connection with our review of The New York Power
Corporation's request for continued listing on the Nasdaq National Market(R).
Based on the facts and Company representations, we have determined to deny the
Company's request.
Our determination is based on the following factors. As represented, the Company
proposes to file its Form 10-K for fiscal year ended December 31, 1995 upon
completion of the annual audit of its financial statements. The Company has had
significant turnover in key financial personnel and has only recently been able
to secure funds necessary for continued operations due to negotiations with its
creditors. Additionally, the Company's financial statements are inordinately
complex due to the significant transactions and restructuring steps undertaken
by the Company in 1995. New World expects to file its Form 10-K by mid-June,
with the Form 10-Q for quarter ended March 31, 1996 to be filed shortly
thereafter. The By-Laws of the NASD contemplate timely filing of an issuer's SEC
reports, including Form 10-K with audited financial statements and Form 10-Q.
The staff is of the opinion that the granting of any additional time to file the
Form 10-K and Form 10-Q is not warranted as significant time has already elapsed
since the deadlines indicated by the SEC and the NASD. As a result of the
Company's inability to provide a definitive plan which will ensure its
compliance in the near term with all necessary criteria, the staff has
determined that continued listing on the Nasdaq National Market is no longer
warranted. Accordingly, the Company's securities are scheduled to be de-listed
from The Nasdaq Stock
1715 K STREET, NW WASHINGTON, DC 20006-1500 202-496-2500 FAX 202-496-2697
<PAGE>
Mr. George P. Petrenko
May 16, 1996
Page Two
Market(sm) effective with the opening of business on Tuesday, May 28, 1996.
The Company may seek further procedural remedies. For information regarding a
review of the staff's findings, please contact David A.
Donohoe, Jr., Counsel, at (202) 496-2529.
If you have any questions relating to the compliance issues discussed herein,
please contact me at (800) 955-8095.
Yours truly,
/s/ Jon B. Koon
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Jon B. Koon
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